EXHIBIT 10.1
ASSUMPTION AGREEMENT AND SEVENTH AMENDMENT TO
CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS
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This ASSUMPTION AGREEMENT AND SEVENTH AMENDMENT TO CREDIT
AGREEMENT AND OTHER LOAN DOCUMENTS (this "Amendment") is entered into as of this
25th day of April, 2007, by and among All American Semiconductor, Inc., a
Delaware corporation, as pre-petition debtor and as a debtor and
debtor-in-possession ("Borrower"), the other "Designated Companies" signatory
hereto, each as a pre-petition debtor and as a debtor and debtor-in-possession,
the financial institutions signatory hereto as lenders (collectively, the
"Lenders"), Harris N.A., successor by merger to Harris Trust and Savings Bank,
individually as a Lender, as L/C Issuer and as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"), and U.S. Bank National
Association, individually as a Lender and as co-administrative agent for the
Lenders (in such capacity, the "Co-Administrative Agent"). Capitalized terms
used but not otherwise defined in this Amendment shall have the respective
meanings ascribed to them in the Pre-Petition Credit Agreement (as defined
below), as amended hereby (the Pre-Petition Credit Agreement, as so amended, the
"Credit Agreement").
RECITALS
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WHEREAS, Borrower, Administrative Agent, Co-Administrative
Agent and the Lenders have entered into that certain Credit Agreement, dated as
of May 14, 2003 (as amended, restated, supplemented or otherwise modified in
writing from time to time prior to the Petition Date, the "Pre-Petition Credit
Agreement," and together with the other "Loan Documents" (as defined in the
Pre-Petition Credit Agreement and as in effect immediately prior to the Petition
Date, the "Pre-Petition Credit Documents");
WHEREAS, on April 25, 2007 (the "Petition Date"), Borrower and
each other Designated Company (each a "Debtor," and collectively, the
"Debtors"(1)) filed voluntary petitions for relief under chapter 11 of title 11
of the United States Code (the "Bankruptcy Code"), in the United States
Bankruptcy Court of the Southern District of Florida (Miami Division) (the
"Bankruptcy Court"), Case No. 07-12963-LMI (Jointly Administered) (each, a
"Bankruptcy Case," and collectively, the "Bankruptcy Cases");
WHEREAS, numerous Events of Default, including, without
limitation, the Events of Default arising from the commencement of the
Bankruptcy Cases, have occurred and are continuing under the Pre-Petition Credit
Agreement as of the date hereof;
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(1) The following are wholly-owned subsidiaries of the Borrower, organized
under the laws of jurisdictions outside the United States and who are
not Designated Companies, also filed voluntary petitions for relief
under chapter 11 of the Bankruptcy Code in the Bankruptcy Court:
AllAmMex Components, S. de R.L. de C.V.; AGD Electronics Asia Pacific
Co., Ltd.; and AGD Electronics Limited (the "Foreign Debtors"). The
Foreign Debtors are not parties to the Pre-Petition Credit Documents or
this Amendment.
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WHEREAS, in order to continue their operations as
debtors-in-possession under the Bankruptcy Code pending the sale of all or a
substantial portion of their assets and properties pursuant to section 363 and
other applicable provisions of the Bankruptcy Code, the Debtors have requested
that Administrative Agent and the Lenders continue making secured revolving
loans to Borrower pursuant to the Credit Agreement (the "DIP Financing"); and
WHEREAS, Administrative Agent and the Lenders are willing to
continue to provide further secured financing to Borrower only if, among other
things, the Pre-Petition Credit Documents are amended as hereinafter set forth,
and the Bankruptcy Court enters an Interim Financing Order and a Final Financing
Order, each in form and substance satisfactory to Administrative Agent and the
Required Lenders.
NOW THEREFORE, in consideration of the premises, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
I. Amendments to Pre-Petition Credit Documents. Effective as of the
Assumption Agreement Effectiveness Date (as defined in Section V hereof), the
parties hereto hereby amend the Pre-Petition Credit Documents as follows:
A. From and after the Assumption Agreement Effectiveness Date,
all references in the Credit Agreement and the other Loan Documents to (i) "All
American Semiconductor, Inc.," "AASI," "AAS," "Borrower" or any other reference
to such entity in any capacity shall be deemed to be references to All American
Semiconductor, Inc., both before the Petition Date, as a pre-petition debtor,
and on and after the Petition Date, as a debtor-in-possession in its Bankruptcy
Case; (ii) each Designated Company by any name and in any capacity shall be
deemed to be references to such Designated Company, both before the Petition
Date, as a pre-petition debtor, and on and after the Petition Date, as a
debtor-in-possession in its Bankruptcy Case; and (iii) the Pre-Petition Credit
Agreement and the other Pre-Petition Credit Documents shall mean and include the
Pre-Petition Credit Agreement and the other Pre-Petition Credit Documents, in
each case, as amended by this Amendment.
B. When used in the Credit Agreement and the other Loan
Documents, the terms "Bankruptcy Code," "Bankruptcy Court," "Debtors," "DIP
Financing," "Pre-Petition Credit Documents," "Petition Date," "Pre-Petition
Credit Agreement," and "Bankruptcy Cases" shall have the respective meanings set
forth in the Recitals of this Amendment.
C. When used in the Credit Agreement and the other Loan
Documents, the terms "Approved Budget," "Initial Approved Budget," "Supplemental
Approved Budget," "Pre-Petition Collateral," "DIP Collateral," "Pre-Petition
Indebtedness," "DIP Indebtedness," "DIP Credit Documents," "Permitted Budget
Variances," "Collateral Value Reduction Amount," "Approved Administration
Expenses," "Final Hearing," "Loan Payment Date," "Tested Line Item," "Carve-Out
Event," "Prior Claims" and "Carve-Out" shall have the respective meanings set
forth in the Financing Order.
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D. Section 1.1 of the Pre-Petition Credit Agreement is hereby
amended by adding the following new paragraph to the conclusion thereof:
"Subject to the terms and conditions hereof, each DIP Lender,
by its acceptance hereof, severally agrees to make DIP Revolving Loans
to Borrower from time to time on or after the Assumption Agreement
Effectiveness Date and prior to the Termination Date, up to the amount
of such DIP Lender's DIP Revolving Credit Commitment, subject to any
reductions thereof pursuant to the terms hereof. The sum of the
aggregate principal amount of all Revolving Loans (including DIP
Revolving Loans) and L/C Obligations at any time outstanding on or
after the Petition Date shall not exceed the sum of: (a) the Borrowing
Base as calculated as at the close of business on the immediately
preceding Business Day (as reduced by any reserves taken pursuant to
this Section 1.1) plus (b) the DIP Overadvance Amount as then in effect
plus (c) in the Administrative Agent's sole discretion, any Permitted
Overadvances then in effect; provided, however, that (i) the amount of
Eligible Receivables included in any Borrowing Base shall take into
account the Receivable-related information from the then most recently
delivered report provided by Borrower to Administrative Agent pursuant
to Section 8.5(b) hereof, and (ii) the Eligible Inventory component as
at each Business Day, subject to true-up on or prior to the fifth
Business Day of each week using actual Eligible Inventory reflected on
the then most recently delivered weekly Borrowing Base Certificate
pursuant to Section 8.5(a) hereof, shall be equal to (A) the aggregate
amount of Eligible Inventory for the immediately preceding Business Day
minus (B) the aggregate amount of sales of Eligible Inventory made by
Borrower on the such immediately preceding Business Day (less the
aggregate amount of gross margin associated therewith) plus (C) the
aggregate amount of Eligible Inventory purchased during such
immediately preceding Business Day. Each Borrowing of DIP Revolving
Loans shall be made ratably from the DIP Lenders in proportion to their
respective Revolver Percentages for DIP Revolving Loans. Except as
otherwise expressly provided herein or in the Financing Order, DIP
Revolving Loans may be repaid and the principal amount thereof
reborrowed before the Termination Date. Notwithstanding any other
provision of this Agreement to the contrary, the Administrative Agent
shall have the right from time to time from and after the Assumption
Agreement Effectiveness Date, upon two (2) Business Days' prior written
notice, to establish reserves against the Borrowing Base in such
amounts and with respect to such matters (including without limitation
reserves with respect to Funds Transfer and Deposit Account Liability,
Hedging Liability, cash management exposure, uninsured casualty to or
other loss of any material portion of the Inventory occurring after the
Assumption Agreement Effectiveness Date and the unused portion of the
Carve-Out, if any, from and after the occurrence of a Carve-Out Event
as permitted in the Financing Order) as the Administrative Agent shall
deem necessary or appropriate in its reasonable business judgment to
preserve and/or protect the Collateral. Any and all reserves in effect
immediately prior to the Assumption Agreement Effectiveness Date shall
remain in effect, in amounts determined by the Administrative Agent in
its reasonable discretion, from and after the Petition Date. The amount
of all such reserves established from time to time pursuant to this
Section 1.1 shall be subtracted from the Borrowing Base when
calculating the amount of availability with respect to DIP Revolving
Loans hereunder.
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E. Section 1.2 of the Pre-Petition Credit Agreement is hereby
amended by deleting the first sentence thereof in its entirety and replacing it
with the following:
"The Revolving Loans made to the Borrower by a Lender prior to
the Petition Date shall be evidenced by a single promissory note of the
Borrower issued to such Lender in the form of Exhibit B hereto. The DIP
Revolving Loans made to the Borrower by a DIP Lender from and after the
Petition Date shall be evidenced by a single promissory note of the
Borrower issued to such DIP Lender in the form of Exhibit A attached to
the Assumption Agreement."
F. Section 1.3(a) of the Pre-Petition Credit Agreement is hereby
amended by adding the following sentence at the end of such Section:
"Borrower and each other Designated Company acknowledges and
agrees that no Letter of Credit remained undrawn and outstanding as of
the Petition Date. Notwithstanding any provision to the contrary set
forth in this Agreement or any other Loan Document, Borrower shall not
have the right to request, and none of Administrative Agent, L/C Issuer
or any Lender shall have any obligation to issue or guaranty, any
Letter of Credit, in each case from and after the Petition Date."
G. Section 1.6(a) of the Pre-Petition Credit Agreement is hereby
amended by adding the following sentence at the end of such Section:
"Notwithstanding any provision to the contrary set forth in
this Section 1.6(a) or any other provision of the Loan Documents, from
and after the Petition Date, (i) all Revolving Loans made on or after
the Petition Date shall be made as Base Rate Loans, and not Eurodollar
Loans, (ii) no Base Rate Loan may be converted to, or continued as, a
Eurodollar Loan, and (iii) all Loans outstanding from and after the
Petition Date are and shall be Base Rate Loans."
H. Section 1.6(d) of the Pre-Petition Credit Agreement shall be
inapplicable from and after the Petition Date as if deleted in its entirety from
the Credit Agreement as of such date.
I. Section 1.9(b) of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"(b) Mandatory. Subject to the terms of the Financing Order:
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(i) All proceeds of Collateral, including, without limitation,
payments in respect of Receivables, shall be applied to the Obligations
in the manner described in Section 3.1 hereof.
(ii) Immediately upon receipt of any Net Cash Proceeds from
any Disposition of Collateral (other than the sale of Inventory in the
ordinary course of business) or Event of Loss of Borrower or any other
Designated Company, Borrower shall remit to the Administrative Agent
for application to the Obligations in accordance with Section 3.1
hereof 100% of such Net Cash Proceeds, and any such Loan repayment
shall not be subject to reborrowing (and to the extent applied to
outstanding DIP Revolving Loans, shall result in a corresponding
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permanent reduction of the DIP Lenders' respective DIP Revolving Credit
Commitments according to their applicable Revolver Percentages for DIP
Revolving Loans. Upon any Disposition of all or substantially all of
the assets of the Designated Companies, the Revolving Credit
Commitments shall be automatically and permanently reduced to zero;
provided, however, that the Administrative Agent shall set aside a
portion of the Net Cash Proceeds of such Disposition and shall make
available such Net Cash Proceeds to the Borrower from time to time for
payment of any amounts constituting part of the Carve-Out and any
amounts constituting Approved Administration Expenses, in each case
subject to the terms of the Financing Order.
(iii) [Intentionally omitted].
(iv) The Borrower shall, on each date the DIP Revolving Credit
Commitments are reduced pursuant to Section 1.12 hereof, prepay the DIP
Revolving Loans by the amount, if any, necessary to reduce the sum of
the aggregate principal amount of DIP Revolving Loans then outstanding
to the amount to which the DIP Revolving Credit Commitments have been
so reduced.
(v) If at any time on or after the Petition Date the sum of
the unpaid principal balance of the Revolving Loans (including DIP
Revolving Loans) and L/C Obligations then outstanding shall be in
excess of the sum of the Borrowing Base as then determined and computed
in accordance with Section 1.1 hereof (and as reduced by any reserves
taken pursuant to Section 1.1 hereof) plus the DIP Overadvance Amount
then in effect plus, in the Administrative Agent's sole discretion, any
Permitted Overadvances then in effect, the Borrower shall immediately
and without notice or demand pay over the full amount of such excess
(together with any accrued interest and fees with respect thereto) to
the Administrative Agent for the ratable account of the DIP Lenders as
and for a mandatory prepayment of the Obligations, with each such
prepayment to be applied in the manner required pursuant to Section 3.1
hereof.
(vi) [Intentionally omitted].
J. Section 2.1 of the Pre-Petition Credit Agreement is hereby
amended by adding as new subsections (e) and (f) thereof the following:
"(e) DIP Commitment Fee. Borrower agrees to pay to the
Administrative Agent, for the benefit of the Administrative Agent and
the DIP Lenders in accordance with their respective Revolver
Percentages for DIP Revolving Loans, a fee in an aggregate amount equal
to $250,000 (the "DIP Commitment Fee"), which fee shall be fully earned
on, and paid in immediately available funds on, the Assumption
Agreement Effectiveness Date.
(f) DIP Administration Fee. The Borrower agrees to pay to the
Administrative Agent for its own account an administration fee of
$50,000 (the "DIP Agency Fee"), which administration fee shall be fully
earned on, and paid in immediately available funds on, the Assumption
Agreement Effectiveness Date."
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K. Section 3.1 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating subsections (b) and (c) thereof in their
entirety as follows:
"(b) Application of Collateral Proceeds. Notwithstanding any
provision to the contrary in this Agreement or any other Loan
Documents, except to the extent otherwise provided in the Financing
Order, all Collateral proceeds or other payments received for
application to any Obligations (whether received in the normal course,
from mandatory prepayments, from the exercise of default-related rights
and remedies or otherwise) shall (subject to set asides or other
provision for payment of the Carve-Out and Approved Administration
Expenses to the extent permitted under the Financing Order) be
distributed as follows (as among the Administrative Agent and the
Lenders, regardless of the allowability of any portion of such
Obligations) unless otherwise determined by Administrative Agent and
Required Lenders in their sole discretion: first, to the Administrative
Agent for payment of any pre-petition and post-petition fees
(including, without limitation, the DIP Agency Fee), expenses, costs
(including, without limitation, the pre-petition and post-petition fees
and expenses of Latham & Watkins LLP and Giuliani Capital Advisors),
indemnities and other amounts as to which Administrative Agent is
entitled to be reimbursed or indemnified by any or all of the Borrower,
any other Designated Company and/or the Lenders pursuant to the Loan
Documents or the Financing Order; second, to the DIP Lenders for
payment of the DIP Commitment Fee pro rata based on their respective
Revolver Percentages for DIP Revolving Loans; third, to the
Administrative Agent for payment or reimbursement of all Obligations in
respect of all pre-Petition Date Letters of Credit then due and
payable; fourth, to the Pre-Petition Lenders for payment of interest in
respect of the Pre-Petition Indebtedness pro rata based on their
respective Revolver Percentages under the Pre-Petition Revolving Credit
Commitments; fifth, to the Pre-Petition Lenders or Administrative
Agent, as the case may be, for payment of the outstanding principal
balance of the Pre-Petition Indebtedness and cash collateralization of
any Obligations in respect of any pre-Petition Date Letters of Credit
that are not then due and payable, in the case of principal payments,
pro rata based on the respective Revolver Percentages of the
Pre-Petition Lenders under the Pre-Petition Revolving Credit
Commitments; sixth, to the Pre-Petition Lenders for payment of all
fees, expenses, costs, indemnities, and all other Pre-Petition
Indebtedness not addressed above, pro rata based on their respective
Revolver Percentages under the Pre-Petition Revolving Credit
Commitments; seventh, to the DIP Lenders for payment of interest in
respect of the DIP Indebtedness pro rata based on their respective
Revolver Percentages for DIP Revolving Loans; eighth, to the DIP
Lenders for payment of the outstanding principal balance of the DIP
Indebtedness pro rata based on the DIP Lenders' respective Revolver
Percentages for DIP Revolving Loans; ninth, to the DIP Lenders for
payment of all fees, expenses, costs, indemnities and all other DIP
Indebtedness not addressed above, pro rata based on their respective
Revolver Percentages for DIP Revolving Loans; and tenth, to the
Borrower or as otherwise required by law. Notwithstanding the
foregoing, to the extent the Bankruptcy Court fails to allow or
otherwise permit payment of all or any portion of the DIP Agency Fee
and the DIP Commitment Fee (collectively, the "Disallowed Fees"), then
(x) the first proceeds distributable on account of the Pre-Petition
Indebtedness equal to the aggregate amount of the Disallowed Fees shall
be remitted to the Administrative Agent and/or the DIP Lenders, as
applicable, on account of their respective Pre-Petition Indebtedness
(in the case of Administrative Agent, the Pre-Petition Indebtedness
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owing to Harris as Pre-Petition Lender) pro rata up to the respective
amounts of the Disallowed Fees to which they would otherwise have been
entitled had the Bankruptcy Court permitted and allowed such Disallowed
Fees in their entirety and (y) the balance of the proceeds
distributable on account of the Pre-Petition Indebtedness shall be
distributed pro rata to the Pre-Petition Lenders based on their
respective Revolver Percentages under the Pre-Petition Revolving Credit
Commitments determined as if the payments referenced in the immediately
preceding clause (x) had not been made.
(c) [Intentionally omitted]."
L. Section 4.1 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"Section 4.1 Collateral.
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Subject to the terms of the Financing Order (and except to the
extent otherwise provided in the Financing Order), the Obligations
shall be secured by valid, perfected and enforceable Liens on all
right, title and interest of the Borrower and each other Designated
Company in all real and personal property and fixtures of such Person,
including all accounts, chattel paper, instruments, documents, cash,
cash equivalents, general intangibles (including payment intangibles
and software, all patents, trademarks, copyrights and similar
intellectual property rights, and all application and registrations
therefor, and all tax refunds), letter-of-credit rights, supporting
obligations, deposit accounts, investment property, inventory,
equipment, fixtures, and commercial tort claims, whether now owned or
hereafter acquired or arising, and all proceeds thereof. The Borrower
acknowledges and agrees that the Administrative Agent's Liens on the
Collateral are for the benefit of Administrative Agent, L/C Issuer, the
Lenders and their respective Affiliates, and are valid and perfected
first priority Liens subject only to Liens permitted by Section 8.8
hereof, in each case pursuant to one or more Collateral Documents from
such Persons, each in form and substance satisfactory to the
Administrative Agent. Borrower hereby confirms that the security
interests granted hereunder and under the other Loan Documents extend
to all Collateral, whether arising or acquired prior to, on or after
the Petition Date and secure all Obligations, whether arising prior to,
on or after the Petition Date, including, without limitation, the DIP
Indebtedness.
Furthermore, subject to the terms of the Financing Order, to
further secure the payment and performance of the Obligations (whether
arising prior to, on or after the Petition Date), including all
renewals, extensions, restructurings and refinancings of any or all of
the Obligations, Borrower and each other Designated Company hereby
grants to Administrative Agent, for the benefit of Administrative
Agent, L/C Issuer and the Lenders, a continuing security interest, Lien
and mortgage in and to all of the respective right, title and interest
of such Designated Company, as pre-petition debtor and
debtor-in-possession, in all of the real and personal property of such
Designated Company (as pre-petition debtor and debtor-in-possession),
whether arising or acquired prior to, on or after the Petition Date and
regardless of where located, including, without limitation: (i) the
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Collateral referenced in this Section 4.1 and in Section 1 of the
Security Agreement to which such Designated Company is a party; (ii)
all causes of action and claims of such Designated Company's estate
against third parties, including, without limitation, claims of such
Designated Company as debtor-in-possession under the Bankruptcy Code
and all proceeds of avoidance claims of such Designated Company under
sections 544, 545, 547, 548, 551 or 553 of the Bankruptcy Code (such
avoidance claims of all Designated Companies, collectively, "Avoidance
Actions"); (iii) all other assets of such Designated Company, whether
real, personal, tangible or intangible or mixed, now existing or
hereafter acquired, created, built or otherwise coming into being
together with all improvements thereon (including, without limitation,
all of each such Designated Company's leasehold interests, rights of
tenancy or other rights to occupy the premises occupied or controlled
by such Designated Company); and (iv) all additions and accessions to,
substitutions for, and replacements, rents, profits, products and
proceeds of any of the foregoing, including, without limitation, the
proceeds of any insurance policies covering any of the above-described
property. Subject to the terms of the Financing Order (including,
without limitation, the set asides or other provision for payment of
amounts constituting part of the Carve-Out and Approved Administration
Expenses), that portion of the Obligations equal to the sum of the DIP
Indebtedness plus the Collateral Value Reduction Amount shall have the
highest administrative priority under section 364(c)(1) of the
Bankruptcy Code, and shall have priority over all other costs and
expenses of administration of any kind, including those specified in,
or ordered pursuant to, sections 105, 326, 328, 330, 331, 503(b),
506(c), 507(a), 507(b), 546(c), 726, 1114 or any other provision of the
Bankruptcy Code or otherwise (whether incurred in any Bankruptcy Case,
any conversion of any Bankruptcy Case pursuant to section 1112 of the
Bankruptcy Code, or in any other proceedings related thereto), and
shall at all times be senior to the rights of the Borrower, each other
Designated Company and each other Foreign Debtor, any successor trustee
or estate representative in their respective Bankruptcy Cases or any
subsequent case or proceeding under the Bankruptcy Code, and shall have
the highest administrative priority under section 364(c)(1) of the
Bankruptcy Code."
M. Section 4.2 of the Pre-Petition Credit Agreement is hereby
amended by adding the following new sentence to the conclusion thereof:
"Notwithstanding anything in this Agreement or any other Loan
Document to the contrary, Administrative Agent shall have the right to
transfer, on a daily basis, all collected and available balances in the
Designated Companies' deposit accounts (other than (i) accounts
containing solely employee-related trust funds and (ii) "petty cash"
accounts of Designated Companies other than the Borrower; provided that
the aggregate balances in all such petty cash accounts shall at no time
exceed $25,000), including, without limitation, the Concentration
Accounts, to an account in the name of Administrative Agent for
application to the Obligations in accordance with Section 1.9(b)(ii)
hereof or Section 3.1 hereof, as applicable."
N. Section 5.1 of the Pre-Petition Credit Agreement is hereby
amended by adding, or amending and restating, as applicable, the following
defined terms as follows:
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"AASI Canada" means All American Semiconductor of Canada, Inc.
"Agreement" means that certain Credit Agreement, dated as of May 14,
2003, by and among Borrower, Administrative Agent, Co-Administrative
Agent and the Lenders, as amended, restated, supplemented or otherwise
modified from time to time prior to the Petition Date, and as further
amended by the Assumption Agreement, and as the foregoing may
thereafter be further amended, restated, supplemented or otherwise
modified from time to time, including, without limitation, pursuant to
the Interim Financing Order, the Final Financing Order or any other
order of the Bankruptcy Court to which the Administrative Agent and
Required Lenders have consented in writing in their sole discretion.
"Assumption Agreement" means that certain Assumption Agreement
and Seventh Amendment to Credit Agreement and Other Loan Documents,
dated as of April 25, 2007, by and among the Borrower, the other
Designated Companies, Administrative Agent, Co-Administrative Agent and
Lenders.
"Assumption Agreement Effectiveness Date" shall have the
meaning ascribed to such term in Section 5 of the Assumption Agreement.
"Collateral" means any and all properties, rights, interests
and privileges from time to time subject to the Liens granted to the
Administrative Agent, for the ratable benefit of Administrative Agent,
the L/C Issuer and the Lenders, or any security trustee therefor,
pursuant to the Collateral Documents, the Interim Financing Order or
the Final Financing Order, in each case, whether such property, right,
interest or privilege is acquired by the Borrower or any other
Designated Company, as the case may be, on or after the Petition Date.
The term "Collateral" shall include all Pre-Petition Collateral and all
DIP Collateral, as those terms are defined in the Financing Order.
"Credit Event" means the advancing of any Revolving Loan
(including, without limitation, any DIP Revolving Loan), the
continuation of or conversion into a Eurodollar Loan, or the issuance
of, or extension of the expiration date or increase in the amount of,
any Letter of Credit, in each case whether made or done prior to, on or
after the Petition Date.
"DIP Lenders" shall mean those Lenders with DIP Revolving
Credit Commitments.
"DIP Overadvance Amount" means, at any time during each week
reflected in the Approved Budget, the amount listed in the "DIP
Overadvance Amount" line item of the Approved Budget for such week, as
the same may be increased solely to the extent expressly provided
herein and in the Financing Order.
"DIP Revolving Credit Commitments" shall mean the obligations
of the DIP Lenders to make DIP Revolving Loans to or for the account of
Borrower hereunder from and after the Petition Date in accordance with
their respective Revolver Percentages for DIP Revolving Loans in an
aggregate principal amount at any one time outstanding not to exceed
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the amount set forth opposite each DIP Lender's name on Schedule 1
attached to the Assumption Agreement.
"DIP Revolving Loans" shall mean all Revolving Loans made or
incurred on or after the Petition Date by any or all of the
Administrative Agent and the DIP Lenders to, or for the account of, the
Borrower.
"Existing Pre-Petition Defaults" shall mean all Events of
Default existing as of the Petition Date, including, without
limitation, all "Specified Defaults" under, and as defined in, the
Forbearance Agreements.
"Final Financing Order" shall mean an order of the Bankruptcy
Court entered in the Bankruptcy Cases after the Final Hearing (as
defined in the Interim Financing Order) pursuant to sections 363 and
364 of the Bankruptcy Code, inter alia, authorizing the Designated
Companies, as debtors-in-possession, to use cash collateral and
authorizing Borrower to incur secured indebtedness pursuant to this
Agreement and the other Loan Documents, which order shall be in form
and substance satisfactory to Administrative Agent and Required Lenders
in their sole discretion.
"Financing Order" shall mean the Interim Financing Order until
such time as the Final Financing Order shall have become effective,
upon which event, "Financing Order" shall mean the Final Financing
Order.
"Forbearance Agreements" mean, collectively, (i) that certain
Forbearance Agreement, dated as of March 29, 2007, by and among
Borrower, the other Designated Companies, Administrative Agent,
Co-Administrative Agent and the Lenders, and (ii) that certain Second
Forbearance Agreement, dated as of April 15, 2007, by and among
Borrower, the other Designated Companies, Administrative Agent,
Co-Administrative Agent and the Lenders, in each case, as may be
amended, restated or otherwise modified from time to time.
"Foreign Debtor" means AllAmMex Components, S. de R.L. de
C.V.; AGD Electronics Asia Pacific Co., Ltd.; and AGD Electronics
Limited, or any of them.
"Foreign Subsidiary" means a Subsidiary of Borrower or any
other Designated Company organized under the laws of any country (or
any political subdivision thereof) other than the United States of
America.
"Interim Financing Order" shall mean the order of the
Bankruptcy Court entered in the Bankruptcy Cases on April __, 2007,
pursuant to sections 363 and 364 of the Bankruptcy Code, inter alia,
authorizing the Designated Companies, as debtors-in-possession, to use
cash collateral and authorizing the Borrower to incur secured
indebtedness pursuant to this Agreement and the other Loan Documents,
and to enter into and/or assume the Assumption Agreement and the other
DIP Credit Documents, which order shall be in form and substance
satisfactory to Administrative Agent and Required Lenders in their sole
discretion.
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"Lenders" means and includes Harris N.A. and the other
financial institutions from time to time party to this Agreement,
including each assignee Lender pursuant to Section 12.12 hereof, in
their capacity as Pre-Petition Lenders in respect of the Pre-Petition
Credit Documents, the Pre-Petition Collateral and the Pre-Petition
Indebtedness, and in their capacity as DIP Lenders in respect of the
DIP Credit Documents, the DIP Indebtedness and the DIP Collateral.
"Loan Documents" means this Agreement, the Assumption
Agreement, the Interim Financing Order, the Final Financing Order, the
Revolving Notes, the Applications, the Collateral Documents, the
Guaranties, each other instrument or document executed and/or delivered
hereunder or thereunder or otherwise in connection therewith, as each
may be amended, supplemented or otherwise modified from time to time
(including, without limitation, by any of the DIP Credit Documents (as
defined in the Financing Order) or any order of the Bankruptcy Court to
which Administrative Agent and Required Lenders have consented in their
sole discretion). Without limiting the foregoing, the term "Loan
Documents" shall include all DIP Credit Documents.
"Loans" means any Revolving Loan (including, without
limitation, any DIP Revolving Loan), whether outstanding as a Base Rate
Loan or Eurodollar Loan, each of which is a "type" of Loan hereunder,
and whether made before, on or after the Petition Date.
"Net Cash Proceeds" means, as applicable, (a) with respect to
any Disposition by a Person, the aggregate amount of cash and cash
equivalent proceeds received by such Person or for such Person's
account (including, without limitation, any payments received for
non-competition covenants, consulting or management fees in connection
with such sale, and any portion of the amount received evidenced by a
promissory note or other evidence of indebtedness issued by the
purchaser), minus the sum of (i) the reasonable direct costs relating
to such Disposition, including, without limitation, customary sales
fees, commissions and other expenses and any allowed success fee owing
to Raymond James & Associates, Inc. under the terms of that certain
engagement letter with the Borrower, dated April 24, 2007 (as in effect
on the Assumption Agreement Effectiveness Date or as otherwise amended
with the prior written consent of Administrative Agent), (ii) income,
capital gains, sale, use or other transactional taxes paid or payable
by such Person at the time of such Disposition as a direct result of
such Disposition, (iii) the amounts required to be applied to repay
principal, interest and other fees and charges on indebtedness or other
obligations constituting a Prior Claim and secured by a Lien on the
asset which is the subject of such Disposition that is senior in
priority to the Administrative Agent's Liens on such asset, and (iv)
until actually received by, or payable to, such Person, any portion of
the amount received held in escrow or evidenced by a promissory note or
other evidence of indebtedness issued by a purchaser or non-compete,
consulting or management agreement or covenant or otherwise for which
compensation is paid over time; and (b) with respect to any Event of
Loss of a Person, cash and cash equivalent proceeds received by such
Person or for such Person's account (whether as a result of payments
made under any applicable insurance policy therefor or in connection
with condemnation proceedings or otherwise), minus the sum of (i) the
reasonable direct costs incurred in connection with the collection of
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such proceeds, awards or other payments, (ii) income or capital gains
taxes paid or payable by such Person at the time of receipt of such
insurance proceeds as a direct result of such Event of Loss, and (iii)
any amounts retained by or paid to parties having rights to such
proceeds, awards or other payments that are superior to the rights of
the Administrative Agent and Lenders to such proceeds, awards or other
payments.
"Obligations" means all obligations of the Borrower to pay
principal and interest on the Loans, all Reimbursement Obligations
owing under the Applications, all fees and charges payable hereunder,
and all other payment obligations of the Borrower or any other
Designated Company arising under or in relation to any Loan Document
(including, without limitation, any interest, fees and other charges on
the Loans or otherwise under the Loan Documents that would accrue but
for the filing of the Bankruptcy Cases or any other insolvency
proceeding with respect to the Borrower or any other Designated
Company, whether or not a claim for such amounts is allowed in such
Bankruptcy Cases or any other insolvency proceeding and including
Obligations to the Administrative Agent and Lenders pursuant to
Sections 9.5 and 12.15 hereof), all obligations of the Borrower or any
other Designated Company in respect of Hedging Liabilities and all
obligations of the Borrower or any other Designated Company in respect
of Funds Transfer and Deposit Account Liability, in each case whether
now existing or hereafter arising, due or to become due, direct or
indirect, absolute or contingent, liquidated or unliquidated, arising
by operation of law or otherwise, and howsoever evidenced, held or
acquired, whether arising or incurred before, on or after the Petition
Date. Without limiting the generality of the foregoing, the term
"Obligations" shall include all Pre-Petition Indebtedness and all DIP
Indebtedness as those terms are defined in the Financing Order. The
allowability of the Obligations constituting Pre-Petition Indebtedness
shall be subject to the terms of the Financing Order and any other
applicable order of the Bankruptcy Court, and all references to
"Obligations" herein shall be deemed to exclude any portion of the
Obligations, if any, that are disallowed by final order of the
Bankruptcy Court, and in such case, only from and after such
disallowance order becomes final.
"Permitted Overadvance" means an amount approved in the sole
discretion of the Administrative Agent not to exceed $500,000 at any
one time outstanding by which the outstanding principal balance of
Revolving Loans and L/C Obligations hereof knowingly exceeds the sum of
the Borrowing Base as then determined and computed in accordance with
Section 1.1 hereof (as reduced by any reserves taken pursuant to
Section 1.1 hereof) plus the DIP Overadvance Amount; provided, however,
that (i) Permitted Overadvances shall be advanced only if, in
Administrative Agent's judgment, such Permitted Overadvances are
necessary or desirable to preserve or protect the Collateral, or any
portion thereof, or to enhance the likelihood of, or maximize the
amount of, repayment by the Borrower of the Obligations, and (ii)
Permitted Overadvances shall not knowingly be permitted to be
outstanding for a period exceeding three consecutive Business Days.
"Pre-Petition Revolving Credit Commitments" shall mean the
Revolving Credit Commitments to make Revolving Loans, as in effect
immediately prior to the Petition Date.
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"Pre-Petition Lenders" shall mean those Lenders with Revolving
Credit Commitments to make Revolving Loans immediately prior to the
Petition Date.
"Revolver Percentage" means: (i) so long as there are any
Revolving Loans (including, without limitation, DIP Revolving Loans) or
Revolving Credit Commitments (including, without limitation, DIP
Revolving Credit Commitments) outstanding, the percentage of the
Revolving Credit Commitments represented by such Lender's Revolving
Credit Commitment, which in the case of the DIP Revolving Credit
Commitments of the DIP Lenders are as set forth in Schedule 1 attached
to the Assumption Agreement; or (ii) at all other times after the
indefeasible payment in full of the Loans (including all DIP Revolving
Loans) and the termination in full of the Revolving Credit Commitments
(including the DIP Revolving Credit Commitments), the percentage held
by such Lender (including through participation interests in
Reimbursement Obligations) of the aggregate principal amount of all
Loans and L/C Obligations then outstanding.
"Revolving Credit" means the credit facility for making
Revolving Loans (including, without limitation, DIP Revolving Loans)
and issuing Letters of Credit described in Sections 1.1 and 1.3 hereof.
"Revolving Loan" is defined in Section 1.1 hereof whether made
before, on or after the Petition Date (including, without limitation,
DIP Revolving Loans), and as so defined, includes a Base Rate Loan or a
Eurodollar Loan, each of which (as so defined) is a "type" of Revolving
Loan hereunder.
"Termination Date" means the occurrence of the Loan Payment
Date, as such term is defined in the Financing Order, or such earlier
date on which the Revolving Credit Commitments are terminated in
accordance with the terms of this Agreement (subject to the provisions
of the Financing Order with respect to funding of Approved
Administration Expenses); provided, that the Obligations outstanding as
of the commencement of the Bankruptcy Cases shall be deemed to have
been automatically accelerated pursuant to this Agreement (provided
that, notwithstanding such acceleration, such Obligations shall be due
and payable as provided in this Agreement and the Financing Order) and
the Pre-Petition Revolving Credit Commitments outstanding as of the
commencement of the Bankruptcy Cases shall have been automatically
terminated pursuant to this Agreement.
O. The definition of "Applicable Margin" in Section 5.1 of the
Pre-Petition Credit Agreement is hereby amended by adding the following sentence
at the end of such definition:
"Notwithstanding the foregoing and notwithstanding any
provision to the contrary in Section 1.4 hereof or any other provision
of this Agreement, at any time on or after the Petition Date, the
Applicable Margin with respect to all DIP Revolving Loans and other
Obligations incurred or advanced on or after the Petition Date shall
equal three percent (3%)."
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P. The definition of "Eligible Inventory" in Section 5.1 of the
Pre-Petition Credit Agreement is hereby amended by replacing subparagraph (m)
thereof with the following:
"(m) it is not "in-transit" Inventory, and
(n) it is otherwise deemed to be Eligible Inventory in
the reasonable judgment of the Administrative Agent."
Q. The definition of "Required Lenders" in Section 5.1 of the
Pre-Petition Credit Agreement is hereby amended by adding the following sentence
at the end of such definition:
"Notwithstanding the foregoing, at any time on or after the
Petition Date, the term "Required Lenders" shall mean the DIP Lenders
the total of whose (i) DIP Revolving Credit Commitments, plus (ii)
outstanding Loans and interests in Letters of Credit as of the Petition
Date, exceeds 50% of the sum of (x) the total DIP Revolving Credit
Commitments of all DIP Lenders, plus (y) all outstanding Loans and
interests in Letters of Credit of all Lenders as of the Petition Date."
R. The definition of "Revolving Credit Commitment" in Section 5.1
of the Pre-Petition Credit Agreement is hereby amended by adding the following
sentence at the end of such definition:
"Notwithstanding the foregoing, upon the commencement of the
Bankruptcy Cases and at all times prior to the Assumption Agreement
Effectiveness Date, the Revolving Credit Commitment of each Lender
shall be deemed terminated, but from and after the Assumption Agreement
Effectiveness Date, the Revolving Credit Commitment of each Lender
shall mean such Lender's DIP Revolving Credit Commitment."
S. Section 6.4 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating the first sentence thereof in its entirety as
follows:
"From and after the Petition Date, the Borrower will use the
proceeds of the Loans and other Collateral proceeds solely to fund (i)
disbursements of the type and up to the amounts set forth in the
Approved Budget (after giving effect to any Permitted Budget
Variances), (ii) amounts constituting part of the Carve-Out and
Approved Administration Expenses, in each case to the extent provided
in the Financing Order, and (iii) repayment of any part of the
Obligations."
T. Section 6.6 of the Pre-Petition Credit Agreement is hereby
amended by replacing the reference to "December 31, 2002" set forth therein with
a reference to "the Petition Date."
U. Section 6.14 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"Section 6.14 Affiliate Transactions.
----------------------
Except as set forth in Section 8.15 hereof, no Designated
Company is a party to any contract or agreement with any of its
Affiliates except on terms and conditions which are no less favorable
14
to such Designated Company than would be usual and customary in similar
contracts or agreements between Persons not affiliated with each
other."
V. Article 6 of the Pre-Petition Credit Agreement is hereby
further amended by adding as new subsections 6.26, 6.27 and 6.28 thereof the
following:
Section 6.26 Administrative Priority; Lien Priority.
--------------------------------------
(a) From and after the entry of the Financing Order, and
subject to the provisions thereof, the Obligations will constitute
allowed administrative expenses in the Bankruptcy Cases having priority
in payment over all other administrative expenses and unsecured claims
against the Borrower and the other Designated Companies now existing or
hereafter arising, of any kind or nature whatsoever (subject to the set
asides or other provision for payment of amounts constituting part of
the Carve-Out and amounts constituting Approved Administration
Expenses), including, without limitation, all administrative expenses
of the kind specified in, or arising or ordered under, sections 105,
326, 328, 330, 331, 503(b), 506(c), 507, 546(c), 726, 1114 or any other
provision of the Bankruptcy Code, subject, as to priority, only to
Prior Claims.
(b) From and after the entry of the Financing Order, and
subject to the terms thereof, the Liens of the Administrative Agent on
the Collateral shall be a valid and perfected first priority Liens,
subject only to the Liens permitted under Section 8.8 hereof.
(c) From and after the entry of the Financing Order, such
Financing Order is in full force and effect, and has not been reversed,
modified, amended, stayed, vacated or subject to appeal absent the
written consent of the Administrative Agent, the Required Lenders and
the Borrower.
Section 6.27 Appointment of Trustee or Examiner.
----------------------------------
No order has been entered in any Bankruptcy Case (i) for the
appointment of a chapter 11 trustee, (ii) for the appointment of an
examiner with enlarged powers (beyond those set forth in sections
1106(a)(3) and (4) of the Bankruptcy Code) under section 1106(b) of the
Bankruptcy Code or (iii) to convert any Bankruptcy Case to a chapter 7
case or to dismiss any Bankruptcy Case (other than any Bankruptcy Case
of any Foreign Debtor).
Section 6.28 Foreign Debtors.
---------------
With respect to any and all Receivables invoiced on letterhead
of any Foreign Debtor and/or paid by the applicable account debtor to
the order of such Foreign Debtor: (i) all such Receivables were and are
generated from the sale by such Foreign Debtor of Inventory acquired by
such Foreign Debtor from the Borrower, (ii) the Borrower was and is the
sole source of Inventory for such Foreign Subsidiary, (iii) all such
Receivables were and are included in the calculation of the Borrowing
Base, (iv) to reimburse the Borrower for such Inventory provided to
such Foreign Subsidiary, all payments on such Receivables by the
respective account debtors were made directly to Borrower's collections
15
lock box maintained at the Administration Agent, (v) all such
Receivables payments were and are transferred from such lock box
directly into the Concentration Account, (vi) all collection efforts on
such Receivables were and are performed by Borrower, and (vii) Borrower
is the sole provider of cash and other working capital to such Foreign
Subsidiary. The aggregate book value of all Inventory owned, controlled
or otherwise possessed (including, without limitation, on a consignment
basis) by the Foreign Debtors is less than $400,000."
W. Section 7.1 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"Section 7.1 All Credit Events.
-----------------
At the time of each Credit Event hereunder:
(a) each of the representations and warranties set forth
herein and in the other Loan Documents, which, in accordance with
Section 12.5 hereof, are made at and as of the time of such Credit
Event, shall be and remain true and correct in all material respects as
of said time, both before and after giving effect to such Credit Event,
except to the extent the same (i) expressly relate to an earlier date
or (ii) are not true and correct solely by virtue of the occurrence or
continuance of an Existing Pre-Petition Default or the event or
condition that gave rise to same;
(b) except for the Existing Pre-Petition Defaults, the
Designated Companies shall be in compliance in all material respects
with all of the terms and conditions hereof and of the other Loan
Documents, and no Default or Event of Default shall have occurred and
be continuing or would occur as a result of such Credit Event;
provided, however, that the Lenders (or the Administrative Agent, in
the case of Revolving Loans made pursuant to Section 3.2(e) hereof), in
their sole discretion, may continue to make advances with respect to a
Credit Event notwithstanding the existence of any Default or Event of
Default and any such advances so made shall not be deemed a waiver of
any such Default or Event of Default;
(c) in the case of any Borrowing request under the
Revolving Credit, after giving effect to such Borrowing, (i) the
aggregate outstanding principal amount of all Revolving Loans
(including DIP Revolving Loans) and outstanding L/C Obligations shall
not exceed the sum of the Borrowing Base as then determined and
computed in accordance with Section 1.1 hereof (as reduced by any
reserves taken pursuant to Section 1.1 hereof) plus the DIP Overadvance
Amount then in effect plus, in the Administrative Agent's sole
discretion, any Permitted Overadvances then in effect, and (ii) the
aggregate principal amount of all DIP Revolving Loans then outstanding
shall not exceed the sum of all DIP Revolving Credit Commitments then
in effect;
(d) in the case of a Borrowing, the Administrative Agent
shall have received the notice required by Section 1.6 hereof, and in
the case of the issuance of any Letter of Credit, the L/C Issuer shall
have received a duly completed Application for such Letter of Credit
together with any fees called for by Section 2.1 hereof, and, in the
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case of an extension or increase in the amount of a Letter of Credit, a
written request therefor in a form reasonably acceptable to the L/C
Issuer together with fees called for by Section 2.1 hereof;
(e) since the Petition Date, there shall have occurred no
Material Adverse Effect and no event which may be expected to have a
Material Adverse Effect; and
(f) such Credit Event shall not violate any order,
judgment or decree of the Bankruptcy Court or any other court or other
governmental authority, including, without limitation, the Financing
Order, or any provision of law or regulation applicable to the
Administrative Agent, L/C Issuer or any Lender (including, without
limitation, Regulation U of the Board of Governors of the Federal
Reserve System) as then in effect.
Each request for a Borrowing hereunder and each request for
the issuance of, increase in the amount of, or extension of the
expiration date of, a Letter of Credit hereunder, shall be deemed to be
a representation and warranty by the Borrower and each other Designated
Company on the date of such Credit Event as to the facts specified in
subsections (a) through (f), inclusive, of this Section."
X. Section 8.5(a) of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"(a) as soon as available, and in any event no later than
the close of business on each Business Day, a consolidated Borrowing
Base Certificate in the form attached hereto as Exhibit C showing the
computation of the Borrowing Base (calculated in accordance with
Section 1.1 hereof) in reasonable detail as of the close of business on
the immediately preceding Business Day, together with such other
information as is therein required, in each case prepared by the
Borrower and certified to by the Borrower's chief financial officer or
such other officer of the Borrower reasonably acceptable to the
Administrative Agent;"
Y. Section 8.5 of Pre-Petition Credit Agreement is hereby amended
by amending and restating subsection (b) thereof in its entirety as follows:
"(b) as soon as available, and in any event within 20 days
after the last day of each calendar month, a consolidated Receivables
and accounts payable aging and a consolidated Inventory stock status
report (by major category of Inventory and by location of the relevant
Inventory) and an aging of Franchise Inventory for the Designated
Companies (separately listing the aggregate value of Franchise
Inventory that is aged (i) less than or equal to 18 months from the
date of last receipt, (ii) more than 18 months, but less than or equal
to 36 months from the date of last receipt, and (iii) more than 36
months from the date of last receipt), each in form and scope
reasonably satisfactory to the Administrative Agent and prepared by the
Borrower and certified to by its chief financial officer or another
officer of the Borrower reasonably acceptable to the Administrative
Agent; provided, however, that for each calendar month ending on or
after the Petition Date, the Borrower shall furnish such consolidated
17
Receivables and accounts payable aging reports on a weekly basis as
soon as available, and in any event within seven days following the end
of each week;"
Z. Section 8.6 of the Pre-Petition Credit Agreement is hereby
amended by adding the following paragraph at the end of such Section:
"Without limiting any of the foregoing, from and after the
Petition Date, Borrower hereby agrees to, and shall cause each other
Designated Company to: (i) give Administrative Agent and its
Representatives (defined below) access to the offices, properties,
officers, employees, accountants, auditors, counsel and other
representatives, books and records of Borrower and the other Designated
Companies, (ii) furnish to Administrative Agent and its Representatives
such financial, operating, property and sale related data and other
information as such Persons shall reasonably request, and (iii)
instruct Borrower's and any other Designated Company's employees,
accountants, auditors, counsel, financial advisors (including, without
limitation, Raymond James & Associates, Inc., RAS Management Advisors,
Inc. and any other advisor retained by, or on behalf of, any Designated
Company) and other representatives to fully cooperate with, and upon
request regularly consult with, Administrative Agent and its
Representatives in respect of the immediately preceding clauses (i) and
(ii)), but in each case subject to the attorney-client and/or attorney
work product privileges. For purposes of this Agreement, the term
"Representatives" shall mean Administrative Agent's employees, agents,
representatives, advisors, appraisal/liquidator firms and consultants,
and any financial advisor, appraisal/liquidator firm and other
consultant retained by Administrative Agent's counsel to assist in the
representation of Administrative Agent (including, without limitation,
Giuliani Capital Advisors and its members, employees and other
representatives)."
AA. Section 8.7 of the Pre-Petition Credit Agreement is hereby
amended by adding the following sentence to the end of such Section:
"Notwithstanding any provision to the contrary set forth in
this Agreement, the exceptions set forth in subsections 8.7(b), (d),
(f), (g), (h), (k), (l) and (m) hereof shall not apply to any
Indebtedness for Borrowed Money or any other indebtedness or obligation
of the Borrower or any other Designated Company incurred on or after
the Petition Date."
BB. Section 8.7 of the Pre-Petition Credit Agreement is hereby
further amended by amending and restating the last paragraph of such Section in
its entirety as follows:
"Notwithstanding the foregoing, no Designated Company other
than the Borrower shall incur, create, assume, become or be liable in
any manner with respect to, or permit to exist, any obligations or
indebtedness (including without limitation trade payables and
accounts), including all types of indebtedness and obligations
otherwise permitted under this Section 8.7, except intercompany
indebtedness owing to the Borrower to the extent permitted under the
Financing Order."
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CC. Section 8.8 of the Pre-Petition Credit Agreement is hereby
amended by adding the following sentence to the end of such Section:
"Notwithstanding any provision to the contrary set forth in
this Agreement, the exceptions set forth in subsections 8.8(d), (e),
(h) and (i) hereof shall not apply to any Lien granted or otherwise
arising on or after the Petition Date."
DD. Section 8.8 of the Pre-Petition Credit Agreement is hereby
further amended by amending and restating subsection (j) thereof as follows, and
adding as a new subsection (k) thereof, the following:
"(j) the Liens granted in favor of the Administrative
Agent to secure the Obligations pursuant to the Collateral Documents
and the Financing Order; and
(k) set asides or other provision for payment of amounts
constituting part of the Carve-Out and amounts constituting Approved
Administration Expenses, in each case, to the extent permitted under
the Financing Order."
EE. Section 8.9 of the Pre-Petition Credit Agreement is hereby
amended by adding the following sentence to the end of such Section:
"Notwithstanding any provision to the contrary set forth in
this Agreement, the exceptions set forth in subsections 8.9(b)-(e), (f)
(solely as it relates to investments, loans, acquisitions and advances
to any Foreign Debtor), (g) - (j), (l), (n) and (o) hereof shall not
apply to any investments, loans, advances or acquisitions made on or
after the Petition Date."
FF. Section 8.10 of the Pre-Petition Credit Agreement is hereby
amended by adding the following sentence to the end of such Section:
"Notwithstanding any provision to the contrary set forth in
this Agreement, the exceptions set forth in subsections 8.10(a) (solely
as it relates to any lease, but not sale, of Inventory in the ordinary
course of business), (c) and (d) hereof (and the corresponding
obligation of Administrative Agent to release its Liens on the subject
Property set forth in the last sentence of Section 8.10 hereof) shall
not apply to any merger, consolidation, sale, transfer, lease or other
disposal of Property on or after the Petition Date."
GG. Section 8.12 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"No Designated Company shall (a) declare or pay any dividends
on or make any other distributions in respect of any class or series of
its capital stock or other equity interests (including, without
limitation, any payments in respect of stock appreciation rights and
common stock equivalents), (b) directly or indirectly purchase, redeem,
or otherwise acquire or retire any of its capital stock or other equity
interests or any warrants or options to acquire the same, other than
the retirement of the stock by a Designated Company (other than the
Borrower) in connection with its liquidation and dissolution or other
termination to the extent permitted by or consistent with Section 8.1
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in a cashless transaction, or (c) pay consulting, management, or other
similar fees to their Affiliates (collectively, "Restricted Payments");
provided, however, that the foregoing shall not operate to prevent the
making of dividends or distributions by any Subsidiary of a Designated
Company to such Designated Company."
HH. Section 8.15 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"No Designated Company shall enter into any contract,
agreement or business arrangement with any of its Affiliates on terms
and conditions which are less favorable to such Designated Company than
would be usual and customary in similar contracts, agreements or
business arrangements between Persons not affiliated with each other,
or pay any consulting, management or similar fees to any officer,
stockholder, director or Affiliate of any Designated Company, except
that (i) the Borrower or any other Designated Company may transfer
Inventory at cost to any other Designated Company at the time of
shipment thereof to a customer of such Designated Company; and (ii)
subject to the terms of this Agreement and the Financing Order, the
Borrower may transfer Inventory at "cost plus" to any Foreign Debtor in
the ordinary course of its business consistent with its recent past
practice."
II. Section 8.17 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"Except for Subsidiaries existing on the Assumption Agreement
Effectiveness Date, no Designated Company shall form or acquire any
other Subsidiary."
JJ. Section 8.21 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"No Designated Company shall incur, or increase the amount of,
any Subordinated Debt from and after the Petition Date."
KK. Section 8.22 of the Pre-Petition Credit Agreement is hereby
amended by making the financial covenants set forth in subsections (a) - (f) and
(h) thereof inapplicable to any time period beginning on or after the Petition
Date.
LL. Section 8.25 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"Section 8.25 Inventory Purchases.
-------------------
From and after the Petition Date, (i) no Designated Company
(other than the Borrower) shall, or shall permit any Foreign Debtor to,
at any time purchase or otherwise acquire any Inventory from any Person
(other than from Borrower to the extent permitted under Section 8.15
hereof); and (ii) Borrower shall not at any time purchase or otherwise
acquire any Inventory from any Person except in accordance with the
terms of this Agreement and the Financing Order."
20
MM. Section 8.28 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"The Borrower irrevocably agrees and consents to
Administrative Agent engaging (and thereafter continuing to retain) at
the expense of the Borrower, one or more appraisal/liquidation firms
satisfactory to the Administrative Agent, to promptly prepare and
deliver a written appraisal/liquidation proposal of all or any portion
of the Collateral based on assumptions and standards reasonably
acceptable to the Administrative Agent; provided, however, that the
aggregate amount of all such expenses in excess of the aggregate
amounts budgeted for Administrative Agent expenses in the Approved
Budget and the Approved Administration Expenses shall be immediately
due and payable on the Termination Date (immediately prior to the
termination of the DIP Revolving Credit Commitments) (and, for the
avoidance of doubt, all such fees and reimbursable expenses shall
constitute Obligations and, as the case may be, Pre-Petition
Indebtedness or DIP Indebtedness, and shall otherwise be subject to the
terms and conditions of the Loan Documents and the Financing Order).
The rights provided to the Administrative Agent in this Section 8.28
shall be in addition to all other rights and remedies available to the
Administrative Agent and the Lenders under the Loan Documents and
applicable law."
NN. Section 8 of the Pre-Petition Credit Agreement is hereby
further amended by adding as a new subsection 8.29 thereof the following:
"Section 8.29 Sale Process Covenants. Subject to the
provisions of subsection 8.29(m) below, the Borrower shall, and shall
cause each other Designated Company and Foreign Debtor to, sell on or
before June 8, 2007, pursuant to section 363 and/or other applicable
provisions of the Bankruptcy Code and other applicable laws, all or a
substantial portion of their respective assets and Property to the
Successful Bidder pursuant to the terms of the Successful Bidder
Purchase Agreement (as each such term is defined below) in accordance
with bidding and auction procedures acceptable to Administrative Agent
and Required Lenders and approved by the Bankruptcy Court (the "Section
363 Sale"). Without limiting the generality of the foregoing:
(a) at all times through the consummation of a Section
363 Sale, Borrower shall continue to retain (and take all actions
necessary in the Bankruptcy Cases to retain) Raymond James &
Associates, Inc. or another investment banking firm proposed by the
Borrower and acceptable to the Administrative Agent (the "Investment
Bank"), in either case on terms and conditions acceptable to
Administrative Agent (it being understood and agreed that the retention
of Raymond James & Associates, Inc. pursuant to that certain engagement
letter with the Borrower, dated April 24, 2007 (as in effect on the
Assumption Agreement Effectiveness Date or as subsequently amended with
the prior written consent of Administrative Agent), is deemed
acceptable to the Administrative Agent), to assist and advise the
Borrower and other Designated Companies regarding all aspects of the
sale process;
(b) on the Petition Date, the Debtors shall file a motion
pursuant to section 363 and other applicable provisions of the
Bankruptcy Code, in form and substance satisfactory to the
Administrative Agent and the Required Lenders, seeking Bankruptcy Court
21
approval of the Section 363 Sale, and of auction and bidding procedures
with respect to the Section 363 Sale (the "Bidding Procedures") that
are satisfactory to Administrative Agent and Required Lenders (the
"Sale Motion");
(c) on or prior to the Petition Date, the Debtors shall
have prepared and delivered to the Administrative Agent a form of
definitive purchase agreement with respect to the Section 363 Sale that
is in form and substance satisfactory to the Administrative Agent and
Required Lenders (the "Form Purchase Agreement");
(d) on or prior to May 1, 2007, the Bankruptcy Court
shall have entered an order, in form and substance satisfactory to the
Administrative Agent and the Required Lenders, approving the Bidding
Procedures (the "Bidding Procedures Order");
(e) within one Business Day following entry of the
Bidding Procedures Order, the Debtors shall deliver to all known
prospective purchasers copies of the Bidding Procedures Order and the
Form Purchase Agreement to be marked up and returned to the Debtors as
part of any Qualifying Bid (as defined below);
(f) the Debtors shall establish (and the Bidding
Procedures Order shall provide) May 28, 2007 as the deadline for
prospective purchasers to (i) complete all due diligence and (ii)
submit a definitive purchase agreement and any related purchase
documents setting forth all of the terms and conditions of a legally
binding bid for the purchase of all or a substantial portion of the
Debtors' assets, together with redlined copies of such definitive
purchase documents marked against the applicable Form Purchase
Agreement (each, a "Qualified Bid");
(g) on or prior to May 30, 2007, the Debtors shall have
completed negotiations with the prospective purchasers that submitted
Qualified Bids (each, a "Qualified Bidder") with respect to the terms
and conditions of such Qualified Bids and shall have selected a
Qualified Bid acceptable to the Administrative Agent and Required
Lenders in their sole discretion (unless, in Administrative Agent's
judgment, it provides for the payment of all Obligations in full in
cash in accordance with the terms of this Agreement) to become the
"stalking horse bid" and/or opening bid at the auction pursuant to the
terms of the Bidding Procedures Order (the "Opening Bid"); provided,
that no Designated Company shall seek authority from the Bankruptcy
Court to provide such bidder any bid protections (including, without
limitation, any expense reimbursement or break-up fee) without the
prior written consent of Administrative Agent and Required Lenders;
(h) on or prior to June 1, 2007, the Debtors shall have
(i) conducted and concluded an auction with respect to the sale of the
Debtors' assets in accordance with the terms of the Bidding Procedures
Order, and (ii) selected a Qualified Bid received at such auction as
the highest or otherwise best offer to purchase all or a substantial
portion of the Debtor's assets, which Qualified Bid shall be acceptable
to Administrative Agent and Required Lenders in their sole discretion
unless, in Administrative Agent's judgment, it provides for the payment
of all Obligations in full in cash in accordance with the terms of this
Agreement (such Qualified Bid, as reflected in the tendered purchase
22
agreement, the "Successful Bidder Purchase Agreement," and the Person
making such Qualified Bid, the "Successful Bidder");
(i) on or prior to June 5, 2007, the Bankruptcy Court
shall have held a final hearing on the Sale Motion (the "Sale Hearing")
and entered an order, in form and substance satisfactory to the
Administrative Agent and the Required Lenders, granting the Sale Motion
and authorizing and approving the transactions contemplated by the
Successful Bidder Purchase Agreement (the "Sale Order");
(j) on or prior to June 8, 2007, the Debtors shall have
consummated the transactions contemplated by the Successful Bidder
Purchase Agreement in accordance with the terms thereof and of the Sale
Order;
(k) the Debtors (i) shall cause the Successful Bidder
Purchase Agreement to remain in full force and effect in all respects
at all times until the consummation of the transactions contemplated
thereby (without any amendments or other modifications thereto as to
which the Administrative Agent acting at the direction of the Required
Lenders has not given its prior written consent), (ii) shall comply,
and shall cause the Foreign Debtors to comply, with all of the
provisions of the Successful Bidder Purchase Agreement and the Sale
Order, and shall satisfy, and shall cause the Foreign Debtors to
satisfy, all conditions precedent to the obligation of the Successful
Bidder to consummate the transactions contemplated by the Successful
Bidder Purchase Agreement, (iii) shall not amend, supplement or
otherwise modify any of the terms of the Successful Bidder Purchase
Agreement or any of the agreements, instruments or documents relating
thereto, without the prior written consent of the Administrative Agent
acting at the direction of the Required Lenders, (iv) shall not
exercise any right to terminate, or execute and deliver or otherwise
provide any waivers or consents with respect to the Successful Bidder
Purchase Agreement or any of the agreements, instruments or documents
relating thereto, without the prior written consent of the
Administrative Agent acting at the direction of the Required Lenders,
and (v) promptly after receipt of same, provide to Administrative Agent
copies of all notices and other written communications from, or on
behalf of, the Successful Bidder to any Debtor;
(l) the Debtors shall, and shall cause Investment Bank
to, (i) meet at such reasonable times during normal business hours and
as often as may be reasonably requested with the Administrative Agent
and the Lenders and their respective Representatives, to answer
questions related to the sale process, and (ii) provide updates and
deliver such written materials as reasonably may be requested by
Administrative Agent or any Lender relating to the sale process, or any
proposed sale transaction or any indication of interest or other offer
from any prospective purchaser. In addition, on a weekly basis from and
after the Petition Date through the consummation of the Section 363
Sale, the Designated Companies shall, or shall cause Investment Bank
to, prepare and deliver to Administrative Agent and the Lenders a
report, in form and substance acceptable to Administrative Agent, on
the status and progress of the sale process. Without limiting the
foregoing, the Designated Companies shall, and shall cause Investment
Bank to, provide the Administrative Agent, the Lenders and their
respective designees copies of all material reports, analyses and other
materials related to the sale process (including, without limitation,
23
any and all confidential memoranda or other work product provided to
any Designated Company by Investment Bank). Notwithstanding anything in
this subsection 8.29(l) to the contrary, neither the Designated
Companies nor Investment Bank shall be required to disclose, except as
otherwise required by applicable law, any information that is protected
by the attorney-client and/or attorney work product privileges.
(m) Nothing herein or in any other Loan Document shall
require, or be construed as requiring, any of Administrative Agent or
any Lender to consent to any Opening Bid, any Section 363 Sale or any
other Disposition of assets or Property (except to the extent expressly
permitted under Section 8.10 hereof), which consent the Administrative
Agent and each Lender have the absolute right to withhold in their
respective sole and absolute discretion unless and until the
Obligations are repaid and otherwise satisfied in full in cash in
accordance with the terms hereof.
Notwithstanding any of provision to the contrary set forth in
this subsection 8.29, Administrative Agent (acting in its sole
discretion or at the direction of the Required Lenders in their sole
discretion) may extend any of the time periods and deadlines set forth
above (other than the deadline set forth in subsection 8.29(j));
provided, that no such extension shall be effective unless and until
agreed to in writing by the Administrative Agent."
OO. Section 8 of the Pre-Petition Credit Agreement is hereby
further amended by adding as a new subsection 8.30 thereof the following:
"Section 8.30 Post-Petition Date Reporting Requirements. In
addition to, and not in lieu of, all other reports, documents and other
information required to be delivered by any Designated Company to
Administrative Agent under this Agreement, on Friday of each week, the
Borrower shall deliver to the Administrative Agent a weekly report, in
form and substance reasonably satisfactory to the Administrative Agent
and signed by an Authorized Representative of Borrower (the "Weekly
Variance Report"), reflecting, on a line item basis, (i) the actual
cash receipts and cash disbursements for the seven day period ending on
the immediately preceding Friday, the percentage variance of such
actual results from the budgeted amounts reflected in the Approved
Budget for such period and for the cumulative post-Petition Date period
ending at the end of such seven day period, and a reasonably detailed
explanation of each material variance; and (ii) the actual payments
made in respect of Approved Administration Expenses for the seven day
period ending on the immediately preceding Friday, and the remaining
budgeted amount of each category of Approved Administration Expenses
after deducting such payments."
PP. Section 8 of the Pre-Petition Credit Agreement is hereby
further amended by adding as new subsections 8.31, 8.32, 8.33 and 8.34 thereof
the following:
"Section 8.31 Repayment of Indebtedness. Except pursuant to a
confirmed plan of reorganization or liquidation and except as
specifically permitted hereunder or as otherwise agreed to in writing
by Administrative Agent and Required Lenders in their sole discretion,
Borrower shall not, and shall cause the other Designated Companies not
24
to, make any payment or transfer with respect to any Lien or
indebtedness incurred or arising prior to the Petition Date that is
subject to the automatic stay provisions of the Bankruptcy Code whether
by way of "adequate protection" under the Bankruptcy Code or otherwise.
Without limiting the generality of the foregoing, Borrower shall not
make, and shall cause the other Designated Companies not to make, any
pre-petition "critical vendor" payments or any pre-petition or
post-petition employee retention, incentive, severance or similar
payments ("KERP Payments") except in amounts and on other terms and
conditions that (i) are approved by order of the Bankruptcy Court, and
(ii) are consented to in writing by the Administrative Agent acting at
the direction of the Required Lenders.
Section 8.32 Reclamation Claims. Borrower shall not, and shall
cause the other Designated Companies not to, enter into any agreement
to return any inventory to any creditor for application against any
pre-Petition Date indebtedness, pre-Petition Date trade payables or
other pre-Petition Date claims under section 546(h) of the Bankruptcy
Code or otherwise, or allow any creditor to take any setoff or
recoupment against any of Borrower's or any other Designated Company's
pre-Petition Date indebtedness, pre-Petition Date trade payables or
other pre-Petition Date claims based upon any such return pursuant to
section 553(b)(1) of the Bankruptcy Code or otherwise, except in
amounts and on other terms and conditions that (i) are approved by
order of the Bankruptcy Court, and (ii) are consented to in writing by
the Administrative Agent acting at the direction of the Required
Lenders.
Section 8.33 Chapter 11 Claims. Borrower shall not, and shall
cause the other Designated Companies not to, incur, create, assume,
suffer to exist or permit any other super-priority administrative claim
which is pari passu with, or senior to, the claims of any or all of the
Administrative Agent and Lenders against any or all of the Borrower and
the other Designated Companies.
Section 8.34 Limitations on Product Vendor Purchases.
---------------------------------------
In addition to, and not in lieu of, any other limitations on
the use of Loan proceeds and Collateral proceeds set forth herein and
in the Financing Order (including, without limitation, the limitations
imposed by the Approved Budget), Borrower shall only make payments to
product vendors if, and to the extent, all Inventory being purchased by
Borrower from such product vendor: (i) is either in stock with such
product vendor as of the date the applicable order is placed or can be
shipped by such product vendor to the Borrower (so as to be received by
Borrower) within six (6) Business Days of the date the applicable order
is placed; and (ii) (ii) as of the date such order is placed, such
Inventory is subject to existing customer purchase orders and can be
shipped to such customers within two (2) Business Days of receipt by
Borrower; provided, however, that if Inventory purchased by Borrower
is, prior to delivery to a customer, subject to the completion of
services provided to Borrower by a provider of value-added services,
then such provider of value-added services shall be deemed to be an
additional product vendor with respect to such Inventory and Borrower
shall have no obligation to ship such Inventory to its customer until
two (2) Business Days after receipt from such provider of value-added
services."
25
QQ. Section 9.1 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"Section 9.1 Events of Default.
-----------------
Notwithstanding the provisions of section 362 of the
Bankruptcy Code and without notice, application or motion to, hearing
before, or order of, the Bankruptcy Court or any notice to any or all
of the Borrower or the other Designated Companies, and subject to the
provisions of Section 9.2 hereof and the Administrative Agent's and
Lenders' obligation to forbear in respect of the Existing Pre-Petition
Defaults pursuant to Section 2 of the Assumption Agreement, any one or
more of the following shall constitute an "Event of Default" hereunder:
(a) default in the payment when due of all or any part of
the principal of or interest on any Loans (whether at the stated
maturity thereof or at any other time provided for in this Agreement)
or of any Reimbursement Obligation or of any fee or other Obligation
payable hereunder or under any other Loan Document;
(b) default in the observance or performance of any
covenant set forth in Sections 4.2, 4.5, 8.1, 8.4, 8.6-8.12
(inclusive), 8.15, 8.21-8.22 (inclusive), 8.25-8.26 (inclusive) or
8.28-8.29 (inclusive), 8.31-8.34 (inclusive) hereof or of any provision
in this Agreement dealing with the use, disposition or remittance of
the proceeds of Collateral or requiring the maintenance of insurance
thereon;
(c) default in the observance or performance of any
covenant set forth in (i) Section 8.5(a), Section 8.5(n), or Section
8.30 hereof, which failure continues for 2 days after the occurrence
thereof; (ii) Section 8.5(b) hereof, which failure continues for 3 days
after the occurrence thereof; (iii) Section 8.5(c), (d), (e) or (f)
hereof, which failure continues for 5 days after the occurrence
thereof; (iv) Section 8.28 hereof, which failure continues for 10 days
after the occurrence thereof; or (v) any provision hereof other than as
set forth in clause (b) above or subclauses (i), (ii), (iii) or (iv) of
this clause (c), which is not remedied within 15 days after the
occurrence thereof;
(d) any material representation or warranty made herein
or in any other Loan Document or in any certificate furnished to the
Administrative Agent or the Lenders pursuant hereto or thereto or in
connection with any transaction contemplated hereby or thereby proves
untrue in any material respect as of the date of the issuance or making
or deemed making thereof;
(e) any event occurs or condition exists (other than
those described in subsections (a) through (d) above) which is
specified as an event of default under any of the other Loan Documents,
which continues beyond any cure or grace period set forth therein, or
any of the Loan Documents shall for any reason not be or shall cease to
be in full force and effect or is declared to be null and void, or any
of the Collateral Documents shall for any reason fail to create a valid
and perfected first priority Lien in favor of the Administrative Agent
in the Collateral or any material part thereof except as expressly
permitted by the terms thereof and the Financing Order, or any
26
Designated Company takes any action for the purpose of terminating,
repudiating or rescinding any Loan Document executed by it or any of
its obligations thereunder;
(f) except to the extent permitted or excused by the
Bankruptcy Code, any default shall occur and be continuing under any
Indebtedness for Borrowed Money issued, assumed or guaranteed by any
Designated Company aggregating in excess of $1,000,000, or under any
indenture, agreement or other instrument under which the same may be
issued, and such default shall continue for a period of time sufficient
to permit the acceleration of the maturity of any such Indebtedness for
Borrowed Money (whether or not such maturity is in fact accelerated),
or any such Indebtedness for Borrowed Money shall not be paid when due
(whether by demand, lapse of time, acceleration or otherwise);
(g) any judgment or judgments, writ or writs or warrant
or warrants of attachment, or any similar process or processes shall be
entered or filed against any Designated Company, or against any of its
Property, in an aggregate amount for all Designated Companies and their
Property in excess of $1,000,000 (except to the extent fully covered by
insurance pursuant to which the insurer has accepted liability therefor
in writing), and which remains undischarged, unvacated, unbonded or
unstayed for a period of 30 days;
(h) any Designated Company, or any member of its
Controlled Group, shall fail to pay when due an amount or amounts
aggregating in excess of $500,000 which it shall have become liable to
pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having aggregate Unfunded Vested
Liabilities in excess of $1,000,000 (collectively, a "Material Plan")
shall be filed under Title IV of ERISA by any Designated Company, or
any other member of its Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any Material Plan or a proceeding shall be
instituted by a fiduciary of any Material Plan against any Designated
Company, or any member of its Controlled Group, to enforce Section 515
or 4219(c)(5) of ERISA and such proceeding shall not have been
dismissed within 30 days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated;
(i) any Designated Company is enjoined, restrained or in
any way prevented by the order of any court or any administrative or
regulatory agency from conducting all or a material part of its
business affairs and such event could be reasonably likely to have a
Material Adverse Effect;
(j) any loss, theft, substantial damage or destruction of
any item or items of Collateral shall occur if (i) the amount of such
loss with respect to which the insurer has not within 30 days accepted
liability exceeds $1,000,000 in the aggregate or (ii) such loss results
in an interruption of the business of any Designated Company which
would reasonably be expected to have a Material Adverse Effect;
27
(k) there shall be instituted in any court criminal
proceedings against any Designated Company or any Designated Company
shall be indicted for any crime, in either case for which forfeiture of
a material amount of its Property is a potential penalty;
(l) Bruce Goldberg shall cease to function as a senior
management officer of the Borrower, unless he is replaced within 120
days with a Person satisfactory to the Administrative Agent in its
reasonable judgment;
(m) an event shall occur which has a Material Adverse
Effect; or
(o) the occurrence of any of the following in any
Bankruptcy Case:
1. the bringing of a motion, taking of any
action or the filing of any plan of reorganization or
disclosure statement attendant thereto by Borrower or
any other Designated Company in any Bankruptcy Case:
(i) to obtain additional financing under section
364(c) or (d) of the Bankruptcy Code not otherwise
permitted pursuant to this Agreement; (ii) to grant
any Lien (other than any Lien permitted under Section
8.8 hereof) upon or affecting any Collateral; (iii)
except as provided in the Financing Order, to use
cash collateral of Administrative Agent or any Lender
under section 363(c) of the Bankruptcy Code without
the prior written consent of the Administrative Agent
acting at the direction of the Required Lenders; or
(iv) any other action or actions adverse to the
Administrative Agent and the Lenders or their rights
and remedies hereunder or their interest in the
Collateral;
2. the filing of any plan of reorganization or
liquidation or disclosure statement attendant
thereto, or any direct or indirect amendment to such
plan or disclosure statement by Borrower or any other
Designated Company or any other Person to which the
Administrative Agent, acting at the direction of the
Required Lenders, does not consent or otherwise agree
to the treatment of their claims;
3. the entry of an order in any of the
Bankruptcy Cases confirming a plan or plans of
reorganization or liquidation that does not contain a
provision for termination of all financing
commitments hereunder and repayment in full in cash
of all of the Obligations under this Agreement on or
before the effective date of such plan or plans;
4. the entry of any order amending,
supplementing, staying, vacating or otherwise
modifying any Loan Document, the Interim Financing
Order, the Final Financing Order, the Sale Order or
the Bidding Procedures Order in any material respect,
in each case without the written consent of the
Administrative Agent acting at the direction of the
Required Lenders, or the filing of a motion for
reconsideration with respect to any of the Interim
Financing Order, the Final Financing Order, the
Bidding Procedures Order or the Sale Order;
28
5. the Final Financing Order is not entered by
the Bankruptcy Court by the earlier of (x) May 25,
2007, or such later date as Administrative Agent
(acting at the direction of the Required Lenders in
their sole discretion) may consent to in writing or
(y) immediately following the expiration of the
Interim Financing Order;
6. the Bidding Procedures Order is not entered
by the Bankruptcy Court by May 1, 2007;
7. the Sale Order is not entered by the
Bankruptcy Court by June 5, 2007;
8. the payment of, or application for authority
to pay, any pre-petition claim without the prior
written consent of the Administrative Agent (acting
at the direction of the Required Lenders), unless
otherwise permitted under this Agreement or under
"first-day" orders acceptable to the Administrative
Agent and the Required Lenders (including, without
limitation, any "critical vendor" payments or KERP
Payments);
9. the allowance of any claim or claims under
section 506(c) of the Bankruptcy Code or otherwise
against any or all of the Administrative Agent and
the Lenders, their respective claims or any of their
Collateral, or the filing of any motion or
application seeking allowance of any such claim;
10. the appointment of an interim or permanent
trustee in any Bankruptcy Case or the appointment of
a receiver or an examiner in any Bankruptcy Case with
expanded powers to operate or manage the financial
affairs, the business, or reorganization of Borrower
or any other Designated Company;
11. except as expressly permitted by Section
8.10, the sale or other disposition, without the
Administrative Agent's and Required Lenders' consent,
of any Collateral through a sale under section 363 of
the Bankruptcy Code, a confirmed plan of
reorganization or liquidation in the applicable
Bankruptcy Cases or otherwise;
12. the dismissal of any Bankruptcy Case or the
conversion of any Bankruptcy Case from one under
chapter 11 to one under chapter 7 of the Bankruptcy
Code, or Borrower or any other Designated Company
shall file a motion or other pleading seeking the
dismissal of any Bankruptcy Case under section 1112
of the Bankruptcy Code or otherwise;
13. the entry of an order by the Bankruptcy
Court granting relief from or modifying the automatic
stay of section 362 of the Bankruptcy Code (i) to
allow any creditor (other than Administrative Agent
and the Lenders) to execute upon or enforce a Lien on
any Collateral, or (ii) with respect to any Lien of
or the granting of any Lien on any Collateral to any
29
state or local environmental or regulatory agency or
authority, which in either case would have a Material
Adverse Effect;
14. the assertion of or joinder in any claim,
counterclaim, action, proceeding, application,
motion, objection, defense or other contested matter,
the purpose of which is to seek or the result of
which would be to obtain any order, judgment,
determination, declaration or similar relief (i)
invalidating, setting aside, avoiding or
subordinating, in whole or in part, the Obligations
or Administrative Agent's Liens on Collateral, (ii)
for monetary, injunctive or other affirmative relief
against any or all of the Administrative Agent and
the Lenders or any Collateral, or (iii) preventing,
hindering or otherwise delaying the exercise by any
or all of the Administrative Agent and the Lenders of
any of their respective rights and remedies under the
Financing Order, the Loan Documents or applicable
law, or the enforcement or realization (whether by
foreclosure, credit bid, further order of the
Bankruptcy Court or otherwise) by Administrative
Agent or any Lender upon any Collateral;
15. the commencement of any other suit or action
against Administrative Agent or any Lender and, as to
any suit or action brought by any Person other than
Borrower or any other Designated Company or any
officer or employee of Borrower or any other
Designated Company, the continuation thereof without
dismissal for thirty (30) days after service thereof
on Administrative Agent or such Lender, that asserts
or seeks by or on behalf of Borrower or any other
Designated Company, the United States Environmental
Protection Agency, any state environmental protection
or health and safety agency, any official committee
in any Bankruptcy Case or any other party in interest
in any of the Bankruptcy Cases, a claim (i) in excess
of $50,000, (ii) that would otherwise have a Material
Adverse Effect, or (iii) that would otherwise have a
material adverse effect on the rights and remedies of
Administrative Agent or any Lender under any Loan
Document or the collectibility of all or any portion
of the Obligations;
16. the entry of an order in any Bankruptcy Case
avoiding or requiring disgorgement of any portion of
any payment made on account of the Obligations owing
under this Agreement or any of the other Loan
Documents, whether such payment was made prior to, on
or after the Petition Date;
17. the failure of Borrower or any other
Designated Company to perform any of its obligations
under the Interim Financing Order or the Final
Financing Order;
18. the entry of an order granting, approving or
allowing, or the filing by Borrower or any other
Designated Company of any motion or application
seeking the entry of an order granting, approving or
30
allowing, in any of the Bankruptcy Cases, any other
super-priority administrative claim or Lien pari
passu with, or superior to, the Liens and
super-priority administrative claims granted to any
or all of the Administrative Agent and Lenders under
the Financing Order and other Loan Documents; and
19. the entry of any order amending,
supplementing, staying, vacating or otherwise
modifying the Bidding Procedures Order or the Sale
Order in any material respect without the prior
written consent of the Administrative Agent (acting
at the direction of the Required Lenders) or the
filing by any Designated Company of any motion or
application seeking the entry of any such order
without the prior written consent of the
Administrative Agent acting at the direction of the
Required Lender.
RR. Section 9.2 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as follows:
"Section 9.2 Non-Bankruptcy Defaults. If an Event of Default
shall have occurred and shall be continuing, and subject to the
provisions of the Financing Order:
(a) The Administrative Agent shall, by written notice to
the Borrower: (i) if so directed by the Required Lenders, terminate the
remaining Commitments and all other obligations of the Lenders
hereunder on the date stated in such notice (which may be the date
thereof); (ii) if so directed by the Required Lenders, declare the
principal of and the accrued interest on all outstanding Loans to be
forthwith due and payable and thereupon all outstanding Loans,
including both principal and interest thereon, shall be and become
immediately due and payable together with all other amounts payable
under the Loan Documents without further demand, presentment, protest
or notice of any kind; and (iii) if so directed by the Required
Lenders, demand that the Borrower immediately pay to the Administrative
Agent 105% of the full amount then available for drawing under each or
any Letter of Credit, and the Borrower agrees to immediately make such
payment and acknowledges and agrees that the Lenders would not have an
adequate remedy at law for failure by the Borrower to honor any such
demand and that the Administrative Agent, for the benefit of the
Lenders, shall have the right to require the Borrower to specifically
perform such undertaking whether or not any drawings or other demands
for payment have been made under any Letter of Credit. The
Administrative Agent, after giving notice to the Borrower of the
occurrence of any Event of Default, shall also promptly send a copy of
such notice to the other Lenders, but the failure to do so shall not
impair or annul the effect of such notice.
(b) As provided in the Financing Order, if Administrative
Agent and Lenders are entitled, and have elected in accordance with the
provisions hereof and of the Financing Order, to enforce Administrative
Agent's Liens or exercise any other default-related rights and remedies
under the Loan Documents or applicable law, and provided that
Administrative Agent and Lenders in their sole discretion have made
available to the Designated Companies (through additional post-petition
loans or by consenting to Designated Companies' use of cash collateral)
sufficient funds to pay the reasonable and necessary costs thereof, if
any, the Designated Companies shall cooperate with Administrative Agent
31
and the Lenders in connection with such enforcement action by, among
other things, (i) providing access to the Designated Companies'
premises to representatives of the Administrative Agent and the Lenders
(including any collateral liquidator or consultant retained by, or on
behalf of, Administrative Agent), (ii) providing Administrative Agent
and the Lenders and their representatives access to the Designated
Companies' books and records and any information or documents requested
by Administrative Agent, Lenders or their representatives, (iii)
performing all other obligations set forth in the Loan Documents, and
(iv) taking reasonable steps to safeguard and protect the Collateral
until Administrative Agent and the Lenders can make adequate provision
to protect and safeguard the Collateral, and Designated Companies shall
not otherwise interfere or encourage others to interfere with the
Administrative Agent's and the Lenders' enforcement of their rights and
remedies. In addition, at any time after the Administrative Agent and
Lenders are entitled to relief from the automatic stay under the
Financing Order or otherwise, and have elected in accordance with the
provisions hereof to enforce Administrative Agent's Liens or exercise
any other default-related remedies, and provided that Administrative
Agent and the Lenders in their sole discretion have made available to
the Designated Companies (through additional post-petition loans or by
consenting to the Designated Companies' use of cash collateral)
sufficient funds to pay the reasonable and necessary costs thereof, the
Designated Companies shall, at the written request of the
Administrative Agent, sell or otherwise dispose of any or all of the
Collateral on terms and conditions acceptable to Administrative Agent
and Required Lenders in their sole discretion, and in connection
thereof to file the appropriate section 363 and related motions and
obtain approval of the Bankruptcy Court for each such sale or other
disposition, and shall promptly turn over the proceeds of such sale(s)
or other disposition(s) to the Administrative Agent for application to
the Indebtedness in accordance with the provisions of the Loan
Documents and the Financing Order.
(c) Upon acceleration of the Obligations as provided in
subsection (a) of this Section 8.2, the Administrative Agent, upon
request of the Required Lenders, shall have the right to the
appointment of a receiver for the properties and assets of the Borrower
and the other Designated Companies, and the Borrower, for itself and on
behalf of the other Designated Companies, hereby consents to such
rights and such appointment and hereby waives any objection the
Borrower or any other Designated Company may have thereto or the right
to have a bond or other security posted by the Administrative Agent on
behalf of the Lenders and the L/C Issuer, in connection therewith.
(d) The rights and remedies of the Administrative Agent
and the Lenders hereunder shall be cumulative, and not exclusive."
SS. Section 12.8 of the Pre-Petition Credit Agreement is hereby
amended by inserting therein the following provision immediately after the
address block for Bilzin Sumberg Baena Price & Axelrod LLP and before the
paragraph beginning with the words "Each such notice, request or other
communication . . ."
"and with a copy to:
32
Squire, Sanders & Dempsey L.L.P
312 Walnut Street, Suite 3500
Cincinnati, OH 45202
Attention: Stephen D. Lerner, Esq.
Telephone: (513) 361-1220
Facsimile: (513) 361-1201"
TT. The Master Corporate Guaranty, dated as of May 14, 2003 (as
amended, restated or otherwise modified from time to time, the "Domestic
Subsidiary Guaranty"), by and among each Designated Company (other than AASI
Canada) and Administrative Agent, is hereby amended by adding the following
sentence to the conclusion of the second paragraph thereof:
"Notwithstanding any provision herein to the contrary, the
Borrower Obligations that are unconditionally guaranteed by each
Guarantor hereunder shall include, without limitation, any and all DIP
Indebtedness (as such term is defined in the Credit Agreement) incurred
by the Borrower pursuant to the terms of the Assumption Agreement (as
defined in the Credit Agreement) subsequent to the commencement of a
bankruptcy case under chapter 11 of the Bankruptcy Code (as defined in
the Credit Agreement). Each Borrower Obligation shall rank pari passu
with each other Borrower Obligation."
UU. The Corporate Guaranty and Covenant, dated as of May 14, 2003
(as amended, restated or otherwise modified from time to time, the "AASI Canada
Guaranty"), by and among AASI Canada and Administrative Agent, is hereby amended
by adding the following sentence to the conclusion of the second paragraph
thereof:
"Notwithstanding any provision herein to the contrary, the
Borrower Obligations that are unconditionally guaranteed by Covenantor
hereunder shall include, without limitation, any and all DIP
Indebtedness (as such term is defined in the Credit Agreement) incurred
by the Borrower pursuant to the terms of the Assumption Agreement (as
defined in the Credit Agreement) subsequent to the commencement of a
bankruptcy case under chapter 11 of the Bankruptcy Code (as defined in
the Credit Agreement). Each Borrower Obligation shall rank pari passu
with each other Borrower Obligation."
VV. The Security Agreement, dated as of May 14, 2003, by and
between the Borrower and the Administrative Agent (as amended, restated or
otherwise modified from time to time, the "Borrower Security Agreement"), is
hereby amended by adding the following new paragraph to the conclusion of
Section 2 thereof:
"Borrower hereby confirms its grant to Administrative Agent,
for the benefit of Administrative Agent, L/C Issuer and the Lenders, of
a continuing perfected Lien on and security interest in the Collateral
hereunder and pursuant to the Pre-Petition Credit Documents (as defined
in the Credit Agreement), as security for the Obligations. Borrower
further confirms that the security interests granted hereunder and in
the Pre-Petition Credit Documents extend to all Collateral, whether
arising or acquired prior to, on or after the Petition Date (as defined
in the Credit Agreement) and secure all Obligations, whether arising
33
prior to, on or after the Petition Date, including, without limitation,
the DIP Indebtedness (as defined in the Credit Agreement). Furthermore,
Borrower hereby acknowledges and consents to the grant of all Liens and
super-priority administrative claims in favor of Administrative Agent,
for the benefit of itself and the Lenders, pursuant to the Financing
Order."
WW. The Security Agreement, dated as of May 14, 2003, by and among
each Designated Company (other than Borrower) and Administrative Agent (as
amended, restated or otherwise modified from time to time, the "Subsidiary
Security Agreement"), is hereby amended by adding the following new paragraph to
the conclusion of Section 2 thereof:
"Each Debtor hereby confirms its grant to Administrative
Agent, for the benefit of Administrative Agent, L/C Issuer and the
Lenders, of a continuing perfected Lien on and security interest in
such Debtor's Collateral hereunder and pursuant to the Pre-Petition
Credit Documents (as defined in the Credit Agreement), as security for
the Obligations. Each Debtor further confirms that the security
interests granted hereunder and in the Pre-Petition Credit Documents
extend to all such Debtor's Collateral, whether arising or acquired
prior to, on or after the Petition Date (as defined in the Credit
Agreement) and secure all Obligations, whether arising prior to, on or
after the Petition Date, including, without limitation, the DIP
Indebtedness (as defined in the Credit Agreement). Furthermore, each
Debtor hereby acknowledges and consents to the grant of all Liens and
super-priority administrative claims in favor of Administrative Agent,
for the benefit of itself and the Lenders, pursuant to the Financing
Order."
XX. Section 1 of each Pledge Agreement is hereby amended by adding
the following new paragraph to the conclusion thereof:
"Each Pledgor hereby confirms and agrees that the Pledged
Collateral secures all of the Obligations under the Credit Agreement,
including, without limitation, all DIP Indebtedness (as defined in the
Credit Agreement), and hereby grants a first priority Lien on the
Pledged Collateral to Agent (for the benefit of itself, the L/C Issuer
and the Lenders) as collateral for all of the Obligations, which Lien
shall be subject only to the Prior Claims. Each Pledgor's respective
Subsidiaries whose capital stock and related rights constitute Pledged
Collateral hereunder hereby confirms and agrees that such Pledged
Collateral secures all of the Obligations under the Credit Agreement,
including, without limitation, all DIP Indebtedness, and hereby grants
a first priority Lien on the Pledged Collateral as collateral for all
of the Obligations, which Lien shall be subject only to the Prior
Claims."
II. Forbearance With Respect to Existing Pre-Petition Defaults.
----------------------------------------------------------
Nothing in this Amendment or in any of the other DIP Credit
Documents or the Interim Financing Order or the Final Financing Order shall
constitute or be deemed to constitute a waiver by Administrative Agent or any
Lender of: (i) any existing or future Default or Event of Default (including,
without limitation, the Events of Default arising from the commencement of the
Bankruptcy Cases or any other Existing Pre-Petition Default), or (ii) any rights
or remedies of Administrative Agent, L/C Issuer or any Lender under any of the
34
Loan Documents, applicable law or otherwise against any or all of the Borrower
and each other Designated Company, any other guarantor or obligor with respect
to any Obligations, or any other Person or any of their respective property.
Without prejudice to, or waiver of, (x) the Administrative Agent's, L/C Issuer's
and each Lender's rights and remedies against any or all of the Borrower and
each other Designated Company in respect of any Default or Event of Default
other than the Existing Pre-Petition Defaults, or (y) the Administrative
Agent's, L/C Issuer's and each Lender's rights and remedies against any Person
other than any or all of the Borrower and each other Designated Company,
Administrative Agent, L/C Issuer and each Lender agree to forbear from
foreclosing their respective Liens on any Collateral otherwise taking
enforcement action against any or all of the Borrower and the other Designated
Companies, in each case based solely on the occurrence or continuance of any
Existing Pre-Petition Default; provided, that in all cases such forbearance
shall terminate upon the occurrence of any Event of Default other than an
Existing Pre-Petition Default. Without limiting the generality of the foregoing,
nothing in this Amendment or in any of the DIP Credit Documents or the Interim
Financing Order or the Final Financing Order (x) shall restrict, impair or
otherwise affect the Administrative Agent's and Lenders' respective rights and
remedies under any agreements containing subordination provisions in favor of
any or all of Administrative Agent and Lenders (including, without limitation,
any rights or remedies available to Administrative Agent and Lenders as a result
of the occurrence or continuation of any Existing Pre-Petition Defaults), (y)
shall amend or modify any provision thereof, or (z) shall restrict or otherwise
affect Administrative Agent's rights under Section 4.2 of the Credit Agreement.
All Subordinated Debt shall remain subordinated in right of payment to the
Obligations (including, without limitation, the DIP Indebtedness) owing to the
Administrative Agent and the Lenders to the extent set forth in the agreements
containing the applicable subordination and intercreditor provisions and the
Financing Order.
III. Ratification of Pre-Petition Credit Documents.
---------------------------------------------
Each of the Borrower and the other Designated Companies, as
debtors, grantors, pledgors, guarantors, assignors, or in other similar
capacities in which such Persons grant Liens or security interests in their
properties or otherwise act as accommodation parties or guarantors, as the case
may be, (i) hereby acknowledges and consents to each of the terms of the
Amendment, (ii) confirms, ratifies and reaffirms (x) all of its respective
obligations and undertakings under each Loan Document to which it is a party
(including, without limitation, its guaranty of the Obligations), and (y) its
grant of security interests and Liens in all of its properties pursuant to any
such Loan Documents as security for its guaranty of the Obligations and all of
its other obligations and undertakings under the Loan Documents, (iii) agrees
that all such obligations and undertakings and all such security interests and
Liens remain in full force and effect from and after the effectiveness of this
Amendment and applies equally to all Obligations, whether arising before, on or
after the Petition Date, agrees that all Collateral granted by such undersigned
continues to secure the payment and performance of all Obligations, whether
arising before, on or after the Petition Date, and acknowledges and agrees that
there is no defense, setoff or counterclaim of any kind, nature or description
to such obligations and undertakings, (iv) acknowledges and agrees that all
references to the Credit Agreement in any Loan Document shall mean and include
the Credit Agreement as amended and modified by the Amendment, and (v) the
execution of this Amendment shall not operate as a waiver of any right, power or
remedy of the Administrative Agent or Lenders, constitute a waiver of any
35
provision of any of the Loan Documents or serve to effect a novation of the
Obligations.
IV. Entire Agreement and Acknowledgements of the Parties. The parties
hereto agree that the amendments set forth in this Amendment, as modified by the
Financing Order, constitute the entire agreement of the parties with respect to
the matters set forth herein, shall be limited precisely as written and shall
not be deemed to be a consent to any waiver, amendment or modification of any
other term or condition of the Credit Agreement or any Loan Documents.
V. Conditions Precedent. The effectiveness of this Amendment shall be
subject to satisfaction of the following conditions precedent (any one or all of
which may be waived by the Administrative Agent in its sole discretion) (the
date on which all such conditions precedent are satisfied or waived is referred
to as the "Assumption Agreement Effectiveness Date"):
A. The Administrative Agent shall have received (i) counterparts
of this Amendment, duly executed and delivered by the Borrower, each other
Designated Company, the Administrative Agent and the Lenders, and (ii) duly
executed originals of each Revolving Note by Borrower to each DIP Lender in the
original principal amount of such DIP Lender's DIP Revolving Credit Commitment,
which Revolving Note shall be substantially in the form attached hereto as
Exhibit A;
B. The Bankruptcy Court shall have approved and entered the
Interim Financing Order in a form and in substance satisfactory to
Administrative Agent and the Required Lenders in their sole discretion in the
Bankruptcy Cases;
C. The Borrower and the other Designated Companies shall have
executed and delivered to the Administrative Agent all other loan and security
documentation, in form and substance satisfactory to the Administrative Agent
and the Required Lenders, evidencing or otherwise relating to the DIP Financing
and the other transactions contemplated herein;
D. The Administrative Agent shall have received satisfactory
corporate resolutions, secretary's certificates and other evidence of
appropriate corporate authorization of the transactions contemplated herein;
E. The Borrower shall have paid in immediately available funds
the DIP Commitment Fee, the DIP Agency Fee and all other costs, fees and
expenses then owing to the Administrative Agent and Lenders, including, without
limitation, the reasonable fees and expenses of counsel and financial advisors
retained by, or for the benefit of, the Administrative Agent;
F. The Administrative Agent shall have received the Initial
Approved Budget (including all related cash receipt projections and other
back-up documentation) in form and substance satisfactory to Administrative
Agent and the Required Lenders;
G. All representations and warranties set forth in the DIP Credit
Documents shall be true and correct in all material respects other than any
breaches of representations and warranties in the Credit Agreement constituting
Existing Pre-Petition Defaults;
36
H. No Default shall have occurred and be continuing other than
the Existing Pre-Petition Defaults;
I. All of the "first day" pleadings and proposed forms of orders
filed in the Bankruptcy Cases shall be in form and substance satisfactory to the
Administrative Agent and the Required Lenders;
J. The Debtors shall have filed the Sale Motion in form and
substance satisfactory to the Administrative Agent and the Required Lenders; and
K. All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents, instruments, and
other legal matters incident thereto shall be satisfactory to Administrative
Agent and its counsel.
VI. Payment of Administrative Agent's Costs and Expenses. The parties
hereto agree that Section 12.15 of the Pre-Petition Credit Agreement and the
other applicable provisions of the Loan Documents provide that, and, to the
extent necessary, hereby agree to amend Section 12.15 of the Pre-Petition Credit
Agreement and such other applicable provisions of the Loan Documents to provide
that, the Borrower and the other Designated Companies shall be jointly and
severally obligated to promptly pay or reimburse Administrative Agent for all
pre-petition and post-petition fees, costs and expenses (including the
reasonable fees and expenses of all of its counsel, advisors, consultants,
appraisers and auditors) incurred in connection with:
A. the negotiation, preparation and filing and/or recordation of
the DIP Credit Documents, the Interim Financing Order and the Final Financing
Order, or the preservation and protection of Administrative Agent's and each
Lender's rights and claims hereunder and thereunder;
B. any amendment, modification or waiver of, consent with respect
to, or termination of, any of the DIP Credit Documents or any transactions
contemplated thereby or advice in connection with the administration of the
Loans made pursuant hereto or any rights and remedies of any or all of the
Administrative Agent and Lenders hereunder or thereunder;
C. any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Administrative Agent, any Lender, Borrower or any of
other Designated Company, Foreign Debtor or any other Person and whether as a
party, witness or otherwise) in any way relating to the Collateral, any of the
Loan Documents (including, without limitation, the Pre-Petition Credit
Documents) or any other agreement to be executed or delivered in connection
herewith or therewith, including any litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review thereof (and the filing of any
petition, complaint, answer, motion or other pleading in connection therewith),
in connection with any Bankruptcy Case or any other bankruptcy or other
insolvency proceeding commenced by or against any or all of the Borrower, any
other Designated Company or any other Person that may be obligated to any or all
of the Administrative Agent and Lenders by virtue of the Loan Documents;
D. any attempt to enforce any rights or remedies of any or all of
the Administrative Agent and Lenders against any or all of the Borrower, any
other Designated Company or any other Person that may be obligated to
Administrative Agent or any Lender by virtue of any of the Loan Documents,
37
including, without limitation, the action taken in connection with the
protection, collection, lease, sale, taking possession of, or liquidation of any
of the Collateral or Administrative Agent's and/or any Lender's interest
therein, and any attempt to enforce any security interest in any of the
Collateral;
E. the obtaining of approval or entry by the Bankruptcy Court of
any or all of the Interim Financing Order, the Final Financing Order, the
Bidding Procedures Order, the Sale Order and the DIP Credit Documents;
F. the preparation and review of pleadings, documents and reports
related to any Bankruptcy Case and any subsequent case under chapter 7 of the
Bankruptcy Code, attendance at meetings, court hearings or conferences related
to any Bankruptcy Case and any subsequent case under chapter 7 of the Bankruptcy
Code, and general monitoring of any Bankruptcy Case and any subsequent case
under chapter 7 of the Bankruptcy Code;
G. efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Borrower, any other
Designated Company or their respective affairs, (iii) collect any or all of the
Obligations, and (iv) verify, protect, evaluate, assess, appraise, collect,
sell, liquidate or otherwise dispose of any of the Collateral; and
H. the rendering of any advice with respect to any of the
foregoing.
The Borrower's and each other Designated Company's respective
reimbursement obligations as set forth above shall include all reasonable
attorneys' fees and expenses and other reasonable professional and service
providers' fees and expenses arising from any of the services described above
and other advice, assistance or other representation, including those in
connection with any appellate proceedings, and all expenses, costs, charges and
other fees incurred by such counsel and others in connection with or relating to
any of the events or actions described in this section, all of which shall be
jointly and severally payable, on demand, by the Borrower and each other
Designated Company to Administrative Agent. Without limiting the generality of
the foregoing, such expenses, costs, charges and fees may include: reasonable
fees, costs and expenses of accountants, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court costs
and expenses; photocopying and duplication expenses; court reporter fees, costs
and expenses; long distance telephone charges; air express charges; telegram or
telecopy charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal or
other advisory services.
VII. References in Loan Documents. All references to any Pre-Petition Credit
Document shall be deemed to be a reference to same as amended hereby.
VIII. Miscellaneous.
-------------
A. To induce Administrative Agent and each Lender to enter into
this Amendment, each of the Borrower and each other Designated Company signatory
hereto hereby represents and warrants to each of the Administrative Agent and
the Lenders that (i) the Borrower and each other Designated Company has full
power and authority to enter into this Amendment, that this Amendment has been
duly authorized, executed and delivered by the Borrower and each other
38
Designated Company and that this Amendment constitutes a legal, valid and
binding obligation of Borrower and each other Designated Company enforceable
against such Person in accordance with its terms and (ii) no event has occurred
since the Petition Date which has or could have a Material Adverse Effect.
B. This Amendment may be executed in any number of counterparts,
each of which when so executed shall be deemed an original, but all such
counterparts shall constitute one and the same instrument, and all signatures
need not appear on any one counterpart. Any party hereto may execute and deliver
a counterpart of this Amendment by delivering by facsimile or other electronic
transmission a signature page of this Amendment signed by such party, and any
such facsimile or other electronic signature shall be treated in all respects as
having the same effect as an original signature. Any party delivering by
facsimile or other electronic transmission a counterpart executed by it shall
promptly thereafter also deliver a manually signed counterpart of this Amendment
to Administrative Agent.
C. It is the parties' intention that this Amendment be
interpreted in such a way that it is valid and effective under applicable law;
provided, however, the invalidity, illegality, or unenforceability of any
provision in or obligation under this Amendment in any jurisdiction shall not
affect or impair the validity, legality, or enforceability of the remaining
provisions or obligations under this Amendment or of such provision or
obligation in any other jurisdiction.
D. This Amendment, the Credit Agreement, the other Loan
Documents, and all Liens and other rights and privileges created hereby or
pursuant hereto or to any other Loan Document shall be binding upon Borrower and
the other Designated Companies, and their respective estates, and, in the case
of the Debtors, any trustee, other estate representative or any successor in
interest of any Debtor in any Bankruptcy Case or any subsequent case commenced
under chapter 7 of the Bankruptcy Code, and shall not be subject to section 365
of the Bankruptcy Code. This Amendment, the Credit Agreement and the other Loan
Documents shall be binding upon, and inure to the benefit of, the successors of
the Administrative Agent, Co-Administrative Agent, L/C Issuer and the Lenders
and their respective assigns, transferees and endorsees. The Liens created by
this Amendment, the Credit Agreement and the other Loan Documents shall be and
remain valid and perfected in the event of the substantive consolidation or
conversion of any Bankruptcy Case or any other bankruptcy case of Borrower or
any other Designated Company thereof to a case under chapter 7 of the Bankruptcy
Code or in the event of dismissal of any Bankruptcy 11 Case or the release of
any Collateral from the jurisdiction of the Bankruptcy Court for any reason,
without the necessity that Administrative Agent file financing statements or
otherwise perfect its Liens under applicable law. Neither Borrower nor any other
Designated Company may assign, transfer, hypothecate or otherwise convey its
rights, benefits, obligations or duties hereunder or under any of the other Loan
Documents without the prior express written consent of the Administrative Agent
acting at the direction of the Required Lenders. Any such purported assignment,
transfer, hypothecation or other conveyance by Borrower or any other Designated
Company without the prior express written consent of the Administrative Agent
acting at the direction of the Required Lenders shall be void. The terms and
provisions of this Amendment, the Credit Agreement and the other Loan Documents
are for the purpose of defining the relative rights and obligations of Borrower,
the other Designated Companies, the Administrative Agent, the L/C Issuer and
Lenders with respect to the transactions contemplated hereby and thereby and no
Person (not a signatory thereto) shall be a third party beneficiary of any of
39
the terms and provisions of this Amendment, the Credit Agreement or any of the
other Loan Documents.
IX. Conflict with Financing Order. Solely to the extent of any direct and
irreconcilable conflict between this Amendment and the Financing Order, the
conflicting term of the Financing Order shall govern and control.
X. Choice of Law and Jurisdiction. To the extent not governed by the
provisions of the Bankruptcy Code, any dispute between any or all of the
Borrower, the other Designated Companies, the Administrative Agent, the L/C
Issuer and the Lenders and arising out of, connected with, related to, or
incidental to the relationship established between them in connection with this
Amendment, and whether arising in contract, tort, equity or otherwise, shall be
resolved in accordance with the internal laws and not the conflicts of law
provisions of the State of Illinois.
XI. Waiver of Jury Trial. THE PARTIES HERETO WAIVE ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION
WITH THIS AMENDMENT OR ANY MATTER ARISING HEREUNDER.
[Signature Pages Follow]
40
IN WITNESS WHEREOF, the parties hereto have executed this Amendment or caused it
to be executed by their duly authorized officers, all as of the day and year
first above written.
BORROWER AND OTHER ALL AMERICAN SEMICONDUCTOR, INC.,
DESIGNATED COMPANIES: a Delaware corporation, as the Borrower
By: /s/ BRUCE M. GOLDBERG
---------------------
Its: President
---------------------------------------
Access Micro Products, Inc.
All American A.V.E.D., Inc.
All American Added Value, Inc.
All American Semiconductor of Atlanta, Inc.
All American Semiconductor of Chicago, Inc.
All American Semiconductor of Florida, Inc.
All American Semiconductor of Huntsville, Inc.
All American Semiconductor of Massachusetts, Inc.
All American Semiconductor of Michigan, Inc.
All American Semiconductor of Minnesota, Inc.
All American Semiconductor of New York, Inc.
All American Semiconductor of Philadelphia, Inc.
All American Semiconductor of Phoenix, Inc.
All American Semiconductor of Portland, Inc.
All American Semiconductor of Rockville, Inc.
All American Semiconductor of Salt Lake, Inc.
All American Semiconductor of Texas, Inc.
All American Semiconductor-Northern California,
Inc.
All American Semiconductor of Washington, Inc.
All American Technologies, Inc.
All American Transistor of California, Inc.
Aved Industries, Inc.
Palm Electronics Manufacturing Corp.
All American Semiconductor of Ohio, Inc.
All American Semiconductor of Wisconsin, Inc.
All American Semiconductor of Rhode Island, Inc.
All American IDT, Inc.
AGD China, Inc., each as a Designated Company
By: /s/ BRUCE M. GOLDBERG
----------------------------------------
Its: President
---------------------------------------
[Signature page to Assumption Agreement and Seventh Amendment]
41
AMERICAPITAL, LLC, as a Designated Company
By: All American Semiconductor, Inc.,
its sole member
By: /s/ BRUCE M. GOLDBERG
----------------------------------------
Its: President
---------------------------------------
ALL AMERICAN SEMICONDUCTOR OF
CANADA, INC., as a Designated Company
By: /s/ BRUCE M. GOLDBERG
----------------------------------------
Its: President
---------------------------------------
[Signature page to Assumption Agreement and Seventh Amendment]
42
IN WITNESS WHEREOF, the parties hereto have executed this Amendment or caused it
to be executed by their duly authorized officers, all as of the day and year
first above written.
LENDERS: HARRIS N.A., successor by merger to
HARRIS TRUST AND SAVINGS BANK,
as Administrative Agent, L/C Issuer and a Lender
By: /s/ LAWRENCE A. MIZERA
------------------------------------------
Name: Lawrence A. Mizera
---------------------------------------
Title: Vice President
---------------------------------------
U.S. BANK NATIONAL ASSOCIATION,
as Co-Administrative Agent and as a Lender
By: /s/ ROBERT F. POLK
------------------------------------------
Name: Robert F. Polk
---------------------------------------
Title: Senior Vice President
---------------------------------------
GMAC COMMERCIAL FINANCE LLC,
as a Lender
By: /s/ DOUG BOOTHE
------------------------------------------
Name: Doug Boothe
---------------------------------------
Title: Director
---------------------------------------
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ BRUCE METTEL
------------------------------------------
Name: Bruce Mettel
---------------------------------------
Title: Vice President
---------------------------------------
FIRST BANK BUSINESS CAPITAL, INC.
f/k/a FB Commercial Finance, Inc., as a Lender
By: /s/ WALTER CASTILLO
------------------------------------------
Name: Walter Castillo
---------------------------------------
Title: Vice President
---------------------------------------
[Signature page to Assumption Agreement and Seventh Amendment]
43
SCHEDULE 1 TO ASSUMPTION AGREEMENT
----------------------------------
DIP Revolving Credit Commitments and Revolver Percentages for DIP Revolving
- ---------------------------------------------------------------------------
Loans
- -----
DIP Lender DIP Revolving Credit Commitment Revolver Percentage
- ---------- ------------------------------- -------------------
Harris N.A. $6,250,000 25%
U.S. Bank National $5,000,000 20%
Association
GMAC Commercial $5,000,000 20%
Finance LLC
PNC Bank, National $5,000,000 20%
Association
First Bank Business $3,750,000 15%
Capital, Inc.
44
EXHIBIT "A"
REVOLVING NOTE
$ April 25, 2007
FOR VALUE RECEIVED, the undersigned, ALL AMERICAN SEMICONDUCTOR, INC.,
a Delaware corporation (the "Borrower"), hereby promises to pay to the order of
_______________ (the "Lender") on the Termination Date of the hereinafter
defined Credit Agreement, at the principal office of Harris N.A., successor by
merger to Harris Trust and Savings Bank ("Harris"), as administrative agent for
the Lenders (in such capacity, the "Administrative Agent"), in Chicago,
Illinois, in immediately available funds, the principal sum of _____________
Dollars ($___________) or, if less, the aggregate unpaid principal amount of all
DIP Revolving Loans made by the Lender to the Borrower pursuant to the Credit
Agreement (as defined below), together with interest on the principal amount of
each DIP Revolving Loan from time to time outstanding hereunder at the rates,
and payable in the manner and on the dates, specified in the Credit Agreement
(as defined below).
This Note is one of the Revolving Notes referred to in that certain
Credit Agreement, dated as of May 14, 2003 (as amended, restated or otherwise
modified from time to time, including, without limitation, pursuant to that
certain Assumption Agreement and Seventh Amendment to Credit Agreement and Other
Loan Documents, dated as of April 25, 2007, the "Credit Agreement;" capitalized
terms used but not defined herein shall have the respective meanings ascribed to
such terms in the Credit Agreement), by and among Administrative Agent,
[Lender], as Co-Administrative Agent, and the Lenders, and this Note and the
holder hereof are entitled to all the benefits and security provided for thereby
or referred to therein, to which Credit Agreement reference is hereby made for a
statement thereof. To the extent not governed by the provisions of the
Bankruptcy Code, this Note shall be governed by and construed in accordance with
the internal laws of the State of Illinois. This Note shall be subject to the
terms of the Financing Order.
Voluntary prepayments may be made hereon without penalty or charge
except as provided in the Credit Agreement, certain prepayments are required to
be made hereon, and this Note may be declared due prior to the expressed
maturity hereof, all in the events, on the terms and in the manner as provided
for in the Credit Agreement.
The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.
ALL AMERICAN SEMICONDUCTOR, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
EXHIBIT "B"
REVOLVING NOTE
$_________________ May 14, 2003
FOR VALUE RECEIVED, the undersigned, ALL AMERICAN SEMICONDUCTOR, INC.,
a Delaware corporation (the "Borrower"), hereby promises to pay to the order of
____________________ (the "Lender") on the Termination Date of the hereinafter
defined Credit Agreement, at the principal office of Harris Trust and Savings
Bank, as Administrative Agent, in Chicago, Illinois, in immediately available
funds, the principal sum of ___________________ Dollars ($__________) or, if
less, the aggregate unpaid principal amount of all Revolving Loans made by the
Lender to the Borrower pursuant to the Credit Agreement, together with interest
on the principal amount of each Revolving Loan from time to time outstanding
hereunder at the rates, and payable in the manner and on the dates, specified in
the Credit Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement dated as of May 14, 2003, among the Borrower, Harris Trust and Savings
Bank, as Administrative Agent, and U.S. Bank National Association, as Co-Agent
and the Lenders party thereto (the "Credit Agreement"), and this Note and the
holder hereof are entitled to all the benefits and security provided for thereby
or referred to therein, to which Credit Agreement reference is hereby made for a
statement thereof. All defined terms used in this Note, except terms otherwise
defined herein, shall have the same meaning as in the Credit Agreement. This
Note shall be governed by and construed in accordance with the internal laws of
the State of Illinois.
Voluntary prepayments may be made hereon without penalty or charge
except as provided in the Credit Agreement, certain prepayments are required to
be made hereon, and this Note may be declared due prior to the expressed
maturity hereof, all in the events, on the terms and in the manner as provided
for in the Credit Agreement.
The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.
ALL AMERICAN SEMICONDUCTOR, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
EXHIBIT "C"
BORROWING BASE CERTIFICATE
HARRIS TRUST &
SAVINGS BANK BORROWING BASE CERTIFICATE
REPORT NUMBER _______________________ DATE
All American Semiconductor, Inc.
TOTAL APPROVED LINE Maximum Inventory Loan
ACCOUNTS RECEIVABLE UPDATE COLLATERAL STATUS
Period Covered:
ADDITIONS:
As of Date:
(A) New Sales (See Attached) (1) Previous Coll. Balance
(B) Miscellaneous (+) (2) Total Additions
Total Gross Additions (2) (3) Collections/Deductions
(4) New Collateral Balance
DEDUCTIONS:
(A) Collections (See Attached) (5) Less Ineligibles
(B) Discounts Allowed (6) Eligible Collateral
(C) Credit Memos (7) Rate of Advance
(D) Miscellaneous
(-) Non A/R (8) Available A/R (A)
Total Gross Collections (3) (9) Avail Inv. (Per Attached)(B)
LOAN BALANCE UPDATE (10) Other Loan Value (C)
Loan Outstanding as of: (11) Total Loan Value
From Previous Report # A/R + Inv. + Other:
A + B + C
Less Collections
(12) Maximum Borrowing Limit
Additional Advance Requested Lessor of Total Loan Value
or
New Loan Balance This Report Total Approved Rev. Line
Plus L/C or Other Reserves (13) Less Total Loans and
Other Liabilities
Total Loans and Other
Liabilities (14) New Availability
(Carry to Line 13)
Pursuant to the Terms of the Credit Agreement dated as of May 14, 2003 between
us (the "Credit Agreement), we submit this Borrowing Base to you and certify
that the information set forth above and on any attachments to this certificate
is true, correct and complete as of the date of this certificate.
Borrower:
Authorized Signer: