Exhibit 10.92
EXECUTION COPY
SECOND LIEN CREDIT AGREEMENT
DATED AS OF SEPTEMBER 8, 2004
AMONG
HEADWATERS INCORPORATED
THE LENDERS FROM TIME TO TIME PARTIES HERETO
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
AS ADMINISTRATIVE AGENT
XXXXXX XXXXXXX & CO. INCORPORATED,
AS COLLATERAL AGENT
JPMORGAN CHASE BANK,
AS SYNDICATION AGENT
___________________________________________________________________________
XXXXXX XXXXXXX SENIOR FUNDING, INC. AND
X.X. XXXXXX SECURITIES INC.,
AS JOINT LEAD ARRANGERS AND JOINT BOOK RUNNERS
_____________________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.........................................................1
1.1. Certain Defined Terms................................................1
1.2. Plural Forms........................................................27
ARTICLE II THE LOANS.........................................................27
2.1. Loans...............................................................27
2.2. Repayments..........................................................27
2.3. Ratable Loans; Types of Advances....................................28
2.4. Minimum Amount of Each Advance......................................28
2.5. Optional Principal Payments.........................................28
2.6. Method of Selecting Types and Interest Periods for New Advances.....28
2.7. Conversion and Continuation of Outstanding Advances;
No Conversion or Continuation of Eurodollar Advances
After Default.....................................................29
2.8. Changes in Interest Rate, Etc.......................................29
2.9. Rates Applicable After Default......................................30
2.10. Method of Payment...................................................30
2.11. Noteless Agreement; Evidence of Indebtedness........................30
2.12. Telephonic Notices..................................................31
2.13. Interest Payment Dates; Interest and Fee Basis......................31
2.14. Notification of Advances, Interest Rates, Prepayments...............32
2.15. Lending Installations...............................................32
2.16. Non-Receipt of Funds by the Administrative Agent....................32
2.17. Replacement of Lender...............................................32
2.18. Defaulting Lenders..................................................33
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ARTICLE III YIELD PROTECTION; TAXES..........................................35
3.1. Yield Protection....................................................35
3.2. Changes in Capital Adequacy Regulations.............................36
3.3. Availability of Types of Advances...................................37
3.4. Funding Indemnification.............................................37
3.5. Taxes...............................................................37
3.6. Lender Statements; Survival of Indemnity............................39
3.7. Alternative Lending Installation....................................40
ARTICLE IV CONDITIONS PRECEDENT..............................................40
4.1. Initial Advance.....................................................40
ARTICLE V REPRESENTATIONS AND WARRANTIES.....................................43
5.1. Existence and Standing..............................................43
5.2. Authorization and Validity..........................................43
5.3. No Conflict; Government Consent.....................................44
5.4. Financial Statements................................................44
5.5. Material Adverse Change.............................................45
5.6. Taxes...............................................................45
5.7. Litigation and Contingent Obligations...............................45
5.8. Subsidiaries........................................................45
5.9. ERISA...............................................................46
5.10. Accuracy of Information.............................................46
5.11. Regulation U........................................................46
5.12. Material Agreements.................................................46
5.13. Compliance with Laws................................................46
5.14. Ownership of Properties.............................................47
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5.15. Plan Assets; Prohibited Transactions................................47
5.16. Environmental Matters...............................................48
5.17. Investment Company Act..............................................48
5.18. Public Utility Holding Company Act..................................48
5.19. Insurance...........................................................48
5.20. No Default or Unmatured Default.....................................48
5.21. SDN List Designation................................................48
5.22. Solvency............................................................48
ARTICLE VI COVENANTS.........................................................48
6.1. [Reserved.].........................................................48
6.2. Limitation on Indebtedness..........................................48
6.3. Limitation on Restricted Payments...................................51
6.4. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.................................54
6.5. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries...........................................55
6.6. Guarantees by Restricted Subsidiaries...............................56
6.7. Limitation on Transactions with Shareholders and Affiliates.........56
6.8. Limitation on Liens.................................................57
6.9. Limitation on Sale-Leaseback Transactions...........................59
6.10. Limitation on Asset Sales...........................................60
6.11. Existence...........................................................61
6.12. Payment of Taxes and Other Claims...................................61
6.13. Maintenance of Properties and Insurance.............................61
6.14. Notice of Defaults..................................................62
6.15. Reporting...........................................................62
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6.16. Mergers, Consolidations and Sales of Assets.........................63
6.17. Total Leverage Ratio................................................64
6.18. Collateral; Environmental Reports...................................64
6.19. Use of Proceeds.....................................................67
ARTICLE VII DEFAULTS.........................................................68
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES..................69
8.1. Acceleration........................................................69
8.2. Amendments..........................................................70
8.3. Preservation of Rights..............................................71
ARTICLE IX GENERAL PROVISIONS................................................71
9.1. Survival of Representations.........................................71
9.2. Governmental Regulation.............................................72
9.3. Headings............................................................72
9.4. Entire Agreement....................................................72
9.5. Several Obligations; Benefits of This Agreement.....................72
9.6. Expenses; Indemnification...........................................72
9.7. Numbers of Documents................................................73
9.8. Accounting..........................................................73
9.9. Severability of Provisions..........................................73
9.10. Nonliability of Lenders.............................................74
9.11. Confidentiality.....................................................74
9.12. Nonreliance.........................................................74
9.13. Disclosure..........................................................75
9.14. Performance of Obligations..........................................75
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9.15. USA Patriot Act Notification........................................75
ARTICLE X THE ADMINISTRATIVE AGENT...........................................76
10.1. Appointment; Nature of Relationship.................................76
10.2. Powers..............................................................76
10.3. General Immunity....................................................76
10.4. No Responsibility for Loans, Recitals, Etc..........................77
10.5. Action on Instructions of Lenders...................................77
10.6. Employment of Agents and Counsel....................................77
10.7. Reliance on Documents; Counsel......................................77
10.8. Agents' Reimbursement and Indemnification...........................78
10.9. Notice of Default...................................................78
10.10. Rights as a Lender..................................................78
10.11. Lender Credit Decision..............................................79
10.12. Successor Agents....................................................79
10.13. Administrative Agent and Lead Arrangers Fees........................80
10.14. Delegation to Affiliates............................................80
10.15. Co-Agents, Documentation Agent, Syndication Agent, Etc..............81
10.16. Collateral Documents................................................81
10.17. Supplemental Collateral Agent.......................................82
ARTICLE XI SETOFF; RATABLE PAYMENTS..........................................82
11.1. Setoff..............................................................82
11.2. Ratable Payments....................................................83
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS................83
12.1. Successors and Assigns..............................................83
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12.2. Participations......................................................84
12.3. Assignments.........................................................84
12.4. Dissemination of Information........................................86
12.5. Tax Treatment.......................................................86
ARTICLE XIII NOTICES.........................................................87
13.1. Notices; Effectiveness; Electronic Communication....................87
13.2. Change of Address, Etc..............................................88
ARTICLE XIV COUNTERPARTS; INTEGRATION; EFFECTIVENESS;
ELECTRONIC EXECUTION.............................................88
14.1. Counterparts; Effectiveness.........................................88
14.2. Electronic Execution of Assignments.................................88
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL......88
15.1. CHOICE OF LAW.......................................................88
15.2. CONSENT TO JURISDICTION.............................................88
15.3. WAIVER OF JURY TRIAL................................................89
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SCHEDULES
Commitment Schedule
Schedule I [Intentionally omitted.]
Schedule II Southwest Concrete Escrow and Deposit Accounts
Schedule III Permitted Alternative Fuel Acquisition
Schedule 5.7 - Litigation
Schedule 5.8 - Subsidiaries
Schedule 5.14(a)(i) - Owned Real Property
Schedule 5.14(a)(ii) - Real Property Leases
Schedule 5.14(a)(iii) - Tenant Leases
Schedule 5.14(b)(iii) - Real Property Collateral
Schedule 6.2(b)(ii) - Subordination Terms for Intercompany Indebtedness
Schedule 6.2(b)(iv) - Existing Indebtedness
Schedule 6.3 - Existing Minority Investments
Schedule 6.7 - Existing Affiliate Transactions
EXHIBITS
Exhibit A-1 - Form of Borrower's Counsel's Opinion
Exhibit A-2 - Form of Opinion of Local Counsel
Exhibit A-3 - Form of Corporate Formalities Opinion
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Assignment and Assumption Agreement
Exhibit D - Form of Money Transfer Instruction
Exhibit E - Form of Promissory Note (if requested)
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Exhibit F - Form of Officer's Certificate
Exhibit G - List of Closing Documents (including Collateral Documents)
Exhibit H - Form of Mortgage
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SECOND LIEN CREDIT AGREEMENT
This Second Lien Credit Agreement, dated as of September 8, 2004, is
entered into by and among Headwaters Incorporated, a Delaware corporation, the
Lenders, Xxxxxx Xxxxxxx Senior Funding, Inc. ("MSSF"), as Administrative Agent,
and MSSF and X.X. Xxxxxx Securities Inc., as joint lead arrangers and joint
bookrunners, JPMorgan Chase Bank, as syndication agent and Xxxxxx Xxxxxxx & Co.
Incorporated, as Collateral Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Certain Defined Terms. As used in this Agreement:
"Accounting Changes" is defined in Section 9.8 hereof.
"ACM Block & Brick" means ACM Block & Brick, LP.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the Closing Date, by which the Borrower or
any of its Restricted Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
of voting power) of the outstanding ownership interests of a partnership or
limited liability company of any Person.
"Adjusted Consolidated Net Income" means, for any period, the aggregate
net income (or loss) of the Borrower and its Restricted Subsidiaries determined
in conformity with GAAP; provided that the following items shall be excluded in
computing Adjusted Consolidated Net Income (without duplication):
(i) the net income (or loss) of any Person that is not a
Restricted Subsidiary, except that the Borrower's equity in the net income of
any such Person for such period (to the extent not otherwise excluded pursuant
to clauses (ii) through (vi) below) will be included up to the aggregate amount
of cash actually distributed by such Person during such period to the Borrower
or to its Restricted Subsidiaries (less minority interest therein) as a dividend
or other distribution;
(ii) the net income (or loss) of any Person accrued prior to
the date it becomes a Restricted Subsidiary or is merged into or consolidated
with the Borrower or any of its Restricted Subsidiaries or all or substantially
all of the property and assets of such Person are acquired by the Borrower or
any of its Restricted Subsidiaries;
(iii) the net income of any Restricted Subsidiary, that is not
a Guarantor, to the extent that the declaration or payment of dividends or
similar distributions by such Restricted Subsidiary of such net income is not at
the time permitted by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Restricted Subsidiary;
(iv) any gains or losses (on an after-tax basis) attributable
to sales of assets outside the ordinary course of business of the Borrower and
its Restricted Subsidiaries;
(v) solely for purposes of calculating the amount of
Restricted Payments that may be made pursuant to clause (C) of the first
paragraph of Section 6.3, any amount paid or accrued as dividends on Preferred
Stock of the Borrower owned by Persons other than the Company and any of the
Company's Restricted Subsidiaries; and
(vi) all extraordinary gains.
"Administrative Agent" means MSSF in its capacity as contractual
representative of the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, as Administrative Agent, and any successor Administrative
Agent appointed pursuant to Article X.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of several Loans, as the case may be (i) made by some or all of the
Lenders on the same Borrowing Date, or (ii) converted or continued by the
Lenders on the same date of conversion or continuation, consisting, in either
case, of the aggregate amount of the several Loans of the same Type and, in the
case of Eurodollar Loans, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of voting securities, by contract
or otherwise.
"Agents" means the Administrative Agent and the Collateral Agent.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as may be reduced from time to time pursuant hereto. The initial
Aggregate Commitment is One-Hundred Fifty Million and 00/100 Dollars
($150,000,000).
"Agreement" means this Credit Agreement, as it may be amended,
restated, supplemented or otherwise modified and as in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect in the United States, applied in a manner consistent
with that used in preparing the financial statements of the Borrower referred to
in Section 5.4, except as amended from time to time to incorporate Accounting
Changes pursuant to Section 9.8 hereof.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Base Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
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"Applicable Margin" means, (a) with respect to Floating Rate Loans,
5.00% and (b) with respect to Eurodollar Loans, 6.00%.
"Applicable Pledge Percentage" means 100%, but 65% in the case of a
pledge of Equity Interests of a Foreign Subsidiary to the extent a 100% pledge
would cause a Deemed Dividend Problem or a Financial Assistance Problem.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Asset Sale" means any sale, lease, transfer or other disposition
(including by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Borrower or any of its
Restricted Subsidiaries to any Person other than the Borrower or any of its
Restricted Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Borrower or any of its Restricted Subsidiaries
or (iii) any other property and assets (other than the Capital Stock or other
Investment in an Unrestricted Subsidiary) of the Borrower or any of its
Restricted Subsidiaries outside the ordinary course of business of the Borrower
or such Restricted Subsidiary and, in each case, that is not governed by Section
6.16; provided that "Asset Sale" shall not include (a) sales of Property in the
ordinary course of business and the granting of any option or other right to
purchase, lease or otherwise acquire such Property, but excluding Property
(other than fixtures or personal Property) subject to a Lien under a Mortgage,
(b) sales, transfers or other dispositions of assets constituting a Permitted
Investment or Restricted Payment permitted to be made under Section 6.3, (c)
sales, leases, transfers or other dispositions of Property that, together with
all other Property of the Borrower and its Subsidiaries previously leased, sold
or disposed of (other than dispositions otherwise permitted pursuant to this
definition) do not exceed 1% of Consolidated Total Assets in the aggregate for
any fiscal year, (d) any sale, transfer, assignment or other disposition of any
property or equipment that has become damaged, worn out, obsolete or otherwise
unsuitable for use in connection with the business of the Borrower or its
Restricted Subsidiaries but excluding in each case Property (other than fixtures
and personal Property) subject to a Lien under a Mortgage, (e) the sale of Cash
Equivalent Investments, (f) an issuance of Capital Stock by a Restricted
Subsidiary to the Borrower or to a Wholly-Owned Restricted Subsidiary, (g) a
disposition or transfer of Property by a Restricted Subsidiary to the Borrower,
by the Borrower to a Restricted Subsidiary, or by a Restricted Subsidiary to
another Restricted Subsidiary, (h) a sale or grant of licenses of intellectual
property entered into in the ordinary course of business, (i) leases of assets
in the ordinary course of business reasonably determined by the Borrower or its
Subsidiaries to be in the best interests of the Borrower and its Subsidiaries,
as applicable, or (j) to the extent consummated as Tax-Free Exchange
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Transactions, sales or dispositions of real Property with an aggregate fair
market value not to exceed, in any fiscal year of the Borrower, 1% of
Consolidated Total Assets.
"Assignment Agreement" is defined in Section 12.3.1.
"Authorized Officer" means any of the Chief Executive Officer, Chief
Financial Officer, Treasurer or General Counsel of the Borrower, or such other
officer of the Borrower as may be designated by the Borrower in writing to the
Administrative Agent from time to time, acting singly.
"Average Life" means, at any date of determination with respect to any
Indebtedness, the quotient obtained by dividing (1) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such Indebtedness and (b) the amount
of such principal payment by (2) the sum of all such principal payments.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest published by the Wall Street Journal, from time to
time, as the prime rate; and (b) 1/2 of 1% per annum above the Federal Funds
Effective Rate.
"BBH Debt" means the existing indebtedness of ACM Block & Brick owing
to Xxxxx Brothers Xxxxxxxx & Co.
"Borrower" means Headwaters Incorporated, a Delaware corporation, and
its permitted successors and assigns (including, without limitation, a debtor in
possession on its behalf).
"Borrower Incentive Plans" means the Borrower's 1995 Stock Option Plan,
the 2000 Employee Stock Purchase Plan, the 2002 Stock Incentive Plan, the 2003
Stock Incentive Plan and any similar or successor incentive plans as shall from
time to time be in effect with respect to the Borrower or any Subsidiary.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.6.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in New York City for the conduct of substantially
all of their commercial lending activities, interbank wire transfers can be made
on the Fedwire system and dealings in Dollars are carried on in the London
interbank market and (ii) for all other purposes, a day (other than a Saturday
or Sunday) on which banks generally are open in New York City for the conduct of
substantially all of their commercial lending activities and interbank wire
transfers can be made on the Fedwire system.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
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Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Interests.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.
"Change of Control" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 35% or more of the outstanding shares of voting stock
of the Borrower; (ii) other than pursuant to a transaction permitted hereunder,
the Borrower shall cease to own, directly or indirectly and free and clear of
all Liens or other encumbrances, a majority of the outstanding shares of voting
stock of the Guarantors on a fully diluted basis; or (iii) the majority of the
Board of Directors of the Borrower fails to consist of Continuing Directors.
"Closing Date" means September 8, 2004.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.
"Collateral" means all Property and interests in Property now owned or
hereafter acquired by the Borrower or any of its Subsidiaries in or upon which a
security interest, lien, mortgage, leasehold mortgage, deed of trust, leasehold
deed of trust or trust deed is granted to the Administrative Agent, for the
benefit of the Holders of the Obligations, whether under the Pledge and Security
Agreement, under any of the other Collateral Documents or under any of the other
Loan Documents.
"Collateral Agent" means MS&Co. Incorporated in its capacity as
Collateral Agent for the Lenders, and any successor Collateral Agent appointed
pursuant to Article X.
"Collateral Documents" means all agreements, instruments and documents
executed in connection with this Agreement that are intended to create or
evidence Liens to secure the Obligations, including, without limitation, the
Pledge and Security Agreement, the Intellectual Property Security Agreements,
the Mortgages and all other security agreements, mortgages, leasehold mortgages,
5
deeds of trust, leasehold deeds of trust, trust deeds, loan agreements, notes,
guarantees, subordination agreements, pledges, powers of attorney, consents,
assignments, contracts, fee letters, notices, leases, financing statements and
all other written matter whether heretofore, now, or hereafter executed by the
Borrower or any of its Subsidiaries and delivered to the Administrative Agent.
"Commitment" means, as to each Lender, its obligation to make a Loan to
the Borrower pursuant to Section 2.1 in an aggregate principal amount set forth
for such Lender on the Commitment Schedule.
"Commitment Schedule" means the Schedule identifying each Lender's
Commitment as of the Closing Date attached hereto and identified as such.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Interests of
such Person, whether outstanding on the Closing Date or issued thereafter,
including, without limitation, all series and classes of such common stock.
"Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation,
(iv) amortization, (v) non-cash charges for impairments of goodwill and
intangible assets and (vi) an amount equal to the tax credits under Section 29
of the Code during such period as a result of the Permitted Alternative Fuel
Acquisition up to an amount not to exceed $20,000,000 in any fiscal year minus,
to the extent included in Consolidated Net Income, (i) interest income, all
calculated for the Borrower and its Restricted Subsidiaries on a consolidated
basis and (ii) deferred license fees recognized in the fiscal quarter ending
March 31, 2004 in an amount equal to $24,755,000.00; provided that for the
twelve months ended June 30, 2004, Consolidated EBITDA shall be deemed to be
$202,828,000.00. Notwithstanding anything herein, in any financial statements of
the Borrower or in Agreement Accounting Principles to the contrary, for purposes
of calculating and determining Consolidated EBITDA, any Acquisition made by the
Borrower or any of its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during the
period for which such Consolidated EBITDA was calculated shall be deemed to have
occurred on the first day of the relevant period for which such Consolidated
EBITDA was calculated on a pro forma basis reasonably acceptable to the
Administrative Agent, but without giving effect to any projected synergies
resulting from such Acquisition.
"Consolidated Funded Indebtedness" means, at any time, with respect to
any Person, the sum of, without duplication, (i) the aggregate Dollar amount of
Consolidated Indebtedness owing by such Person or for which such Person is
liable which has actually been funded and is outstanding at such time, whether
or not such amount is due or payable at such time, plus (ii) the aggregate
stated or face amount of all Letters of Credit at such time for which such
Person is the account party or is otherwise liable, plus (iii) the aggregate
amount of Capitalized Lease Obligations owing by such Person or for which such
Person is otherwise liable, plus (iv) the aggregate amount of Off-Balance Sheet
Liabilities of such Person, plus (v) Contingent Obligations of any of the
Indebtedness described in the foregoing clauses (i), (ii), (iii) and (iv).
"Consolidated Indebtedness" means at any time, with respect to any
Person, the Indebtedness of such Person and its Subsidiaries calculated on a
consolidated basis as of such time.
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"Consolidated Interest Expense" means, with reference to any period,
the interest expense of the Borrower and its Restricted Subsidiaries calculated
on a consolidated basis for such period, in accordance with Agreement Accounting
Principles, including without limitation, any Off-Balance Sheet Liability that
would constitute interest if the transaction giving rise to such Off-Balance
Sheet Liability were re-characterized as a loan transaction.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Borrower and its Restricted Subsidiaries calculated on a
consolidated basis for such period in accordance with Agreement Accounting
Principles.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Borrower and its Restricted
Subsidiaries (which shall be as of a date not more than 90 days prior to the
date of such computation, and which shall not take into account Unrestricted
Subsidiaries), plus, to the extent not included, any Preferred Stock of the
Borrower, less any amounts attributable to Disqualified Stock or any equity
security convertible into or exchangeable for Indebtedness, the cost of treasury
stock and the principal amount of any promissory notes receivable from the sale
of the Capital Stock of the Borrower or any of its Restricted Subsidiaries, each
item to be determined in conformity with GAAP (excluding the effects of foreign
currency exchange adjustments under Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 52).
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses (other than for
collection or deposit in the ordinary course of business), contingently agrees
to purchase or provide funds for the payment of, or otherwise becomes or is
contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership,
other than indemnity obligations that do not relate to Indebtedness of third
parties.
"Continuing Director" means, with respect to any Person as of any date
of determination, any member of the board of directors of such Person who (i)
was a member of such board of directors on the Closing Date, or (ii) was
nominated for election or elected to such board of directors with the approval
of the required majority of the Continuing Directors who were members of such
board at the time of such nomination or election; provided that any individual
who is so elected or nominated in connection with a merger, consolidation,
acquisition or similar transaction shall not be a Continuing Director unless
such individual was a Continuing Director prior thereto.
7
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Conversion/Continuation Notice" is defined in Section 2.7.
"Credit Party" means, at any time, any of the Borrower and any Person
which is a Guarantor at such time.
"Deemed Dividend Problem" means, with respect to any Foreign
Subsidiary, such Foreign Subsidiary's accumulated and undistributed earnings and
profits being deemed to be repatriated to the Borrower or the applicable parent
Domestic Subsidiary for U.S. federal income tax purposes and the effect of such
repatriation causing adverse tax consequences to the Borrower or such parent
Domestic Subsidiary, in each case as determined by the Borrower in its
commercially reasonable judgment acting in good faith and in consultation with
its legal and tax advisors.
"Default" means an event described in Article VII.
"Defaulted Amount" means, with respect to any Lender at any time, any
amount required to be paid by such Lender to any Agent or any other Lender
hereunder or under any other Loan Document at or prior to such time that has not
been so paid as of such time, including, without limitation, any amount required
to be paid by such Lender to (a) the Administrative Agent pursuant to Section
2.16 to reimburse the Administrative Agent for the amount of any Loan made by
the Administrative Agent for the account of such Lender, (b) any other Lender
pursuant to Section 11.2 to purchase any participation in Loans owing to such
other Lender and (c) any Agent pursuant to Section 10.8 to reimburse such Agent
for such Lender's ratable share of any amount required to be paid by the Lenders
to such Agent as provided therein. In the event that a portion of a Defaulted
Amount shall be deemed paid pursuant to Section 2.19(b), the remaining portion
of such Defaulted Amount shall be considered a Defaulted Amount originally
required to be paid hereunder or under any other Loan Document on the same date
as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender that, at such time,
(a) owes a Defaulted Loan or a Defaulted Amount or (b) shall take any action or
be the subject of any action or proceeding of a type described in Section 7.8 or
7.9.
"Defaulted Loan" means, with respect to any Lender at any time, the
portion of any Loan required to be made by such Lender to the Borrower pursuant
to Section 2.1 at or prior to such time that has not been made by such Lender or
by the Administrative Agent for the account of such Lender pursuant to Section
2.16 as of such time. In the event that a portion of a Defaulted Loan shall be
deemed made pursuant to Section 2.18(a), the remaining portion of such Defaulted
Loan shall be considered a Defaulted Loan originally required to be made
pursuant to Section 2.1 on the same date as the Defaulted Loan so deemed made in
part.
8
"Disinterested Members" mean members of the board of directors of the
Borrower who are not employed by the Borrower or any Affiliate thereof.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (1) required to be redeemed prior to
the Maturity Date, (2) redeemable at the option of the holder of such class or
series of Capital Stock at any time prior to the Maturity Date or (3)
convertible into or exchangeable for Capital Stock referred to in clause (1) or
(2) above or Indebtedness having a scheduled maturity prior to the Maturity
Date; provided that only the portion of Capital Stock which so matures or is
mandatorily redeemable, is so convertible or exchangeable or is so redeemable at
the option of the holder thereof prior to such date will be deemed to be
Disqualified Stock; provided further that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to repurchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
Maturity Date shall not constitute Disqualified Stock if the "asset sale" or
"change of control" provisions applicable to such Capital Stock are no more
favorable to the holders of such Section 6.10 and such Capital Stock
specifically provides that such Person will not repurchase or redeem any such
stock pursuant to such provision prior to the Borrower's repayment of such Loans
as are required to be repaid pursuant to Section 6.10.
"Dollar", "dollar" and "$" means the lawful currency of the United
States of America.
"Domestic Subsidiary" means any Subsidiary of any Person organized
under the laws of a jurisdiction located in the United States of America.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, injunctions, permits, concessions, franchises,
licenses, agreements and other governmental restrictions relating to (i) the
protection of the environment, (ii) the effect of the environment on human
health, (iii) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (iv)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equipment" means all of the Borrower's and each Subsidiary's present
and future (i) equipment, including, without limitation, machinery,
manufacturing, distribution, data processing and office equipment, assembly
systems, tools, molds, dies, fixtures, appliances, furniture, furnishings,
vehicles, vessels, aircraft, aircraft engines, and trade fixtures, (ii) other
tangible personal property (other than inventory), and (iii) any and all
accessions, parts and appurtenances attached to any of the foregoing or used in
connection therewith, and any substitutions therefor and replacements, products
and proceeds thereof.
"Equity Interests" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
9
Person, and other ownership or profit interests in such Person (including,
without limitation, partnership, member or trust interests therein), whether
voting or non-voting, and whether or not such shares, warrants, options, rights
or other interests are authorized or otherwise existing on any date of
determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rules or regulations promulgated thereunder.
"Escrow Bank" is defined in Section 2.18(c).
"Eurodollar Advance" means an Advance consisting of Eurodollar Loans.
"Eurodollar Base Rate" means, for any Interest Period, an interest rate
per annum equal to the rate per annum obtained by dividing (a) the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
the page of the Telerate screen (or any successor page) that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 A.M. (London time)
two Business Days before the first day of such Interest Period (provided that,
if for any reason such rate does not appear on such page or service or such page
or service shall not be available, the term "Eurodollar Base Rate" shall mean
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal to the rate determined by the Administrative Agent to be the offered rate
on such other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 A.M. (London time) two Business
Days prior to the first day of such Interest Period) by (b) a percentage equal
to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.9, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of the Eurodollar Base Rate applicable to such
Interest Period, plus the Applicable Margin then in effect, changing as and when
the Applicable Margin changes.
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Loans comprising part of the same Advance means the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Loans is determined) having a term equal to such Interest Period.
"Excess Proceeds" has the meaning provided in Section 6.10.
10
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Administrative Agent, taxes imposed on its overall
net income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which such Lender or the Administrative Agent is incorporated or
organized or any political combination or subdivision or taxing authority
thereof or (ii) the jurisdiction in which the Administrative Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation is located.
"Exempt Property" means (i) in the case of the Real Property, all such
Real Property other than the Real Property Collateral, (ii) all vehicles and
other Collateral subject to state certificate of title statutes, (iii) all
Deposit Accounts (as defined in the Security Agreement) which are not maintained
with the Collateral Agent and that with respect to which Account Control
Agreements (as defined in the Pledge and Security Agreement) are not required to
be entered into pursuant to the terms of the Pledge and Security Agreement and
(iv) the escrow and deposit accounts established in connection with Permitted
Acquisitions or set forth on Schedule II hereto.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Existing Credit Agreement" means that certain Credit Agreement dated
as of March 31, 2004 between the Borrower, certain of its subsidiaries, the
lenders party thereto and Bank One, NA (Main Office Chicago) as administrative
agent, as the same has been amended or supplemented prior to the Closing Date.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (New
York City time) on such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics or (ii) any Rate Management Transaction.
"Financial Assistance Problem" means, with respect to any Foreign
Subsidiary, the inability of such Foreign Subsidiary to become a Subsidiary
Guarantor or to permit its Capital Stock from being pledged pursuant to a pledge
agreement on account of legal or financial limitations imposed by the
jurisdiction of organization of such Foreign Subsidiary or other relevant
jurisdictions having authority over such Foreign Subsidiary, in each case as
determined by the Borrower in its commercially reasonable judgment acting in
good faith and in consultation with its legal and tax advisors
"First Lien Administrative Agent" means MSSF, in its capacity as
administrative agent under the First Lien Credit Agreement.
11
"First Lien Collateral Agent" means MS&Co., in its capacity as
collateral agent under the First Lien Credit Agreement.
"First Lien Collateral Documents" means all agreements, instruments and
documents executed in connection with the First Lien Credit Agreement that are
intended to create or evidence Liens to secure the obligations under the First
Lien Loan Documents.
"First Lien Credit Agreement" means the Credit Agreement dated as of
September 8, 2004 in connection with the First Lien Financing by and among the
Borrower, as the borrower, the lenders party thereto, MSSF, as administrative
agent, Xxxxxx Xxxxxxx & Co. Incorporated, as collateral agent and JPMorgan Chase
Bank, as syndication agent .
"First Lien Financing" means the $715 million senior secured first lien
financing incurred by the Borrower pursuant to the First Lien Credit Agreement.
"First Lien Loan Documents" means the Loan Documents" as defined in the
First Lien Credit Agreement.
"First Tier Foreign Subsidiary" means each Foreign Subsidiary with
respect to which any one or more of the Borrower and its Domestic Subsidiaries
directly owns or controls more than 50% of such Foreign Subsidiary's issued and
outstanding equity interests.
"Floating Rate" means, for any day, a rate per annum equal to the sum
of (i) the Alternate Base Rate for such day, changing when and as the Alternate
Base Rate changes plus (ii) the Applicable Margin then in effect, changing as
and when the Applicable Margin changes.
"Floating Rate Advance" means an Advance consisting of Floating Rate
Loans.
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.9, bears interest at the Floating Rate.
"Foreign Subsidiary" means any Subsidiary of any which is not a
Domestic Subsidiary of such Person.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Governmental Authority" means any nation or government, any foreign,
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (1) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
12
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (2) entered into for purposes of
assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor" means each Subsidiary of the Borrower which is a party to
the Guaranty, including each Subsidiary of the Borrower which becomes a party to
the Guaranty pursuant to a joinder or other supplement thereto.
"Guaranty" means the Guaranty, dated as of the Closing Date, made by
the Guarantors in favor of the Administrative Agent for the benefit of the
Holders of the Obligations, as the same may be amended, restated, supplemented
or otherwise modified from time to time.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
"Holders of the Obligations" means the holders of the Obligations from
time to time and shall refer to (i) each Lender in respect of its Loans, (ii)
the Administrative Agent and the Lenders in respect of all other present and
future obligations and liabilities of the Borrower or any of the Guarantors of
every type and description arising under or in connection with this Agreement or
any other Loan Document, and (iii) their respective successors, transferees and
assigns.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness; provided that (1) any Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary will be deemed to be incurred
by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary and
(2) neither the accrual of interest nor the accretion of original issue discount
nor the payment of interest in the form of additional Indebtedness (to the
extent provided for when the Indebtedness on which such interest is paid was
originally issued) shall be considered an Incurrence of Indebtedness.
"Indebtedness" of a Person means, at any time, without duplication,
such Person's (i) obligations for borrowed money, (ii) obligations representing
the deferred purchase price of Property or services (other than current accounts
payable arising in the ordinary course of such Person's business payable on
terms customary in the trade), if the deferred purchase price is due more than
six (6) months after the date the obligation is incurred or is evidenced by a
note or similar written instrument, (iii) obligations which are evidenced by
notes, bonds, debentures, acceptances, or other instruments representing
extensions of credit (including, without limitation, securities convertible into
or exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights, options for the purchase or other
13
acquisition from such Person of such shares (or such other interests), (iv)
obligations of such Person to purchase, redeem, retire, defease or otherwise
acquire or make any payment in respect of any capital stock of any other Person,
valued, in the case of Redeemable Preferred Interests, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (v) Capitalized Lease Obligations, (vi) Contingent Obligations of
such Person, (vii) reimbursement obligations under Letters of Credit, bankers'
acceptances, surety bonds and similar instruments, (viii) Off-Balance Sheet
Liabilities, (ix) obligations under Sale and Leaseback Transactions, (x) Net
Xxxx-to-Market Exposure under Rate Management Transactions and other Financial
Contracts, (xi) Rate Management Obligations and (xii) any other obligation for
borrowed money which in accordance with Agreement Accounting Principles would be
shown as a liability on the consolidated balance sheet of such Person.
"Intellectual Property Security Agreements" means the intellectual
property security agreements as any Credit Party may from time to time make in
favor of the Administrative Agent for the benefit of the Holders of the
Obligations, in each case as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Intercreditor Agreement" means the intercreditor agreement dated as of
the date hereof among the Administrative Agent, the Collateral Agent, the First
Lien Administrative Agent and the First Lien Collateral Agent.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months, commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on but
exclude the day which corresponds numerically to such date one, two, three or
six months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding advances to customers or suppliers in the
ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable, prepaid expenses or deposits on the balance sheet of the
Borrower or its Restricted Subsidiaries and endorsements for collection or
deposit arising in the ordinary course of business) or capital contribution or
transfer of cash or other property to others or any payment for property or
services for the account or use of others, or any purchase or acquisition of
Capital Stock, bonds, notes, debentures or other similar instruments issued by,
such Person and shall include (1) the designation of a Restricted Subsidiary as
an Unrestricted Subsidiary and (2) the retention of the Capital Stock (or any
other Investment) by the Borrower or any of its Restricted Subsidiaries, of (or
in) any Person that has ceased to be a Restricted Subsidiary, including without
limitation, by reason of any transaction permitted by clause (c) or (d) of
Section 6.5. For purposes of the definition of "Unrestricted Subsidiary" and
Section 6.3, (a) the amount of, or a reduction in, an Investment shall be equal
to the book value thereof at the time such Investment is made or reduced and (b)
in the event the Borrower or a Restricted Subsidiary makes an Investment by
14
transferring assets to any Person and as part of such transaction receives Net
Cash Proceeds, the amount of such Investment shall be the book value of the
assets less the amount of Net Cash Proceeds so received, provided the Net Cash
Proceeds are applied in accordance with clause (i) or (ii) of Section 6.10(b).
"Lead Arranger" means MSSF and its successors, in its capacity as Sole
Lead Arranger and Sole Book Runners.
"Leased Real Property" means each parcel of real property leased or
subleased by any Credit Party or any of its Subsidiaries pursuant to any Real
Property Lease.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or affiliate of such Lender
or the Administrative Agent listed on the signature pages hereof or on the
administrative information sheets provided to the Administrative Agent in
connection herewith or on a Schedule or otherwise selected by such Lender or the
Administrative Agent pursuant to Section 2.15.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, security interest, encumbrance, lien, charge or deposit
arrangement or other arrangement having the practical effect of the foregoing
and shall include the interest of a vendor or lessor under any conditional sale
agreement, Capitalized Lease Obligation or other title retention agreement.
"Loan" is defined in Section 2.1.
"Loan Documents" means this Agreement, the Collateral Documents, the
Guaranty and all other documents, instruments, notes (including any Notes issued
pursuant to Section 2.11 (if requested)) and agreements executed in connection
herewith or therewith or contemplated hereby or thereby, as the same may be
amended, restated or otherwise modified and in effect from time to time.
"Material Adverse Change" means any material adverse change (i) in the
business, condition (financial or otherwise), performance, operations or results
of operations or properties of the Borrower and its Restricted Subsidiaries,
taken as a whole, (ii) the rights and remedies of any Agent or any Lender under
any Loan Document or (iii) in the ability of the Borrower and its Restricted
Subsidiaries (taken as a whole) to repay the Obligations or to perform their
obligations under the Loan Documents.
"Maturity Date" means the earlier of (i) September 1, 2012 and (ii) the
date the Loans are declared due and payable pursuant to Section 8.1 hereof.
"Moody's" means Xxxxx'x Investors Services, Inc. and any successor
thereto.
15
"Mortgage" means deeds of trust, trust deeds, mortgages, leasehold
mortgages and leasehold deeds of trust in substantially the form of Exhibit H
hereto (with such changes as may be required to account for local law matters)
and otherwise in form and substance reasonably satisfactory to the
Administrative Agent and covering the Real Property Collateral, in each case as
amended, restated, supplemented or otherwise modified from time to time.
"Mortgage Instruments" is defined in Section 6.18.
"Mortgage Policies" is defined in Section 6.18.
"MS&Co." means Xxxxxx Xxxxxxx & Co. Incorporated.
"MSSF" means Xxxxxx Xxxxxxx Senior Funding, Inc.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, which is covered by Title IV of ERISA and to which the
Borrower or any member of the Controlled Group is obligated, or within any of
the preceding five plan years has been obligated, to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any member of the Controlled Group or (b) was so maintained and in
respect of which the Borrower or any member of the Controlled Group could have
liability under Section 4064 or 4069 of ERISA in the event such plan has been or
were to be terminated.
"Net Cash Proceeds" means (a) with respect to any Asset Sale, the
proceeds of such Asset Sale received by the Borrower or its Restricted
Subsidiaries in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or Cash Equivalents, but excluding any other consideration received in the
form of assumption by the acquiring Person of Indebtedness or other obligations
relating to the properties or assets that are the subject of the Asset Sale, net
of:
(1) brokerage commissions and other fees and expenses
(including without limitation fees and expenses of counsel, investment bankers,
accountants and title and recording fees) related to such Asset Sale;
(2) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole;
(3) payments made to repay Indebtedness (other than pursuant
to an Offer to Purchase) or any other obligation outstanding at the time of such
Asset Sale that either (x) is secured by a Lien on the property or assets sold,
(y) is required to be paid as a result of such sale or (z) by the terms of such
Asset Sale or applicable law, must be repaid out of the proceeds from such Asset
Sale;
16
(4) all distributions and other payments required to be made
to minority interest holders in Subsidiaries or joint ventures as a result of
such Asset Sale (to the extent such amounts are received by the Company or its
Restricted Subsidiaries); and
(5) appropriate amounts to be provided by the Company or any
Restricted Subsidiary as a reserve against any liabilities associated with such
Asset Sale, including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale, all as determined in conformity with GAAP; and
(b) with respect to any issuance or sale of Capital Stock, the proceeds
of such issuance or sale in the form of cash or Cash Equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or Cash Equivalents, net of attorney's fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and brokerage,
consultant and other fees incurred in connection with such issuance or sale and
net of taxes paid or payable as a result thereof.
"Net Xxxx-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and "unrealized
profits" means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).
"Non-Consenting Lender" is defined in Section 8.2.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.11.
"Obligations" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Administrative
Agent, any Lender, the Lead Arranger, any affiliate of the Administrative Agent,
any Lender, or the Lead Arrangers, or any indemnitee under the provisions of
Section 9.6 or any other provisions of the Loan Documents, in each case of any
kind or nature, present or future, arising under this Agreement or any other
Loan Document, whether or not evidenced by any note, guaranty or other
instrument, whether or not for the payment of money, whether arising by reason
of an extension of credit, loan, foreign exchange risk, guaranty,
indemnification, or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, reasonable attorney's and
paralegals' fees and disbursements (in each case whether or not allowed), and
any other sum chargeable to the Borrower or any of its Subsidiaries under this
Agreement or any other Loan Document.
17
"Off-Balance Sheet Liability" of a Person means the principal component
of (i) any repurchase obligation or liability of such Person with respect to
Receivables or notes receivable sold by such Person, (ii) any liability under
any so-called "synthetic lease" or "tax ownership operating lease" transaction
entered into by such Person, or (iii) any obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the consolidated balance
sheets of such Person, but excluding from this clause (iii) all Operating
Leases.
"Offer to Prepay" means an offer to prepay Loans by the Borrower
commenced by delivering a notice to the Administrative Agent for distribution to
each Lender stating:
(i) the Section of this Agreement pursuant to which the offer is
being made and that all Loans (for which prepayment is elected
by the Lender thereof) will be prepaid on a pro rata basis;
(ii) the prepay price and the date of prepay (which shall be a
Business Day no earlier than 5 days nor later than 10 days
from the date such notice is delivered to the Administrative
Agent) (the "Prepayment Date");
(iii) that any Loan for which prepayment is not elected by the
Lender thereof will continue to accrue interest pursuant to
its terms;
(iv) that, unless the Borrower defaults in the payment of the
prepay price, any Loan accepted for payment pursuant to the
Offer to Prepay shall cease to accrue interest on and after
the Prepayment Date;
(v) that Lenders will be entitled to withdraw their election if
the Administrative Agent receives, not later than the close of
business on the third Business Day immediately preceding the
Prepayment Date, a telegram, facsimile transmission or letter
setting forth the name of such Lender, the principal amount of
Loans for which prepayment was to be elected and a statement
that such Lender is withdrawing his election to have such
Loans prepaid; and
(vi) that Lenders whose Loans are being prepaid only in part will
continue to hold Loans equal in principal amount to the
unprepaid portion of the Loans prepaid; provided that each
Loan prepaid and each remaining unpaid Loan shall be in a
principal amount of $1,000 or integral multiples thereof.
On the Prepayment Date, the Borrower shall (a) deposit with the
Administrative Agent money sufficient to pay the prepay price of all Loans or
portions thereof so accepted, together with accrued and unpaid interest through
the Prepayment Date and (b) deliver, or cause to be delivered, to the
Administrative Agent a certificate of an Authorized Officer specifying the Loans
or portions thereof being prepaid the Borrower. The Administrative Agent shall
promptly make available to the Lenders of Loans so accepted payment in an amount
equal to the prepay price.
18
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Other Taxes" is defined in Section 3.5(ii).
"Owned Real Property" means all real property owned by any Credit Party
or any of its Subsidiaries from time to time.
"Pari Passu Indebtedness" has the meaning provided in Section 6.10.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each February, May, August and
November and the Maturity Date.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto
"Permitted Acquisition" means any Acquisition meeting the following
requirements or otherwise approved by the Required Lenders:
(i) as of the date of the consummation of such Acquisition, no
Default or Unmatured Default shall have occurred and be continuing or would
result from such Acquisition, and the representation and warranty contained in
Section 5.11 shall be true both before and after giving effect to such
Acquisition;
(ii) such Acquisition is consummated on a non-hostile basis
pursuant to a negotiated acquisition agreement approved by the board of
directors or other applicable governing body of the seller or entity to be
acquired, and no material challenge to such Acquisition (excluding the exercise
of appraisal rights) shall be pending or threatened by any shareholder or
director of the seller or entity to be acquired;
(iii) the business to be acquired in such Acquisition is
similar or related to one or more of the lines of business in which the Borrower
and its Subsidiaries are engaged on the Closing Date;
(iv) as of the date of the consummation of such Acquisition,
all material governmental and corporate approvals required in connection
therewith shall have been obtained;
(v) (a) such Acquisition is a Permitted Alternative Fuel
Acquisition or (b) during any fiscal year, (1) the Purchase Price for each such
Acquisition (other than a Permitted Fuel Acquisition) payable in cash shall not
exceed $30,000,000 and, together with the Purchase Price payable in cash for all
other Permitted Acquisitions, shall not exceed an amount equal to $50,000,000
and (2) the Purchase Price for each such Acquisition (other than a Permitted
Alternative Fuel Acquisition) not payable in cash (other than equity issued by
the Borrower), together with the Purchase Price not payable in cash (other than
equity issued by the Borrower) for all other Permitted Acquisitions, shall not
19
exceed an amount equal to $20,000,000 (as determined by reference to the
underlying documents for such transaction, as long as such documents shall be
the product of an arm's length basis and entered into in good faith), provided
that (x) limitations set forth in this clause (b) shall not apply to any
Acquisition if the Total Leverage Ratio after giving pro forma effect to such
Acquisition is less than or equal to 4.00:1.00 and (y) any Acquisition
consummated during a period when the Total Leverage Ratio, after giving pro
forma effect to such Acquisition, was less than or equal to 4.00:1.00 shall be
disregarded for purposes of determining compliance with this clause (b); and
(vi) prior to the consummation of such Permitted Acquisition,
the Borrower shall have delivered to the Administrative Agent a pro forma
consolidated balance sheet, income statement and cash flow statement of the
Borrower and its Subsidiaries (the "Acquisition Pro Forma"), based on the
Borrower's most recent financial statements delivered pursuant to Section 6.15.1
and using historical financial statements for the acquired entity provided by
the seller(s) or which shall be complete and shall fairly present, in all
material respects, the financial condition and results of operations and cash
flows of the Borrower and its Subsidiaries in accordance with Agreement
Accounting Principles, but taking into account such Permitted Acquisition and
the funding of all Indebtedness in connection therewith, and such Acquisition
Pro Forma shall reflect that, on a pro forma basis, the Borrower would have been
in compliance with the financial covenant set forth in Section 6.17 for the four
fiscal quarter period reflected in the compliance certificate most recently
delivered to the Administrative Agent pursuant to Section 6.15.3 prior to the
consummation of such Permitted Acquisition (giving effect to such Permitted
Acquisition and all Indebtedness funded in connection therewith as if made on
the first day of such period).
"Permitted Alternative Fuel Acquisition" means the Acquisition of
membership interests listed on Schedule III hereto for an aggregate purchase
price (excluding amounts accounted for as expenses on the financial statements
of the Borrower) not to exceed $15 million.
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Indebtedness" means unsecured Indebtedness of the Borrower
whether senior or subordinated provided that (i) both before and after the
incurrence of such Indebtedness, the Borrower is in pro forma compliance with
Section 6.17, (ii) in no event shall the terms of such Indebtedness require
amortization prior to 6 months after the Maturity Date, (iii) a Subsidiary under
the Loan Documents shall not guarantee such Indebtedness unless (x) such
Subsidiary is also a Guarantor under the Guaranty and (y) such guarantee of such
Indebtedness provides for the release and termination thereof, without action by
any party, upon any release and termination of such Guaranty by the applicable
Subsidiary (other than by reason of repayment and satisfaction of all of the
Obligations), (iv) to the extent any such Indebtedness is subordinated, such
Indebtedness shall be subordinated on terms and conditions reasonably acceptable
to the Administrative Agent and (v) the Net Cash Proceeds from such Indebtedness
shall be applied to make a prepayment of Indebtedness under the First Lien
Credit Agreement or an Offer to Prepay.
"Permitted Investment" means:
(i) an Investment in the Borrower or a Guarantor or a Person
which will, upon the making of such Investment, become a Guarantor or
be merged or consolidated with or into or transfer or convey all or
20
substantially all its assets to, the Borrower or a Guarantor; provided
that such person's primary business is related, ancillary or
complementary to the businesses of the Borrower and the Guarantors on
the date of such Investment;
(ii) Cash Equivalent Investments;
(iii) payroll, travel and similar advances or loans to cover
matters that are expected at the time of such advances or loans
ultimately to be treated as expenses in accordance with GAAP;
(iv) stock, obligations or securities received in satisfaction
of judgments;
(v) an Investment in by an Unrestricted Subsidiary consisting
solely of an Investment in another Unrestricted Subsidiary;
(vi) Rate Management Transactions designed solely to protect
the Borrower or its Restricted Subsidiaries against fluctuations in
interest rates, commodity prices or foreign currency exchange rates;
(vii) receivables owing to the Borrower or any Restricted
Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
(viii) any Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and
in compliance with Section 6.10;
(ix) an Investment by the Borrower or any of its Restricted
Subsidiaries that, together with all other outstanding Investments made
pursuant to this clause (ix), does not exceed $20 million;
(x) deposits required by government agencies or public
utilities (including pertaining to taxes and other similar charges);
(xi) Guarantees issued in accordance with the provisions of
Section 6.2;
(xii) Investments in existence on the Closing Date;
(xiii) Investments in the Loans;
(xiv) Permitted Acquisitions; and
(xv) Investments in entities in which the Borrower or any
Restricted Subsidiary owns less than 100% of the issued and outstanding
equity interests thereof, including the Investments described in
Schedule 6.3, provided that Investments made after the date of this
Agreement do not exceed over the term of this Agreement, an amount
equal to $10 million plus an aggregate amount equal to 5% of
Consolidated EBITDA for each twelve month period following the Closing
21
Date (the "Minority Investment Base Amount") in any fiscal year of the
Borrower; provided further that if the aggregate amount of such
Investments actually made in any one fiscal year of the Borrower are
actually less than the Minority Investment Base Amount (the difference
being the "Shortfall Amount"), then, so long as no Default or Unmatured
Default has occurred and is continuing, the permitted amount of such
Investments during the immediately succeeding fiscal year only shall be
an amount equal to the Minority Investment Base Amount plus the
Shortfall Amount.
"Permitted Purchase Money Indebtedness" is defined in Section
6.2(b)(vi).
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan, excluding any
Multiemployer Plan, which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code as to which the Borrower
or any member of the Controlled Group may have any liability.
"Pledge and Security Agreement" means that certain Second Lien Pledge
and Security Agreement, dated as of the Closing Date, by and between the Credit
Parties and the Collateral Agent for the benefit of the Holders of the
Obligations, as the same may be amended, restated, supplemented, or otherwise
modified from time to time.
"Pledge Subsidiary" means each Domestic Subsidiary and each First Tier
Foreign Subsidiary.
"Preferred Interests" means, with respect to any Person, equity
interests issued by such Person that are entitled to a preference or priority
over other equity interests issued by such Person upon any distribution of such
Person's property and assets, whether by dividend or upon liquidation.
"Prepayment Date" is defined in the definition of Offer to Prepay.
"Pro Forma Opening Statements" is defined in Section 4.1.10.
"Projections" is defined in Section 4.1.10.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro Rata Share" means, with respect to any Lender, the percentage
obtained by dividing (i) such Lender's Commitment at such time by (ii) the
aggregate amount of all of the Commitments at such time; provided, however, if
all of the Commitments are terminated pursuant to the terms of this Agreement,
then "Pro Rata Share" means the percentage obtained by dividing (a) the sum of
such Lender's outstanding Loans at such time by (b) the aggregate outstanding
amount of all Loans at such time.
"Purchasers" is defined in Section 12.3.1.
22
"Rate Management Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered by the
Borrower or a Subsidiary which is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.
"Real Property" means the Leased Real Property and the Owned Real
Property.
"Real Property Collateral" means all Owned Real Property listed on
Schedule 5.14(b)(iii), any Owned Real Property acquired after the Closing Date
with a net book value in excess of $1,000,000 and any additional Owned Real
Property to the extent that the aggregate net book value of all Owned Real
Property that does not constitute Real Property Collateral exceeds $15,000,000.
"Real Property Leases" means all leases of real property under which
any Credit Party or any of its Subsidiaries is a lessee from time to time.
"Receivable(s)" means and includes all of the Borrower's and each
Restricted Subsidiary's presently existing and hereafter arising or acquired
accounts, accounts receivable, and all present and future rights of the Borrower
or such Restricted Subsidiary to payment for goods sold or leased or for
services rendered (except those evidenced by instruments or chattel paper),
whether or not they have been earned by performance, and all rights in any
merchandise or goods which any of the same may represent, and all rights, title,
security and guarantees with respect to each of the foregoing, including,
without limitation, any right of stoppage in transit.
"Redeemable" means, with respect to any equity interest, any
Indebtedness or any other right or obligation, any such equity interest,
Indebtedness, right or obligation that (a) the issuer has undertaken to redeem
at a fixed or determinable date or dates, whether by operation of a sinking fund
or otherwise, or upon the occurrence of a condition not solely within the
control of the issuer or (b) is redeemable at the option of the holder.
"Refinancing" means the refinancing of all outstanding Indebtedness
incurred under the Existing Credit Agreement.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
23
extension of credit by banks, non-banks and non-broker lenders for the purpose
of purchasing or carrying margin stocks applicable to member banks of the
Federal Reserve System.
"Replacement Assets" means, on any date, any capital expenditures,
property or assets (other than current assets) of a nature or type or that are
used in a business (or an Investment in a company having property or assets of a
nature or type, or engaged in a business) similar or related to the nature or
type of the property and assets of, or the business of, the Borrower and its
Restricted Subsidiaries existing on such date.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan
subject to Title IV of ERISA, excluding, however, such events as to which the
PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that
it be notified within 30 days of the occurrence of such event, provided,
however, that a failure to meet the minimum funding standard of Section 412 of
the Code and of Section 302 of ERISA shall be a Reportable Event regardless of
the issuance of any such waiver of the notice requirement in accordance with
either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having more than 50%
of the sum of the aggregate outstanding principal amount of Loans at such time,
provided, however, that if any Lender shall be a Defaulting Lender at such time,
there shall be excluded from the determination of Required Lenders at such time
the outstanding aggregate principal amount of Loans of such Lender at such time.
"Restricted Payments" has the meaning provided in Section 4.04.
"Restricted Subsidiary" means any Subsidiary of the Borrower other than
an Unrestricted Subsidiary.
"S&P" means Standard and Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group or with respect to which the Borrower or any member of the
Controlled Group is reasonably expected to incur liability under Section 4064 or
4069 of ERISA.
24
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Stated Maturity" means, with respect to any Indebtedness, the date
specified in such Indebtedness as the fixed date on which the final installment
of principal of such Indebtedness is due and payable, but shall not include any
contingent obligations to repay, redeem or repurchase any such principal prior
to the date scheduled for the payment thereof at the option of holders or
otherwise.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Obligations to the
written reasonable satisfaction of the Administrative Agent.
"Subordinated Indebtedness Documents" means any document, agreement or
instrument evidencing any Subordinated Indebtedness or entered into in
connection with any Subordinated Indebtedness.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Supplemental Collateral Agent" is defined in Section 10.17.
"Tapco Acquisition" means the acquisition by the Borrower of 100% of
the ownership interests in Tapco Holdings, Inc., a Michigan corporation pursuant
to the Tapco Acquisition Documents.
"Tapco Acquisition Documents" means the Agreement and Plan of Merger
dated as of September 8, 2004 by and among the Borrower, Headwaters T
Acquisition Corp., a direct wholly owned Subsidiary of the Borrower and Tapco
Holdings, Inc., (b) the certificate of merger of Headwaters T Acquisitions Corp.
into Tapco Holdings, Inc., duly filed with the State of Michigan and (c) the
certificate of Articles of Merger/Share Exchange of Headwaters T Acquisition
Corp. into Tapco Holdings, Inc., duly filed with the State of Utah Department of
Commerce.
25
"Tapco Real Property Collateral" means the Real Property Collateral
marked with an asterisk on Schedules 5.14(b)(iii) and 5.14(b)(iv).
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Tax-Free Exchange Transactions" means any transaction involving the
purchase or sale of Property which does not trigger capital gains or similar
taxes for the Borrower or any Subsidiary thereof.
"Tenant Leases" means all leases of real property under which any
Credit Party or any of its Subsidiaries is the lessor or sublessor from time to
time.
"Transferee" is defined in Section 12.4.
"Total Leverage Ratio" is defined in Section 6.17.
"Transaction" means collectively the Tapco Acquisition, the Refinancing
and the transactions contemplated under the Loan Documents.
"Transaction Documents" means, collectively, the Loan Documents and the
Acquisition Documents.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as
a Floating Rate Loan or a Eurodollar Loan.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under each Single Employer
Plan subject to Title IV of ERISA exceeds the fair market value of all such
Plan's assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan for which a valuation report is available,
using actuarial assumptions for funding purposes as set forth in such report.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Unrestricted Subsidiary" means (1) any Subsidiary of the Borrower that
at the time of determination shall be designated an Unrestricted Subsidiary by
the board of directors of the Borrower in the manner provided below and (2) any
Subsidiary of an Unrestricted Subsidiary. The board of directors of the Borrower
may designate any Restricted Subsidiary (including any newly acquired or newly
formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, the Company or any Restricted Subsidiary; provided that (A) any Guarantee by
the Borrower or any Restricted Subsidiary of any Indebtedness of the Subsidiary
being so designated shall be deemed an "Incurrence" of such Indebtedness and an
26
"Investment" by the Company or such Restricted Subsidiary (or both, if
applicable) at the time of such designation; (B) either (I) the Subsidiary to be
so designated has total assets of $1,000 or less or (II) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under Section
6.3 and (C) if applicable, the Incurrence of Indebtedness and the Investment
referred to in clause (A) of this proviso would be permitted under Section 6.2
and Section 6.3. The board of directors of the Borrower may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that (a) no
Default or Unmatured Default shall have occurred and be continuing at the time
of or after giving effect to such designation and (b) all Liens and Indebtedness
of such Unrestricted Subsidiary outstanding immediately after such designation
would, if Incurred at such time, have been permitted to be Incurred (and shall
be deemed to have been Incurred) for all purposes of this Agreement. Any such
designation by the board of directors of the Borrower shall be evidenced to the
Administrative Agent by promptly filing with the Administrative Agent a copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares or Investments by foreign nationals mandated by
applicable law) by such Person or one or more Wholly Owned Subsidiaries of such
Person.
1.2. Plural Forms. The foregoing definitions shall be equally
applicable to both the singular and plural forms of the defined terms.
ARTICLE II
THE loans
2.1. Loans. Each Lender severally and not jointly agrees to make a term
loan, in Dollars, to the Borrower on the Closing Date in an amount equal to such
Lender's Commitment (each such loan being referred to herein individually as a
"Loan" and collectively as the "Loans"). Immediately upon the making of the
Loans, the Commitments will be reduced to Zero. No portion of a Loan once repaid
or prepaid may be reborrowed.
2.2. Repayments. Any outstanding Loans shall be paid in full by the
Borrower on the Maturity Date and all other unpaid Obligations shall be paid in
full by the Borrower on the earlier of the date when due or the Maturity Date,
as applicable.
2.3. Ratable Loans; Types of Advances. (a) Each Advance hereunder shall
consist of Loans made from the several Lenders ratably in proportion to their
respective Pro Rata Shares.
(b) The Advances may be Floating Rate Advances or Eurodollar
Advances, or a combination thereof, selected by the Borrower in accordance with
Sections 2.6 and 2.7.
2.4. Minimum Amount of Each Advance. Each Eurodollar Advance shall be
in the minimum amount of $10,000,000 (and in multiples of $1,000,000 if in
excess thereof), and each Floating Rate Advance shall be in the minimum amount
of $10,000,000 (and in multiples of $1,000,000 if in excess thereof).
27
2.5. Optional Principal Payments. Subject to the provisions of the next
succeeding sentence, the Borrower may from time to time pay (a) all outstanding
Floating Rate Loans, or any portion of the outstanding Floating Rate Loans, in a
minimum aggregate amount of $5,000,000 or any integral multiple of $1,000,000 in
excess thereof, in each case upon two (2) Business Days' prior notice to the
Administrative Agent and (b) subject to the payment of any funding
indemnification amounts required by Section 3.4, all outstanding Eurodollar
Loans, or, in a minimum aggregate amount of $5,000,000 or any integral multiple
of $1,000,000 in excess thereof, any portion of the outstanding Eurodollar Loans
upon three (3) Business Days' prior notice to the Administrative Agent.
Notwithstanding the foregoing, (i) the Borrower shall pay a premium of 4.00% of
the aggregate principal amount of Loans prepaid during the period from the
Closing Date to but excluding the first anniversary of the Closing Date, (ii)
the Borrower shall pay a premium of 3.00% of the aggregate principal amount of
Loans prepaid during the period from the first anniversary of the Closing Date
to but excluding the second anniversary of the Closing Date, (iii) the Borrower
shall pay a premium of 2.00% of the aggregate principal amount of Loans prepaid
during the period from the second anniversary of the Closing Date to but
excluding the third anniversary of the Closing Date and (iv) the Borrower shall
pay a premium of 1.00% of the aggregate principal amount of Loans prepaid during
the period from the third anniversary of the Closing Date to but excluding the
fourth anniversary of the Closing Date.
2.6. Method of Selecting Types and Interest Periods for New Advances.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time;
provided that there shall be no more than 5 Interest Periods in effect with
respect to all of the Loans at any time, unless such limit has been waived by
the Administrative Agent in its sole discretion. The Borrower shall give the
Administrative Agent irrevocable notice (a "Borrowing Notice") not later than
2:00 p.m. (New York City time) at least one Business Day before the Borrowing
Date of each Floating Rate Advance and three Business Days before the Borrowing
Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than 1:00 p.m. (New York City time) on each Borrowing Date, each
Lender shall make available its Loan or Loans in Federal or other funds
immediately available in New York City to the Administrative Agent at its
address specified pursuant to Article XIII. The Administrative Agent will
promptly make the funds so received from the Lenders available to the Borrower
at the Administrative Agent's aforesaid address.
2.7. Conversion and Continuation of Outstanding Advances; No Conversion
or Continuation of Eurodollar Advances After Default. Floating Rate Advances
shall continue as Floating Rate Advances unless and until such Floating Rate
28
Advances are converted into Eurodollar Advances pursuant to this Section 2.7 or
are repaid in accordance with Section 2.5. Each Eurodollar Advance shall
continue as a Eurodollar Advance until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance shall be automatically
converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or
was repaid in accordance with Section 2.5 or (y) the Borrower shall have given
the Administrative Agent a Conversion/Continuation Notice (as defined below)
requesting that, at the end of such Interest Period, such Eurodollar Advance
continue as a Eurodollar Advance for the same or another Interest Period. The
Borrower may elect from time to time to convert all or any part of an Advance of
any Type into any other Type or Types of Advances; provided that any conversion
of any Eurodollar Advance shall be made on, and only on, the last day of the
Interest Period applicable thereto, and provided, further, that no Advance that
is less than $2,000,000 may be converted into or continued as a Eurodollar
Advance. Notwithstanding anything to the contrary contained in this Section 2.7,
during the continuance of a Default or an Unmatured Default, the Administrative
Agent may (or shall at the direction of the Required Lenders), by notice to the
Borrower, declare that no Advance may be made, converted or continued as a
Eurodollar Advance. The Borrower shall give the Administrative Agent irrevocable
notice (a "Conversion/Continuation Notice") of each conversion of an Advance or
continuation of a Eurodollar Advance not later than 2:00 p.m. (New York City
time) at least one (1) Business Day, in the case of a conversion into a Floating
Rate Advance, or three (3) Business Days, in the case of a conversion into or
continuation of a Eurodollar Advance, prior to the date of the requested
conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
2.8. Changes in Interest Rate, Etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.7, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to Section 2.7 hereof, at a rate per annum equal to the Floating Rate for such
day. Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Administrative Agent as
applicable to such Eurodollar Advance based upon the Borrower's selections under
Sections 2.6 and 2.7 and otherwise in accordance with the terms hereof. No
Interest Period may end after the Maturity Date.
2.9. Rates Applicable After Default. During the continuance of a
Default (including the Borrower's failure to pay any Loan at maturity) the
Required Lenders may, at their option, by notice to the Borrower (which notice
29
may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that (i) each Eurodollar Advance shall bear interest
for the remainder of the applicable Interest Period at the rate otherwise
applicable to such Interest Period plus 2% per annum and (ii) each Floating Rate
Advance shall bear interest at a rate per annum equal to the Floating Rate in
effect from time to time plus 2% per annum; provided that, during the
continuance of a Default under Section 7.7 or 7.8, the interest rates set forth
in clauses (i) and (ii) above shall be applicable to all Advances, fees and
other Obligations hereunder without any election or action on the part of the
Administrative Agent or any Lender.
2.10. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Administrative Agent at the Administrative Agent's
address specified pursuant to Article XIII, or at any other Lending Installation
of the Administrative Agent specified in writing by the Administrative Agent to
the Borrower, by 1:00 p.m. (New York City time) on the date when due and shall
be applied ratably by the Administrative Agent among the Lenders. Each payment
delivered to the Administrative Agent for the account of any Lender shall be
delivered promptly by the Administrative Agent to such Lender in the same type
of funds that the Administrative Agent received at its address specified
pursuant to Article XIII or at any Lending Installation specified in a notice
received by the Administrative Agent from such Lender.
2.11. Noteless Agreement; Evidence of Indebtedness.
(i) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from
time to time hereunder.
(ii) The Administrative Agent shall also maintain accounts in which
it will record (a) the date and the amount of each Loan made
hereunder, the Type thereof and the Interest Period (in the
case of a Eurodollar Advance) with respect thereto, (b) the
amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender
hereunder, (c) the effective date and amount of each
Assignment Agreement delivered to and accepted by it and the
parties thereto pursuant to Section 12.3, (d) the amount of
any sum received by the Administrative Agent hereunder from
the Borrower and each Lender's share thereof, and (e) all
other appropriate debits and credits as provided in this
Agreement, including, without limitation, all fees, charges,
expenses and interest.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of
the existence and amounts of the Obligations therein recorded;
provided, however, that the failure of the Administrative
Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the
Borrower to repay the Obligations in accordance with their
terms.
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(iv) Any Lender may request that its Loans be evidenced by
promissory notes (the "Notes") in substantially the form of
Exhibit. In such event, the Borrower shall prepare, execute
and deliver to such Lender such Note(s) payable to the order
of such Lender. Thereafter, the Loans evidenced by such
Note(s) and interest thereon shall at all times (prior to any
assignment pursuant to Section 12.3) be represented by one or
more Notes payable to the order of the payee named therein,
except to the extent that any such Lender subsequently returns
any such Note(s) for cancellation and requests that such Loans
once again be evidenced as described in paragraphs (i) and
(ii) above.
2.12. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Administrative Agent or any Lender in
good faith believes to be acting on behalf of the Borrower, it being understood
that the foregoing authorization is specifically intended to allow Borrowing
Notices and Conversion/Continuation Notices to be given telephonically. The
Borrower agrees to deliver promptly to the Administrative Agent a written
confirmation, signed by an Authorized Officer, if such confirmation is requested
by the Administrative Agent or any Lender, of each telephonic notice. If the
written confirmation differs in any material respect from the action taken by
the Administrative Agent and the Lenders, the reasonable and documented records
of the Administrative Agent and the Lenders shall govern absent manifest error.
2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable in arrears on each Payment Date,
commencing with the first such date to occur after the Closing Date, on any date
on which the Floating Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a Eurodollar
Advance on a day other than a Payment Date shall be payable on the date of
conversion. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest on Eurodollar Advances shall be
calculated for actual days elapsed on the basis of a 360-day year. Interest on
Floating Rate Advances shall be calculated for actual days elapsed on the basis
of a 365/366-day year. Interest shall be payable for the day an Advance is made
but not for the day of any payment on the amount paid if payment is received
prior to 1:00 p.m. (New York City time) at the place of payment. If any payment
of principal of or interest on an Advance, any fees or any other amounts payable
to the Administrative Agent or any Lender hereunder shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest, fees and commissions in connection with
such payment.
2.14. Notification of Advances, Interest Rates, Prepayments. Promptly
after receipt thereof, the Administrative Agent will notify each Lender of the
contents of each Borrowing Notice, Conversion/Continuation Notice, and repayment
notice received by it hereunder. The Administrative Agent will notify the
Borrower and each Lender of the interest rate applicable to each Eurodollar
31
Advance promptly upon determination of such interest rate and will give the
Borrower and each Lender prompt notice of each change in the Alternate Base
Rate.
2.15. Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender, as applicable, and may change its
Lending Installation from time to time. All terms of this Agreement shall apply
to any such Lending Installation and the Loans and any Notes issued hereunder
shall be deemed held by each Lender for the benefit of any such Lending
Installation. Each Lender may, by written notice to the Administrative Agent and
the Borrower in accordance with Article XIII, designate replacement or
additional Lending Installations through which Loans will be made by it or
Facility LCs will be issued by it and for whose account Loan payments are to be
made.
2.16. Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the Administrative
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Administrative Agent until the date the Administrative Agent recovers
such amount at a rate per annum equal to (x) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.17. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 or if any
Lender becomes a Defaulting Lender (any Lender so affected an "Affected
Lender"), the Borrower may elect, if such amounts continue to be charged or such
suspension is still effective, to terminate or replace the Commitment and Loans
of such Affected Lender, provided that no Default or Unmatured Default shall
have occurred and be continuing at the time of such termination or replacement,
and provided further that, concurrently with such termination or replacement,
(i) if the Affected Lender is being replaced, another bank or other entity which
is reasonably satisfactory to the Borrower and the Administrative Agent shall
agree, as of such date, to purchase for cash the Loans of the Affected Lender
pursuant to an Assignment Agreement substantially in the form of Exhibit C and
to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender to be terminated as of such date and to
comply with the requirements of Section 12.3 applicable to assignments, and (ii)
the Borrower shall pay to such Affected Lender in immediately available funds on
the day of such replacement (A) all interest, fees and other amounts then
32
accrued but unpaid to such Affected Lender by the Borrower hereunder to and
including the date of termination, including without limitation payments due to
such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any,
equal to the payment which would have been due to such Lender on the day of such
replacement under Section 3.4 had the Loans of such Affected Lender been prepaid
on such date rather than sold to the replacement Lender, in each case to the
extent not paid by the purchasing lender and (iii) if the Affected Lender is
being terminated, the Borrower shall pay to such Affected Lender all Obligations
due to such Affected Lender (including the amounts described in the immediately
preceding clauses (i) and (ii) plus, to the extent not paid by the replacement
Lender, the outstanding principal balance of such Affected Lender's Advances).
2.18. Defaulting Lenders. (a) In the event that, at any one time, (i)
any Lender shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Loan to the Borrower and (iii) the Borrower shall be required to make
any payment hereunder or under any other Loan Document to or for the account of
such Defaulting Lender, then the Borrower may, so long as no Default shall occur
or be continuing at such time and to the fullest extent permitted by applicable
law, set off and otherwise apply the Obligation of the Borrower to make such
payment to or for the account of such Defaulting Lender against the obligation
of such Defaulting Lender to make such Defaulted Loan. In the event that, on any
date, the Borrower shall so set off and otherwise apply its obligation to make
any such payment against the obligation of such Defaulting Lender to make any
such Defaulted Loan on or prior to such date, the amount so set off and
otherwise applied by the Borrower shall constitute for all purposes of this
Agreement and the other Loan Documents a Loan by such Defaulting Lender made on
the date of such setoff under the Facility pursuant to which such Defaulted Loan
was originally required to have been made pursuant to Section 2.1. Such Loan
shall be considered, for all purposes of this Agreement, to comprise part of the
Advance in connection with which such Defaulted Loan was originally required to
have been made pursuant to Section 2.1, even if the other Loans comprising such
Advance shall be Eurodollar Loans on the date such Loan is deemed to be made
pursuant to this subsection (a). The Borrower shall notify the Administrative
Agent at any time the Borrower exercises its right of set-off pursuant to this
subsection (a) and shall set forth in such notice (A) the name of the Defaulting
Lender and the Defaulted Loan required to be made by such Defaulting Lender and
(B) the amount set off and otherwise applied in respect of such Defaulted Loan
pursuant to this subsection (a). Any portion of such payment otherwise required
to be made by the Borrower to or for the account of such Defaulting Lender which
is paid by the Borrower, after giving effect to the amount set off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section 2.18.
(b) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
any Agent or any of the other Lenders and (iii) the Borrower shall make any
payment hereunder or under any other Loan Document to the Administrative Agent
for the account of such Defaulting Lender, then the Administrative Agent may, on
its behalf or on behalf of such other Agents or such other Lenders and to the
fullest extent permitted by applicable law, apply at such time the amount so
paid by the Borrower to or for the account of such Defaulting Lender to the
payment of each such Defaulted Amount to the extent required to pay such
Defaulted Amount. In the event that the Administrative Agent shall so apply any
such amount to the payment of any such Defaulted Amount on any date, the amount
so applied by the Administrative Agent shall constitute for all purposes of this
33
Agreement and the other Loan Documents payment, to such extent, of such
Defaulted Amount on such date. Any such amount so applied by the Administrative
Agent shall be retained by the Administrative Agent or distributed by the
Administrative Agent to such other Agents or such other Lenders, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent, such other Agents and such other Lenders
and, if the amount of such payment made by the Borrower shall at such time be
insufficient to pay all Defaulted Amounts owing at such time to the
Administrative Agent, such other Agents and such other Lenders, in the following
order of priority:
(i) first, to the Agents for any Defaulted Amounts then owing to
them, in their capacities as such, ratably in accordance with
such respective Defaulted Amounts then owing to the Agents;
and
(ii) second, to any other Lenders for any Defaulted Amounts then
owing to such other Lenders, ratably in accordance with such
respective Defaulted Amounts then owing to such other Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied
by the Administrative Agent pursuant to this subsection (b), shall be
applied by the Administrative Agent as specified in subsection (c) of
this Section 2.18.
(c) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Loan or
a Defaulted Amount and (iii) the Borrower, any Agent or any other Lender shall
be required to pay or distribute any amount hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower or
such Agent or such other Lender shall pay such amount to the Administrative
Agent to be held by the Administrative Agent, to the fullest extent permitted by
applicable law, in escrow or the Administrative Agent shall, to the fullest
extent permitted by applicable law, hold in escrow such amount otherwise held by
it. Any funds held by the Administrative Agent in escrow under this subsection
(c) shall be deposited by the Administrative Agent in an account with a bank
(the "Escrow Bank") selected by the Administrative Agent, in the name and under
the control of the Administrative Agent, but subject to the provisions of this
subsection (c). The terms applicable to such account, including the rate of
interest payable with respect to the credit balance of such account from time to
time, shall be the Escrow Bank's standard terms applicable to escrow accounts
maintained with it. Any interest credited to such account from time to time
shall be held by the Administrative Agent in escrow under, and applied by the
Administrative Agent from time to time in accordance with the provisions of,
this subsection (c). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from time to time
to the extent necessary to make any Loans required to be made by such Defaulting
Lender and to pay any amount payable by such Defaulting Lender hereunder and
under the other Loan Documents to the Administrative Agent or any other Lender,
as and when such Loans or amounts are required to be made or paid and, if the
amount so held in escrow shall at any time be insufficient to make and pay all
such Loans and amounts required to be made or paid at such time, in the
following order of priority:
(i) first, to the Agents for any amounts then due and payable by
such Defaulting Lender to them hereunder, in their capacities
as such, ratably in accordance with such respective amounts
then due and payable to the Agents;
34
(ii) second, to any other Lenders for any amount then due and
payable by such Defaulting Lender to such other Lenders
hereunder, ratably in accordance with such respective amounts
then due and payable to such other Lenders; and
(iii) third, to the Borrower for any Loan then required to be made
by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that any Lender that is a Defaulting Lender shall, at any time,
cease to be a Defaulting Lender, any funds held by the Administrative Agent in
escrow at such time with respect to such Lender shall be distributed by the
Administrative Agent to such Lender and applied by such Lender to the
Obligations owing to such Lender at such time under this Agreement and the other
Loan Documents ratably in accordance with the respective amounts of such
Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.18 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Loan and that
any Agent or any Lender may have against such Defaulting Lender with respect to
any Defaulted Amount.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the Closing Date, the adoption
of any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any change
in any such law, rule, regulation, policy, guideline or directive or in the
interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency (other than any change by way of imposition or increase of Reserve
Requirements):
(i) subjects any Lender or any applicable Lending Installation to
any Taxes, or changes the basis of taxation of payments (other
than with respect to Excluded Taxes) to any Lender in respect
of its Eurodollar Loans, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining its Eurodollar Loans, or
reduces any amount receivable by any Lender or any applicable
Lending Installation in connection with its Eurodollar Loans,
or requires any Lender or any applicable Lending Installation
35
to make any payment calculated by reference to the amount of
Eurodollar Loans held or interest received by it, by an amount
deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans,
or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Eurodollar Loans, then, within 15 days of
demand, accompanied by the written statement required by Section 3.6, by such
Lender, the Borrower shall pay such Lender or LC Issuer such additional amount
or amounts as will compensate such Lender or LC Issuer for such increased cost
or reduction in amount received. If, upon receipt of the notice specified by the
immediately preceding sentence, the Borrower so notifies the Administrative
Agent, the Borrower may either (i) prepay in full all Eurodollar Loans of such
Lender then outstanding, so long as the Borrower reimburses such Lender for its
increased costs in accordance with this Section 3.1, or (ii) convert all
Eurodollar Loans of all Lenders then outstanding into Floating Rate Loans in
accordance with this Agreement, so long as the Borrower reimburses the Lenders
for all of their increased costs in accordance with this Section 3.1.
3.2. Changes in Capital Adequacy Regulations. If a Lender determines
the amount of capital required or expected to be maintained by such Lender any
Lending Installation of such Lender or any corporation controlling such Lender
or LC Issuer is increased as a result of a Change, then, within 15 days of
demand, accompanied by the written statement required by Section 3.6, by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans, or
its Commitment to Loans, as applicable, hereunder (after taking into account
such Lender's policies as to capital adequacy). "Change" means (i) any change
after the Closing Date in the Risk-Based Capital Guidelines or (ii) any adoption
of, or change in, or change in the interpretation or administration of any other
law, governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
Closing Date which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the Closing Date, including
transition rules, and (ii) the corresponding capital regulations promulgated by
regulatory authorities outside the United States implementing the July 1988
report of the Basle Committee on Banking Regulation and Supervisory Practices
Entitled "International Convergence of Capital Measurements and Capital
Standards," including transition rules, and any amendments to such regulations
adopted prior to the Closing Date.
3.3. Availability of Types of Advances. (a) Eurodollar Advances shall
not be available on the Closing Date. For 45 days following the Closing Date no
Eurodollar Advances shall be available other than those with an Interest Period
of one month.
(b) If (x) any Lender reasonably determines that maintenance
of its Eurodollar Loans at a suitable Lending Installation would violate any
applicable law, rule, regulation, or directive, whether or not having the force
of law, or (y) the Required Lenders determine in good faith that (i) deposits of
a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, or
36
(iii) no reasonable basis exists for determining the Eurodollar Base Rate, then
the Administrative Agent shall suspend the availability of Eurodollar Advances
and require any affected Eurodollar Advances to be repaid or converted to
Floating Rate Advances on the respective last days of the then current Interest
Periods with respect to such Loans or within such earlier period as required by
law, subject to the payment of any funding indemnification amounts required by
Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made or continued, or a Floating Rate Advance is not converted
into a Eurodollar Advance, on the date specified by the Borrower for any reason
other than default by the Lenders, or a Eurodollar Advance is not prepaid on the
date specified by the Borrower for any reason, the Borrower will indemnify each
Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain such Eurodollar Advance.
3.5. Taxes.
(i) All payments by the Borrower to or for the account of any
Lender or the Administrative Agent hereunder or under any Note
shall be made free and clear of and without deduction for any
and all Taxes. If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent, (a) the
sum payable shall be increased as necessary so that after
making all required deductions (including deductions
applicable to additional sums payable under this Section 3.5)
such Lender or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had
no such deductions been made, (b) the Borrower shall make such
deductions, (c) the Borrower shall pay the full amount
deducted to the relevant authority in accordance with
applicable law and (d) the Borrower shall furnish to the
Administrative Agent the original copy of a receipt evidencing
payment thereof or, if a receipt cannot be obtained with
reasonable efforts, such other evidence of payment as is
reasonably acceptable to the Administrative Agent, in each
case within 30 days after such payment is made.
(ii) In addition, the Borrower shall pay any present or future
stamp or documentary taxes and any other excise or property
taxes, intangible or mortgage recording taxes, charges or
similar levies which arise from any payment made hereunder or
under any Note or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note ("Other
Taxes").
(iii) The Borrower shall indemnify the Administrative Agent and each
Lender for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed on
amounts payable under this Section 3.5) paid by the
Administrative Agent or such Lender as a result of its any
Advances made by it hereunder or otherwise in connection with
its participation in this Agreement and any liability
(including penalties, interest and expenses) arising therefrom
or with respect thereto. Payments due under this
37
indemnification shall be made within 30 days of the date the
Administrative Agent or such Lender makes demand therefor
pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S.
Lender") agrees that it will, not more than ten Business Days
after the date on which it becomes a party to this Agreement
(but in any event before a payment is due to it hereunder),
(i) deliver to each of the Borrower and the Administrative
Agent two duly completed copies of United States Internal
Revenue Service Form W-8BEN or W-8ECI, certifying in either
case that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United
States federal income taxes, or (ii) in the case of a Non-U.S.
Lender that is fiscally transparent, deliver to the
Administrative Agent a United States Internal Revenue Form
W-8IMY together with the applicable accompanying forms, W-8 or
W-9, as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax. Each
Non-U.S. Lender further undertakes to deliver to each of the
Borrower and the Administrative Agent (x) renewals or
additional copies of such form (or any successor form) on or
before the date that such form expires or becomes obsolete,
and (y) after the occurrence of any event requiring a change
in the most recent forms so delivered by it, such additional
forms or amendments thereto as may be reasonably requested by
the Borrower or the Administrative Agent. All forms or
amendments described in the preceding sentence shall certify
that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United
States federal income taxes, unless an event (including
without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly
completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the
Administrative Agent that it is not capable of receiving
payments without any deduction or withholding of United States
federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to
clause (iv) above (unless such failure is due to a change in
treaty, law or regulation, or any change in the interpretation
or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally
was required to be provided), such Non-U.S. Lender shall not
be entitled to indemnification under this Section 3.5 with
respect to Taxes imposed by the United States; provided that,
should a Non-U.S. Lender which is otherwise exempt from or
subject to a reduced rate of withholding tax become subject to
Taxes because of its failure to deliver a form required under
clause (iv) above, the Borrower shall take such steps as such
Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction
of withholding tax with respect to payments under this
Agreement or any Note pursuant to the law of any relevant
38
jurisdiction or any treaty shall deliver to the Borrower (with
a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a
reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any
political subdivision thereof asserts a claim that the
Administrative Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or properly completed,
because such Lender failed to notify the Administrative Agent
of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender
shall indemnify the Administrative Agent fully for all amounts
paid, directly or indirectly, by the Administrative Agent as
tax, withholding therefor, or otherwise, including penalties
and interest, and including taxes imposed by any jurisdiction
on amounts payable to the Administrative Agent under this
subsection, together with all costs and expenses related
thereto (including attorneys fees and time charges of
attorneys for the Administrative Agent, which attorneys may be
employees of the Administrative Agent). The obligations of the
Lenders under this Section 3.5(vii) shall survive the payment
of the Obligations and termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Administrative Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4
or 3.5. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type, currency and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not.
Notwithstanding any other term or condition contained herein or elsewhere in the
Loan Documents, a Lender claiming compensation under Section 3.1, 3.2, 3.4 or
3.5 shall only be entitled to compensation under this Article III (i) from and
after the date of such notice until the events giving rise to such claim have
ceased to exist, and (ii) during the ninety (90) day period preceding the date
the Borrower receives notice from the Administrative Agent or such Lender
setting forth the described claim for compensation. Unless otherwise provided
herein, the amount specified in the written statement of any Lender shall be
payable on demand after receipt by the Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive
payment of the Obligations and termination of this Agreement.
3.7. Alternative Lending Installation. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
39
the judgment of such Lender, reasonably disadvantageous to such Lender. A
Lender's designation of an alternative Lending Installation shall not affect the
Borrower's rights under Section 2.18 to replace a Lender.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall not be required to make the
initial Advance hereunder, which initial Advance shall occur no later than the
Closing Date, unless the following conditions precedent have been satisfied and,
if applicable, the Borrower has furnished to the Administrative Agent with
sufficient copies for the Lenders:
4.1.1 Copies of the articles or certificate of incorporation
(or the equivalent thereof) of each initial Credit Party, in each case, together
with all amendments thereto, and a certificate of good standing, each certified
by the appropriate governmental officer in its jurisdiction of organization, as
well as any other information required by Section 326 of the USA Patriot Act, 31
U.S.C. Section 5318 or otherwise necessary for the Administrative Agent or any
Lender to verify the identity of such Credit Party as required by Section 326 of
the USA Patriot Act, 31 U.S.C. Section 5318.
4.1.2 Copies, certified by the Secretary or Assistant
Secretary (or the equivalent thereof) of each initial Credit Party, in each
case, of its by-laws and of its Board of Directors' resolutions and of
resolutions or actions of any other body authorizing the execution of the Loan
Documents and Tapco Acquisition Documents to which such Credit Party is a party
and certified copies of the Tapco Acquisition Documents.
4.1.3 An incumbency certificate, executed by the Secretary or
Assistant Secretary (or the equivalent thereof) of each initial Credit Party, in
each case, which shall identify by name and title and bear the signatures of the
Authorized Officers and any other officers of such Credit Party authorized to
sign the Loan Documents to which such Credit Party is party, upon which
certificate the Administrative Agent and the Lenders shall be entitled to rely
until informed of any change in writing by such Credit Party.
4.1.4 A certificate signed by the chief financial officer of
the Borrower, the statements in which shall be true, stating that on the initial
Borrowing Date (a) no Default or Unmatured Default has occurred and is
continuing, (b) all of the representations and warranties in Article V shall be
true and correct in all material respects as of such date and (c) (i) no
Material Adverse Change has occurred since September 30, 2003 and (ii) no
material adverse change in the business, condition (financial or otherwise),
operations, performance and properties of Tapco Holdings, Inc. and its
Subsidiaries, taken as a whole, has occurred since October 31, 2003.
4.1.5 A written opinion of the initial Credit Parties'
counsel, in form and substance satisfactory to the Administrative Agent and
addressed to the Lenders, in substantially the form of Exhibit A.
4.1.6 Any Notes requested by a Lender pursuant to Section 2.11
payable to the order of each such requesting Lender.
40
4.1.7 Written money transfer instructions, in substantially
the form of Exhibit D, addressed to the Administrative Agent and signed by an
Authorized Officer, together with such other related money transfer
authorizations as the Administrative Agent may have reasonably requested.
4.1.8 [Reserved.]
4.1.9 The Administrative Agent shall have received the audited
consolidated financial statements of the Borrower and its Subsidiaries for the
Borrower's fiscal year ended September 30, 2003, audited consolidated financial
statements of Tapco Holdings, Inc. and its Subsidiaries for the fiscal year
ended October 31, 2003 and interim financial statements of the Borrower and
Tapco Holdings, Inc. dated the end of the most recent fiscal quarter for which
financial statements are available (or, in the event the Lenders' due diligence
review reveals material changes since such financial statements, as of a later
date within 45 days of the initial Advance).
4.1.10 The Administrative Agent and the Lenders shall have
received pro forma opening consolidated financial statements ("Pro Forma Opening
Statements") giving effect to the Tapco Acquisition and financial statement
projections ("Projections") of balance sheets, income statements and cash flow
statements on a quarterly basis for the first year following the day of the
initial Advance and on an annual basis for each year thereafter until the fiscal
year 2011, together with such information as the Administrative Agent and the
Lenders may reasonably request to confirm the tax, legal, and business
assumptions made in such Pro Forma Opening Statements and Projections, such Pro
Forma Opening Statements and Projections demonstrating, in the reasonable
judgment of the Administrative Agent and the Lenders, together with all other
information then available to the Administrative Agent and the Lenders, that the
Borrower and its Subsidiaries have the ability to repay their debts and satisfy
the respective other obligations as and when due and to comply with Section
6.17.
4.1.11 The Administrative Agent and the Lenders shall have
received a certificate from the Chief Financial Officer of the Borrower and each
Guarantor certifying that the Borrower and each Guarantor, as the case may be,
is Solvent and will be Solvent subsequent to incurring the Indebtedness
hereunder (including the Advances), will be able to pay its debts and
liabilities as they become due and will not be left with unreasonably small
capital with which to engage in its businesses.
4.1.12 The Administrative Agent shall have received evidence
reasonably satisfactory to the Administrative Agent of (i) the consummation of
the Tapco Acquisition concurrently with the initial Advance strictly in
accordance with the terms of the Tapco Acquisition Agreement, without any waiver
or amendment not consented to by the Lenders of any term, provision or condition
set forth therein and in compliance with all applicable laws and (ii) the
payment of all principal, interest, fees and premiums, if any, on all (x)
Indebtedness under the Existing Credit Agreement, and (y) Indebtedness of Tapco,
and, in each case, the agreement to release all Liens and the termination of the
applicable agreements relating thereto, all taking effect concurrently with the
effectiveness of this Agreement; provided, however, that any existing letters of
credit incorporated into and governed by the terms of the First Lien Credit
41
Agreement shall not be required to be terminated in connection with the
termination of the Existing Credit Agreement and the agreements, documents, and
instruments related thereto.
4.1.13 Such other documents as the Administrative Agent or its
counsel may have reasonably requested, including, without limitation, those
documents set forth in Exhibit G hereto.
4.1.14 The Lenders shall have completed a legal,
environmental, tax accounting and confirmatory business due diligence
investigation of the Credit Parties and their respective Subsidiaries in scope,
and with results, satisfactory to the Lenders.
4.1.15 The Lenders shall have received true and complete
copies of the consolidated audited balance sheets of Tapco Holdings, Inc. and
its Subsidiaries as of October 31, 2001, 2002 and 2003 and the related audited
consolidated statements of income and members' equity and cash flow for the
fiscal years ended October 31, 2001, 2002 and 2003 including the audit reports
and notes thereto, in each case prepared in accordance with GAAP consistently
applied throughout the periods covered thereby. Such financial statements shall
fairly reflect in all material respects the financial position of Tapco
Holdings, Inc. and the Subsidiaries on a consolidated basis as of the respective
dates thereof and the results of operations and changes in members' equity and
cash flow for the periods then ended.
4.1.16 The Lenders shall be satisfied with the corporate and
legal structure and capitalization of each Credit Party and each of its
Subsidiaries, including the terms and conditions of the charter, bylaws and each
class of Equity Interest in each Credit Party and each Subsidiary and of each
agreement or instrument relating to such structure or capitalization.
4.1.17 (a) The Lenders shall be satisfied with the terms and
conditions of the First Lien Financing and the documentation with respect
thereto, including the Intercreditor Agreement, and the Borrower shall have
received at least $640 million in gross cash proceeds from the incurrence of the
First Lien Financing, and all such proceeds shall have been used or shall be
used simultaneously with the initial Advance by the Borrower to fund the
Transaction, and (b) the full amount of the Revolving Loan Commitments under the
First Lien Credit Agreement (minus any amount attributable to existing letters
of credit being deemed issued under the First Lien Credit Agreement) shall be
available to be drawn after giving effect to all drawings on the Closing Date.
4.1.18 The Lead Arrangers shall be satisfied with the
Borrower's arrangements to retain and compensate key employees of Tapco
Holdings, Inc. and its Subsidiaries.
4.1.19 The Lenders shall be satisfied that, and shall have
received a certificate from the Chief Financial Officer of the Borrower in the
form of Exhibit I hereto certifying (based on stated assumptions as to the
EBITDA of Tapco and its Subsidiaries) that, (a) Consolidated EBITDA for the
12-month period ending as of the most recently ended fiscal quarter on a pro
forma basis after giving effect to the Transaction, is no less than $190.0
42
million and (b) the Total Leverage Ratio (on a pro forma basis after giving
effect to the Transaction) for such 12-month period, is no greater than
5.1:1.00.
4.1.20 The Borrower shall have paid all accrued fees of the
Administrative Agent, the Lead Arrangers and the Lenders (including the fees and
expenses of counsel for the Lead Arrangers and local counsel for the Lenders).
4.1.21 The Second Lien Financing shall have received a debt
rating from both Xxxxx'x Investor Services, Inc. and Standard & Poor's Ratings
Services, a division of The McGraw Hill Companies, Inc.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each Lender and the
Administrative Agent as of each of (i) the Closing Date and (ii) the date of the
initial Advances hereunder (if different from the Closing Date):
5.1. Existence and Standing. Each of the Borrower and its Subsidiaries
is a corporation, partnership (in the case of Subsidiaries only) or limited
liability company (in the case of Subsidiaries only) duly and properly
incorporated or organized, as the case may be, validly existing and (to the
extent such concept applies to such entity) in good standing under the laws of
its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except where the failure to do so could reasonably be expected to
result in a Material Adverse Change.
5.2. Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Transaction Documents to
which it is a party and to perform its obligations thereunder. The execution and
delivery by the Borrower of the Transaction Documents to which it is a party and
the performance of its obligations thereunder have been duly authorized by
proper proceedings, and the Transaction Documents to which the Borrower is a
party constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyances, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally; (ii) general equitable principles
(whether considered in a proceeding in equity or at law); and (iii) requirements
of reasonableness, good faith and fair dealing.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower or its Subsidiaries, as applicable, of the Loan
Documents to which such Person is a party, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof,
nor the consummation of the Tapco Acquisition or the Refinancing will violate
(i) any law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on the Borrower or any of its Subsidiaries or (ii) the Borrower's
or any Subsidiary's articles or certificate of incorporation, partnership
agreement, certificate of partnership, articles or certificate of organization,
by-laws, or operating agreement or other management agreement, as the case may
be, or (iii) the provisions of any indenture, instrument or agreement to which
the Borrower or any of its Subsidiaries is a party or is subject, or by which
it, or its Property, is bound, or conflict with, or constitute a default
thereunder, or result in, or require, the creation or imposition of any Lien in,
43
of or on the Property of the Borrower or a Subsidiary pursuant to the terms of,
any such indenture, instrument or agreement, except as in the aggregate could
not be reasonably likely to result in a Material Adverse Change. No order,
consent, adjudication, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other action in
respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by the Borrower or any of its Subsidiaries,
is required to be obtained by the Borrower or any of its Subsidiaries in
connection with the execution and delivery of the Loan Documents, the borrowings
under this Agreement, the payment and performance by the Borrower of the
Obligations or the legality, validity, binding effect or enforceability of any
of the Loan Documents, or the consummation of the Tapco Acquisition or the
Refinancing except as in the aggregate cannot reasonably be expected to result
in a Material Adverse Change.
5.4. Financial Statements. (a) The September 30, 2003 audited
consolidated financial statements of the Borrower and its Subsidiaries and the
October 31, 2003 audited consolidated financial statements of Tapco Holdings,
Inc. and its Subsidiaries heretofore delivered to the Administrative Agent and
the Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present, in all material respects, the consolidated financial condition and
operations of the Borrower and its Subsidiaries and Tapco Holdings, Inc. and its
Subsidiaries, respectively, at such date and the consolidated results of their
operations for the period then ended. The June 30, 2004 unaudited consolidated
financial statements of the Borrower and its Subsidiaries and Tapco Holdings,
Inc. and its Subsidiaries, respectively, heretofore delivered to the
Administrative Agent and the Lenders, were prepared in accordance with generally
accepted accounting principles in effect on the date such statements were
prepared and fairly present, subject to year-end audit adjustments, in all
material respects, the consolidated financial condition and operations of the
Borrower and its Subsidiaries as at such date and the consolidated results of
their operations for the period then ended.
(b) The consolidated pro forma balance sheet of the Borrower
and its Subsidiaries as at June 30, 2004 and the related Consolidated pro forma
statements of income and cash flows of the Borrower for the twelve months then
ended, certified by the chief financial officer of the Borrower, copies of which
have been furnished to each Lender Party, fairly present, subject to year-end
audit adjustments, in all material respects the consolidated pro forma financial
condition of the Borrower and its Subsidiaries as at such date and the
Consolidated pro forma results of operations of the Borrower and its
Subsidiaries for the period ended on such date, in each case giving effect to
the Tapco Acquisition, all in accordance with generally accepted accounting
principles.
5.5. Material Adverse Change. Since September 30, 2003, there has been
no Material Adverse Change and since October 31, 2003, there has been no
material adverse change in the business, condition (financial or otherwise),
operations, performance and properties of Tapco Holdings, Inc. and its
Subsidiaries, taken as a whole.
44
5.6. Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns, Utah state tax returns and, to the Borrower's best
knowledge after due inquiry, all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except in
respect of such taxes, if any, as are being contested in good faith and as to
which adequate reserves have been provided in accordance with Agreement
Accounting Principles and as to which no Lien exists (except as permitted by
Section 6.15.1), except as could not be reasonably expected to result in a
Material Adverse Change. No Liens have been filed and no claims are being
asserted with respect to such taxes. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries in respect of any taxes or other
governmental charges are adequate under Agreement Accounting Principles.
5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to result
in a Material Adverse Change or affecting Tapco Holdings, Inc. and its
Subsidiaries which could reasonably be expected to have a material adverse
effect on the business, condition (financial or otherwise), operations,
performance or properties of Tapco Holdings, Inc. and its subsidiaries taken as
a whole, or which seeks to prevent, enjoin or delay the making of any Credit
Extensions. Other than liabilities incident to any litigation, arbitration or
proceeding which could not reasonably be expected to be in an aggregate amount
in excess of $1,000,000 or as disclosed in Schedule 5.7, the Borrower has no
material contingent obligations not provided for or disclosed in the financial
statements referred to in Section 5.4.
5.8. Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable and are owned by such Credit
Party or one or more of its Subsidiaries free and clear of all Liens, except
those created under the Collateral Documents and the second priority liens
created under the Second Lien Collateral Documents.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $1,000,000. Neither the Borrower nor any other
member of the Controlled Group has incurred, or is reasonably expected to incur,
pursuant to Section 4201 of ERISA, any withdrawal liability to Multiemployer
Plans an amount that would result in a Material Adverse Change. Each Plan
complies in all material respects with all applicable requirements of law and
regulations. No Reportable Event has occurred with respect to any Plan. Neither
the Borrower nor any other member of the Controlled Group has withdrawn from any
Multiemployer Plan or Multiple Employer Plan within the meaning of Title IV of
ERISA or initiated steps to do so, and no steps have been taken to reorganize or
terminate, within the meaning of Title IV of ERISA, any Multiemployer Plan. No
steps have been taken to initiate the termination of any Plan, and the PBGC has
not given notice that it intends to terminate any Plan.
45
5.10. Accuracy of Information. (a) No Loan Document or written
statement furnished by the Borrower or any of its Subsidiaries to the
Administrative Agent or to any Lender in connection with the negotiation of, or
compliance with, the Loan Documents contained any material misstatement of fact
or omitted to state a material fact or any fact necessary to make the statements
contained therein not misleading.
(b) The consolidated forecasted financial statements of the
Borrower and its Subsidiaries delivered to the Lenders pursuant to Section 6.1.7
were prepared in good faith on the basis of the assumptions stated therein,
which assumptions were fair in light of the conditions existing at the time of
delivery of such forecasts, and represented, at the time of delivery, the
Borrower's best estimate of its future financial performance.
5.11. Regulation U. Neither the Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate of
buying or carrying margin stock (as defined in Regulation U), and after applying
the proceeds of each Credit Extension, margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or any other
restriction hereunder.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to result in a Material
Adverse Change. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any (i) agreement or instrument to which it is a party,
which default could reasonably be expected to result in a Material Adverse
Change or (ii) any agreement or instrument evidencing or governing Indebtedness.
5.13. Compliance with Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property, except as cannot
reasonably be expected to result in a Material Adverse Change.
5.14. Ownership of Properties. (a) Set forth on Schedule 5.14(a)(i)
hereto is a complete and accurate list of all Owned Real Property as of the date
hereof, showing as of the date hereof the street address, county or other
relevant jurisdiction, state, record owner and book and estimated fair market
value thereof; (ii) set forth on Schedule 5.14(a)(ii) hereto is a complete and
accurate list of all Real Property Leases as of the date hereof, showing the
street address or other information sufficient to identify the location of the
affected real property, state, lessor, lessee, expiration date and annual rental
cost thereof; and (iii) set forth on Schedule 5.14(a)(iii) hereto is a complete
and accurate list of all Tenant Leases as of the date hereof, showing the street
address or other information sufficient to identify the location of the affected
real property, state, lessor, lessee, expiration date and annual rental cost
thereof.
(b) (i) The Borrower and its Subsidiaries have good,
marketable and insurable fee simple title to, or a valid leasehold interest in,
to all of the Owned Real Property listed on Schedule 5.14(a)(i) hereto and all
46
of the Leased Real Property listed on Schedule 5.14(a)(ii) hereto, free and
clear of all Liens, other than Liens created or permitted by the Loan Documents,
including, without limitation, such items that will constitute Permitted
Encumbrances and Liens set forth on Schedule 6.15, (ii) each Real Property Lease
and Real Property Sublease is the legal, valid and binding obligation of the
Borrower or its applicable Subsidiary party thereto, enforceable in accordance
with its terms against the Borrower or Subsidiary and (iii) the Real Property
Collateral set forth on Schedule 5.14(b)(iii) hereto comprises all of the Owned
Real Properties as of the date hereof required to be subject to a Mortgage
pursuant to the Existing Credit Agreement, or acquired subsequent to the date
thereof (after giving effect to the Acquisition), other than the property
located at 32906-32808 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000 and any
properties acquired in connection with the Tapco Acquisition with a net book
value of less than $200,000.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. ss.
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Loans hereunder gives rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business,
the officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws are not reasonably expected to result in a
Material Adverse Change. Neither the Borrower nor any Subsidiary has received
any notice to the effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment, which non-compliance or remedial action could reasonably be
expected to result in a Material Adverse Change.
5.17. Investment Company Act. Neither the Borrower nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. The Borrower is not a
"holding company" as such term is defined in the Public Utility Holding Company
Act of 1935, as amended.
5.19. Insurance. The Borrower maintains, and has caused each Subsidiary
to maintain, with financially sound and reputable insurance companies insurance
on all their Property in such amounts, subject to such deductibles and
self-insurance retentions and covering such properties and risks as is
consistent with sound business practice.
5.20. No Default or Unmatured Default. No Default or Unmatured Default
has occurred and is continuing.
47
5.21. SDN List Designation. Neither the Borrower nor any of its
Subsidiaries or Affiliates is a country, individual or entity named on the
Specifically Designated National and Blocked Persons (SDN) list issued by the
Office of Foreign Asset Control of the Department of the Treasury of the United
States of America.
5.22. Solvency. Each Credit Party is, individually and together with
its Subsidiaries, Solvent.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. [Reserved.]
6.2. Limitation on Indebtedness. (vii) The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, Incur any Indebtedness (other
than the Loans and Indebtedness existing on the Closing Date); provided that the
Borrower or any Guarantor may Incur Indebtedness if, after giving pro forma
effect to the Incurrence of such Indebtedness and the receipt and application of
the proceeds therefrom (as though such Incurrence and receipt and application
had occurred on the first day of the most recently ended four fiscal quarter
period), no Default under Section 6.17 shall have occurred and be continuing.
(viii) Notwithstanding the foregoing Section 6.2(a), the Borrower and
any Restricted Subsidiary (except as specified below) may Incur each and all of
the following:
(i) Indebtedness of the Borrower and any Guarantor outstanding at
any time in an aggregate principal amount (together with
refinancings thereof) not to exceed $725 million under the
First Lien Credit Agreement less any amount of such
Indebtedness permanently repaid as provided under Section
6.10;
(ii) Indebtedness owed (A) to the Borrower or any Guarantor
evidenced by an unsubordinated promissory note or (B) to any
other Restricted Subsidiary; provided that (x) any event which
results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Borrower or another Restricted
Subsidiary) shall be deemed, in each case, to constitute an
Incurrence of such Indebtedness not permitted by this clause
(ii) and (y) if the Borrower or any Guarantor is the obligor
on such Indebtedness, such Indebtedness must be expressly
subordinated in right of payment to the Loans, in the case of
the Borrower, or the Guaranty, in the case of a Guarantor on
the terms set forth in Schedule 6.2(b)(ii) hereto;
(iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to refinance, refund, replace, renew or extend
(including pursuant to any defeasance or discharge mechanism)
then outstanding Indebtedness (other than Indebtedness
outstanding under clause (ii) or (iv) hereof) and any
refinancings thereof in an amount not to exceed the amount so
refinanced or refunded (plus premiums, accrued and unpaid
interest, fees, underwriting discounts, commissions and
48
expenses); provided that (a) Indebtedness the proceeds of
which are used to refinance or refund the Loans or
Indebtedness that is pari passu with, or subordinated in right
of payment to, the Loans or the Guaranty shall only be
permitted under this clause (iii) if (x) in case the Loans are
refinanced in part or the Indebtedness to be refinanced is
pari passu with the Loans or the Guaranty, such new
Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is
outstanding, is expressly made pari passu with, or subordinate
in right of payment to, the remaining Loans or the Guaranty,
or (y) in case the Indebtedness to be refinanced is
subordinated in right of payment to the Loans or the Guaranty,
such new Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such new
Indebtedness is issued or remains outstanding, is expressly
made subordinate in right of payment to the Loans or the
Guaranty at least to the extent that the Indebtedness to be
refinanced is subordinated to the Loans or the Guaranty, (b)
such new Indebtedness, determined as of the date of Incurrence
of such new Indebtedness, does not mature prior to the Stated
Maturity of the Indebtedness to be refinanced or refunded, and
the Average Life of such new Indebtedness is at least equal to
the remaining Average Life of the Indebtedness to be
refinanced or refunded and (c) such new Indebtedness is
Incurred by the Borrower or a Guarantor or by the Restricted
Subsidiary who is the obligor on the Indebtedness to be
refinanced or refunded;
(iv) Indebtedness existing on the date hereof and described in
Schedule 6.2(b)(iv) (and renewals, refinancings or extensions
thereof on terms and conditions no less favorable to the
applicable obligor than such existing Indebtedness and in a
principal amount not in excess of that outstanding as of the
date of such renewal, refinancing or extension);
(v) To the extent approved by the Administrative Agent,
Indebtedness arising under Rate Management Transactions;
(vi) Secured or unsecured purchase money Indebtedness (excluding
Capitalized Leases) incurred by the Borrower or any of its
Subsidiaries after the Closing Date to finance the acquisition
of assets used in its business, if (1) the total of all such
Indebtedness for the Borrower and its Subsidiaries taken
together incurred on or after the Closing Date shall not
exceed an aggregate principal amount of $1,000,000 at any one
time outstanding, (2) such Indebtedness when incurred shall
not exceed the purchase price of the asset(s) financed, (3) no
such Indebtedness shall be refinanced for a principal amount
in excess of the principal balance outstanding thereon at the
time of such refinancing, and (4) any Lien securing such
Indebtedness is permitted under Section 6.8 (such Indebtedness
being referred to herein as "Permitted Purchase Money
Indebtedness");
(vii) Guaranty obligations of the Borrower of any Indebtedness of
any Subsidiary permitted under this Section 6.2;
(viii) Permitted Indebtedness;
49
(ix) Indebtedness of the Borrower and its Subsidiaries constituting
Capitalized Lease Obligations in an aggregate principal amount
not exceeding $10,000,000 at any time outstanding;
(x) Indebtedness in respect of take or pay contracts entered into
by the Borrower and its Subsidiaries in the ordinary course of
business and consistent with past practices;
(xi) Guarantees of the Loans by any Restricted Subsidiary other
than a Foreign Subsidiary in accordance with Section 6.6; and
(xii) Indebtedness of the Borrower or any Guarantor (in addition to
Indebtedness permitted under clauses (i) through (xi) above)
in an aggregate principal amount outstanding at any time
(together with refinancings thereof) not to exceed $10
million, less any amount of such Indebtedness permanently
repaid as provided under Section 6.10;
(ix) Notwithstanding any other provision of this Section 6.2, the
maximum amount of Indebtedness that may be Incurred pursuant
to this Section 6.2 will not be deemed to be exceeded, with
respect to any outstanding Indebtedness due solely to the
result of fluctuations in the exchange rates of currencies.
(x) For purposes of determining any particular amount of
Indebtedness under this Section 6.2, (x) Indebtedness Incurred
under the First Lien Credit Agreement shall be treated as
Incurred pursuant to clause (1) of the second paragraph of
part (b)(xi) of this Section 6.2 and (y) Guarantees, Liens or
obligations with respect to letters of credit supporting
Indebtedness otherwise included in the determination of such
particular amount shall not be included. For purposes of
determining compliance with this Section 6.2, in the event
that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above (other than
Indebtedness referred to in clause (x) of the preceding
sentence), including under part (a), the Borrower, in its sole
discretion, shall classify, and from time to time may
reclassify, such item of Indebtedness.
(xii) The Borrower will not Incur any Indebtedness if such
Indebtedness is subordinate in right of payment to any other
Indebtedness unless such Indebtedness is also subordinate in
right of payment to the Loans to the same extent.
6.3. Limitation on Restricted Payments. The Borrower will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, (1) declare or
pay any dividend or make any distribution on or with respect to its Capital
Stock (other than (x) dividends or distributions payable solely in shares of its
Capital Stock (other than Disqualified Stock) or in options, warrants or other
rights to acquire shares of such Capital Stock and (y) pro rata dividends or
distributions on Common Stock of Restricted Subsidiaries (other than Guarantors)
held by minority stockholders) held by Persons other than the Borrower or any of
its Restricted Subsidiaries, (2) purchase, call for redemption or redeem, retire
or otherwise acquire for value any shares of Capital Stock of (A) the Borrower
or any Guarantor (including options, warrants or other rights to acquire such
50
shares of Capital Stock) held by any Person other than the Borrower or a
Guarantor or (B) a Restricted Subsidiary other than a Guarantor (including
options, warrants or other rights to acquire such shares of Capital Stock) held
by any Affiliate of the Borrower (other than a Wholly Owned Restricted
Subsidiary) or any holder (or any Affiliate of such holder) of 5% or more of the
Capital Stock of the Borrower, (3) make any voluntary or optional principal
payment, or voluntary or optional redemption, repurchase, defeasance, or other
acquisition or retirement for value, of Indebtedness of the Borrower that is
subordinated in right of payment to the Loans or any Indebtedness of a Guarantor
that is subordinated in right of payment to the Guaranty or (4) make any
Investment, other than a Permitted Investment, in any Person (such payments or
any other actions described in clauses (1) through (4) above being collectively
"Restricted Payments") if, at the time of, and after giving effect to, the
proposed Restricted Payment:
(a) a Default or Unmatured Default shall have occurred and be
continuing, or
(b) the aggregate amount of all Restricted Payments made after
the Closing Date shall exceed the sum of
(i) 50% of the aggregate amount of the Adjusted Consolidated Net
Income (or, if the Adjusted Consolidated Net Income is a
negative number, 100% of the negative amount is included in
such calculation) accrued on a cumulative basis during the
period (taken as one accounting period) beginning on the first
day of the fiscal quarter immediately following the Closing
Date and ending on the last day of the last fiscal quarter
preceding the date such Restricted Payment is to be made plus
(ii) the aggregate Net Cash Proceeds received by the Borrower after
the Closing Date as a capital contribution or from the
issuance and sale of its Capital Stock (other than
Disqualified Stock) to a Person who is not a Subsidiary of the
Borrower, including an issuance or sale permitted by this
Agreement of Indebtedness of the Borrower for cash subsequent
to the Closing Date upon the conversion of such Indebtedness
into Capital Stock (other than Disqualified Stock) of the
Borrower, or from the issuance to a Person who is not a
Subsidiary of the Borrower of any options, warrants or other
rights to acquire Capital Stock of the Borrower (in each case,
exclusive of any Disqualified Stock or any options, warrants
or other rights that are redeemable at the option of the
holder, or are required to be redeemed, prior to the Maturity
Date) plus
(iii) an amount equal to the net reduction in Investments (other
than reductions in Permitted Investments) in any Person
resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances, or other transfers
of assets, in each case to the Borrower or any Restricted
Subsidiary or from the Net Cash Proceeds from the sale of any
such Investment (except, in each case, to the extent any such
payment or proceeds are included in the calculation of
Adjusted Consolidated Net Income), or from redesignations of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued
in each case as provided in the definition of "Investments"),
not to exceed, in each case, the amount of Investments
previously made by the Borrower or any Restricted Subsidiary
in such Person or Unrestricted Subsidiary.
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The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend or redemption of any Capital
Stock within 60 days after the related date of declaration or call for
redemption if, at said date of declaration or call for redemption, such
payment or redemption would comply with the preceding paragraph;
(ii) the redemption, repurchase, defeasance or other
acquisition or retirement for value of Indebtedness that is
subordinated in right of payment to the Loans or the Guaranty including
premium, if any, and accrued and unpaid interest, with the proceeds of,
or in exchange for, Indebtedness Incurred under clause (iii) of part
(b) of Section 6.2;
(iii) the repurchase, redemption or other acquisition of
Capital Stock of the Borrower or a Guarantor (or options, warrants or
other rights to acquire such Capital Stock) in exchange for, or out of
the proceeds of a capital contribution or a substantially concurrent
offering of, shares of Capital Stock (other than Disqualified Stock) of
the Borrower (or options, warrants or other rights to acquire such
Capital Stock); provided that such options, warrants or other rights
are not redeemable at the option of the holder, or required to be
redeemed, prior to the Maturity Date;
(iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness which is subordinated in right of payment to the Loans or
the Guaranty in exchange for, or out of the proceeds of a capital
contribution or a substantially concurrent offering of, shares of the
Capital Stock (other than Disqualified Stock) of the Borrower (or
options, warrants or other rights to acquire such Capital Stock);
provided that such options, warrants or other rights are not redeemable
at the option of the holder, or required to be redeemed, prior to the
Maturity Date;
(v) payments or distributions to dissenting stockholders
pursuant to applicable law pursuant to or in connection with a
consolidation, merger or transfer of assets of the Borrower that
complies with the provisions of this Agreement applicable to mergers,
consolidations and transfers of all or substantially all of the
property and assets of the Borrower;
(vi) Investments acquired as a capital contribution to, or in
exchange for, or out of the proceeds of a substantially concurrent
offering of, Capital Stock (other than Disqualified Stock) of the
Borrower;
(vii) the repurchase of Capital Stock deemed to occur upon the
exercise of options or warrants if such Capital Stock represents all or
a portion of the exercise price thereof;
(viii) any purchase, repurchase, redemption, retirement or
other acquisition for value of shares of, or options to purchase shares
of, common stock of the Borrower or any of its Subsidiaries from
employees, former employees, directors or former directors of the
52
Borrower or any of its Subsidiaries (or permitted transferees of such
employees, former employees, directors or former directors), pursuant
to the terms of any of the Borrower Incentive Plans; or
(ix) Restricted Payments, not otherwise described in clauses
(i) through (viii) above, in an aggregate amount not to exceed $20
million.
Each Restricted Payment permitted pursuant to the preceding
paragraph (other than the Restricted Payment referred to in clause (ii) thereof,
an exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof, an Investment acquired as a capital contribution
or in exchange for Capital Stock referred to in clause (vi) thereof and the
repurchase of Capital Stock referred to in clause (vii) thereof), and the Net
Cash Proceeds from any issuance of Capital Stock referred to in clause (iii),
(iv) or (vi), shall be included in calculating whether the conditions of clause
(c) of the first paragraph of this Section 6.3 have been met with respect to any
subsequent Restricted Payments. In the event the proceeds of an issuance of
Capital Stock of the Borrower are used for the redemption, repurchase or other
acquisition of the Notes, or Indebtedness that is pari passu with the Loans or
the Guaranty, then the Net Cash Proceeds of such issuance shall be included in
clause (c) of the first paragraph of this Section 6.3 only to the extent such
proceeds are not used for such redemption, repurchase or other acquisition of
Indebtedness.
For purposes of determining compliance with this Section 6.3,
(x) the amount, if other than in cash, of any Restricted Payment shall be
determined in good faith by the Disinterested Members of the Board of Directors,
whose determination shall be conclusive and evidenced by a Board Resolution and
(y) in the event that a Restricted Payment meets the criteria of more than one
of the types of Restricted Payments described in the above clauses, including
the first paragraph of this Section 6.3, the Borrower, in its sole discretion,
may order and classify, and from time to time may reclassify, such Restricted
Payment if it would have been permitted at the time such Restricted Payment was
made and at the time of such reclassification.
6.4. Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries. The Borrower will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Borrower or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Borrower or any other Restricted
Subsidiary, (iii) make loans or advances to the Borrower or any other Restricted
Subsidiary or (iv) transfer any of its property or assets to the Borrower or any
other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions:
(a) existing on the Closing Date in the First Lien Credit
Agreement, this Agreement or any other agreements in effect on the Closing Date,
and any extensions, refinancings, renewals or replacements of such agreements;
provided that the encumbrances and restrictions in any such extensions,
53
refinancings, renewals or replacements taken as a whole are no less favorable in
any material respect to the Holders of the Obligations than those encumbrances
or restrictions that are then in effect and that are being extended, refinanced,
renewed or replaced;
(b) existing under or by reason of applicable law, regulation,
rule or order;
(c) existing with respect to any Person or the property or
assets of such Person acquired by the Borrower or any Restricted Subsidiary,
existing at the time of such acquisition and not incurred in contemplation
thereof, which encumbrances or restrictions are not applicable to any Person or
the property or assets of any Person other than such Person or the property or
assets of such Person so acquired and any extensions, refinancings, renewals or
replacements of thereof; provided that the encumbrances and restrictions in any
such extensions, refinancings, renewals or replacements taken as a whole are no
less favorable in any material respect to the Holders than those encumbrances or
restrictions that are then in effect and that are being extended, refinanced,
renewed or replaced;
(d) in the case of clause (iv) of the first paragraph of this
Section 6.4:
(i) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset,
(ii) existing by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any property or
assets of the Borrower or any Restricted Subsidiary not otherwise
prohibited by this Agreement or
(iii) arising or agreed to in the ordinary course of business,
not relating to any Indebtedness, and that do not, individually or in
the aggregate, detract from the value of property or assets of the
Borrower or any Restricted Subsidiary in any manner material to the
Borrower or any Restricted Subsidiary;
(iv) with respect to a Restricted Subsidiary and imposed
pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock of, or
property and assets of, such Restricted Subsidiary;
(v) existing in agreements governing Indebtedness of any
Guarantor permitted to be Incurred after the date of this Agreement,
provided that the terms and conditions of any such encumbrances or
restrictions are no more restrictive than those permitted under clause
(a) above, and any extensions, refinancings, renewals or replacements
of such Indebtedness; and provided that the encumbrances or
restrictions in any such extensions, refinancings, renewals or
replacements taken as a whole are no less favorable in any material
respect to the Holders than those encumbrances or restrictions that are
then in effect and that are being extended, refinanced, renewed or
replaced;
54
(vi) existing under purchase money obligations for property
acquired in the ordinary course of business consistent with past
practice that impose encumbrances or restrictions on the property so
acquired of the nature described in clause (iv) of the first paragraph
of this Section 6.4; and
(vii) customary provisions with respect to the distribution of
assets or property in joint venture agreements and other similar
agreements.
Nothing contained in this Section 6.4 shall prevent the Borrower or any
Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted by Section 6.8 or (2) restricting the sale
or other disposition of property or assets of the Borrower or any of its
Restricted Subsidiaries that secure Indebtedness of the Borrower or any of its
Restricted Subsidiaries.
6.5. Limitation on the Issuance and Sale of Capital Stock of Restricted
Subsidiaries. The Borrower will not sell, and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any shares of Capital
Stock of a Restricted Subsidiary (including options, warrants or other rights to
purchase shares of such Capital Stock) except:
(a) to the Borrower or a Wholly Owned Restricted Subsidiary;
(b) issuances of director's qualifying shares or sales to
foreign nationals of shares of Capital Stock of Foreign Subsidiaries, to the
extent required by applicable law;
(c) if, immediately after giving effect to such issuance or
sale, such Restricted Subsidiary would no longer constitute a Restricted
Subsidiary and any Investment in such Person remaining after giving effect to
such issuance or sale would have been permitted to be made under Section 6.3 if
made on the date of such issuance or sale; or
(d) sales of Capital Stock other than Disqualified Stock
(including options, warrants or other rights to purchase shares of such Capital
Stock) of a Restricted Subsidiary by the Borrower or a Restricted Subsidiary,
provided that the Borrower or such Restricted Subsidiary applies the Net Cash
Proceeds of any such sale in accordance with clause (A) or (B) of the second
paragraph of Section 6.10.
6.6. Guarantees by Restricted Subsidiaries. The Borrower will cause
each Restricted Subsidiary, other than a Foreign Subsidiary or a Restricted
Subsidiary that becomes a Restricted Subsidiary as a result of a Permitted
Investment under clause (xv) of the definition of Permitted Investment, to
execute and deliver the Guaranty or, if such Restricted Subsidiary becomes a
Restricted Subsidiary after the Closing Date, a supplement to the Guaranty.
Notwithstanding the foregoing, (i) the Guaranty may provide by
its terms that it shall be automatically and unconditionally released and
discharged upon any sale, exchange or transfer, to any Person not an Affiliate
of the Borrower, of all of the Borrower's and each Restricted Subsidiary's
Capital Stock in, or all or substantially all the assets of, such Restricted
Subsidiary (which sale, exchange or transfer is otherwise permitted by this
55
Agreement) or upon the designation of such Restricted Subsidiary as an
Unrestricted Subsidiary in accordance with the terms of this Agreement and (ii)
to the extent that the aggregate EBITDA of FlexCrete Building Systems, L.C.,
Florida N-Viro L.P. and Florida N-Viro Management, LLC for the most recently
completed four fiscal quarter period does not exceed one percent (1%) of the
Consolidated EBITDA of the Borrower and its Subsidiaries for the same period,
the Borrower shall not be required to cause FlexCrete Building Systems, L.C.,
Florida N-Viro, L.P. or Florida N-Viro Management, LLC to guarantee the
Obligations.
6.7. Limitation on Transactions with Shareholders and Affiliates. The
Borrower will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into, renew or extend any transaction (including, without
limitation, the purchase, sale, lease or exchange of property or assets, or the
rendering of any service) with any holder (or any Affiliate of such holder) of
5% or more of any class of Capital Stock of the Borrower or with any Affiliate
of the Borrower or any Restricted Subsidiary, unless such transaction or series
of related transactions is on fair and reasonable terms no less favorable to the
Borrower or such Restricted Subsidiary than could be obtained, at the time of
such transaction or, if such transaction is pursuant to a written agreement, at
the time of the execution of the agreement providing therefor, in a comparable
arm's-length transaction with a Person that is not such a holder or an
Affiliate.
The foregoing limitation does not limit, and shall not apply to:
(i) any transaction solely between the Borrower and any of its
Restricted Subsidiaries or solely between Restricted Subsidiaries;
(ii) the payment of reasonable and customary regular fees to
directors of the Borrower who are not employees of the Borrower,
insurance premiums in connection with directors' and officers'
insurance and indemnification arrangements entered into by the Borrower
consistent with past practices of the Borrower or typical for companies
with businesses similar to that of the Borrower;
(iii) any payments or other transactions pursuant to any
tax-sharing agreement between the Borrower and any other Person with
which the Borrower files a consolidated tax return or with which the
Borrower is part of a consolidated group for tax purposes;
(iv) any sale of shares of Capital Stock (other than
Disqualified Stock) of the Borrower;
(v) any Permitted Investments or any Restricted Payments not
prohibited by Section 6.3;
(vi) any issuance of securities pursuant to employment
arrangements, stock options and stock ownership plans;
(vii) loans or advances to employees of the Borrower or any of
its Restricted Subsidiaries in the ordinary course of business in
accordance with past practices of the Borrower, but in any event not to
exceed $2.5 million in the aggregate outstanding at any one time;
(viii) the renewal or extension of any agreement or
arrangement in existence on the Closing Date to which the Borrower or
any of its Restricted Subsidiaries is a party and that is described on
Schedule 6.7 to this Agreement, as these agreements may be amended,
modified or supplemented from time to time; provided, however, that any
56
future amendment, modification or supplement entered into after the
Closing Date will be permitted to the extent that its terms are not
materially less favorable to the Borrower or such Restricted Subsidiary
than the terms of the agreements or arrangements in effect on the
Closing Date; and
6.8. Limitation on Liens. The Borrower will not, and will not permit
any Restricted Subsidiary to, create, incur, assume or suffer to exist any Lien
in, of or on any of the Property of the Borrower or any Restricted Subsidiary.
The foregoing limitation does not apply to:
6.8.1 Liens existing on the Closing Date;
6.8.2 Liens granted after the Closing Date on any assets or
Capital Stock of the Borrower or its Restricted Subsidiaries created in favor of
the Holders of the Obligations;
6.8.3 Liens with respect to the assets of a Restricted
Subsidiary granted by such Restricted Subsidiary to the Borrower or a Wholly
Owned Restricted Subsidiary to secure Indebtedness owing to the Borrower or such
other Restricted Subsidiary;
6.8.4 Liens securing Indebtedness which is Incurred to
refinance secured Indebtedness which is permitted to be Incurred under clause
(iii) of Section 6.2(b); provided that such Liens do not extend to or cover any
property or assets of the Borrower or any Restricted Subsidiary other than the
property or assets securing the Indebtedness being refinanced;
6.8.5 Liens to secure Indebtedness Incurred under clause (i)
of Section 6.2(b);
6.8.6 Liens on cash set aside at the time of the Incurrence of
any Indebtedness, or government securities purchased with such cash, in either
case to the extent that such cash or government securities pre-fund the payment
of interest on such Indebtedness and are held in a collateral or escrow account
or similar arrangement to be applied for such purpose;
6.8.7 Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good faith and
by appropriate proceedings and for which adequate reserves in accordance with
Agreement Accounting Principles shall have been set aside on its books, unless
and until any Lien resulting therefrom attaches to its Property or becomes
enforceable against its other creditors.
6.8.8 Liens imposed by law, such as landlords', wage earners',
carriers', warehousemen's and mechanics' liens and other similar liens arising
in the ordinary course of business which (a) secure payment of obligations not
more than 60 days past due, (b) are being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books, or (c)
57
individually or together with all other Liens permitted pursuant to this Section
6.8 outstanding on any date of determination do not materially adversely affect
the use of the Property to which they relate.
6.8.9 Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation.
6.8.10 Deposits securing liability to insurance carriers under
insurance or self-insurance arrangements.
6.8.11 Deposits to secure the performance of bids, trade or
supply contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business.
6.8.12 Easements, reservations, rights-of-way, restrictions,
survey exceptions and other similar encumbrances as to real property of the
Borrower and its Restricted Subsidiaries which customarily exist on properties
of corporations engaged in similar activities and similarly situated and which
(a) were not incurred in connection with and do not secure indebtedness (except
as expressly permitted by this Section 6.8), (b) do not render title to the
property encumbered thereby unmarketable, and (c) do not materially interfere
with the conduct of the business of the Borrower or such Restricted Subsidiary
conducted at the property subject thereto.
6.8.13 Purchase money Liens securing Permitted Purchase Money
Indebtedness; provided, that such Liens shall not apply to any property of the
Borrower or its Restricted Subsidiaries other than that purchased with the
proceeds of such Permitted Purchase Money Indebtedness.
6.8.14 Liens existing on any asset of any Restricted
Subsidiary of the Borrower at the time such Restricted Subsidiary becomes a
Restricted Subsidiary and not created in contemplation of such event.
6.8.15 Liens on any asset securing Indebtedness incurred or
assumed for the purpose of financing or refinancing all or any part of the cost
of acquiring or constructing such asset; provided that such Lien attaches to
such asset concurrently with or within eighteen (18) months after the
acquisition or completion or construction thereof.
6.8.16 Liens existing on any asset of any Restricted
Subsidiary of the Borrower at the time such Restricted Subsidiary is merged or
consolidated with or into the Borrower or any Restricted Subsidiary and not
created in contemplation of such event.
6.8.17 Liens existing on any asset prior to the acquisition
thereof by the Borrower or any Restricted Subsidiary and not created in
contemplation thereof; provided that such Liens do not encumber any other
property or assets.
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6.8.18 Liens in respect of judgments that do not otherwise
cause a Default under this Agreement.
6.8.19 Liens arising out of the refinancing, extension,
renewal or refunding of any Indebtedness secured by any Lien permitted under
Sections 6.8.15 through 6.8.18; provided that (a) such Indebtedness is not
secured by any additional assets and (b) the amount of such Indebtedness secured
by any such Lien is not increased.
6.8.20 So long as no Default or Unmatured Default has occurred
and is continuing, or would result therefrom, Liens on the accounts referred to
in clause (iv) of the definition of "Exempt Property" and on refundable xxxx
xxxxxxx money deposits made in connection with Permitted Acquisitions or other
purchases of assets used in its business otherwise permitted under this
Agreement in an aggregate amount not to exceed 25% of the purchase price of such
Property.
6.8.21 Other Liens securing Indebtedness in an aggregate
amount not to exceed an amount equal to 5% of Consolidated Tangible Assets at
any time outstanding.
In addition, neither Borrower nor any of its Restricted
Subsidiaries shall become a party to any agreement, note, indentures or other
instrument, or take any other action, which would prohibit the creation of a
Lien on any of its Properties or other assets in favor of the Administrative
Agent for the benefit of the Holders of the Obligations; provided, further, that
any agreement, note, indenture or other instrument in connection with purchase
money Indebtedness (including Capitalized Leases) for which the related Liens
are permitted hereunder may prohibit the creation of a Lien in favor of the
Administrative Agent for the benefit of the Holders of the Obligations, with
respect to the assets or property obtained with the proceeds of such
Indebtedness.
6.9. Limitation on Sale-Leaseback Transactions. The Borrower will not,
and will not permit any Restricted Subsidiary to, enter into any sale-leaseback
transaction involving any of its assets or properties whether now owned or
hereafter acquired, whereby the Borrower or a Restricted Subsidiary sells or
transfers such assets or properties and then or thereafter leases such assets or
properties or any part thereof or any other assets or properties which the
Borrower or such Restricted Subsidiary, as the case may be, intends to use for
substantially the same purpose or purposes as the assets or properties sold or
transferred.
The foregoing restriction does not apply to any sale-leaseback
transaction if (i) the lease is for a period, including renewal rights, of not
in excess of three years; (ii) the lease secures or relates to industrial
revenue or pollution control bonds; (iii) the transaction is solely between the
Borrower and any Wholly Owned Restricted Subsidiary or solely between Wholly
Owned Restricted Subsidiaries; or (iv) the Borrower or such Restricted
Subsidiary, within 12 months after the sale or transfer of any assets or
properties is completed, applies an amount not less than the net proceeds
received from such sale in accordance with the second paragraph clause (i) or
(ii) of Section 6.10(b).
6.10. Limitation on Asset Sales. (a) The Borrower will not, and will
not permit any Restricted Subsidiary to, consummate any Asset Sale, unless (i)
the consideration received by the Borrower or such Restricted Subsidiary is at
least equal to the fair market value of the assets sold or disposed of and (ii)
at least 75% of the consideration received consists of (A) cash or Cash
Equivalent Investments, (B) the assumption of unsubordinated Indebtedness of the
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Borrower or any Guarantor or Indebtedness of any other Restricted Subsidiary (in
each case, other than Indebtedness owed to the Borrower or any Affiliate of the
Borrower), provided that the Borrower, such Guarantor or such other Restricted
Subsidiary is irrevocably and unconditionally released from all liability under
such Indebtedness or (C) Replacement Assets.
(b) In the event and to the extent that the Net Cash Proceeds received
by the Borrower or any of its Restricted Subsidiaries from one or more Asset
Sales occurring on or after the Closing Date in any fiscal year exceed 1% of
Consolidated Total Assets, then the Borrower shall or shall cause the relevant
Restricted Subsidiary to:
(i) within 12 months after the date Net Cash Proceeds so
received exceed the amount set forth in the immediately preceding
paragraph,
(A) apply an amount equal to such excess Net Cash
Proceeds to permanently repay Indebtedness under the First
Lien Credit Agreement, or
(B) invest an equal amount, or the amount not so
applied pursuant to clause (A) (or enter into a definitive
agreement committing to so invest within 12 months after the
date of such agreement), in Replacement Assets (including,
without limitation, by using such amount to repay Indebtedness
Incurred to acquire Replacement Assets that were acquired in
anticipation of the applicable Asset Sale), and
(ii) apply (no later than the end of the 12-month period
referred to in clause (i)) such excess Net Cash Proceeds (to the extent
not applied pursuant to clause (i)) as provided in the following
paragraphs of this Section 6.10.
The amount of such excess Net Cash Proceeds required to be applied (or to be
committed to be applied) during such 12-month period as set forth in clause (i)
of the preceding sentence and not applied as so required by the end of such
period shall constitute "Excess Proceeds."
If, as of the first day of any calendar month after the end of
the 12-month period set forth in clause (i) of the preceding paragraph, there
are any Excess Proceeds not theretofore subject to an Offer to Prepay, the
Borrower must commence, not later than the fifteenth Business Day of such month,
and consummate an Offer to Prepay to the Lenders on a pro rata basis an
aggregate principal amount of Loans equal to the Excess Proceeds on such date,
at a purchase price equal to 100% of their principal amount, plus, in each case,
accrued and unpaid interest (if any) to the Payment Date and any applicable
premium as set forth in Section 2.5.
To the extent that the aggregate amount of Loans for which
prepayment is validly elected and not properly withdrawn pursuant to an Offer to
Prepay is less than the Excess Proceeds, the Borrower may use any remaining
Excess Proceeds for any other purpose which is permitted by this Agreement.
If the aggregate principal amount of Loans for which Lenders
elect prepayment exceeds the amount of Excess Proceeds, the Administrative Agent
shall select the Loans to be purchased on a pro rata basis on the basis of the
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aggregate principal amount of Loans electing prepayment. Upon completion of such
Offer to Prepay, the amount of Excess Proceeds shall be reset to zero.
6.11. Existence. The Borrower will, and will cause each Restricted
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, as in
effect on the Closing Sate, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
6.12. Payment of Taxes and Other Claims. The Borrower will, and will
cause each Subsidiary to, timely file complete and correct United States federal
and applicable foreign, state and local tax returns required by law and pay when
due all taxes, assessments and governmental charges and levies upon it or its
income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside in accordance with Agreement Accounting Principles;
provided, however, that it shall not be a Default or Unmatured Default under
this Section 6.5 if all such failures in the aggregate do not result in a
Material Adverse Change.
6.13. Maintenance of Properties and Insurance. The Borrower will cause
all properties used or useful in the conduct of its business or the business of
any of its Restricted Subsidiaries material to the Borrower and its Restricted
Subsidiaries, taken as a whole to be maintained and kept in normal condition,
repair and working order (reasonable wear and tear excepted) and will cause to
be made all necessary repairs, renewals and replacements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly conducted at all times; provided that
nothing in this Section 6.13 shall prevent the Borrower or any Restricted
Subsidiary from discontinuing the use, operation or maintenance of any of such
properties or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Borrower, desirable in the conduct of the business of the
Borrower or such Restricted Subsidiary.
The Borrower will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that in the reasonable good faith judgment
of the Borrower is adequate and appropriate for the conduct of the business of
the Borrower and the Restricted Subsidiaries.
6.14. Notice of Defaults. Within three (3) Business Days after an
Authorized Officer becomes aware thereof, the Borrower will, and will cause each
Subsidiary to, give notice in writing to the Lenders of the occurrence (i) of
any Default or Unmatured Default and (ii) of any other development, financial or
otherwise, which (solely with respect to this clause (ii)) could reasonably be
expected to result in a Material Adverse Change.
6.15. Reporting.
6.15.1 Upon the earlier to occur of (i) the date required by
law or regulation for the following to be filed with a government body and (ii)
the date that is 90 days after the close of each of its fiscal years, the
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Borrower will furnish to the Lenders financial statements prepared in accordance
with generally accepted accounting principles as in effect in the United States
from time to time on a consolidated basis for itself and its Subsidiaries,
including balance sheets as of the end of such period, statements of income and
statements of cash flows, accompanied by (a) an audit report, unqualified as to
scope, of a nationally recognized firm of independent public accountants or
other independent public accountants reasonably acceptable to the Required
Lenders; (b) any management letter prepared by said accountants and (c) a
certificate of said accountants that, in the course of their examination
necessary for their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default under Section 6.17, or if, in the
opinion of such accountants, any such Default or Unmatured Default shall exist,
stating the nature and status thereof.
6.15.2 Upon the earlier to occur of (i) the date required by
law or regulation for the following to be filed with a government body and (ii)
the date that is 45 days after the close of the first three quarterly periods of
each of its fiscal years, the Borrower will furnish to the Lenders, for itself
and its Subsidiaries, consolidated unaudited balance sheets as at the close of
each such period, consolidated statements of income, and a consolidated
statement of cash flows for the period from the beginning of such fiscal year to
the end of such quarter, all certified as to fairness of presentation,
compliance with generally accepted accounting principles as in effect in the
United States from time to time and consistency by its chief financial officer
or treasurer.
6.15.3 Together with the financial statements required under
Sections 6.15.1 and 6.15.2, a compliance certificate in substantially the form
of Exhibit B signed by its chief financial officer or treasurer showing the
calculations necessary to determine compliance with this Agreement, an officer's
certificate in substantially the form of Exhibit F stating that no Default or
Unmatured Default exists, or if any Default or Unmatured Default exists, stating
the nature and status thereof, and a certificate executed and delivered by the
chief executive officer or chief financial officer stating that the Borrower and
each of its principal officers are in compliance with all requirements of
Section 302 and Section 906 of the Xxxxxxxx-Xxxxx Act of 2002 and all rules and
regulations related thereto.
6.15.4 As soon as practicable, and in any event within 45 days
after the beginning of each fiscal year of the Borrower, a copy of the plan and
forecast (including a projected consolidated balance sheet, income statement and
cash flow statement) of the Borrower for such fiscal year, together with a
reasonably detailed descriptions of the assumptions used in the preparation
thereof.
6.15.5 As soon as possible, and in any event within 15 days
after the occurrence thereof, a reasonably detailed notification to the
Administrative Agent and its counsel of any change in the jurisdiction of
organization of the Borrower or any Guarantor.
6.15.6 (a) By no later than such date as the Administrative
Agent may from time to time specify, such valuations and appraisals (all costs
and expenses with respect to which shall be for the account of the Borrower) as
the Administrative Agent may require with respect to the value of the Real
Property Collateral; provided that, so long as no Default has occurred and is
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continuing, no such valuations and appraisals shall be required more than once
with respect to any individual Owned Real Property and (b) As soon as available
and in any event within 30 days after the end of each fiscal year of the
Borrower, a report supplementing Schedules 5.14(a)(i), 5.14(a)(ii),
5.14(a)(iii), 5.14(b)(iii) and 5.14(b)(iv) hereto, including an identification
of all Real Property disposed of by any Credit Party during such fiscal year in
accordance with the terms of this Agreement, a list and description (including
the street address, country or other relevant jurisdiction, state, record owner,
book value thereof and, in the case of leases or property, lessor, lessee,
expiration date and annual rental cost hereof) of all Real Property acquired or
for which leases were entered into during such fiscal year and, as to all such
Schedules, a description of such other changes in the information included in
such Schedule as may be necessary for such Schedule to be accurate and complete.
6.15.7 As soon as available and in any event within 30 days after the end of
each fiscal year, a report summarizing the insurance coverage (specifying type,
amount and carrier) in effect for each Credit Party and its Subsidiaries and
containing such additional information as any Agent, or any Lender through the
Administrative Agent, may reasonably specify.
6.16. Mergers, Consolidations and Sales of Assets. The Borrower shall
not consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into it
unless:
(a) the Borrower shall be the continuing Person;
(b) immediately after giving effect to such transaction, no
Default or Unmatured Default shall have occurred and be continuing;
(c) immediately after giving effect to such transaction on a
pro forma basis, the Borrower shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Borrower immediately prior to
such transaction; and
(d) the Borrower delivers to the Administrative Agent an
officers' certificate (attaching the arithmetic computations to demonstrate
compliance with clause (c) of this Section 6.16) and opinion of counsel, in each
case stating that such consolidation, merger or transfer and such supplemental
indenture, if any, complies with Section 6.16 and that all conditions precedent
provided for herein relating to such transaction have been complied with; and
provided, however, that clause (c) of this Section 6.16 do not apply if, in the
good faith determination of the Board of Directors of the Borrower, whose
determination shall be evidenced by a board resolution, the principal purpose of
such transaction is to change the state of incorporation of the Borrower and any
such transaction shall not have as one of its purposes the evasion of the
foregoing limitations.
6.17. Total Leverage Ratio. The Borrower shall at all times maintain a
ratio (the "Total Leverage Ratio"), determined as of the end of each of its
fiscal quarters set forth below, of (i) Consolidated Funded Indebtedness of the
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Borrower to (ii) Consolidated EBITDA for the then most recently ended four
fiscal quarters, of not greater than the ratio set forth for such period below.
For each four fiscal quarter period ended: Total Leverage Ratio
------------------------------------------ --------------------
September, 2004 through December 31, 2004 5.50:1.00
March 31, 2005 through June 30, 2005 5.25:1.00
September 30, 2005 through December 31, 2005 5.00:1.00
March 31, 2006 through June 30, 2006 4.75:1.00
September 30, 2006 and thereafter 4.50:1.00
6.18. Collateral; Environmental Reports. (a) Subject to the exceptions
set forth in this Section 6.18, the Borrower will cause, and will cause each
other Credit Party to cause, all of its owned Property whether now or hereafter
acquired (other than Exempt Property) to be subject at all times to second
priority (except in case of Liens permitted in Section 6.8), perfected Liens in
favor of the Administrative Agent for the benefit of the Holders of the
Obligations to secure the Obligations in accordance with the terms and
conditions of the Collateral Documents, subject in any case to Liens permitted
by Section 6.8 hereof. Without limiting the generality of the foregoing, the
Borrower will cause the Applicable Pledge Percentage of the issued and
outstanding equity interests of each Pledge Subsidiary) directly owned by the
Borrower or any other Credit Party to be subject at all times to a second
priority, perfected Lien in favor of the Administrative Agent to secure the
Obligations in accordance with the terms and conditions of the Collateral
Documents or such other security documents as the Administrative Agent shall
reasonably request. Notwithstanding the foregoing, (1) no pledge agreement in
respect of the equity interests of a Foreign Subsidiary shall be required
hereunder to the extent such pledge thereunder is prohibited by applicable law
or the Administrative Agent reasonably determines that such pledge would not
provide material credit support for the benefit of the Holders of Secured
Obligations pursuant to legally valid, binding and enforceable pledge agreements
and (2) no such pledge agreement shall be required to be delivered with respect
to Foreign Subsidiaries existing as of the Closing Date, unless otherwise
determined in the reasonable discretion of the Administrative Agent upon 45 days
notice to the Borrower.
(b) The Borrower will cause, and will cause each other Credit
Party to cause, all of its Real Property Collateral whether now or hereafter
acquired or leased to be subject at all times to second priority, perfected
Liens in favor of the Administrative Agent for the benefit of the Holders of
Secured Obligations to secure the Secured Obligations in accordance with the
terms and conditions of the Collateral Documents, subject in each case to Liens
created or permitted by the Loan Documents, including, without limitation, such
items that will constitute Permitted Encumbrances. Without limiting the
generality of the foregoing, the Borrower will, and will cause each Guarantor
to, deliver Mortgages and, to the extent applicable, Mortgage Instruments with
respect to the Real Property Collateral to the extent, and within such time
period as is, reasonably required by the Administrative Agent; provided,
however, that with respect to the Real Property Collateral existing as of the
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Closing Date, no such Mortgages, Mortgage Instruments and pledge agreements are
required to be delivered hereunder until 90 days following the Closing Date with
respect to Real Property Collateral and 120 days following the Closing Date with
respect to all other Real Property Collateral (it being understood and agreed
that the failure to deliver such Mortgages, Mortgage Instruments and pledge
agreements by 120 days following the Closing Date or such date 30 days later as
the Administrative Agent may agree in its sole discretion shall constitute a
Default under Section 7.3); provided that the Borrower hereby agrees to use its
reasonable efforts to cause the delivery of such Mortgages and Mortgage
Instruments as soon as practicable after the Closing Date. Without limiting the
generality of the foregoing, in addition to each Mortgage delivered pursuant to
this Section 6.18, the Administrative Agent shall receive the following items
with respect to the Real Property Collateral (collectively, the "Mortgage
Instruments"):
(A) evidence that counterparts of the Mortgages have been duly
executed, acknowledged and delivered and are in form suitable for
filing or recording in all filing or recording offices that the
Administrative Agent may deem necessary or desirable in order to create
a valid first and subsisting Lien on the property described therein in
favor of the Administrative Agent for the benefit of the Holders of
Secured Obligations and that all applicable filing and recording taxes
and fees have been paid,
(B) with respect to the Real Property Collateral, fully paid
American Land Title Association Lender's Extended Coverage title
insurance policies (the "Mortgage Policies") in form and substance,
with endorsements and in amount reasonably acceptable to the
Administrative Agent, issued by Chicago Title Insurance Company,
insuring the Mortgages of the Real Property Collateral to be valid
first and subsisting Liens on the property described therein, free and
clear of all defects (including, but not limited to, mechanics' and
materialmen's Liens) and encumbrances, excepting only Permitted
Encumbrances, and providing for such other affirmative insurance
(including endorsements for future advances under the Loan Documents
and for mechanics' and materialmen's Liens) and such direct access
reinsurance as the Administrative Agent may reasonably require,
(C) with respect to the Real Property Collateral, American
Land Title Association/American Congress on Surveying and Mapping form
surveys, for which all necessary fees (where applicable) have been
paid, and dated no more than 60 days before the filing of the related
Mortgage or such other date as the Administrative Agent shall
reasonably determine, provided that Chicago Title Insurance Company
shall agree to omit the general survey exception to the applicable
Mortgage Policy on the basis of such survey, certified to the
Administrative Agent and Chicago Title Insurance Company in a manner
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satisfactory to the Administrative Agent by a land surveyor duly
registered and licensed in the States in which the property described
in such surveys is located and acceptable to the Administrative Agent,
showing all buildings and other improvements, any off-site
improvements, the location of any easements, parking spaces, rights of
way, building set-back lines and other dimensional regulations and the
absence of encroachments, either by such improvements or on to such
property, and other defects, other than encroachments and other defects
acceptable to the Administrative Agent or for which affirmative
reinsurance coverage is provided in the Mortgage Policies,
(D) such consents and agreements of third parties, and such
estoppel letters and other confirmations, as the Administrative Agent
may deem necessary or desirable,
(E) evidence of the insurance required by the terms of the
Mortgages,
(F) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to create valid first
and subsisting Liens on the property described in the Mortgages has
been taken,
(G) favorable opinions of local counsel for the Credit Parties
(i) in states in which the Real Property Collateral is located, with
respect to the enforceability and perfection of the Mortgages and any
related fixture filings substantially in the form of Exhibit A-2 hereto
and otherwise in form and substance satisfactory to the Administrative
Agent and (ii) in states in which the Credit Parties party to the
Mortgages are organized or formed, with respect to the valid existence,
corporate power and authority of such Credit Parties in the granting of
the Mortgages, in substantially the form of Exhibit A-3 hereto, and
otherwise in form and substance satisfactory to the Administrative
Agent.
(c) The Borrower shall, within 45 days after the Closing Date
(which may be extended by up to an additional 30 days in the sole discretion of
the Administrative Agent), cause, and cause each other Credit Party to cause,
all of its Deposit Accounts (as defined in the Security Agreement) and
securities accounts (as defined in the New York Uniform Commercial Code) to be
subject to Deposit Account Control Agreements or Securities Account Control
Agreements (each as defined in the Security Agreement), as applicable,
acceptable to the Collateral Agent and subject to any exceptions set forth in
the Security Agreement.
(d) Within 30 days after the Closing Date, the Borrower shall
deliver to the Lenders a Phase I environmental assessment report, from an
environmental consulting firm acceptable to the Lenders, which report shall
identify existing and potential environmental concerns, and shall quantify
related costs and liabilities, associated with all of the Real Property
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Collateral and the Lenders shall be satisfied with the Borrower's plans with
respect thereto and if so recommended by any such Phase I report, the Borrower
shall deliver to the Lenders within 60 days of the Closing Date a Phase II
environmental assessment report with respect to the applicable site and the
Lenders shall be satisfied with the Borrower's plans with respect to the matters
addressed therein.
(e) The Borrower shall use its commercially reasonable efforts
to obtain the consent of Xxxxx Brothers Xxxxxxxx within 90 days of the Closing
Date to the grant by ACM Block & Brick, and shall cause ACM Block & Brick to so
grant, of a perfected third priority lien, on terms satisfactory to the
Administrative Agent, on all property securing the BBH Debt in favor of the
Collateral Agent for the Holders of the Obligations. If such consent is not
obtained within 90 days of the Closing Date, the Borrower shall cause the BBH
Debt to be repaid in full and cause ACM Block & Brick to grant a perfected
second priority lien, on terms satisfactory to the Administrative Agent, on all
property securing the BBH Debt in favor of the Collateral Agent on behalf of the
Holders of the Obligations. Simultaneously with the granting of the liens
contemplated by this Section 6.18(e), the Borrower shall cause ACM Block & Brick
to satisfy all requirements of this Section 6.18 and of the Pledge and Security
Agreement as they apply to Collateral with respect to the property being so
pledged.
(f) Within 14 days of the Closing Date, the Borrower shall
cause Tapco International Corporation to enter into an employment agreement with
Xxxx X. Xxxxxxx, III, as president of Tapco International Corporation, on terms
and conditions satisfactory to the Lead Arrangers.
6.19. Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Loans solely for repaying the
Indebtedness under the Existing Credit Agreement and to finance the Tapco
Acquisition, in each case, including payment of the costs, fees and expenses
incurred by the Borrower and its Subsidiaries in connection therewith.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1 Default in the payment of principal of (or premium, if any, on) any
Loan when the same becomes due and payable at maturity, upon acceleration, or
otherwise;
7.2 Default in the payment of interest on any Loan when the same
becomes due and payable, and such default continues for a period of five
Business Days;
7.3 Default in the performance or breach of Section 6.16, Section 6.17
or Section 6.19 of this Agreement, or the failure to make or consummate an Offer
to Purchase in accordance with Section 6.10;
7.4 Any representation or warranty made or deemed made by the Borrower,
any of its Subsidiaries, or any Authorized Officer thereof to the Lenders or the
Administrative Agent under or in connection with this Agreement, any Advance, or
any certificate or information delivered in connection with this Agreement or
any other Loan Document shall be false in any material respect on the date as of
which made or deemed made.
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7.5 The Borrower or any Guarantor defaults in the performance of or
breaches any other covenant or agreement in this Agreement or under the other
Loan Documents (other than a default specified in clause 7.1, 7.2, 7.3 or 7.4
above) and such default or breach continues for a period of 30 consecutive days
after written notice by the Administrative Agent or the Required Lenders;
7.6 There occurs with respect to any Indebtedness of the Borrower, any
Guarantor or any Restricted Subsidiary having an outstanding principal amount of
$10 million or more in the aggregate for all such issues of all such Persons,
whether such Indebtedness now exists or shall hereafter be created, (I) an event
of default that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such defaulted
payment shall not have been made, waived or extended within 30 days of such
payment default;
7.7 Any final judgment or order (not covered by insurance) for the
payment of money in excess of $5 million in the aggregate for all such final
judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Borrower, any Guarantor or any Restricted Subsidiary and shall not be paid or
discharged, and there shall be any period of 30 consecutive days following entry
of the final judgment or order that causes the aggregate amount for all such
final judgments or orders outstanding and not paid, waived or discharged against
all such Persons to exceed $10 million, during which a stay of enforcement of
such final judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect;
7.8 A court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Borrower, any Guarantor or any Restricted
Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, (B) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Borrower, any Guarantor or any Restricted Subsidiary or for all or
substantially all of the property and assets of the Borrower, any Guarantor or
any Restricted Subsidiary or (C) the winding up or liquidation of the affairs of
the Borrower, any Guarantor or any Restricted Subsidiary and, in each case, such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days;
7.9 The Borrower, any Guarantor or any Restricted Subsidiary (A)
commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Borrower, any
Guarantor or any Restricted Subsidiary or for all or substantially all of the
property and assets of the Borrower, any Guarantor or any Restricted Subsidiary
or (C) effects any general assignment for the benefit of creditors; or
7.10 (a) Any Guarantor repudiates its obligations under the Guaranty
or, except as permitted by this Agreement, the Guaranty is determined to be
unenforceable or invalid or shall for any reason cease to be in full force and
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effect or (b) any of the Collateral Documents shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected second
priority lien on and security interest in the Collateral purported to be covered
thereby; or
7.11 Any Change of Control occurs.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration.
(i) If any Default described in Section 7.8 or 7.9 occurs with
respect to the Borrower, the obligations of the Lenders to
make Loans hereunder shall automatically terminate and the
Obligations shall immediately become due and payable without
any election or action on the part of the Administrative Agent
or any Lender. If any other Default occurs, the Required
Lenders (or the Administrative Agent with the consent of the
Required Lenders) may (a) terminate or suspend the obligations
of the Lenders to make Loans hereunder or declare the
Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of
which the Borrower hereby expressly waives.
(ii) If, after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans as
a result of any Default (other than any Default as described
in Section 7.8 or 7.9 with respect to the Borrower) and before
any judgment or decree for the payment of the Obligations due
shall have been obtained or entered, the Required Lenders (in
their sole discretion) shall so direct, the Administrative
Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Section 8.2 and the
Intercreditor Agreement, the Required Lenders (or the Administrative Agent with
the consent in writing of the Required Lenders) and the Borrower may enter into
agreements supplemental hereto for the purpose of adding or modifying any
provisions to the Loan Documents or changing in any manner the rights of the
Lenders or the Borrower hereunder or thereunder or waiving any Default hereunder
or thereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders (other than any Lender that is, at
such time, a Defaulting Lender), except for any amendment, waiver or consent
with respect to the items set forth in Sections 8.2.1 and 8.2.3, which shall
only require the consent of all of the Lenders directly affected by such
amendment, waiver or consent:
8.2.1 Extend the final maturity date of any Loan to a date
after the Maturity Date, or postpone any regularly scheduled payment of
principal of any Loan or forgive all or any portion of the principal amount
thereof, or reduce the rate or extend the time of payment of interest or fees
thereon (other than a waiver of the application of the default rate of interest
pursuant to Section 2.11 hereof.
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8.2.2 Reduce the percentage specified in the definition of
Required Lenders or any other percentage of Lenders specified to be the
applicable percentage in this Agreement to act on specified matters or amend the
definition of "Pro Rata Share".
8.2.3 Increase the amount of the Commitment of any Lender
hereunder.
8.2.4 Amend this Section 8.2, or permit the Borrower to assign
its rights or obligations under this Agreement.
8.2.5 Subject to the provisions of the Intercreditor
Agreement, other than in connection with a transaction permitted under this
Agreement, release all or substantially all of the Collateral.
8.2.6 Other than in connection with a transaction permitted
under this Agreement, release all or substantially all of the value of the
Guaranty.
If, in connection with any proposed amendment, waiver, or consent, the consent
of all of the Lenders, or all of the Lenders directly affected thereby, is
required pursuant to this Section 8.2, and any such Lender refuses to consent to
such amendment, waiver or consent (any such Lender whose consent is not obtained
as described in this Section 8.2 being referred to as a "Non-Consenting
Lender"), then, so long as the Administrative Agent is not a Non-Consenting
Lender, at the Borrower's request, the Administrative Agent or an Eligible
Assignee shall be entitled (but shall have no obligation) to purchase from such
Non-Consenting Lender, and such Non-Consenting Lender (by its acceptance of the
benefits of the Loan Documents) agrees that it shall, upon the Administrative
Agent's request, sell and assign to the Administrative Agent or such Eligible
Assignee, all of the Loans of such Non-Consenting Lender or Non-Consenting
Lenders for an amount equal to the principal balance of all Loans held by the
Non-Consenting Lender and all accrued interest and fees with respect thereto
through the date of sale. Each Lender (by its acceptance of the benefits of the
Loan Documents) agrees that, if it becomes a Non-Consenting Lender, it shall
execute and deliver to the Administrative Agent an Assignment and Acceptance to
evidence such sale and purchase and shall deliver to the Administrative Agent
any Note (if the assigning Lender's Loans are evidenced by Notes) subject to
such Assignment and Acceptance; provided, however, that the failure of any
Non-Consenting Lender to execute an Assignment and Acceptance shall not render
such sale and purchase (and the corresponding assignment) ineffective.
No amendment of any provision of this Agreement relating to or affecting the
Administrative Agent shall be effective without the written consent of the
Administrative Agent. The Administrative Agent may waive payment of the fee
without obtaining the consent of any other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders or the
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein. Any single or partial exercise of any such right shall not preclude
other or further exercise thereof or the exercise of any other right, and no
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waiver, amendment or other variation of the terms, conditions or provisions of
the Loan Documents whatsoever shall be valid unless in writing signed by, or by
the Administrative Agent with the consent of, the requisite number of Lenders
required pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Administrative
Agent and the Lenders until all of the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive the making of the
Advances herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Administrative Agent and the Lenders
and supersede all prior agreements and understandings among the Borrower, the
Administrative Agent and the Lenders relating to the subject matter thereof
other than those contained in the fee letter described in Section 10.13 which
shall survive and remain in full force and effect during the term of this
Agreement.
9.5. Several Obligations; Benefits of This Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns, provided, however, that
the parties hereto expressly agree that the Lead Arrangers shall enjoy the
benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent
specifically set forth therein and shall have the right to enforce such
provisions on its own behalf and in its own name to the same extent as if it
were a party to this Agreement.
9.6. Expenses; Indemnification. (i) The Borrower shall reimburse the
Administrative Agent and the Lead Arrangers for any reasonable out-of-pocket
expenses (including reasonable attorneys' and paralegals' fees and time charges
of attorneys for the Administrative Agent) paid or incurred by the
Administrative Agent or the Lead Arrangers in connection with the investigation,
preparation, negotiation, documentation, execution, delivery, syndication,
distribution (including, without limitation, via the internet), review,
amendment, modification and administration of the Loan Documents. The Borrower
also agrees to reimburse the Administrative Agent, the Lead Arrangers and the
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Lenders for any reasonable costs, internal charges and out-of-pocket expenses
(including reasonable attorneys' and paralegals' fees and time charges and
expenses of attorneys and paralegals for the Administrative Agent, the Lead
Arrangers and the Lenders, which attorneys and paralegals may be employees of
the Administrative Agent, the Lead Arrangers or the Lenders) paid or incurred by
the Administrative Agent, the Lead Arrangers or any Lender in connection with
the collection and enforcement of the Loan Documents. Expenses being reimbursed
by the Borrower under this Section include, without limitation, the cost and
expense of obtaining an appraisal of each parcel of real property or interest in
real property described in any relevant Collateral Document, which appraisal
shall be in conformity with the applicable requirements of any law or any
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law), or any interpretation thereof, and any rules
promulgated to implement such provisions and costs and expenses incurred in
connection with the Reports described in the following sentence.
(ii) The Borrower hereby further agrees to indemnify the
Administrative Agent, the Lead Arrangers, each Lender, their respective
affiliates, and each of their directors, officers and employees against all
losses, claims, damages, penalties, judgments, liabilities and out-of-pocket
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Administrative Agent, the Lead
Arrangers, any Lender or any affiliate is a party thereto, and all attorneys'
and paralegals' fees, time charges and expenses of attorneys and paralegals of
the party seeking indemnification, which attorneys and paralegals may or may not
be employees of such party seeking indemnification) which any of them may pay or
incur arising out of or relating to this Agreement, the other Loan Documents,
the transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Credit Extension hereunder except to
the extent that they are determined in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification. The obligations of the
Borrower under this Section 9.6 shall survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders, as shall have been reasonably requested of the Borrower by the
Administrative Agent.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used in the calculation of any financial covenant or test shall
be interpreted and all accounting determinations hereunder in the calculation of
any financial covenant or test shall be made in accordance with Agreement
Accounting Principles. If any changes in generally accepted accounting
principles are hereafter required or permitted and are adopted by the Borrower
or any of its Subsidiaries with the agreement of its independent certified
public accountants and such changes result in a change in the method of
calculation of any of the financial covenants, tests, restrictions or standards
herein or in the related definitions or terms used therein ("Accounting
Changes"), the parties hereto agree, at the Borrower's request, to enter into
negotiations, in good faith, in order to amend such provisions in a credit
neutral manner so as to reflect equitably such changes with the desired result
that the criteria for evaluating the Borrower's and its Subsidiaries' financial
condition shall be the same after such changes as if such changes had not been
made; provided, however, until such provisions are amended in a manner
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reasonably satisfactory to the Administrative Agent and the Required Lenders, no
Accounting Change shall be given effect in such calculations. In the event such
amendment is entered into, all references in this Agreement to Agreement
Accounting Principles shall mean generally accepted accounting principles as of
the date of such amendment. Notwithstanding the foregoing, all financial
statements to be delivered by the Borrower pursuant to Section 6.1 shall be
prepared in accordance with generally accepted accounting principles in effect
at such time.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders and the Administrative Agent on the other hand
shall be solely that of borrower and lender. Neither the Administrative Agent,
the Lead Arrangers nor any Lender shall have any fiduciary responsibilities to
the Borrower. Neither the Administrative Agent, the Lead Arrangers nor any
Lender undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's business
or operations. The Borrower agrees that neither the Administrative Agent, the
Lead Arrangers nor any Lender shall have liability to the Borrower (whether
sounding in tort, contract or otherwise) for losses suffered by the Borrower in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. None of the parties hereto shall have any
liability with respect to, and each party hereto hereby waives, releases and
agrees not to xxx for, any special, indirect, consequential or punitive damages
suffered by any such party in connection with, arising out of, or in any way
related to the Loan Documents or the transactions contemplated thereby.
9.11. Confidentiality. The Administrative Agent and each Lender agrees
to hold any confidential information which it may receive from the Borrower in
connection with this Agreement in confidence, except for disclosure (i) to its
Affiliates and to the Administrative Agent and any other Lender and their
respective Affiliates, to the extent such Person is or is reasonably expected to
be involved in the evaluation of such information in connection with the
transactions contemplated by this Agreement, (ii) to legal counsel, accountants,
and other professional advisors to such Lender or to a Transferee, (iii) to
regulatory officials, (iv) to any Person as required by law, regulation, or
legal process, or to any Person as required in connection with any legal
proceeding to which it is a party, provided that the Borrower shall have
received prior written notice of such disclosure to the extent such notice is
permitted and the disclosing party shall have taken all steps reasonably
requested by the Borrower to protect the confidentiality of the information so
disclosed, (v) to its direct or indirect contractual counterparties in swap
agreements or to legal counsel, accountants and other professional advisors to
such counterparties, to the extent required in connection with such swap
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agreements, (vi) permitted by Section 12.4, and (vii) to rating agencies subject
to confidentiality restrictions reasonably acceptable to the Borrower, if
requested or required by such agencies in connection with a rating relating to
the Advances hereunder. Without limiting Section 9.4, the Borrower agrees that
the terms of this Section 9.11 shall set forth the entire agreement between the
Borrower and each Lender (including the Administrative Agent) with respect to
any confidential information previously or hereafter received by such Lender in
connection with this Agreement, and this Section 9.11 shall supersede any and
all prior confidentiality agreements entered into by such Lender with respect to
such confidential information.
9.12. Nonreliance. Each Lender hereby represents that it is not relying
on or looking to any margin stock (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for herein.
9.13. Disclosure. The Borrower and each Lender hereby acknowledge and
agree that each Lender and/or its Affiliates from time to time may hold
investments in, make other loans to or have other relationships with the
Borrower and its Affiliates.
9.14. Performance of Obligations. The Borrower agrees that the
Administrative Agent may, but shall have no obligation to (i) at any time, pay
or discharge taxes, liens, security interests or other encumbrances levied or
placed on or threatened against any Collateral and (ii) after the occurrence and
during the continuance of a Default make any other payment or perform any act
required of the Borrower under any Loan Document or take any other action which
the Administrative Agent in its discretion deems necessary or desirable to
protect or preserve the Collateral, including, without limitation, any action to
(x) effect any repairs or obtain any insurance called for by the terms of any of
the Loan Documents and to pay all or any part of the premiums therefor and the
costs thereof and (y) pay any rents payable by the Borrower which are more than
30 days past due, or as to which the landlord has given notice of termination,
under any lease. The Administrative Agent shall use its best efforts to give the
Borrower notice of any action taken under this Section 9.14 prior to the taking
of such action or promptly thereafter provided the failure to give such notice
shall not affect the Borrower's obligations in respect thereof. The Borrower
agrees to pay the Administrative Agent, upon demand, the principal amount of all
funds advanced by the Administrative Agent under this Section 9.14, together
with interest thereon at the rate from time to time applicable to Floating Rate
Loans from the date of such advance until the outstanding principal balance
thereof is paid in full. If the Borrower fails to make payment in respect of any
such advance under this Section 9.14 within one (1) Business Day after the date
the Borrower receives written demand therefor from the Administrative Agent, the
Administrative Agent shall promptly notify each Lender and each Lender agrees
that it shall thereupon make available to the Administrative Agent, in Dollars
in immediately available funds, the amount equal to such Lender's Pro Rata Share
of such advance. If such funds are not made available to the Administrative
Agent by such Lender within one (1) Business Day after the Administrative
Agent's demand therefor, the Administrative Agent will be entitled to recover
any such amount from such Lender together with interest thereon at the Federal
Funds Effective Rate for each day during the period commencing on the date of
such demand and ending on the date such amount is received. The failure of any
Lender to make available to the Administrative Agent its Pro Rata Share of any
such unreimbursed advance under this Section 9.14 shall neither relieve any
other Lender of its obligation hereunder to make available to the Administrative
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Agent such other Lender's Pro Rata Share of such advance on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Administrative Agent. All outstanding principal of, and
interest on, advances made under this Section 9.14 shall constitute Obligations
secured by the Collateral until paid in full by the Borrower.
9.15. USA Patriot Act Notification. The following notification is
provided to the Borrower pursuant to Section 326 of the USA Patriot Act of 2001,
31 U.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government of the United States of America fight the funding of terrorism and
money laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each Person that opens an
account, including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. Accordingly, when the
Borrower opens an account, the Administrative Agent and the Lenders will ask for
the Borrower's name, tax identification number, business address, and other
information that will allow the Administrative Agent and the Lenders to identify
the Borrower. The Administrative Agent and the Lenders may also ask to see the
Borrower's legal organizational documents or other identifying documents.
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1. Appointment; Nature of Relationship. MSSF is hereby appointed by
each of the Lenders as its contractual representative (herein referred to as the
"Administrative Agent") hereunder and under each other Loan Document, and each
of the Lenders irrevocably authorizes the Administrative Agent to act as the
contractual representative of such Lender with the rights and duties expressly
set forth herein and in the other Loan Documents. MS&Co. is hereby appointed by
each of the Lenders as its contractual representative (herein referred to as the
"Collateral Agent" and, together with the Administrative Agent, the "Agents")
hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Collateral Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. Each of the Agents agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined terms "Administrative Agent" and
"Collateral Agent," it is expressly understood and agreed that the Agents shall
not have any fiduciary responsibilities to any of the Holders of the Obligations
by reason of this Agreement or any other Loan Document and that the Agents are
merely acting as the contractual representatives of the Lenders with only those
duties as are expressly set forth in this Agreement and the other Loan
Documents. In its capacity as the Lenders' contractual representative, each of
the Agents (i) does not hereby assume any fiduciary duties to any of the Holders
of the Obligations, (ii) is a "representative" of the Holders of the Obligations
within the meaning of the term "secured party" as defined in the New York
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders, for itself and on
behalf of its Affiliates as Holders of the Obligations, hereby agrees to assert
no claim against either of the Agents on any agency theory or any other theory
of liability for breach of fiduciary duty, all of which claims each Holder of
the Obligations hereby waives.
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10.2. Powers. Each of the Agents shall have and may exercise such
powers under the Loan Documents as are specifically delegated to Agent by the
terms of each thereof, together with such powers as are reasonably incidental
thereto. Neither Agent shall have any implied duties or fiduciary duties to the
Lenders, or any obligation to the Lenders to take any action thereunder except
any action specifically provided by the Loan Documents to be taken by the such
Agent.
10.3. General Immunity. Neither Agent nor any of their respective
directors, officers, agents or employees shall be liable to the Borrower, or any
Lender or Holder of the Obligations for any action taken or omitted to be taken
by it or them hereunder or under any other Loan Document or in connection
herewith or therewith except to the extent such action or inaction is determined
in a final, non-appealable judgment by a court of competent jurisdiction to have
arisen from the gross negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, Etc. Neither Agent nor any
of their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (a) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (b) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except, in the case of the Administrative Agent, receipt of items required to be
delivered solely to the Administrative Agent; (d) the existence or possible
existence of any Default or Unmatured Default; (e) the validity, enforceability,
effectiveness, sufficiency or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith; (f) the value,
sufficiency, creation, perfection or priority of any Lien in any Collateral; or
(g) the financial condition of the Borrower or any guarantor of any of the
Obligations or of any of the Borrower's or any such guarantor's respective
Subsidiaries. Neither Agent shall have any duty to disclose to the Lenders
information that is not required to be furnished by the Borrower to such Agent
at such time, but is voluntarily furnished by the Borrower to such Agent (either
in its capacity as such Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. Each Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders (or all of the Lenders in the event that and to the extent that
this Agreement expressly requires such), and such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders.
The Lenders hereby acknowledge that neither Agent shall be under any duty to
take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement or any other Loan Document unless it shall be
requested in writing to do so by the Required Lenders (or all of the Lenders in
the event that and to the extent that this Agreement expressly requires such).
Each Agent shall be fully justified in failing or refusing to take any action
hereunder and under any other Loan Document unless it shall first be indemnified
to its satisfaction by the Lenders pro rata against any and all liability, cost
and expense that it may incur by reason of taking or continuing to take any such
action.
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10.6. Employment of Agents and Counsel. Each Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Each Agent shall be entitled to advice of
counsel concerning the contractual arrangement between such Agent and the
Lenders and all matters pertaining to such Agent's duties hereunder and under
any other Loan Document.
10.7. Reliance on Documents; Counsel. Each Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex, electronic mail message, statement, paper or document believed
by it to be genuine and correct and to have been signed or sent by the proper
person or persons, and, in respect to legal matters, upon the opinion of counsel
selected by such Agent, which counsel may be employees of such Agent. For
purposes of determining compliance with the conditions specified in Section 4.1,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the applicable date specifying its objection
thereto.
10.8. Agents' Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Administrative Agent and the Collateral Agent
ratably in proportion to the Lenders' Pro Rata Shares (i) for any amounts not
reimbursed by the Borrower for which such Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
such Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by such Agent in
connection with any dispute between such Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against such Agent in connection with any
dispute between such Agent and any Lender or between two or more of the
Lenders), or the enforcement of any of the terms of the Loan Documents or of any
such other documents, provided that (i) no Lender shall be liable for any of the
foregoing to the extent any of the foregoing is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Agent and (ii) any indemnification
required pursuant to Section 3.5(vii) shall, notwithstanding the provisions of
this Section 10.8, be paid by the relevant Lender in accordance with the
provisions thereof. The obligations of the Lenders under this Section 10.8 shall
survive payment of the Obligations and termination of this Agreement.
10.9. Notice of Default. Neither Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless such Agent has received written notice from a Lender or the
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Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders.
10.10. Rights as a Lender. In the event either Agent is a Lender, such
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Advances as any Lender and may
exercise the same as though it were not an Agent, and the term "Lender" or
"Lenders" shall, at any time when an Agent is a Lender, unless the context
otherwise indicates, include such Agent in its individual capacity. Either Agent
and their respective Affiliates may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. Neither
Agent, in its individual capacity, is obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Collateral
Agent, the Lead Arrangers or any other Lender and based on the financial
statements prepared by the Borrower and such other documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement and the other Loan Documents. Each Lender also acknowledges
that it will, independently and without reliance upon the Administrative Agent,
the Collateral Agent, the Lead Arrangers or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. Successor Agents. (a) The Administrative Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower, such
resignation to be effective (x) twenty (20) days after the retiring
Administrative Agent gives notice of its intention to resign, if the
Administrative Agent resigns due to its determination, in its sole discretion,
that being the Administrative Agent poses a conflict of interest for it or (y)
upon the appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, forty-five (45) days after the retiring
Administrative Agent gives notice of its intention to resign. The Administrative
Agent may be removed at any time with or without cause by written notice
received by the Administrative Agent from the Required Lenders, such removal to
be (i) subject to, so long as no Default has occurred and is continuing, the
prior written consent of the Borrower, such consent not to be unreasonably
withheld and (ii) effective on the date specified by the Required Lenders. Upon
any such resignation or removal, the Required Lenders shall have the right to
appoint, on behalf of the Borrower and the Lenders, a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Required Lenders within thirty days after the resigning Administrative Agent's
giving notice of its intention to resign, then the resigning Administrative
Agent may appoint, on behalf of the Borrower and the Lenders, a successor
Administrative Agent. Notwithstanding the previous sentence, the Administrative
Agent may at any time without the consent of the Borrower or any Lender, appoint
any of its Affiliates which is a commercial bank as a successor Administrative
Agent hereunder. If the Administrative Agent has resigned or been removed and no
successor Administrative Agent has been appointed, the Lenders may perform all
the duties of the Administrative Agent hereunder and the Borrower shall make all
payments in respect of the Obligations to the applicable Lender and for all
other purposes shall deal directly with the Lenders. No successor Administrative
Agent shall be deemed to be appointed hereunder until such successor
Administrative Agent has accepted the appointment. Any such successor
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Administrative Agent shall be a commercial bank or other financial institution
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Administrative Agent. Upon the effectiveness of the
resignation or removal of the Administrative Agent, the resigning or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the
resignation or removal of an Administrative Agent, the provisions of this
Article X shall continue in effect for the benefit of such Administrative Agent
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Administrative Agent by merger, or the
Administrative Agent assigns its duties and obligations to an Affiliate pursuant
to this Section 10.12, then the term "Prime Rate" as used in this Agreement
shall mean the prime rate, base rate or other analogous rate of the new
Administrative Agent.
(b) The Collateral Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective (x) twenty (20) days after the retiring Collateral Agent gives notice
of its intention to resign, if the Collateral Agent resigns due to its
determination, in its sole discretion, that being the Administrative Agent poses
a conflict of interest for it or (y) upon the appointment of a successor
Collateral Agent or, if no successor Collateral Agent has been appointed,
forty-five (45) days after the retiring Collateral Agent gives notice of its
intention to resign. The Collateral Agent may be removed at any time with or
without cause by written notice received by the Collateral Agent from the
Required Lenders, such removal to be (i) subject to, so long as no Default has
occurred and is continuing, the prior written consent of the Borrower, such
consent not to be unreasonably withheld and (ii) effective on the date specified
by the Required Lenders. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint, on behalf of the Borrower and the
Lenders, a successor Collateral Agent. If no successor Collateral Agent shall
have been so appointed by the Required Lenders within thirty days after the
resigning Collateral Agent's giving notice of its intention to resign, then the
resigning Collateral Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Collateral Agent. Notwithstanding the previous sentence,
the Collateral Agent may at any time without the consent of the Borrower or any
Lender, appoint any of its Affiliates as a successor Collateral Agent hereunder.
If the Collateral Agent has resigned or been removed and no successor Collateral
Agent has been appointed, the Lenders may perform all the duties of the
Collateral Agent hereunder and the Borrower shall make all payments in respect
of the Obligations to the applicable Lender and for all other purposes shall
deal directly with the Lenders. No successor Collateral Agent shall be deemed to
be appointed hereunder until such successor Collateral Agent has accepted the
appointment. Any such successor Collateral Agent shall be a commercial bank,
trust company or other financial institution having capital and retained
earnings of at least $100,000,000. Upon the acceptance of any appointment as
Collateral Agent hereunder by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Collateral
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Agent. Upon the effectiveness of the resignation or removal of the Collateral
Agent, the resigning or removed Collateral Agent shall be discharged from its
duties and obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation or removal of a Collateral Agent, the
provisions of this Article X shall continue in effect for the benefit of such
Collateral Agent in respect of any actions taken or omitted to be taken by it
while it was acting as the Collateral Agent hereunder and under the other Loan
Documents.
10.13. Administrative Agent and Lead Arrangers Fees. The Borrower
agrees to pay to the Administrative Agent and the Lead Arrangers, for their
respective accounts, the fees agreed to by the Borrower, the Administrative
Agent and the Lead Arrangers pursuant to that certain letter agreement dated
September 3, 2004, or as otherwise agreed from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree
that each of the Administrative Agent and the Collateral Agent may delegate any
of its respective duties under this Agreement to any of its respective
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which such Agent is entitled under Articles IX and X.
10.15. Co-Agents, Documentation Agent, Syndication Agent, Etc. None of
the Lenders, if any, identified in this Agreement as a "co-agent",
"documentation agent" or "syndication agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to such
Lenders as it makes with respect to the Administrative Agent and the Collateral
Agent in Section 10.11.
10.16. Collateral Documents. (a) Each Lender authorizes the Collateral
Agent to enter into each of the Collateral Documents to which it is a party and
to take all action contemplated by such documents. Each Lender agrees that no
Holder of the Obligations (other than the Collateral Agent) shall have the right
individually to seek to realize upon the security granted by any Collateral
Document, it being understood and agreed that such rights and remedies may be
exercised solely by the Collateral Agent for the benefit of the Holders of the
Obligations upon the terms of the Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by
any Person as collateral security for the Obligations, the Collateral Agent is
hereby authorized to execute and deliver on behalf of the Holders of the
Obligations any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Collateral Agent on behalf of the
Holders of the Obligations.
(c) The Lenders hereby authorize the Collateral Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Collateral Agent upon any Collateral (i) upon termination of the Commitments and
payment and satisfaction of all of the Obligations (other than contingent
indemnity obligations and Rate Management Obligations) at any time arising under
or in respect of this Agreement or the Loan Documents or the transactions
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contemplated hereby or thereby; (ii) as permitted by, but only in accordance
with, the terms of the applicable Loan Document; or (iii) if approved,
authorized or ratified in writing by the Required Lenders, unless such release
is required to be approved by all of the Lenders hereunder. Upon request by the
Collateral Agent at any time, the Lenders will confirm in writing the Collateral
Agent's authority to release particular types or items of Collateral pursuant to
this Section 10.16.
(d) Upon any sale or transfer of assets constituting
Collateral which is permitted pursuant to the terms of any Loan Document, or
consented to in writing by the Required Lenders or all of the Lenders, as
applicable, and upon at least five Business Days' prior written request by the
Borrower to the Collateral Agent, the Collateral Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Collateral Agent
for the benefit of the Holders of the Obligations herein or pursuant hereto upon
the Collateral that was sold or transferred; provided, however, that (i) the
Collateral Agent shall not be required to execute any such document on terms
which, in the Collateral Agent's opinion, would expose the Collateral Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens upon
(or obligations of the Borrower or any Subsidiary in respect of) all interests
retained by the Borrower or any Subsidiary, including (without limitation) the
proceeds of the sale, all of which shall continue to constitute part of the
Collateral.
10.17. Supplemental Collateral Agent. Anything contained herein or in
the Collateral Documents to the contrary notwithstanding, the Administrative
Agent may from time to time, when the Administrative Agent deems it necessary,
appoint one or more trustees, co-trustees, collateral co-agents or collateral
subagents (each a "Supplemental Collateral Agent") with respect to all or any
part of the Real Property Collateral. In the event that the Administrative Agent
so appoints any Supplemental Collateral Agent with respect to any Real Property
Collateral, (i) such Supplemental Collateral Agent shall automatically be
vested, in addition to the Administrative Agent, with all rights, powers,
privileges, interests and remedies of the Administrative Agent under the
Collateral Documents with respect to such Real Property Collateral; (ii) such
Supplemental Collateral Agent shall be deemed to be an "Agent" for purposes of
this Agreement and the other Loan Documents, and the provisions of Section 9.1
of the Security Agreement, this Article and Section 9.6 hereof that refer to the
Agents (or either of them) shall inure to the benefit of such Supplemental
Collateral Agent, and all references therein and in the other Loan Documents to
the Administrative Agent shall be deemed to be references to the Administrative
Agent and/or such Supplemental Collateral Agent, as the context may require; and
(iii) the term "Administrative Agent," when used herein or in any applicable
Collateral Document in relation to the Liens on or security interests in such
Real Property Collateral granted in favor of the Administrative Agent, and any
rights, powers, privileges, interests and remedies of the Administrative Agent
with respect to such Real Property Collateral, shall be deemed to include such
Supplemental Collateral Agent; provided, however, that no such Supplemental
Collateral Agent shall be authorized to take any action with respect to any such
Real Property Collateral unless and except to the extent expressly authorized in
writing by the Administrative Agent. Should any instrument in writing from the
Borrower or any other Credit Party be required by any Supplemental Collateral
Agent so appointed by the Administrative Agent to more fully or certainly vest
in and confirming to such Supplemental Collateral Agent such rights, powers,
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privileges and duties, the Borrower shall, or shall cause such Credit Party to,
execute, acknowledge and deliver any and all such instruments promptly upon
request by the Administrative Agent. If any Supplemental Collateral Agent, or
successor thereto, shall die, become incapable of acting, resign or be removed,
all the rights, powers, privileges and duties of such Supplemental Collateral
Agent, to the extent permitted by law, shall automatically vest in and be
exercised by the Administrative Agent until the appointment of a new
Supplemental Collateral Agent.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any other Default occurs, any and all deposits (including all
account balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a
participation in the Loans held by the other Lenders so that after such purchase
each Lender will hold its Pro Rata Share. If any Lender, whether in connection
with setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their respective Pro Rata Shares. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and the Lenders and their respective successors and assigns
permitted hereby, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents without the prior
written consent of each Lender, (ii) any assignment by any Lender must be made
in compliance with Section 12.3, and (iii) any transfer by Participation must be
made in compliance with Section 12.2. Any attempted assignment or transfer by
any party not made in compliance with this Section 12.1 shall be null and void,
unless such attempted assignment or transfer is treated as a participation in
accordance with Section 12.3.2. The parties to this Agreement acknowledge that
clause (ii) of this Section 12.1 relates only to absolute assignments and this
Section 12.1 does not prohibit assignments creating security interests,
including, without limitation, (x) any pledge or assignment by any Lender of all
or any portion of its rights under this Agreement and any Note to a Federal
Reserve Bank, (y) in the case of a Lender which is a Fund, any pledge or
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assignment of all or any portion of its rights under this Agreement and any Note
to its Administrative Agent in support of its obligations to its Administrative
Agent or (z) any pledge or assignment by any Lender of all or any portion of its
rights under this Agreement and any Note to direct or indirect contractual
counterparties in swap agreements relating to the Loans; provided, however, that
no such pledge or assignment creating a security interest shall release the
transferor Lender from its obligations hereunder unless and until the parties
thereto have complied with the provisions of Section 12.3. The Administrative
Agent may treat the Person which made any Loan or which holds any Note as the
owner thereof for all purposes hereof unless and until such Person complies with
Section 12.3; provided, however, that the Administrative Agent may in its
discretion (but shall not be required to) follow instructions from the Person
which made any Loan or which holds any Note to direct payments relating to such
Loan or Note to another Person. Any assignee of the rights to any Loan or any
Note agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has been
issued in evidence thereof), shall be conclusive and binding on any subsequent
holder or assignee of the rights to such Loan.
12.2. Participations.
12.2.1 Permitted Participants; Effect. Any Lender may at any
time sell to one or more banks or other entities ("Participants") participating
interests in any Loans of such Lender, any Note held by such Lender, or any
other interest of such Lender under the Loan Documents. In the event of any such
sale by a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the owner of its Loans and the holder
of any Note issued to it in evidence thereof for all purposes under the Loan
Documents, all amounts payable by the Borrower under this Agreement shall be
determined as if such Lender had not sold such participating interests, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents.
12.2.2 Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment, modification
or waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Advance in which such Participant has
an interest which would require consent of all of the Lenders pursuant to the
terms of Section 8.2 or of any other Loan Document.
12.2.3 Benefit of Certain Provisions. The Borrower agrees that
each Participant shall be deemed to have the right of setoff provided in Section
11.1 in respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Loan Documents, provided that each
Lender shall retain the right of setoff provided in Section 11.1 with respect to
the amount of participating interests sold to each Participant. The Lenders
agree to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts to
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be shared in accordance with Section 11.2 as if each Participant were a Lender.
The Borrower further agrees that each Participant shall be entitled to the
benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 12.3,
provided that (i) a Participant shall not be entitled to receive any greater
payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such interest
for its own account, unless the sale of such interest to such Participant is
made with the prior written consent of the Borrower, and (ii) any Participant
not incorporated under the laws of the United States of America or any State
thereof agrees to comply with the provisions of Section 3.5 to the same extent
as if it were a Lender.
12.3. Assignments.
12.3.1 Permitted Assignments. Any Lender may at any time
assign to one or more banks or other entities ("Purchasers") all or any part of
its rights and obligations under the Loan Documents. Such assignment shall be
evidenced by an agreement substantially in the form of Exhibit C or in such
other form as may be agreed to by the parties thereto (each such agreement, an
"Assignment Agreement"). Each such assignment with respect to a Purchaser which
is not a Lender or an Affiliate of a Lender or an Approved Fund shall either be
in an amount equal to the entire applicable Commitment and/or Loans, as
applicable, of the assigning Lender or (unless each of the Borrower and the
Administrative Agent otherwise consents) be in an aggregate amount not less than
$1,000,000. The amount of the assignment shall be based on the Commitment and/or
outstanding Loans (if the Commitment has been terminated), as applicable,
subject to the assignment, determined as of the date of such assignment or as of
the "Trade Date," if the "Trade Date" is specified in the Assignment Agreement.
12.3.2 Consents. The consent of the Borrower shall be required
prior to an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund, provided that the consent of the
Borrower shall not be required if (i) a Default has occurred and is continuing,
(ii) if such assignment is in connection with the physical settlement of any
Lender's obligations to direct or indirect contractual counterparties in swap
agreements relating to the Loans or (iii) if such assignment is made in
connection with the primary syndication of the Loans and commitments hereunder.
The consent of the Administrative Agent shall be required prior to an assignment
becoming effective unless the Purchaser is a Lender, an Affiliate of a Lender or
an Approved Fund. Any consent required under this Section 12.3.2 shall not be
unreasonably withheld or delayed.
12.3.3 Effect; Effective Date. Upon delivery to the
Administrative Agent of an Assignment Agreement, together with any consents
required by Sections 12.3.1 and 12.3.2, such assignment shall become effective
on the effective date specified in such assignment. The Assignment Agreement
shall contain a representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Loans under the applicable
Assignment Agreement constitutes "plan assets" as defined under ERISA and that
the rights and interests of the Purchaser in and under the Loan Documents will
not be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by or on behalf of the Lenders
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and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party thereto, and the
transferor Lender shall be released with respect to the Loans assigned to such
Purchaser without any further consent or action by the Borrower, the Lenders or
the Administrative Agent. In the case of an assignment covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a Lender hereunder but shall continue to be entitled to the
benefits of, and subject to, those provisions of this Agreement and the other
Loan Documents which survive payment of the Obligations and termination of the
applicable agreement. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 12.3
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 12.2.
Upon the consummation of any assignment to a Purchaser pursuant to this Section
12.3.3, the transferor Lender, the Administrative Agent and the Borrower shall,
if the transferor Lender or the Purchaser desires that its Loans be evidenced by
Notes, make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender, if applicable, and new
Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective Commitments (or, if
the Commitments have been terminated, outstanding Loans), as adjusted pursuant
to such assignment.
12.3.4 Register. The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain a copy of each
Assignment Agreement delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Revolving Loan Commitments of, and
principal amounts of the Advances owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
at any reasonable time and from time to time upon reasonable prior notice.
12.3.5 Borrower Increased Costs. Notwithstanding any other
provision of this Agreement to the contrary, if solely and directly as a result
of any assignment or transfer effected by a Lender under this Agreement, there
arises or will arise any obligation on the part of the Borrower under Article
III of this Agreement to pay any sum in excess of the sum (if any) which, but
for such assignment or transfer, it would have been obliged to pay to such
Lender as an additional amount under Article III, the Borrower shall not be
obliged to pay such excess.
12.4. Dissemination of Information. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
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without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1. Notices; Effectiveness; Electronic Communication
13.1.1 Notices Generally. Except in the case of notices and
other communications expressly permitted to be given by telephone (and except as
provided in Section 13.1.2 below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows:
(i) if to the Borrower, at its address or telecopier number set
forth on the signature page hereof;
(ii) if to the Administrative Agent, at its address or telecopier
number set forth on the signature page hereof;
(iii) if to a Lender, to it at its address (or telecopier number)
set forth in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when
received; notices sent by telecopier shall be deemed to have been given
when sent (except that, if not given during normal business hours for
the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices delivered
through electronic communications to the extent provided in Section
13.1.2 below, shall be effective as provided in said Section 13.1.2.
13.1.2 Electronic Communications. Notices and other
communications to the Lenders hereunder may be delivered or furnished by
electronic communication (including e-mail and internet or intranet websites)
pursuant to procedures approved by the Administrative Agent or as otherwise
determined by the Administrative Agent, provided that the foregoing shall not
apply to notices to any Lender pursuant to Article II if such Lender has
notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. The Administrative Agent or the
Borrower may, in its respective discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it or as it otherwise determines, provided that such
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determination or approval may be limited to particular notices or
communications. Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgement from the intended
recipient (such as by the "return receipt requested" function, as available,
return e-mail or other written acknowledgement), provided that if such notice or
other communication is not given during the normal business hours of the
recipient, such notice or communication shall be deemed to have been given at
the opening of business on the next Business Day for the recipient, and (ii)
notices or communications posted to an Internet or intranet website shall be
deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.
13.2. Change of Address, Etc. Any party hereto may change its address
or telecopier number for notices and other communications hereunder by notice to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION
14.1. Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Except as provided in Article IV, this
Agreement shall become effective when it shall have been executed by the
Borrower, the Administrative Agent and the Lenders and when the Administrative
Agent shall have received counterparts hereof which, when taken together, bear
the signatures of each of such parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
14.2. Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Assignment Agreement
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, or any other state laws based on the Uniform Electronic
Transactions Act.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
87
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE LC ISSUER, ANY LENDER OR ANY
HOLDER OF THE OBLIGATIONS TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY HOLDER OF THE OBLIGATIONS OR
ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY HOLDER OF THE
OBLIGATIONS INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A
COURT IN NEW YORK CITY, NEW YORK.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT,
EACH LENDER, AND EACH OTHER HOLDER OF THE OBLIGATIONS HEREBY WAIVE TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
[Signature Pages Follow]
88
IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the
Administrative Agent have executed this Agreement as of the date first above
written.
HEADWATERS INCORPORATED
as the Borrower
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
00000 X. Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
XXXXXX XXXXXXX SENIOR FUNDING, INC., as a Lender, as
Administrative Agent, and as Joint Lead Arranger
By: /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxx
Title: Executive Director
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx/Xxxxx Xxxxxxx
Telephone: 000-000-0000/1439
FAX: 000-000-0000/1866
XXXXXX XXXXXXX & CO. INCORPORATED,
as Collateral Agent
By: /s/ Xxxx Xxxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Executive Director
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx/Xxxxx Xxxxxxx
Telephone: 000-000-0000/1439
FAX: 000-000-0000/1866
JPMORGAN CHASE BANK, as a Lender
and Syndication Agent
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
0000 Xxxx Xxxxxx, Xxxxx 0
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
Email: xxxxx.x.xxxxxx@xxxxx.xxx
With a copy to:
Bank One, N.A.
Attention: Xxxx X. Xxxxxxx
00 Xxxx Xxxxxxxx, Xxxx Xxxx Xxxx, XX 00000
Tel: 000-000-0000/Fax: 000-000-0000
Email: xxxx_x_Xxxxxxx@xxxxxxx.xxx
X.X. XXXXXX SECURITIES INC.,
as Joint Lead Arranger
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
000 Xxxx Xxxxxx, Xxxxx 0
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
Email: xxxx.x.xxxxxxx@xxxxxxxx.xxx
COMMITMENT SCHEDULE
Commitments
Amount of % of Aggregate
Lender Commitment Commitment
------ ---------- --------------
Xxxxxx Xxxxxxx Senior Funding, Inc. $ 90,000,000.00 60%
JPMorgan Chase Bank $ 60,000,000.00 40%
TOTAL $150,000,000.00 100%
SCHEDULE I
CONSOLIDATED EBITDA
[insert EBITDA Amounts]
SCHEDULE II
SOUTHWEST CONCRETE ESCROW AND DEPOSIT ACCOUNTS
1. Escrow Amount at August 31, 2004: $1,100,000
Chase Manhattan Bank
ABA: 000000000
For Account of Xxxxx Brothers Xxxxxxxx & Co.
Acct: 000-0-000000
Further Credit to: Headwaters Incorporated
Acct: 8457046
Escrowed funds to collateralize an equipment loan - funds are released
to Headwaters in an amount equal to principal payments made on the
related loan.
2. Escrow Amount at August 31, 2004: $5,200,000
X.X. Xxxxxx Xxxxx Bank
ABA: 000000000
Account: 00103409257
REF: ACM Block & Brick / Southwest Escrow
Escrowed funds related to an environmental indemnity in connection with
the Southwest Concrete acquisition - Headwaters may submit certain
environmental claims to be paid from this escrow account, subject to
certain terms, through December 31, 2005. Subsequent to December 31,
2005, all remaining escrowed funds are released to the Southwest
Concrete sellers.
SCHEDULE III
PERMITTED ALTERNATIVE FUEL ACQUISITION
Membership interests in DTE IndyCoke, LLC
SCHEDULE 5.7
LITIGATION
Headwaters:
1. Boynton, et al v. Headwaters, Inc. et al, U.S. Dist. Ct. W.D. Tenn.,
Civ. No. 1-02-1111, filed 2002.
In October 1998, Headwaters entered into a technology purchase
agreement with Xxxxx X. Xxxxxxxx and Adtech, Inc. The transaction
transferred certain patent and royalty rights to Headwaters related to
a synthetic fuel technology invented by Davidson. (This technology is
distinct from the technology developed by Headwaters.) This action is
factually related to an earlier action brought by certain purported
officers and directors of Adtech, Inc. That action was dismissed by the
United States District Court for the Western District of Tennessee and
the District Court's order of dismissal was affirmed on appeal. In the
current action, the allegations arise from the same facts, but the
claims are asserted by certain purported stockholders of Adtech. In
June 2002, Headwaters received a summons and complaint from the United
States District Court for the Western District of Tennessee alleging,
among other things, fraud, conspiracy, constructive trust, conversion,
patent infringement and interference with contract arising out of the
1998 technology purchase agreement entered into between Davidson and
Adtech on the one hand, and Headwaters on the other. The complaint
seeks declaratory relief and compensatory damages in the approximate
amount of $10 million and punitive damages. The District Court has
dismissed all claims against Headwaters except conspiracy and
constructive trust. The case is set for trial in November 2004.
2. AGTC v. Headwaters Incorporated, American Arbitration Association, Salt
Lake City, Utah, No. 81 181 031 02, filed 2002.
In March 1996, Headwaters entered into an agreement with AGTC and its
associates for certain services related to the identification and
selection of synthetic fuel projects. In March 2002, AGTC filed an
arbitration demand in Salt Lake City, Utah claiming that it is owed
commissions under the 1996 agreement for 8% of the revenues received by
Headwaters from the Port Hodder project. AGTC claims approximate
damages in a range between $520,000 and $14,000,000. Headwaters asserts
that AGTC did not perform under the agreement and that the agreement
was terminated and the disputes were settled in July 1996. Headwaters
has filed an answer in the arbitration, denying AGTC's claims and has
asserted counterclaims against AGTC. In July and August 2004, the
arbitrator held hearings. The arbitrator has asked the parties for
post-hearing briefs and proposed findings and conclusions.
3. Headwaters Incorporated v. AJG Financial Services, Inc., Fourth Dist.
Ct., State of Utah, Civ. No. 000403381, filed 2000.
In December 1996, Headwaters entered into a technology license and
proprietary chemical reagent sale agreement with AJG Financial
Services, Inc. The agreement called for AJG to pay royalties and to
purchase proprietary chemical reagent material from Headwaters. In
October 2000, Headwaters filed a complaint in the Fourth District Court
for the State of Utah against AJG alleging that it had failed to make
payments and to perform other obligations under the agreement.
Headwaters asserts claims including breach of contract, declaratory
judgment, unjust enrichment and accounting and seeks money damages as
well as other relief. AJG's answer to the complaint denies Headwaters'
claims and asserted counterclaims based upon allegations of
misrepresentation and breach of contract. AJG seeks compensatory
damages in the approximate amount of $71 million and punitive damages.
Headwaters denies the allegations of AJG's counterclaims. The case is
set for trial in January 2005.
4. EEOC and Xxxxxx et xx x. Eldorado Stone, LLC, U.S. Dist. Ct. W.D.
Wash., Civ. No. CV03-2768P, filed 2003.
In September 2003, the EEOC filed a complaint in the Federal District
Court for the Western District of Washington against Eldorado Stone,
LLC, an affiliated company, and certain individuals alleging sexual
harassment, retaliation, and constructive discharge in violation of the
Civil Rights Act, arising out of the operations at a Carnation,
Washington facility. Six individual former employees joined the lawsuit
alleging multiple related causes of action. Plaintiffs pray for
injunctive relief as well as compensatory and punitive damages.
Eldorado Stone has filed answers to the complaints, denying liability
and damages. Plaintiffs have not provided a damages calculation, but
estimates range between $500,000 and $1,000,000.
5. XxXxxx v. Headwaters Incorporated, Fourth Dist. Ct., State of Utah,
Civ. No. 040401670, filed 2004.
In 1995, Headwaters granted stock options to a member of its board of
directors, Xxxxx , XxXxxx. The director resigned from the board in
1996. Headwaters has declined XxXxxx'x attempts to exercise most of the
options on grounds that the options terminated. In May 2004, XxXxxx
filed a complaint in the Fourth District Court for the State of Utah
against Headwaters alleging breach of contract, breach of implied
covenant of good faith and fair dealing, fraud, and misrepresentation.
XxXxxx seeks declaratory relief as well as compensatory damages in the
approximate amount of $2,000,000 and punitive damages. Headwaters has
filed an answer denying XxXxxx'x claims and has asserted counterclaims
against XxXxxx. XxXxxx denies the counterclaims.
Tapco:
1. Xxxxx Associates Sales Company, Inc. vs. Xxxxx Xxx Xxxxxx, Evergreene
Marketing, Inc., Xxxx X. Xxxxxx, and Xxxxxxxx Xxxxxx Xxxxx, North
Carolina Superior Court, Columbus County, Division Case No. 03CV01428.
Xxxxx Associate Sales Company, Inc. ("Xxxxx"), a company which formerly
provided sales representatives to Tapco International Corporation
("Tapco International"), filed a claim on November 3, 2003 against two
former Tapco International individual sales representatives, Xxxx X.
Xxxxxx and Xxxxxxxx Xxxxxx Xxxxx, seeking compensatory damages in
excess of $10,000 and punitive damages. Although Tapco International is
not a named defendant in the suit, Tapco International has an oral
indemnification agreement with Xx. Xxxxxx and Xx. Xxxxx and has,
consequently, undertaken their defense. Although the suit is still
ongoing, Tapco International believes that the General Release obtained
from Xxxxx pursuant to settlement of an earlier related lawsuit filed
by Xxxxx against Tapco International bars this second lawsuit.
2. Xxxxxxx Xxxxxxx vs. Tapco International Corporation, Xxxxx County
Circuit Court, State of Michigan, Case No. 03-318496NZ.
On June 9, 2003, Xxxxxxx Xxxxxxx, an employee of Tapco International
who was terminated in 2002, filed an age discrimination complaint.
Although the claims was denied by the EEOC on March 10, 2003, the
matter is still ongoing. Xx. Xxxxxxx claims compensatory damages in the
amount of $25,000, exemplary damages in the amount of $25,000 and lost
wages and benefits, past and future. Tapco International maintains that
the decision to terminate Xx. Xxxxxxx was performance-related.
3. Dinesol Building Products, Ltd. vs. Tapco International, Inc., U.S.
District Court for the Northern District of Ohio, Case No. 4:04 CV
0185.
This litigation involves claims and counterclaims for both patent
infringement and trade dress claims in connection with certain vent,
block and shutter products. While the patent infringement claims were
settled in June 2004 pursuant to a settlement agreement under which
Dinesold Building Products, Ltd. agreed to change its design, the trade
dress claims are currently being litigated.
4. Tapco International Corporation vs. Xxxxx Inc., U.S. District Court for
the Eastern District of Michigan, Case No. 03-72109.
On May 29, 2003, Tapco International filed a claim of patent
infringement against a Canadian competitor, Xxxxx, Inc. ("Xxxxx").
Tapco International is seeking preliminary and permanent enjoinment of
Xxxxx from infringing various of its patents.
5. Xxxxxx Xxxxxxx vs. Tapco International Corporation, Michigan Department
of Xxxxx Xxxxxx, Xxxxxxxxx/Xxxxxx Xx. 000000, XXXX 23AA400557C.
Xxxxxx Xxxxxxx, a current employee of Tapco International, filed a
claim of age, gender and disability discrimination against her
employer. No specific amount of damages have been claimed. On January
20, 2004, the State of Michigan Department of Civil Rights sent Tapco
International a notice requesting a response to interrogatories and a
statement of position with regard to the complaint. Tapco responded to
this request in a letter dated February 17, 2004. In this letter, Tapco
International states that no adverse employment action has been taken
against Xx. Xxxxxxx and requests that the charge be dismissed with a
finding of no probable cause.
6. Metamora
There is historical contamination at the 0000 Xxxxx Xxx Xxxxxx,
Xxxxxxxx, XX property, which has been the subject of several
investigations. Initially, the site was targeted for investigation due
to a disgruntled former employee's 1991 report of illegal disposal of
hazardous waste drums in a pond on the property that has since been
filled. Subsequent investigation discredited the employee's claims but
did turn up modest levels of contaminants at the site. A No Further
Action ("NFA") letter from the Michigan Department of Environmental
Quality has been requested. There are presently no estimates of amounts
of remediation should remediation eventually be required.
7. Internal Revenue Service audit of Tapco Holdings, Inc. & Subsidiaries
federal income tax returns for the tax year ended October 31, 2002.
8. Workers Compensation claims by Xxxxxxx Xxxxxxxx, Xxxx Xxxxxxxxx,
Xxxxxxx Xxxxxx and Xxxxxx Xxxxxxx.
SCHEDULE 5.8
SUBSIDIARIES
Headwaters:
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Number of Number of Percentage of
Class of Equity Shares Shares its Equity
Name Parent Jurisdiction Interest Authorized Outstanding Interest Owned
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ACM Block & Brick ACM Block & Utah Common Stock 100 100 100
General, Inc. Brick, LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ACM Block & Brick American Utah Units -- -- 100
Partner, LLC Construction
Materials, Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ACM Block & Brick, American Utah Units -- -- 100
LLC Construction
Materials,
Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ACM Block & Brick, ACM Block & Texas Partnership -- -- 1
LP Brick Interest
General,
Inc.
(General
Partner)
-------------- -----------------
ACM Block & 99
Brick
Partner, LLC
(Limited
Partner)
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ACM FlexCrete, LP ACM Block & Texas Partnership -- -- 1
Brick Interest
General,
Inc.
(General
Partner)
-------------- -----------------
ACM Block & 99
Brick
Partner, LLC
(Limited
Partner)
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ACM Georgia, Inc. ACM Block & Georgia Common Stock 100 100 100
Brick
Partner, LLC
(Limited
Partner)
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
American Headwaters Utah Common Stock 100 100 100
Construction Incorporated
Materials, Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Best Masonry & ISG Texas Common Stock 100,000 1,000 100
Tool Supply, Inc. Resources,
Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Chihuahua Stone LLC Eldorado Delaware Units -- -- 100
Stone LLC
(Member)
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Number of Number of Percentage of
Class of Equity Shares Shares its Equity
Name Parent Jurisdiction Interest Authorized Outstanding Interest Owned
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Covol Engineered Headwaters Utah Units -- -- 100
Fuels, LC Clean Coal
Corp.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Covol Services Headwaters Utah Common Stock 100 100 100
Corporation Incorporated
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Don's Building ISG Texas Partnership -- -- 1
Supply, L.P. Manufactured Interest
Products,
Inc.
(General
Partner)
-------------- -----------------
ISG Partner, 99
Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eagle Stone & Brick Eldorado Delaware Units -- -- 100
LLC Stone
(Member)
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eldorado Headwaters Utah Units -- -- 100
Acquisition, LLC Incorporated
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eldorado Funding Co. Headwaters Utah Common Stock 100 100 100
Incorporated
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eldorado Headwaters Utah Common Stock 100 100 100
G-Acquisition Co. Incorporated
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eldorado Headwaters Utah Common Stock 100 100 100
SC-Acquisition Co. Incorporated
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eldorado Stone Eldorado Delaware Units -- -- 4
Acquisition Co., LLC G-Acquisition
Co.
-------------- -----------------
Eldorado 96
Acquisition,
LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eldorado Stone Eldorado Washington Common Stock 5000 1000 100
Corporation Stone
Acquisition
Co., LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eldorado Stone Eldorado Utah Units -- -- 50
Funding Co., LLC G-Acquisition
Co.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eldorado Stone Eldorado Utah Units -- -- 50
Funding Co., LLC Acquisition,
LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eldorado Stone LLC Eldorado Delaware Units -- -- 22
Stone
Coporation
-------------- -----------------
Northwest 17
Stone &
Brick Co.,
Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Number of Number of Percentage of
Class of Equity Shares Shares its Equity
Name Parent Jurisdiction Interest Authorized Outstanding Interest Owned
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eldorado 24
SC-Acquisition
Co.
-------------- -----------------
Eldorado 37
Stone
Acquisition
Co., LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Eldorado Stone Eldorado Delaware Units -- -- 100
Operations LLC Stone LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
FlexCrete Building ISG Utah Units -- -- 90
Systems, L.C. Resources,
Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Florida N-Viro, L.P. VFL Delaware -- -- -- 51
Technology
Corporation
(GP)
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Florida N-Viro VFL Delaware Units -- -- 52
Management, LLC Technology
Corporation
(Member)
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Global Climate Headwaters Utah Common Stock 100 100 100
Reserve Corporation Incorporated
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Headwaters Clean Headwaters Utah Common Stock 100 100 100
Coal Corp. Incorporated
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Headwaters Heavy Headwaters Utah Common Stock 100 100 90
Oil, Inc. Incorporated
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Headwaters Headwaters Utah Common Stock 100 100 100
NanoKinetix, Inc. Incorporated
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Headwaters Olysub Headwaters Delaware Common Stock 1, 000 100 100
Corporation Incorporated
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Headwaters Headwaters Utah Common Stock 100 100 100
Technology Incorporated
Innovation Group,
Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
HTI Chemical Headwaters New Jersey Common Stock 1,000,000 100 100
Subsidiary, Inc. Technology
(f/k/a Chemsampco, Innovation
Inc.) Group
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Hydrocarbon Hydrocarbon Canada, Class A (Common Unlimited 1,000,000 100
Technologies Technologies, province of Voting)
Canada, Inc. Inc. Alberta
-------------- ------------------ --------------- ---------------- -----------------
-- Class B (Common Unlimited 0 --
Non-Voting)
-------------- ------------------ --------------- ---------------- -----------------
-- Class C Unlimited 0 --
(Preferred
Redeemable
Voting)
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Number of Number of Percentage of
Class of Equity Shares Shares its Equity
Name Parent Jurisdiction Interest Authorized Outstanding Interest Owned
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
-- Class D Unlimited 0 --
Preferred
Redeemable
Voting)
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Hydrocarbon Headwaters Utah Common Stock 100 100 100
Technologies, Inc. Technology
Innovation
Group
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ISG Canada Limited ISG Canada, Common Stock Unlimited 100 100
Resources, province of
Inc. New Brunswick
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ISG Manufactured ISG Utah Common Stock 20,000,00 1,000 100
Products, Inc. Resources,
Inc.
-------------- ----------------- --------------- ---------------- -----------------
N/A Preferred Stock 10,000,000 0
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ISG Partner, Inc. ISG Utah Common Stock 20,000,00 100 100
Resources,
Inc.
-------------- ------------------ --------------- ---------------- -----------------
N/A Preferred Stock 10,000,000 0
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ISG Resources, Inc. Headwaters Utah Common Stock 8,000,000 100 100
Olysub
Corporation
-------------- ------------------ --------------- ---------------- -----------------
N/A Preferred Stock 2,000,000 0
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ISG Services Headwaters Utah Common Stock 100 100 100
Corporation (f/k/a Olysub
ISG Capital Corporation
Corporation)
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
ISG Swift Crete, ISG Utah Common Stock 10,000,000 100 100
Inc. Resources,
Inc.
-------------- ------------------ --------------- ---------------- -----------------
N/A Preferred Stock 20,000,000 0
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
L&S Stone LLC Eldorado Delaware Units -- -- 100
Stone LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
X-X Xxxxx LLC Eldorado Delaware Units -- -- 100
Stone LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Xxxxx X. Xxxxxxx, ISG California Common Stock 25,000 12,296 100
Inc. Resources,
Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Magna Wall, Inc. ISG Texas Common Stock 1,000,000 1,000 100
Resources,
Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Northwest Eldorado Delaware Units -- -- 100
Properties LLC Stone LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Northwest Stone & Eldorado Washington Common Stock 5000 1000 100
Brick Co., Inc. Stone
Acquisition
Co., LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Number of Number of Percentage of
Class of Equity Shares Shares its Equity
Name Parent Jurisdiction Interest Authorized Outstanding Interest Owned
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Northwest Stone & Eldorado Delaware Units -- -- 100
Brick LLC Stone LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Palestine Concrete ISG Texas Partnership -- -- 1
Tile Company, L.P. Manufactured Interest
Products,
Inc.
(General
Partner)
-------------- -----------------
ISG Partner, 99
Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
StoneCraft Eldorado Delaware Units -- -- 100
Industries LLC Stone LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
Tempe Stone LLC Eldorado Delaware Units -- -- 100
Stone LLC
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
United Terrazzo ISG California Common Stock 800 16 100
Supply Co., Inc. Resources,
Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
VFL Technology ISG Pennsylvania Common Stock 1000 100 100
Corporation Resources,
Inc.
--------------------- -------------- --------------- ------------------ --------------- ---------------- -----------------
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Number of Number of Percentage of
Class of Equity Shares Shares its Equity
Name Parent Jurisdiction Interest Authorized Outstanding Interest Owned
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Tapco Holdings, Inc. Headwaters Michigan Common Stock 100 100 100
Incorporated
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Tapco International Tapco Holdings, Michigan Common Stock 60,000 1,000 100
Corporation Inc.
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Atlantic Shutter Tapco South Carolina Common Stock 100,000 1,000 100
Systems, Inc. International
Corporation
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Builder's Edge, Inc. Wamco Corporation Pennsylvania Common Stock 10,000 100 100
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Comaco, Inc. Wamco Corporation Pennsylvania Common Stock 10,000 100 100
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
MTP, Inc. (d/b/a Tapco Ohio Common Stock 75 45 100
The Foundry) International
Corporation
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Metamora Products Tapco Michigan Common Stock 550,000 390.407 67.47
Corporation International
Corporation
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Metamora Products Wamco Corporation Michigan Common Stock 550,000 390.407 32.53
Corporation
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Metamora Products Metamora Pennsylvania Common Stock 400,000 400,000 100
Corporation of Products
Elkland Corporation
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Number of Number of Percentage of
Class of Equity Shares Shares its Equity
Name Parent Jurisdiction Interest Authorized Outstanding Interest Owned
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Tapco Europe Tapco United Kingdom Common Stock 600,000 501,000 100
Limited International
Corporation
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Vantage Building Tapco Michigan Common Stock 1,000 1,000 100
Products Corporation International
Corporation
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
Wamco Corporation Metamora Michigan Common Stock 100,000 85,000 100
Products
Corporation of
Elkland
--------------------- ------------------ --------------- ------------------ --------------- ---------------- -----------------
SCHEDULE 5.14(a)(i)
OWNED REAL PROPERTY
Headwaters:
------------------------------- ------------------------------------------------ -------------------------------------------
Record Owner Facility & Address Book Value
------------------------------- ------------------------------------------------ -------------------------------------------
Headwaters Incorporated Wellington Property ("Sunnyside") $45,000
Near 0000 X. Xxxxxxx Xx.
Xxxxx, XX 00000
Xxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
Headwaters Technology New Jersey Facility $766,662.17
Innovation Group 0000 Xxx Xxxx Xxxxxx
Xxxxxxxxxxxxx, XX 00000
Xxxxxx County
------------------------------- ------------------------------------------------ -------------------------------------------
ISG Resources ("ISG Centralia Storage $487,839.16
Resources") 0000 Xxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxx County
------------------------------- ------------------------------------------------ -------------------------------------------
ISG Resources Irondale (Denver) Terminal $2,854,604.77
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxx County
------------------------------- ------------------------------------------------ -------------------------------------------
ISG Resources Ogden Storage Terminal $16,598.60
0000 Xxxxxxx Xxxxxx
Xxxxx, XX 000000
Xxxxx County
------------------------------- ------------------------------------------------ -------------------------------------------
ISG Resources Pomona Terminal $3,613,375.67
1345 - 0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Los Angeles County
------------------------------- ------------------------------------------------ -------------------------------------------
ISG Resources Altavista $70,000
Xxxx Xxxxxxxx Xxxxxxxxx Xxxxx Xxxxx #00
Xxxxxxxxx, XX 00000
Xxxxxxxx County
------------------------------- ------------------------------------------------ -------------------------------------------
ISG Resources Bull Run / Lost Ridge $699,716.80
000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxxxx County
------------------------------- ------------------------------------------------ -------------------------------------------
ISG Resources Cape Fear $94,564.43
0000 Xxxxxxxx Xx.
Xxxxxx, XX 00000
Brunswick County
------------------------------- ------------------------------------------------ -------------------------------------------
ISG Resources MTRF (Testing Facility) $552,640.38
0000 Xxxxxxx 000, XX
Xxxxxxxxxxxx, XX 00000
Bartow County
------------------------------- ------------------------------------------------ -------------------------------------------
ISG Resources Pacolet Terminal $205,308.26
000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxxxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
American Construction Best / Magna Wall - Bagging Plant & Testing $677,902.03 (combined value of both
Materials / ACM Mortars & Facility Xxxxxxxxx Road properties)
Stucco 0000 Xxxxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
Bexar County
------------------------------- ------------------------------------------------ -------------------------------------------
------------------------------- ------------------------------------------------ -------------------------------------------
American Construction Best Masonry - San Antonio Store See above
Materials / ACM Mortars & 0000 Xxxxxxxxx Xxxx
Xxxxxx Xxx Xxxxxxx, XX 00000
Bexar County
------------------------------- ------------------------------------------------ -------------------------------------------
American Construction Best Masonry - South Houston Store $304,574.24
Materials / ACM Mortars & 00000 Xxxxxx Xxxxx Xxxxx
Xxxxxx Xxxxxxx, XX 00000
Xxxxxx County
------------------------------- ------------------------------------------------ -------------------------------------------
American Construction Don's Building Supply - Dallas Store & Facility $592,940.90
Materials / ACM Mortars & 0000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000
Xxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
American Construction XX Xxxxxxx Plant / United Terrazzo $1,128,821.20
Materials / ACM Mortars & 00000 Xxxxxx Xxxxxx
Xxxxxx Xx Xxxxxx, XX 00000
Los Angeles County
------------------------------- ------------------------------------------------ -------------------------------------------
ACM Block & Brick Palestine - Dallas Facility $2,465,875.03
0000 Xxxxx Xxxx Xxxx
Xxxxxx, XX 00000
Xxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
ACM Block & Brick Palestine - Palestine Facility $791,729.51
0000 X. Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
ACM Block & Brick, L.P. Corporate Office / Facility $1,826,700
(d/b/a Southwest Concrete 0000 XX 000
Products) ("ACM Xxxxx & Xxxxxxxx, XX 00000
Xxxxx") Xxxxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
ACM Block & Brick Magnolia $135,000
32906 and 00000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Xxxxxxxxxx County
------------------------------- ------------------------------------------------ -------------------------------------------
ACM Block & Brick San Antonio $2,920,400
0000 Xxxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
Bexar County
------------------------------- ------------------------------------------------ -------------------------------------------
Eldorado Stone West Carnation $2,300,000
00000 XX 00xx Xxxxxx, Xxxxxxxx X
Xxxxxxxxx, XX 00000
King County
------------------------------- ------------------------------------------------ -------------------------------------------
Eldorado Stone Northwest Arlington (Northwest Stone & Brick) $1,150,000
0000 000xx Xxxxxx XX and
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
Eldorado Stone Northwest Royal City $750,000
0000 Xxxx 00.0 XX
Xxxxx Xxxx, XX 00000
Grant County
------------------------------- ------------------------------------------------ -------------------------------------------
Tapco:
------------------------------- ------------------------------------------------ -------------------------------------------
Record Owner Facility & Address Book Value
------------------------------- ------------------------------------------------ -------------------------------------------
1. Metamora Products 0000 Xxxxx Xxx Xxxxxx $2,416,073
Corporation Xxxxxxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------ -------------------------------------------
2. Metamora Products 0000-0000 Xxxxx Xxx Xxxxxx Items (2) - (6): $3,684,690
Corporation Xxxxxxxx, XX 00000
------------------------------- ------------------------------------------------
3. Metamora Products 0000 Xxxxx Xxx Xxxxxx
Xxxxxxxxxxx Xxxxxxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------
4. Metamora Products 3.5 acre parcel on Xxxxxx Xxxx
Xxxxxxxxxxx Xxxxxxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------
5. Metamora Products 0000 Xxxxxx Xxxxx
Xxxxxxxxxxx Xxxxxxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------
6. Metamora Products 0000 Xxxxxx Xxxxx
Xxxxxxxxxxx Xxxxxxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------ -------------------------------------------
7. Metamora Products Elkland Industrial Park $10,263,696
Corporation of Elkland Xxxxxxx, XX 00000
Tioga County
------------------------------- ------------------------------------------------ -------------------------------------------
8. Wamco Corporation 00000 Xxxx Xxxx $3,310,576
Xxxxx, XX 00000
Xxxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
9. Wamco Corporation 000 Xxxxxxx Xxxx. x0,000,000
Xxxxx Xxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------ -------------------------------------------
SCHEDULE 5.14(a)(ii)
REAL PROPERTY LEASES
Headwaters:
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
Expiration Annual Base
Address of Rental Property Space Lessee Lessor Date of Lease Rent
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
10653 S. River Front 29,122 sq ft Headwaters RiverPark One, LLC 8/01/07 $490,512
Pkwy, Xxx 000 Xxxxxxxxxxxx
Xxxxx Xxxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
11778 South Election 7,648 sq. ft. Headwaters Xxxxxx X.X., LLC 12/31/05 $49,712
Drive, 2 Floor Incorporated
Xxxx Xxxx Xxxxxx
Xxxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxxx 000 Xxxx 13,600 sq ft American Xxxxx Xxxxxxxx 8/31/07 $78,000
Xxxxx, XX 00000 Construction
Materials, Inc.
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 X. Xxxxxxxx 8.49 acres ISG Resources, Inc. Xxxxxx Xxx Xxxxxx 10/04/13 $247,500
Xxxxxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
000 Xxxxxxxx Xxxxx 1,263 sq ft ISG Resources, Inc. Calwest Industrial 7/31/07 $17,364
Xxxxxxx, XX 00000 Holdings, LLC
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 X. 00xx Xxxxxx -- XXX Resources, Inc. Xxxxxxxx Properties, 9/31/05 $15,900
Xxxx Xxxxx, XX 00000 LLC
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxxx Xxxxxx Xxx. 2,566 sq ft ISG Resources, Inc. Xxxxxxx X. & Xxxxx X. 8/31/04 $24,000
Xxx Xxxx, XX 00000 Xxxxxxx
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
00000 Xxxxxxx Xxxx. 2.09 acres ISG Resources, Inc. PGBK Properties, LC 11/12/07 $37,208
Xxxxx Xxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
00 Xxxxxxx Xxxx. 20,000 sq ft VFL Technology D&L Development Co. 4/07 $186,000
Xxxx Xxxxxxx, XX 00000 Corporation
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
48699 Franklin 275 10,000 sq ft VFL Technology Luburgh, Inc. 6/30/05 $30,000
Xxxxxxxxx, XX 00000 Corporation
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
000 Xxxxxxx Xxxxxxxx, 1,500 sq ft VFL Technology Xxxx Xxxxxx 2/28/05 $11,856
Xxx 000 Xxxxxxxxxxx
Xxxxxxxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
00000 X. Xxxxx Xx. 20,000 sq ft Best Masonry & Tool Trust Management Co. 7/31/09 $86,400
Xxxxxxx, XX 00000 Supply, Inc.
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxxxx Xxxx Xx. 16,000 sq ft Best Masonry & Tool Inland.Xxxx.Development,3/31/07 $104,000
Bldg 200 Supply, Inc. LLC
Xxxxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
000 X. Xxxxxxxxxxxx #000 5,000 sq ft Don's Building Xxxxxx Industrial Park 8/30/04 $13,200
XxXxxxxx, XX 00000 Supply, L.P.
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxxxx Xxxxx 5,000 sq ft ACM Block & Brick, Xxxxxxx real Estate 6/30/07 $30,000
Suite C LP (dba Southwest Investment trust
Xxxxxxx, XX 00000 Concrete Products)
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
Expiration Annual Base
Address of Rental Property Space Lessee Lessor Date of Lease Rent
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
1605 Genoa Red Bluff 5,000 sq ft ACM Block & Brick, Xxxxxxx Industries 7/01/09 $72,000
Xxxxxxxx, XX 00000 LP (dba Southwest
Concrete Products)
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxxx Xxxxxx 16,302 sq ft StoneCraft Allspace San Marcos 11/24/05 $133,020
Xxx Xxxxxx, XX 00000 Industries, Inc.
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxxx Xxxxxx 14,000 sq ft StoneCraft Xxxxx Real Properties 9/30/06 $34,080
Xxx Xxxxxx, XX 00000 Industries, Inc. Management Company
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
Lot 58, Pueblo Memorial 25,650 sq ft StoneCraft Pueblo Development 1/09/10 $138,468
Airport (Industrial Park Industries, Inc. Foundation
Subdivision) Xxxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxxxxx Xxxxxx 60,640 sq ft Eldorado Stone LLC Xxxx Enterprises 4/30/07 $362,827
Xxxxxx Xxxxxxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
000 Xxxxxx Xxxxxx 25,500 sq ft StoneCraft XxXxxx Development LLC 4/30/07 $110,160
Xxxxxxxx, XX 00000 Industries LLC
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxx Xxxxx Xx. 50,700 sq ft Tempe Stone LCC Xxxxxx X. and Xxxxxxx 5/01/06 $80,000
Xxxxx, XX 00000 X. Xxxxxxxx as
Trustees under the
Joint Living Trust UDA
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
000 Xxxx Xxxxxx 21,390 sq ft Eagle Stone & Brick Xxxxx Xxxxxx & Xxxxx 1/02/06 $54,999
Xxx Xxx, XX 00000 LLC Xxxxxx
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxxx Xxxxxx Xx. -- L&S Stone LLC Xxxxxx X. Xxxxxx 6/30/05 $39,600
Xxxxxxxxxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
9156 Xxxxx Xxxxxxx Highway -- L&S Stone LLC Xxxxxx X. Xxxxxx & 6/30/05 $226,200
Xxxxxxxxxxx, XX 00000 Xxxxx X. Xxxxxx
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
8642 Xxxxx Xxxxxxx Highway -- L&S Stone LLC KJS Properties, L.L.C. 6/30/05 90,000
Xxxxxxxxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
000 Xxxxx Xxxxxx 45,000 X-X Xxxxx LLC Xxxxxxx Realty 12/30/05 $159,999
Xxxxx Xxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
00 Xxxxx Xxxxx Xxxx. -- X&X Stone LLC The Estate of Xxxxx 11/14/04 $34,980
Xxxxxxx, XX 00000 Dollar
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
00000 XX Xxxxx Xxxxxx 11,750 sq ft Northwest Stone & Xxxxxxx X. Xxxxxxxx, 3/18/05 $48,000
Ferry Rd. Brick Company, LLC Xxxxxxx X. Xxxxxxxx &
Xxxxxx, XX 00000 Xxxxxxx X. Xxxxxxxx
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
Tapco:
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
Expiration Annual Base
Address of Rental Property Space Lessee Lessor Date of Lease Rent
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxxx Xxxx Xxxx 27,000 sq. Metamora Products Xxxxx Industrial 10/31/04 $108,000
Xxxxxx, XX 00000 ft. Corporation Center, L.L.C.
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
000 X. Xxxxxx Xxxxxx 16,000 sq. Metamora Products Mold Masters Co. 12/1/04 $50,400
Xxxxx Xxxx, XX 00000 ft. Corporation
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
00 Xxxxx Xxxxxx, Xxxxxxxx 28,000 sq. Metamora Products Dresser-Rand Company 10/22/04 $63,000
36 ft. Corporation
Xxxxxxx Xxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
Approx. 1 acre of vacant -- Metamora Products The Village of 2006 $1819.20
land adjacent to 0000 Xxxxxxxxxxx Xxxxxxxx
Xxxxx Xxx Xxxxxx
Xxxxxxxx, XX 00000
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxxx Xxxx Xxxxxx 28,000 sq. MTP, Inc. PTM Properties, LLC 8/31/06 $72,348
Xxxxxxxxxx, XX 00000 ft.
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxx Xxxxx 30,926 sq. MTP, Inc. Blake Enterprise, LLC 11/30/05 $92,778
Xxxxxxxxxx, XX 00000 ft.
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
1715 Xxxxxxxx 18,500 sq. MTP, Inc. Xxxxx Xxxxxxxx Month-to-month $24,456
Xxxxxxxxxx, XX 00000 ft.
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
000-000 Xxxx Xxxxxx 2,200 sq. ft. Tapco International South Main Partners Month-to-month $21,000
Xxxxxxxxxx, XX 00000 Corporation
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
0000 Xxxxxxx 000 Xxxxx 80,000 sq. Tapco International Cottingham Asset 5/19/05 $30,506.04
Xxxxx, XX 00000 ft. Corporation Management, LLC
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
Units 22 & 32, Tokenspire 17,500 sq. Tapco Europe, Ltd. X.X.X. (Pensions) 1/30/06 (pound)59,736
Business Park ft. Limited
Xxxx Xx. Xxxxxxxxxx
Xxxxxxxx
Xxxxxxxxx
XX00 0XX
Xxxxxx Xxxxxxx
--------------------------- -------------- --------------------- ----------------------- --------------- -------------
SCHEDULE 5.14(a)(iii)
TENANT LEASES
Headwaters:
------------------ ---------------------------------------- ---------------------- --------------------- --------------
LESSEE /
SUBLESSEE ADDRESS LEASED EST. SPACE ANNUAL RENT
-----------------------------------------------------------------------------------------------------------------------
HEADWATERS CORPORATE HEADQUARTERS
-----------------------------------------------------------------------------------------------------------------------
O'Currance, Inc. 00000 Xxxxx Xxxxxxxx Xxxxx, 2 Floor Lease 7,648 sq ft $47,799.96
Xxxx Xxxx Xxxxxx Xxx. 00/00/00
Xxxxxx, XX 00000
-----------------------------------------------------------------------------------------------------------------------
ISG RESOURCES, INC.
-----------------------------------------------------------------------------------------------------------------------
World Wide 0000 X. Xxxxxxxxxxxx, Xxxxx 000 Lease 40,000 sq ft. $82,750.20
Inflatables Xxxxxx, XX 00000 Exp.
8/30/06
-----------------------------------------------------------------------------------------------------------------------
STONECRAFT INDUSTRIES, LLC
-----------------------------------------------------------------------------------------------------------------------
Racetronics, Inc. 0000 Xxxxx Xxxxxx, Xxxxxx X&X Lease 1,512 sq ft $25,404.00
Xxx Xxxxxx, XX 00000 Exp.
Mo to Mo.
------------------ ---------------------------------------- ---------------------- --------------------- --------------
Lease 1,512 sq ft $12,708.00
Xxxxxxx X. Xxxx 0000 Xxxxx Xxxxxx, Xxxxx X Xxx.
Xxx Xxxxxx, XX 00000 Mo. to Mo.
------------------ ---------------------------------------- ---------------------- --------------------- --------------
Tapco:
None.
SCHEDULE 5.14(b)(iii)
OWNED REAL PROPERTY COLLATERAL
------------------------------- ------------------------------------------------ -------------------------------------------
Record Owner Facility and Address Book Value
------------------------------- ------------------------------------------------ -------------------------------------------
1. ISG Resources Irondale (Denver) Terminal $2,854,604.77
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxx County
------------------------------- ------------------------------------------------ -------------------------------------------
2. American Construction Don's Building Supply - Dallas Store & Facility $592,940.90
Materials / ACM Mortars & 0000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000
Xxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
3. Headwaters Technology New Jersey Facility $766,662.17
Innovation Group 0000 Xxx Xxxx Xxxxxx
Xxxxxxxxxxxxx, XX 00000
Xxxxxx County
------------------------------- ------------------------------------------------ -------------------------------------------
4. American Construction XX Xxxxxxx Plant / United Terrazzo $1,128,821.20
Materials / ACM Mortars & 00000 Xxxxxx Xxxxxx
Xxxxxx Xx Xxxxxx, XX 00000
Los Angeles County
------------------------------- ------------------------------------------------ -------------------------------------------
5. ISG Resources Pomona Terminal $3,613,375.67
1345 - 0000 X. Xxxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Los Angeles County
------------------------------- ------------------------------------------------ -------------------------------------------
6. ACM Block & Brick Palestine - Dallas Facility $2,465,875.03
0000 Xxxxx Xxxx Xxxx
Xxxxxx, XX 00000
Xxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
7. Eldorado Stone West Carnation $2,300,000
00000 XX 00xx Xxxxxx, Xxxxxxxx X
Xxxxxxxxx, XX 00000
King County
------------------------------- ------------------------------------------------ -------------------------------------------
8. Eldorado Stone Northwest Arlington (Northwest Stone & Brick) $1,150,000
0000 000xx Xxxxxx XX and
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
9. Eldorado Stone Northwest Royal City $750,000
0000 Xxxx 00.0 XX
Xxxxx Xxxx, XX 00000
Grant County
------------------------------- ------------------------------------------------ -------------------------------------------
10. Metamora Products 0000 Xxxxx Xxx Xxxxxx $2,416,073
Corporation Xxxxxxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------ -------------------------------------------
11. Metamora Products 0000 Xxxxx Xxx Xxxxxx Items (11) - (15): $3,684,690
Corporation Xxxxxxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------
12. Metamora Products 3.5 acre parcel on Xxxxxx Xxxx
Xxxxxxxxxxx Xxxxxxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------
13. Metamora Products 0000 Xxxxxx Xxxxx
Xxxxxxxxxxx Xxxxxxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------ -------------------------------------------
------------------------------- ------------------------------------------------ -------------------------------------------
14. Metamora Products 0000 Xxxxxx Xxxxx
Xxxxxxxxxxx Xxxxxxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------
15. Metamora Products 0000-0000 Xxxxx Xxx Xxxxxx
Xxxxxxxxxxx Xxxxxxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------ -------------------------------------------
16. Metamora Products Elkland Industrial Park $10,263,694
Corporation of Elkland Xxxxxxx, XX 00000
Tioga County
------------------------------- ------------------------------------------------ -------------------------------------------
17. Wamco Corporation 00000 Xxxx Xxxx $3,310,576
Xxxxx, XX 00000
Xxxxxxx Xxxxxx
------------------------------- ------------------------------------------------ -------------------------------------------
18. Wamco Corporation 000 Xxxxxxx Xxxx. x0,000,000
Xxxxx Xxxx, XX 00000
Lapeer County
------------------------------- ------------------------------------------------ -------------------------------------------
SCHEDULE 6.2(b)(ii)
SUBORDINATION PROVISIONS RE. INTERCOMPANY INDEBTEDNESS
Notwithstanding any provision contained in this [Note] to the contrary, the
indebtedness (principal, interest (including, without limitation, any such
interest accruing subsequent to the filing by or against the Headwaters
Incorporated or any subsidiary (collectively, "Loan Parties") of any proceeding
brought under any applicable bankruptcy or insolvency law, including, without
limitation, Chapter 11 of the United States Bankruptcy Code (11 U.S.C. Section
100 et seq.), whether or not such interest is allowed as a claim pursuant to the
provisions of any such applicable law), collection costs and expenses and other
amounts) of [identify Borrower or Subsidiary] to the holder of this Note
evidenced by or arising under or in respect of this Note (collectively, the
"Subordinated Indebtedness") is and shall at all times be wholly subordinate and
junior in right of payment to any and all other present and future indebtedness
(principal, premium, if any, interest (including, without limitation, any such
interest accruing subsequent to the filing by or against any Loan Party of any
proceeding brought under any applicable bankruptcy or insolvency law, including,
without limitation, Chapter 11 of the United States Bankruptcy Code (11 U.S.C.
Section 100 et seq.), whether or not such interest is allowed as a claim
pursuant to the provisions of any such applicable law), fees, collection costs
and expenses and/or other amounts), liabilities and obligations (including,
without limitation, letter of credit reimbursement obligations) of any Loan
Party for or with respect to borrowed money, letters of credit and/or interest
rate swaps and/or xxxxxx which is incurred under or in connection with that
certain Credit Agreement dated as of March 31, 2004 by and among Headwaters
Incorporated, certain lenders party thereto and Bank One, NA as administrative
agent, as the same may be amended, restated, supplemented or otherwise modified
from time to time (collectively, the "Senior Indebtedness"), in the manner and
with the force and effect hereinafter set forth:
(a) in the event of (i) any liquidation, dissolution or other
winding up of any Loan Party, voluntary or involuntary, (ii) any
receivership, insolvency, bankruptcy, liquidation, readjustment,
reorganization, composition or other similar proceeding relative to any
Loan Party or its property, (iii) any general assignment by any Loan
Party for the benefit of creditors or (iv) any distribution, division,
marshaling or application of any of the properties or assets of any
Loan Party or the proceeds thereof to creditors, voluntary or
involuntary, and whether or not involving legal proceedings, then and
in any such event:
(A) all principal, premium, if any, interest
(including, without limitation, any such interest accruing
subsequent to the filing by or against any Loan Party of any
proceeding brought under any applicable bankruptcy or
insolvency law, including, without limitation, Chapter 11 of
the United States Bankruptcy Code (11 U.S.C. Section 100 et
seq.)), whether or not such interest is allowed as a claim
pursuant to the provisions of any such applicable law), fees,
collection costs and expenses and other amounts owing on or in
respect of any of the Senior Indebtedness shall first be paid
in full in cash before any payment or distribution of any kind
or character, whether in cash, property or securities (other
than in securities, including equity securities, or other
evidences of indebtedness, the payment of which is
unconditionally subordinated to the payment of all of the
Senior Indebtedness which may at the time be outstanding)
shall be made on any of the Subordinated Indebtedness;
(B) all of the Subordinated Indebtedness shall
forthwith become due and payable, and any payment or
distribution of any kind or character, whether in cash,
property or securities (other than in securities, including
equity securities or other evidences of indebtedness, the
payment of which is unconditionally subordinated to the
payment of all of the Senior Indebtedness which may at the
time be outstanding), which would otherwise (but for the terms
hereof) be payable or deliverable in respect of the
Subordinated Indebtedness, shall be paid or delivered, pro
rata, directly to, or for the account of, the holders of the
Senior Indebtedness, for application to the payment of the
Senior Indebtedness until all of the Senior Indebtedness shall
have been paid in full in cash, and the holder(s) of this Note
irrevocably authorize, empower and direct all receivers,
trustees, liquidators, conservators, fiscal agents and others
having authority in the premises to effect all such payments
and deliveries; and
(C) notwithstanding the foregoing provisions, if for
any reason whatsoever any payment or distribution of any kind
or character, whether in cash, property or securities (other
than in securities, including equity securities or other
evidences of indebtedness, the payment of which is
unconditionally subordinated to the payment of all of the
Senior Indebtedness which may at the time be outstanding), be
received by a holder of this Note before all of the Senior
Indebtedness is paid in full in cash, such payment or
distribution shall be held in trust for the benefit of, and
shall immediately paid or delivered by such holder to, as the
case may be, the holders of such Senior Indebtedness remaining
unpaid, pro rata, for application to the payment of the Senior
Indebtedness until all of the Senior Indebtedness shall have
been paid in full in cash;
(b) in the event either (i) any default in respect of the
payment of any principal of, premium on, if any, interest on or other
amount owing with respect to any of the Senior Indebtedness shall have
occurred and be continuing or (ii) any other default on or with respect
to any of the Senior Indebtedness as a result of which the holder(s)
thereof shall then be entitled to accelerate such Senior Indebtedness
shall have occurred and be continuing or would be created by or result
from a payment described in clause (A) or (B) below, then, unless and
until all of the Senior Indebtedness shall have been paid in full in
cash, no Loan Party will not, directly or indirectly, make or agree to
make, and the holder(s) of this Note will not demand, accept or
receive, (A) any payment in cash, property, securities (other than in
securities, including equity securities or other evidences of
indebtedness, the payment of which is unconditionally subordinated to
the payment of all of the Senior Indebtedness which may at the time be
outstanding) or otherwise, direct or indirect, of or on account of any
principal of, interest on or other amount owing with respect to any of
the Subordinated Indebtedness or (B) any payment for the purpose of any
redemption, purchase or other acquisition, direct or indirect, of any
of the Subordinated Indebtedness, and no such payments shall be due or
payable;
(c) if any payment or distribution of any kind or character
(whether in cash, securities or other property) or any security shall
be received by any holder(s) of this Note in contravention of any of
the terms of this Note, such payment or distribution or security shall
be held in trust for the benefit of, and shall be paid over or
delivered and transferred to, the holders of the Senior Indebtedness,
pro rata, for application to the payment of all of the Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such
Senior Indebtedness in full in cash. In the event of the failure of any
holder of this Note to endorse or assign any such payment, distribution
or security, any holder of the Senior Indebtedness is hereby
irrevocably authorized to endorse or assign the same;
(d) without the prior written consent of each holder of Senior
Indebtedness, the holder(s) of this Note shall have no right to enforce
payment of any of the Subordinated Indebtedness against any Loan Party,
or to otherwise take any action against any Loan Party or any property
or assets of any Loan Party (including, without limitation, any
property or assets of any Loan Party pledged as collateral to secure
any of the Senior Indebtedness) unless and until all of the Senior
Indebtedness shall have been paid in full in cash;
(e) the holder(s) of this Note undertake and agree for the
benefit of each holder of Senior Indebtedness to execute, verify,
deliver and file any proofs of claim within fifteen (15) days before
the expiration of the time to file the same which any holder of Senior
Indebtedness may at any time require in order to prove and realize upon
any rights or claims pertaining to the Subordinated Indebtedness and to
effectuate the full benefit of the subordination contained herein; and
upon failure of the holder(s) of this Note so to do, any such holder of
Senior Indebtedness shall be deemed to be irrevocably appointed the
agent and attorney-in-fact of the holder(s) of this Note to execute,
verify, deliver and file any such proofs of claim;
(f) the subordination effected by the foregoing provisions and
the rights created thereby in favor of the holders of the Senior
Indebtedness shall not be affected by (i) any amendment, modification,
extension, renewal, restatement or replacement of, increase in or
addition or supplement to any of the Senior Indebtedness or any
instrument or agreement relating thereto, (ii) any exercise or
nonexercise of any right, power or remedy under or in respect of any of
the Senior Indebtedness or any instrument or agreement relating thereto
or (iii) the giving or denial of any waiver, consent, release,
indulgence, extension, renewal, modification or delay or the taking or
nontaking of any other action, inaction or omission, in respect of any
of the Senior Indebtedness or any instrument or agreement relating
thereto or to any securities relating thereto or any guarantee thereof,
whether or not any holder(s) of this Note shall have had notice or
knowledge of any of the foregoing;
(g) the foregoing provisions are solely for the purpose of
defining the relative rights of the holders of the Senior Indebtedness
on the one hand, and the holder(s) of this Note on the other hand, and
nothing herein shall impair, as between any Loan Party and the
holder(s) of this Note, the obligation of such Loan Party which is
unconditional and absolute, to pay the principal, interest and other
amounts owing on or in respect of the Subordinated Indebtedness in
accordance with the terms of this Note, nor shall anything herein
prevent the holder(s) of this Note from exercising all remedies
otherwise permitted by applicable law or under this Note, subject in
all events to the rights of the holders of the Senior Indebtedness as
herein provided for; and
(h) the provisions of this sixth paragraph of this Note (i) may not be
amended without the prior written consent of each holder of Senior Indebtedness,
(ii) shall be continuing, irrevocable and binding on the holder(s) of this Note
and their respective heirs, executors, personal representatives, successors and
assigns and (iii) shall inure to the benefit of the holders of the Senior
Indebtedness and their respective successors and assigns.
SCHEDULE 6.2(b)(iv)
EXISTING INDEBTEDNESS
Headwaters:
Headwaters Incorporated
August 31, 2004
--------------------------------------------------------------------------------------------- ---------------------
Approximate
Description Amount Outstanding
--------------------------------------------------------------------------------------------- ---------------------
2 7/8% Convertible Senior Subordinated Notes Due 2016 $172,500,000
--------------------------------------------------------------------------------------------- ---------------------
Note payable to a bank, quarterly principal payments of $90,278 with interest at 1/2% above $5,687,500
LIBOR (interest rate floor of 4.5%)
--------------------------------------------------------------------------------------------- ---------------------
Note payable to a bank, quarterly principal payments of $100,000 with interest at 1/2% below $1,100,000
the bank's rate (3.5% at August 31, 2004)
--------------------------------------------------------------------------------------------- ---------------------
Note payable to a bank, quarterly principal payments of $107,143 beginning January 1, 2005 $3,000,000
with interest at 1/2% above LIBOR (interest rate floor of 4.5%). A balloon payment of
approximately $1,285,000 is due November 2008.
--------------------------------------------------------------------------------------------- ---------------------
Total $182,287,500
--------------------------------------------------------------------------------------------- ---------------------
Tapco:
Capital / Equipment Leases of MPT, Inc.:
------------------------ --------------- --------------- --------------- --------- --------- ---------- --------------
Lessor Leased Asset Contract # 2004 Remaining 2005 2006 2007 Total
------------------------ --------------- --------------- --------------- --------- --------- ---------- --------------
Citicorp Del-Lease, Caterpillar 000-0000000-000 $1204 $3756 $3982 $3860 $12802
Inc. Lift Truck
------------------------ --------------- --------------- --------------- --------- --------- ---------- --------------
Citicorp Del-Lease, Caterpillar 000-0000000-000 $1506 $3769 $1638 $6913
Inc. Lift Truck
------------------------ --------------- --------------- --------------- --------- --------- ---------- --------------
M&I First National Material 0147880-000 $1326 $4337 $1977 $7640
Leasing Grinder
------------------------ --------------- --------------- --------------- --------- --------- ---------- --------------
The CIT Group Barrel and 90076445 $4924 $15828 $16013 $36765
screw,
conveyor,
other various
equipment
------------------------ --------------- --------------- --------------- --------- --------- ---------- --------------
The CIT Group Additive 90080253 $3198 $10308 $10468 $23974
feeder, other
various
equipment
------------------------ --------------- --------------- --------------- --------- --------- ---------- --------------
The CIT Group Form, trim 90093652 $8796 $26324 $29183 $21196 $85499
and punch
station;
conveyor; die
------------------------ --------------- --------------- --------------- --------- --------- ---------- --------------
The CIT Group Chiller, 90094528 $2644 $8599 $9697 $8077 $29017
vacuum
system, other
various
equipment
------------------------ --------------- --------------- --------------- --------- --------- ---------- --------------
TOTAL $23,598 $72921 $72958 $33,133 $202,610
------------------------ --------------- --------------- --------------- --------- --------- ---------- --------------
SCHEDULE 6.3
EXISTING MINORITY INVESTMENTS
Headwaters:
Environmental Technologies Group, LLC - Headwaters Incorporated holds a 50%
membership interest.
FT Solutions, LLC - Headwaters Technology Innovation Group, Inc. holds a 50%
membership interest.
FlexCrete Building Systems, L.C. - ISG Resources, Inc. holds a 90% membership
interest.
Florida N-Viro Management, LLC - VFL Technology Corporation holds a 52%
membership interest.
Florida N-Viro, L.P. - VFL Technology Corporation holds a 51% partnership
interest
Tapco:
None.
SCHEDULE 6.7
EXISTING AFFILIATE TRANSACTIONS
None. 2.
EXHIBIT A-1
FORM OF BORROWER'S COUNSEL'S OPINION
Attached
September 8, 2004
Xxxxxx Xxxxxxx Senior Funding, Inc.,
as Administrative Agent
Xxxxxx Xxxxxxx & Co.,
as Collateral Agent
Each of the Lenders party to the Agreement,
as defined below
Re: Second Lien Credit Agreement, dated as of September 8, 2004 (the
"Agreement"), by and among Headwaters Incorporated, the Lenders from time to
time parties thereto, Xxxxxx Xxxxxxx Senior Funding, Inc., as joint lead
arranger and joint bookrunner and as Administrative Agent, Xxxxxx Xxxxxxx & Co.,
Incorporated, as Collateral Agent, X.X. Xxxxxx Securities Inc., as joint lead
arranger and as joint bookrunner, and XX Xxxxxx Xxxxx Bank, as syndication agent
Ladies and Gentlemen:
We have acted as special New York (the "State") counsel to Headwaters
Incorporated, a Delaware corporation (the "Company"), and to each of the
corporations listed on Annex A to this opinion letter (collectively, the
"Guarantors"), in connection with the Agreement. The definitions of terms
contained in Annex B apply to this opinion letter and the definitions of terms
contained in the Agreement apply to terms that are used and not otherwise
defined herein or in Annex B.
This opinion is delivered to you pursuant to Section 4.1.5 of the
Agreement, at the request of the Company.
In rendering this opinion, we have reviewed the following documents,
each made, entered into or dated as of the date of this opinion:
A. the Agreement;
B. the Guaranty, made by each Guarantor in favor of the Administrative
Agent (the "Guaranty";
C. the First Lien Pledge and Security Agreement, by and among the
Company, the Guarantors and the Collateral Agent (the "Pledge and
Security Agreement");
D. the Intellectual Property Security Agreement, by and among the
Company, the Guarantors and the Collateral Agent (the "Intellectual
Property Security Agreement" and, together with the Pledge and Security
Agreement, the "Collateral Agreements");
E. the Intercreditor Agreement, by and among the Company, the
Administrative Agent, the Second Lien Administrative Agent, the
Collateral Agent and the Second Lien Collateral Agent;
F. the Notes delivered on the date of the opinion (the "Delivered
Notes");
G. the UCC-1 financing statements attached hereto as Schedules 1A, 1B,
1C, 1D, 1E, 1F, 1G, 1H, 1I, 1J, 1K, 1L, 1M, 2A, 2B, 3A, 3B, 3C, 3D, 3E
and 3F;
H. the current charters, articles of incorporation, certificates of
incorporation, articles of organization, certificates of formation,
certificates of limited partnership, certificate of partnership,
by-laws, partnership agreements, limited liability company agreements
and operating agreements, as applicable, of the Company and the
California and Texas Guarantors; and
I. such other documents as we have deemed necessary as a basis for the
opinions we express below.
On the basis of the assumptions and subject to the qualifications and
limitations set forth below, we are of the opinion that:
1. (a) The Company is duly incorporated, validly existing and in good
standing under Delaware General Corporation Law and has the corporate power to
own and hold under lease the properties it purports to own and hold under lease
and to conduct the business in which it is engaged.
(b) The Company has the corporate power to execute and
deliver, and to perform its obligations under the Agreement, the
Delivered Notes, the Intercreditor Agreement and the Collateral
Agreements and for the Company's incurrence of the indebtedness in the
amount of the Aggregate Revolving Loan Commitment and the Aggregate
Term B Loan Commitment (as in effect on the date hereof) and the
repayment of such indebtedness, with interest, in accordance with the
terms of the Agreement, and for the grant by the Company of the
security interest in its Collateral described in Section 1.2 of the
Pledge and Security Agreement.
(c) Each California Guarantor is duly incorporated, validly
existing and in good standing under the law of California and has the
corporate power to own and hold under lease the properties it purports
to own and hold under lease and to conduct the business in which it is
engaged.
(d) Each Texas Guarantor is duly incorporated, validly
existing and in good standing under the law of Texas and has the
corporate power to own and hold under lease the properties it purports
to own and hold under lease and to conduct the business in which it is
engaged.
(e) Each California and Texas Guarantor has the corporate
power to execute and deliver, and to perform its obligations under, the
Guaranty and for the grant by such Guarantor of the security interest
in its Collateral described in Section 1.2 of the Pledge and Security
Agreement.
2. Each of the Agreement, the Intercreditor Agreement and the
Collateral Agreements constitutes a valid and legally binding agreement of the
Company, and each Delivered Note will, upon disbursement of the loans evidenced
by such Note, constitute a valid and legally binding obligation of the Company,
in each case enforceable against the Company in accordance with its terms.
3. Each of the Guaranty and the Collateral Agreements (a) has been duly
authorized, executed and delivered by each of the Texas and California
Guarantors and (b) constitutes a valid and legally binding agreement of each
Guarantor, in each case enforceable against such Guarantor in accordance with
its terms.
4. The execution and delivery of, and the performance of its
obligations under, the Agreement, the Delivered Notes, the Intercreditor
Agreement and the Collateral Agreements by the Company do not and will not
violate or conflict with, result in a breach of, constitute a default under, or
result in the creation of any Lien upon any property of the Company under, the
federal law of the United States of America ("Federal Law") or the law of the
State.
5. The execution and delivery of, and the performance of its
obligations under, the Guaranty and the Collateral Agreements by each Guarantor
do not and will not violate or conflict with, result in a breach of, constitute
a default under, or result in the creation of any Lien upon any property of such
Guarantor under, Federal Law or the law of the State or, in the case of the
California Guarantors, the law of California or, in the case of the Texas
Guarantors, the law of Texas.
6. Under Federal Law and the law of the State and, in the case of the
California Guarantors, the law of California and, in the case of the Texas
Guarantors, the law of Texas, no Governmental Approvals are required to have
been obtained, and no Governmental Registrations are required to have been made:
(a) by the Company, (i) for the valid execution and delivery
by the Company of the Agreement, the Delivered Notes, the Intercreditor
Agreement or the Collateral Agreements, (ii) for the Company's
incurrence of the indebtedness in the amount of the Aggregate Revolving
Loan Commitment and the Aggregate Term B Loan Commitment (as in effect
on the date hereof) and the repayment of such indebtedness, with
interest, in accordance with the terms of the Agreement, or (iii) for
the grant by the Company of the security interest in its Collateral
described in Section 1.2 of the Pledge and Security Agreement (such
security interests, collectively, the "Company Security Interests"); or
(b) by any Guarantor, (i) for the valid execution and delivery
by such Guarantor of the Guaranty or the Collateral Agreements, or (ii)
for the grant by such Guarantor of the security interest in its
Collateral described in Section 1.2 of the Pledge and Security
Agreement (such security interests, collectively, the "Guarantor
Security Interests" and, together with the Company Security Interests,
the "Security Interests").
7. (a) Each of the Security Interests is an enforceable security
interest in the collateral to which it applies.
(b) (i) If financing statements in the form attached hereto as
Schedule 1A through Schedule 1M are communicated to the
Delaware Secretary of State by a method of document delivery
authorized under Section 106 of the Administrative Rules of
the Delaware Secretary of State and an amount equal to the
applicable filing fee is tendered to such filing office, such
filing office will have an obligation to accept such financing
statements.
(ii) Upon acceptance of such financing statements by
said filing office, the Company Security Interests and
Guarantor Security Interests granted by the Delaware Guarantor
in so much of the Collateral as consists of (in each case as
defined in the Uniform Commercial Code) accounts (other than
accounts described in Section 9-102(a)(6)(B) of the Uniform
Commercial Code), general intangibles, goods, chattel paper,
investment property, negotiable documents and instruments will
be perfected.
(iii) Such financing statements are all of the
filings, and are in the form, required to effect such
perfection.
(iv) Except for the filings and fees referred to in
clause (i), no other action, including the payment of any
recording or other taxes or fees, is required by law to effect
such perfection.
(c) (i) If financing statements in the form attached hereto as
Schedule 2A and Schedule 2B are communicated to the Office of
the Secretary of State of California by a method of document
delivery authorized under the filing rules of that Office and
an amount equal to the applicable filing fee is tendered to
such filing office, such filing office will have an obligation
to accept such financing statements.
(ii) Upon acceptance of such financing statements by
said filing office, the Guarantor Security Interests granted
by the California Guarantors in so much of the Collateral as
consists of (in each case as defined in the Uniform Commercial
Code) accounts (other than accounts described in Section
9-102(a)(6)(B) of the Uniform Commercial Code), general
intangibles, goods, chattel paper, investment property,
negotiable documents and instruments will be perfected.
(iii) Such financing statements are all of the
filings, and are in the form, required to effect such
perfection.
(iv) Except for the filings and fees referred to in
clause (i), no other action, including the payment of any
recording or other taxes or fees, is required by law to effect
such perfection.
(d) (i) If financing statements in the form attached hereto as
Schedule 3A through Schedule 3F, are communicated to the Texas
Secretary of State by a method of document delivery authorized
under Rule Section 95.106 of the Texas Administrative Code and
an amount equal to the applicable filing fee is tendered to
such filing office, such filing office will have an obligation
to accept such financing statements.
(ii) Upon acceptance of such financing statements by
said filing office, the Guarantor Security Interests granted
by the Texas Guarantors in so much of the Collateral as
consists of (in each case as defined in the Uniform Commercial
Code) accounts (other than accounts described in Section
9-102(a)(6)(B) of the Uniform Commercial Code), general
intangibles, goods, chattel paper, investment property,
negotiable documents and instruments will be perfected.
(iii) Such financing statements are all of the
filings, and are in the form, required to effect such
perfection.
(iv) Except for the filings and fees referred to in
clause (i), no other action, including the payment of any
recording or other taxes or fees, is required by law to effect
such perfection.
(e) (i) The delivery to the First Lien Collateral Agent (as
defined in the Agreement) in New York of the certificates (and
related stock powers executed in blank) evidencing the
Securities listed on Schedule 4 will be effective to perfect
the Security Interest in such Securities.
(ii) The Security Interest in the Securities listed
on Schedule 4, when such certificates are so delivered, will
be free of any adverse claim, as defined in Section
8-102(a)(1) of the New York Uniform Commercial Code.
8. To our knowledge, neither the Company nor any Guarantor is a party
in any action, suit or proceeding in which the pleadings request as relief that
(a) any of the obligations of the Company, or any of the rights of the
Administrative Agent or the Lenders, under the Agreement, the Delivered Notes,
the Intercreditor Agreement or the Collateral Agreements, or (b) any of the
obligations of any Guarantor, or any of the rights of the Administrative Agent
or the Lenders, under the Guaranty or the Collateral Agreements, be declared
invalid or subordinated or their performance be enjoined.
Our opinion is subject to the following qualifications and limitations:
1. Our opinion is subject to the effect of (i) applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and other similar
laws affecting creditors' rights generally, (ii) general equitable principles,
(iii) requirements of reasonableness, good faith and fair dealing and (iv)
additionally in the case of (A) indemnities, a requirement that facts, known to
the indemnitee but not the indemnitor, in existence at the time the indemnity
becomes effective that would entitle the indemnitee to indemnification be
disclosed to the indemnitor, (B) waivers, Sections 9-602 and 9-603 of the
Uniform Commercial Code, (C) indemnities, waivers and exculpatory provisions,
public policy and (D) restrictions on, or remedies in the event of, assignment
or transfer of rights or interests or the creation, attachment, perfection or
enforcement of security interests, Sections 9-401(b), 9-406, 9-407, 9-408 and
9-409 of the Uniform Commercial Code. Our opinion with respect to the Guaranty
is subject to the further qualification that the Guarantor may be exonerated as
to a guaranteed party if such guaranteed party fails to inform the Guarantor of
material, adverse information, known to it and not to the Guarantor, concerning
the Company or any Collateral.
2. The opinions expressed in paragraphs 1(a), 1(c) and 1(d) as
to the due incorporation, valid existence and good standing of the Company, the
California Guarantors and the Texas Guarantors, respectively, are based on
recent good standing certificates and verbal confirmations of good standing as
of September 7, 2004.
3. Certain remedial provisions of the Loan Documents as to
which we are opining may be unenforceable in whole or in part, but the inclusion
of such provisions does not affect the validity of the balance of such Loan
Documents, and the practical realization of the benefits created by such Loan
Documents taken as a whole will not be materially impaired by the
unenforceability of those particular provisions. In addition, certain remedial
provisions of such Loan Documents may be subject to procedural requirements not
set forth therein.
4. The Security Interests (i) will not be enforceable with
respect to, or attach to, any Collateral until value has been given and the
Grantor thereof has rights in such Collateral or (ii) be enforceable with
respect to any Collateral (other than the Securities that are the subject of our
opinion in paragraph 7(e)) against the competing interests of those third
parties (other than the Grantor thereof) who would, in accordance with the
provisions of Applicable Law, take free of, or have priority over, such Security
Interest in such Collateral, notwithstanding its perfection.
5. Our opinion is limited to the law of the State and Federal
Law, in each case as in effect on the date hereof, except that our opinions
expressed in paragraphs 7(b), 7(c) and 7(d) are limited to the Delaware Uniform
Commercial Code, the California Commercial Code and the Texas Uniform Commercial
Code, respectively, and, in each case, to Federal Law.
6. Our opinion is intended for the sole benefit of the
Administrative Agent and the Lenders, and their permitted successors and
assignees and permitted participants in or purchasers of the obligations of the
Company under the Loan Documents and no other Person is entitled to rely on it
for any purpose without our prior written consent.
7. We express no opinion with respect to:
a. the Company's or the Guarantors' rights in, title
to or legal or beneficial ownership of any of the Collateral
or any Collateral acquired after the date hereof;
b. the perfection of the Security Interest in any
dividends or other distributions of any Securities that are
not the subject of our opinion in paragraph 7(e);
c. the priority of the Security Interests in any
Collateral or the effect of perfection or nonperfection of the
Security Interests in any Collateral of a type referred to in
Section 9-301(c) of the New York Uniform Commercial Code (or
the equivalent section of the Delaware, California or Texas
Uniform Commercial Code) that is not located in the State, the
State of California, the State of Delaware, or the State of
Texas, as applicable;
d. any Collateral that (A) is not governed by Article
8 or 9 of the Uniform Commercial Code (and not, in the case of
Article 9, excluded therefrom by Section 9-109(c) or (d)) or
(B) is subject to a certificate of title or (C) is a
trademark;
e. Section 15.2 of the Agreement and the equivalent
sections in the other Loan Documents insofar as said sections
relate to federal courts (except as to the personal
jurisdiction thereof); and
f. the definition of Collateral contained in the
Pledge and Security Agreement to the extent the same purports
to make (A) commercial tort claims part of the Collateral by
using general terms such as "currently existing commercial
tort claims" or (B) any other assets part of the Collateral by
using general terms such as "any property of the Grantors", in
each case without further specificity; provided that the
foregoing shall not in any way limit our opinions in
paragraphs 7(b), 7(c) and 7(d) in respect of (i) commercial
tort claims which are specifically listed in the definition of
Collateral (directly or by reference to a schedule or exhibit)
or (ii) any property which is specifically referenced by type
in the definition of Collateral.
In rendering our opinion:
1. We have, without independent verification, relied, with
respect to factual matters, statements and conclusions, on certificates and
statements of governmental officials and officials of the Company and the
Guarantors and on the representations made by the Company and the Guarantors in
the Loan Documents.
2. We have examined originals, or copies of originals
certified, conformed or otherwise identified to our satisfaction, of such
agreements, documents and records as we have considered relevant and necessary
as a basis for this opinion.
3 We have assumed the accuracy and completeness of all, and
the authenticity of all original, certificates, agreements, documents, records
and other materials submitted to us, the conformity with the originals of any
copies submitted to us, the genuineness of all signatures and the legal capacity
of all natural persons.
4. We have assumed that:
(a) (i) the execution and delivery of, and the
performance of its obligations under, the Agreement
and the Collateral Agreements by the Company do not
and will not (A) require any Governmental Approval or
Governmental Registration or (B) violate or conflict
with, result in a breach of, or constitute a default
under, (1) any agreement or instrument to which the
Company or any of its Affiliates is a party or by
which the Company or any of its Affiliates or any of
their respective properties may be bound, (2) any
Governmental Approval or Governmental Registration
that may be applicable to the Company or any of its
Affiliates or any of their respective properties, (3)
any order, decision, judgment or decree that may be
applicable to the Company or any of its Affiliates or
any of their respective properties, or (4) any law;
(ii) The execution and delivery of, and the
performance of the obligations of each Guarantor
under, the Guaranty and the Collateral Agreements by
such Guarantor do not and will not (A) require any
Governmental Approval or Governmental Registration or
(B) violate or conflict with, result in a breach of,
or constitute a default under, (1) any agreement or
instrument to which such Guarantor or any of its
Affiliates is a party or by which such Guarantor or
any of its Affiliates or any of their respective
properties may be bound, (2) any Governmental
Approval or Governmental Registration that may be
applicable to such Guarantor or any of its Affiliates
or any of their respective properties, (3) any order,
decision, judgment or decree that may be applicable
to such Guarantor or any of its Affiliates or any of
their respective properties, or (4) any law;
except that the foregoing assumptions do not apply to, (x) in the case of the
Governmental Approvals and Governmental Registrations referred to in subclauses
(a)(i)(A) and (a)(ii)(A), the Governmental Approvals and Governmental
Registrations that are the subject of our opinion expressed in paragraph 6
above, and (y) in the case of the law referred to in subclauses (a)(ii)(B)(4)
and (a)(ii)(B)(4), Federal Law, the law of the State, the Delaware General
Corporation Law, the Delaware Uniform Commercial Code, the law of California and
the law of Texas, in each case as in effect on the date hereof, except as to any
Governmental Approvals and Governmental Registrations required under Federal
Law, the law of the State, the Delaware General Corporation Law, the Delaware
Uniform Commercial Code, the law of California and the law of Texas that are not
the subject of our opinion expressed in paragraph 6 above;
(b) the Loan Documents constitute (subject to the
same qualifications as are contained in subparagraph (a) of
the immediately preceding paragraph) the valid, legally
binding and enforceable agreements of the parties thereto
under all applicable law (other than, in the case of the
Company, and the Guarantors, Federal Law and the law of the
State, except as to any Governmental Approvals and
Governmental Registrations required under Federal Law or the
law of the State that are not the subject of our opinion
expressed in paragraph 6 above);
(c) for so much of our opinions expressed in
paragraphs 2 and 3 as relates to Section 15.1 of the Agreement
and the equivalent sections in the other Loan Documents
relating to the selection of New York law as the governing law
of the agreements, that such sections would be enforced by a
court in strict conformity to the provisions of New York
General Obligations Law Section 5-1401;
(d) (i) the Collateral Agent (on behalf of the
Holders of the Secured Obligations) hold the Securities (A)
within the State and (B) without notice of any adverse claim,
as defined in Section 8-102(a)(1) of the Uniform Commercial
Code; and (ii) the Collateral Agent complies with the
provisions of, and continuously holds such Securities for the
benefit of the Holders of the Secured Obligations in the
manner provided for in, the Pledgor Security Agreement;
(e) each of the Delaware Guarantors is a corporation
or limited liability company, as applicable, organized solely
under the laws of the State of Delaware;
(f) each of the Company, the Texas Guarantors and the
California Guarantors has knowingly, voluntarily and
intelligently waived its right to a trial by jury in any
proceeding involving the Loan Documents; and
(g) the Company and the Guarantors are engaged only
in the businesses described in the Company's Annual Report on
Form 10-K for its fiscal year ended September 30, 2003 and
Quarterly Report on Form 10-Q for the quarter ended June 30,
2004.
Very truly yours,
Annex A
Subsidiaries of Headwaters Incorporated
ACM Block & Brick General, Inc.
ACM Block & Brick Partner, LLC
ACM Block & Brick, LLC
ACM Block & Brick, LP
ACM FlexCrete, LP
ACM Georgia, Inc.
American Construction Materials, Inc.
Best Masonry & Tool Supply, Inc.
Chihuahua Stone LLC
Comaco, Inc.
Covol Engineered Fuels, XX
Xxxxx Services Corporation
Don's Building Supply, L.P.
Eagle Stone & Brick LLC
Eldorado Acquisition, LLC
Eldorado Funding Co.
Eldorado G-Acquisition Co.
Eldorado SC-Acquisition Co.
Eldorado Stone Acquisition Co., LLC
Eldorado Stone Corporation
Eldorado Stone Funding Co., LLC
Eldorado Stone LLC
Eldorado Stone Operations LLC
Global Climate Reserve Corporation
Headwaters Clean Coal Corp.
Headwaters Heavy Oil, Inc.
Headwaters NanoKinetix, Inc.
Headwaters Olysub Corporation
Headwaters Technology Innovation Group, Inc.
HTI Chemical Subsidiary, Inc.
Hydrocarbon Technologies, Inc.
ISG Manufactured Products, Inc.
ISG Partner, Inc.
ISG Resources, Inc.
ISG Services Corporation
ISG Swift Crete, Inc.
L&S Stone LLC
X-X Xxxxx LLC
Xxxxx X. Xxxxxxx, Inc.
Magna Wall, Inc.
Northwest Properties LLC
Northwest Stone & Brick Co., Inc.
Northwest Stone & Brick LLC
Palestine Concrete Tile Company, L.P.
StoneCraft Industries LLC
Tempe Stone LLC
United Terrazzo Supply Co., Inc.
VFL Technology Corporation
Tapco Holdings, Inc.
Tapco International Corporation
Vantage Building Products Corporation
MTP, Inc.
Atlantic Shutter Systems, Inc.
Metamora Products Corporation
Metamora Products Corporation of Elkland
Wamco Corporation
Builders Edge, Inc.
Annex B
The following definitions apply to the opinion to which this Annex B is
attached:
"Applicable Law" means (a) all applicable common law and principles of
equity and (b) all applicable provisions of all (i) constitutions, statutes,
rules, regulations and orders of governmental bodies, (ii) Governmental
Approvals and (iii) orders, decisions, judgments and decrees of all courts
(whether at law or in equity or admiralty) and arbitrators.
"California Guarantors" means Xxxxx X. Xxxxxxx Inc. and United Terrazzo
Supply Co., Inc.
"Delaware Guarantors" means Headwaters Olysub Corporation, Chihuaha
Stone LLC, Eagle Stone & Brick LLC, Eldorado Stone Acquisition Co., LLC,
Eldorado Stone LLC, Eldorado Stone Operations LLC, L&S Stone LLC, X-X Xxxxx LLC,
Northwest Properties LLC, Northwest Stone & Brick LLC, StoneCraft Industries
LLC, and Tempe Stone LLC.
"Governmental Approval" means any authorization, consent, approval,
license or exemption (or the like) of or from any governmental unit.
"Governmental Registration" means any registration or filing (or the
like) with, or report or notice (or the like) to, any governmental unit.
"Grantor" means, with respect to any Security Interest, the grantor
thereof.
"Loan Documents" means each of the Agreement, the Guaranty and the
Collateral Agreement, collectively.
"Security" means, with respect to any Person, (a) any and all shares,
interests, participations or other equivalents (however designated) of capital
stock of a corporation, any and all similar ownership interests in a Person
(other than a corporation) and (b) any option, warrant or other right to
acquire, any such shares, interests, participations, equivalents or similar
ownership interests of such Person.
"Texas Guarantors" means Best Masonry & Tool Supply, Inc., Don's
Building Supply, L.P., Palestine Concrete Tile Company, L.P., Magna Wall, Inc.,
ACM Block & Brick LP, and ACM FlexCrete, LP.
"Uniform Commercial Code" means the Delaware Uniform Commercial Code,
Division 9 of the California Commercial Code, or the Texas Uniform Commercial
Code, whichever is applicable.
EXHIBIT A-2
FORM OF OPINION OF LOCAL COUNSEL
Attached
FORM OF OPINION OF LOCAL COUNSEL
WITH RESPECT TO REAL ESTATE MATTERS
__________, 2004
To: The Lenders under the Credit Agreements
referred to below and to Xxxxxx Xxxxxxx Senior Funding, Inc., as
Administrative Agent, and Xxxxxx Xxxxxxx & Co. Incorporated, as
Collateral Agent
Re: Headwaters Incorporated [and [**Name of Subsidiary Fee
Owner**]]
Ladies and Gentlemen:
We have acted as special [name of State] (the "State") counsel to
Headwaters Incorporated, a Delaware corporation ("Borrower") [and [**Insert name
of fee owner and state and organization type**] ("Mortgagor")] in connection
with the execution and delivery of the [Mortgages/Deeds of Trust] referenced
below pursuant to that certain Credit Agreement dated as of September 8, 2004
(the "First Lien Credit Agreement") by and among Borrower, the Lenders (as
defined therein), Xxxxxx Xxxxxxx Senior Funding, Inc., as administrative agent
(in such capacity, "Administrative Agent") for the Lenders, Xxxxxx Xxxxxxx & Co.
Incorporated,. as collateral agent (in such capacity, "Collateral Agent") for
the Lenders and certain other parties named therein, and that certain Second
Lien Credit Agreement dated as of September 8, 2004 (the "Second Lien Credit
Agreement") by and among Borrower, the Lenders (as defined therein),
Administrative Agent, Collateral Agent, and certain other parties named therein.
The First Lien Credit Agreement and Second Lien Credit Agreement are
collectively referred to herein as the "Credit Agreements". This opinion is
rendered at the request of Borrower pursuant to Section 6.26(b)(G) of the First
Lien Credit Agreement and Section 6.18(bXG) of the Second Lien Credit Agreement.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to such terms in the [Mortgages/Deeds of Trust], or
if not defined therein, in the Credit Agreements.
In our capacity as such counsel, we have examined originals, or copies
identified to our satisfaction as being true copies, of such records, documents
or other instruments as in our judgment are necessary or appropriate to enable
us to render the opinions expressed below, including such corporate records and
documents of [Borrower/Mortgagor] and such certificates of public officials and
officers of [Borrower/Mortgagor] as we have deemed necessary or appropriate for
purposes of this opinion. These records, documents and instruments also included
execution copies or counterparts of the following documents (collectively, the
"Subject Documents"):
1. The Credit Agreements;
2. The [Mortgage/Deed of Trust], Assignment of Rents and
Leases, Security Agreement and Fixture Filing dated as of ________, 2004 from
[Borrower//Mortgagor], as [mortgagor/grantor], to [_____________, as trustee
("Trustee"), for the benefit of] Collateral Agent, as [mortgagee/beneficiary]
(the "[First Lien. Mortgage/First Lien Deed of Trust]"), encumbering the
"Mortgaged Property" described therein;
3. The [Mortgage/Deed of Trust], Assignment of Rents and
Leases, Security Agreement and Fixture Filing dated as of _______, 2004 from
[Borrower//Mortgagor], as [mortgagor/grantor], to [_____________, as trustee
("Trustee"), for the benefit of] Collateral Agent, as [mortgagee/beneficiary]
(the "[Second Lien Mortgage/Second Lien Deed of Trust]" and, collectively with
the First Lien Mortgage/First Lien Deed of Trust, the "Mortgages/Deeds of
Trust"), encumbering the "Mortgaged Property" described therein[.][; and]
4. [** FOR MICHIGAN, GEORGIA AND NORTH CAROLINA: The Uniform
Commercial Code Fixture Filings naming [Borrower//Mortgagor] as debtor and
Collateral Agent as secured party, relating to the Mortgaged Property (the
"Fixture Filings").**]
Assumptions
In rendering this opinion we have assumed, without having made any
independent investigation of the facts, except with respect to matters of State
and federal law on which we have opined below, the following:
(i) the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity with
originals of all documents submitted to us as copies;
(ii) to the extent that the obligations of
[Borrower/Mortgagor] may be dependent upon such matters, other than
with respect to [Borrower/Mortgagor], that each party to the agreements
and contracts referred to herein is duly formed, validly existing. and
in good standing under the laws of its jurisdiction of formation; that
each such other party has the requisite corporate or other
organizational power and authority to perform its obligations under
such agreements and contracts, as applicable; and that such agreements
and contracts have been duly authorized, executed and delivered by, and
each of them constitutes the legally valid and binding obligations of,
such other parties, as applicable, enforceable against such other
parties in accordance with their respective terms;
(iii) that [Borrower/Mortgagor] is duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation;
(iv) that [Borrower/Mortgagor] has the requisite corporate
power and authority to enter into and perform its obligations under the
Subject Documents to which it is a party;
(v) the due authorization, execution and delivery by
[Borrower/Mortgagor] of the Subject Documents to which
[Borrower/Mortgagor] is a party;
(vi) that a part or all of the loan proceeds to be advanced
pursuant to the Credit Agreements will have been advanced on or before
the date hereof;
(vii) that all material factual matters, including without
limitation, representations and warranties, contained in the Subject
Documents, are true and correct as set forth therein;
(viii) that [Borrower/Mortgagor], at the time of recordation
of the [Mortgages/Deeds of Trust][**FOR MICHIGAN, GEORGIA AND NORTH
CAROLINA: and filing of the Fixture Filings**), held an interest of
record in the real property portions of the Mortgaged Property owned by
[Borrower/Mortgagor]; [and]
(ix) [**FOR MICHIGAN, GEORGIA AND NORTH CAROLINA: that the
portions of the Fixtures (as defined below) that are or are to become
fixtures with respect to the Mortgaged Property are and will be located
on the Mortgaged Property; and**]
(x) that the Subject Documents will be governed by and
construed in accordance with the internal laws of the State,
notwithstanding the provisions of the Subject Documents to the
contrary.
Opinions
On the basis of such examination, our reliance upon the assumptions
contained herein and our consideration of those questions of law we considered
relevant, and subject to the limitations and qualifications in this opinion, we
are of the opinion that:
1. Each [Mortgage/Deed of Trust] constitutes the legal, valid
and binding obligation of [Borrower/Mortgagor], enforceable against
[Borrower/Mortgagor] in accordance with its terms.
2. The execution and delivery of the Subject Documents, the
performance by [Borrower/Mortgagor] of its obligations thereunder and
the compliance with the terms and conditions thereof by
[Borrower/Mortgagor] are not in contravention of or in conflict with
any law, rule or regulation of the State applicable to
[Borrower/Mortgagor].
3. The execution and delivery by [Borrower/Mortgagor] of the
Subject Documents to which it is a party and the performance of
[Borrower/Mortgagor]'s obligations thereunder do not require any
governmental consents, approvals, authorizations, permits,
registrations, declarations or filings or other action or any notices
to, consents of, orders of or filings with any governmental authority
or regulatory body of the State (including those having jurisdiction
over the enforcement of the environmental laws of the State), except
for the recordation of the [Mortgages/Deeds of Trust] [** FOR MICHIGAN,
GEORGIA AND NORTH CAROLINA: and the Fixture Filings**] in the
respective recording offices described herein.
4. Each [Mortgage/Deed of Trust] (including the
acknowledgement, attestation, seal and witness requirements) is in
appropriate form for recordation in the State.
5. Each [Mortgage/Deed of Trust] is in proper form sufficient
to create a valid [mortgage/deed of trust lien] in favor of Collateral
Agent on, and to vest [Trustee and] Agent with power of sale in, such
of the Mortgaged Property described therein that constitutes real
property (including fixtures, to the extent the same constitute real
property). The recordation of the [Mortgages/Deeds of Trust] in the [**
NAME APPROPRIATE COUNTY RECORDING OFFICE**] are the only recordation,
filings or registrations necessary to perfect the liens on the
Mortgaged Property created by the [Mortgages/Deeds of Trust] [** FOR
MICHIGAN, GEORGIA AND NORTH CAROLINA:, except for the filing with the
** NAME APPROPRIATE COUNTY RECORDING OFFICE** of the Fixture Filings
regarding that portion of the Mortgaged Property constituting
fixtures**]. Upon recordation of the [Mortgages/Deeds of Trust] in the
[** NAME APPROPRIATE COUNTY RECORDING OFFICE**], [Trustee/Collateral
Agent] will have valid and perfected [mortgage/deed of trust liens] on
the Mortgaged Property described therein. No other recordation, filing,
re-recordation or re-filing is necessary in order to perfect or to
maintain the priority of the liens created by the [Mortgages/Deeds of
Trust].
6. The real property descriptions attached to the
[Mortgages/Deeds of Trust] are in form legally sufficient for the
purpose of subjecting that portion of the Mortgaged Property that
constitutes real property to the liens evidenced by the
[Mortgages/Deeds of Trust][** FOR MICHIGAN, GEORGIA AND NORTH CAROLINA:
and the Fixture Filings**].
7. Each [Mortgage/Deed of Trust] is in proper form sufficient
to constitute a valid and effective fixture filing with respect to the
Pic,, rises under Article 9 of the Uniform Commercial Code as in effect
in the State naming [Borrower/Mortgagor] as debtor and Agent as secured
party.
8. Collateral Agent is not required to qualify to transact
business in the State nor will Collateral Agent incur any tax imposed
by the State (including, without limitation, any tax imposed by the
State on interest or on revenue paid in respect of the Credit
Agreements), solely as the result of the ownership or recordation of
the [Mortgages/Deeds of Trust]
9. [**FOR MICHIGAN, GEORGIA AND NORTH CAROLINA: The Fixture
Filings are in appropriate form for recordation in the State.**]
10. [**FOR MICHIGAN, GEORGIA AND NORTH CAROLINA: With respect
to that portion of the Mortgaged Property in which a security interest
may be perfected by the recordation of a fixture filing in the State
(the "Fixtures"), the proper place to file the Fixture Filings is in
the [LIST APPROPRIATE COUNTY RECORDING OFFICE] (the "Filing Office"),
and no filing or recordation in any other place is necessary under the
UCC to perfect a security interest in the Fixtures. Upon the
recordation of the Fixture Filings with the Filing Office, Agent will
have a perfected security interest in the Fixtures. Subsequent to the
recordation of the Fixture Filings in accordance with the procedures
set forth above, no other, further or subsequent filing, recordation,
registration, re-filing, re-recordation or re-registration of the
Fixture Filings or any additional financing statements or any other
instrument and no other actions will be necessary or advisable to
perfect or continue the perfection of the lien created thereby, except
that Article 9 of the UCC requires the recordation of continuation
statements within the period of six (6) months prior to the expiration
of five (5) years from the date of the original recordation or the
recordation of any continuation statement in order to maintain the
effectiveness each of the Fixture Filings.**]
11. [Except as specifically set forth on Schedule 1 hereto,
no] [No] taxes or other charges, including, without limitation,
intangible, documentary, stamp, mortgage, transfer or recording taxes
or similar charges are payable to the State or to any governmental
authority or regulatory body located therein on account of the
execution or delivery of the [Mortgages/Deeds of Trust], or the
creation of the liens and security interests thereunder, or the filing,
recordation or registration of the [Mortgages/Deeds of Trust], except
for nominal filing or recording fees.
Qualifications
The foregoing opinions are subject to the following qualifications, limitations
and exceptions:
1. Qualifying paragraph 1 above, the enforceability of the
[Mortgages/Deeds of Trust] and the liens created thereby may be limited
or affected by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally (including, without
limitation, fraudulent conveyance laws) and by general principles of
equity including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless
of whether considered in a proceeding in equity or at law. The
aforesaid opinion as to enforceability of the [Mortgages/Deeds of
Trust] is also subject to the qualification that certain provisions
contained therein may not be enforceable, but (subject to the
limitations set forth in the foregoing sentence) such unenforceability
will not render the [Mortgages/Deeds of Trust] invalid as a whole or
substantially interfere with realization of the principal benefits
and/or security provided thereby.
2. In rendering the opinions expressed in this opinion letter,
we have made no examination of and express no opinion with respect to:
(i) title to or, except as to adequacy of form, descriptions of the
Mortgaged Property described in the [Mortgages/Deeds of Trust]; (ii)
the nature or extent of [Borrower/Mortgagor]'s rights in, or title to,
the Mortgaged Property; (iii) the existence or non-existence of liens,
security interests, charges or encumbrances thereon or therein actually
of record; or (iv) the priority of any liens on any part of the
Mortgaged Property. We have not independently certified the existence,
condition, location or ownership of any of the Mortgaged Property.
This opinion is given as of the date hereof, and we disclaim any
obligation to update this opinion letter for events occurring after the date of
this opinion letter. The foregoing opinion applies only with respect to the laws
of the State and the federal laws of the United States of America and we express
no opinion with respect to the laws of any other jurisdiction.
This opinion is rendered only to Administrative Agent, the Collateral
Agent and the Lenders and their respective successors and assigns (including any
participant in any Secured Party's interest) and is solely for their benefit in
connection with the transactions contemplated by the Subject Documents and may
not be relied upon by Administrative Agent, Collateral Agent or any Lender or
any of their respective successors or assigns for any other purpose without our
prior written consent.
Very truly yours,
SCHEDULE 1
Mortgage Recording Taxes, Documentary Stamp Taxes
and other similar Taxes and Fees
[**INSERT DESCRIPTION OF AND METHOD OF CALCULATING ALL MORTGAGE RECORDING TAXES,
DOCUMENTARY STAMP TAXES AND SIMILAR TAXES AND FEES**]
EXHIBIT A-3
FORM OF CORPORATE FORMALITIES OPINION
Attached
FORM OF OPINION OF LOCAL COUNSEL
WITH RESPECT TO CORPORATE FORMALITIES
__________, 2004
To: The Lenders under the Credit Agreements
referred to below and to Xxxxxx Xxxxxxx
Senior Funding, Inc., as Administrative Agent,
and Xxxxxx Xxxxxxx & Co. Incorporated, as
Collateral Agent
Re: Headwaters Incorporated [and [**Name of Subsidiary. Fee
Owner**]]
Ladies and Gentlemen:
We have acted as special [name of State] (the "State") counsel to
Headwaters Incorporated, a Delaware corporation ("Borrower"), [and [**Insert
name of fee owner and state and organization type**] ("Mortgagor"),] in
connection with the execution and delivery of (i) the First Lien [Mortgage/Deed
of Trust] referenced below pursuant to that certain Credit Agreement dated as of
September 8, 2004 (the "First Lien Credit Agreement") by and among Borrower, the
lenders referred to therein (the "First Lien Lenders"), Xxxxxx Xxxxxxx Senior
Funding, Inc. ("MSSF"), as administrative agent (in such capacity, "First Lien
Administrative Agent") for the First Lien Lenders, Xxxxxx Xxxxxxx & Co.
Incorporated ("MSCI"), as collateral agent (in such capacity, "First Lien
Collateral Agent") for the First Lien Lenders and certain other parties named
therein, and (ii) the Second Lien [Mortgage/Deed of Trust] referenced below
pursuant to that certain Second Lien Credit Agreement dated as of September 8,
2004 (the "Second Lien Credit Agreement"; collectively with the First Lien
Credit Agreement, the "Credit Agreements") by and among Borrower, the lenders
referred to therein (the "Second Lien Lenders"; collectively with the First Lien
Lenders, the "Lenders"), MSSF, as administrative agent (in such capacity,
"Second Lien Administrative Agent"; collectively with First Lien Administrative
Agent, "Administrative Agent") for the Second Lien Lenders, MSCI, as collateral
agent (in such capacity, "Second Lien Collateral Agent"; collectively with First
Lien Collateral Agent, "Collateral Agent") for the Second Lien Lenders, and
certain other parties named therein. This opinion is rendered at the request of
Borrower pursuant to Section 6.26(b)(G) of the First Lien Credit Agreement and
Section 6.18(b)(G) of the Second Lien Credit Agreement. Capitalized terms used
herein and not otherwise defined shall have the respective meanings ascribed to
such terms in the [Mortgages/Deeds of Trust], or if not defined therein, in the
Credit Agreements.
In our capacity as such counsel, we have examined originals, or copies
identified to our satisfaction as being true copies, of such records, documents
or other instruments as in our judgment are necessary or appropriate to enable
us to render the opinions expressed below, including such corporate records and
documents of [Borrower/Mortgagor] and such certificates of public officials and
officers of [Borrower/Mortgagor] as we have deemed necessary or appropriate for
purposes of this opinion. These records, documents and instruments also included
execution copies or counterparts of the following documents (collectively, the
"Subject Documents"):
1. The Credit Agreements;
2. The [Mortgage/Deed of Trust], Assignment Of Rents and
Leases, Security Agreement and Fixture Filing ([State]) dated as of _____, 2004
from [Borrower//Mortgagor], as [mortgagor/grantor], to [__________, as trustee
("Trustee"), for the benefit of] First Lien Collateral Agent, as
[mortgagee/beneficiary] (the "[First Lien Mortgage/Deed of Trust]"), encumbering
the "Mortgaged Property" described therein; and
3. The [Mortgage/Deed of Trust], Assignment of Rents and
Leases, Security Agreement and Fixture Filing ([State]) dated as of _____, 2004
from [Borrower//Mortgagor], as [mortgagor/grantor], to [__________, as trustee
("Trustee"), for the benefit of] Second Lien Collateral Agent, as
[mortgagee/beneficiary] (the "[Second Lien Mortgage/Deed of Trust]" and,
collectively with the First Lien Mortgage/Deed of Trust, the "Mortgages/Deeds of
Trust"), encumbering the Mortgaged Property.
Assumptions
In rendering this opinion we have assumed, without having made any
independent investigation of the facts, except with respect to matters of State
and federal law on which we have opined below, the following:
(i) the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity with
originals of all documents submitted to us as copies;
(ii) to the extent that the obligations of
[Borrower/Mortgagor] may be dependent upon such matters, other than
with respect to [Borrower/Mortgagor], that each party to the agreements
and contracts referred to herein is duly formed, validly existing and
in good standing under the laws of its jurisdiction of formation; that
each such other party has the requisite corporate or other
organizational power and authority to perform its obligations under
such agreements and contracts, as applicable; and that such agreements
and contracts have been duly authorized, executed and delivered by, and
each of them constitutes the legally valid and binding obligations of,
such other parties, as applicable, enforceable against such other
parties in accordance with their respective terms; and
(iii) that all material factual matters, including without
limitation, representations and warranties, contained in the Subject
Documents, are true and correct as set forth therein.
Opinions
On the basis of such examination, our reliance upon the assumptions
contained herein and our consideration of those questions of law we considered
relevant, and subject to the limitations and qualifications in this opinion, we
are of the opinion that:
1. [Borrower/Mortgagor] is duly organized, validly existing
and in good standing under the laws of the State.
2. [Borrower/Mortgagor] has the requisite corporate power and
authority to enter into and perform its obligations under the Subject Documents
to which it is a party.
3. The Subject Documents to which [Borrower/Mortgagor] is a
party have been duly authorized, executed and delivered by [Borrower/Mortgagor].
4. The execution, delivery and performance by
[Borrower/Mortgagor] of the Subject Documents to which it is a party do not
contravene its certificate or articles of incorporation, by-laws or other
organizational documents.
Qualifications
The foregoing opinions are subject to the following qualifications,
limitations and exceptions:
This opinion is given as of the date hereof, and we disclaim any
obligation to update this opinion letter for events occurring after the date of
this opinion letter. The foregoing opinion applies only with respect to the laws
of the State and the federal laws of the United States of America and we express
no opinion with respect to the laws of any other jurisdiction.
This opinion is rendered only to Administrative Agent, Collateral Agent
and the Lenders and their respective successors and assigns (including any
participant in any Lender's interest) and is solely for their benefit in
connection with the transactions contemplated by the Subject Documents and may
not be relied upon by Administrative Agent, Collateral Agent or any Lender or
any of their respective successors or assigns for any other purpose without our
prior written consent.
Very truly yours,
EXHIBIT B
FORM OF COMPLIANCE CERTIFICATE
To: The Lenders under the
Credit Agreement described below
This Compliance Certificate is furnished pursuant to that certain
Second Lien Credit Agreement, dated as of September 8, 2004 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Headwaters Incorporated, a Delaware corporation, as
the Borrower (the "Borrower"), the Lenders and Xxxxxx Xxxxxxx Senior Funding,
Inc., as Administrative Agent (the "Administrative Agent") for the Lenders.
Unless otherwise defined herein, capitalized terms used in this Compliance
Certificate have the meanings ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected __________ of the Borrower;(1)
2. I have reviewed the terms of the Credit Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Subsidiaries during the
accounting period ending on ________ __, 20__ and covered by the attached
financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below;
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Credit Agreement, all of which data and computations are true, complete and
correct;
5. (a) Schedule II attached hereto sets forth any new applications to
register patentable inventions, trademarks and copyrights filed by the Borrower
or any Domestic Subsidiary which have not been previously disclosed to the
Administrative Agent and (b) attached hereto is a second lien intellectual
property security agreement supplement in the form of Annex A hereto executed
and delivered as of the date hereof by the Borrower or such Domestic Subsidiary
that has filed such new applications to register patentable inventions,
trademarks and copyrights; and
6. (a) Schedule III attached hereto set forth any new commercial tort
claims (the "Commercial Tort Claims") belonging to the Borrower or any Domestic
Subsidiary which have not been previously disclosed to the Administrative Agent
and (b) attached hereto is a pledge and security agreement supplement in the
form of Annex B executed as of the date hereof by the Borrower or such Domestic
Subsidiary to whom such new commercial tort claims belong.
------------------
(1) Per Section 6.15.3 of the Credit Agreement, this certificate is to be
completed and executed by the chief financial officer or treasurer.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ___ day of
____________, 20__.
HEADWATERS INCORPORATED, as Borrower
By: ________________________________
Name:
Title:
SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ (the "Compliance Date") with
Provisions of Sections 6.17 and certain other Sections of
the Credit Agreement(2)
I. FINANCIAL COVENANTS
A. TOTAL LEVERAGE RATIO (Section 6.17)
1. Consolidated Funded Indebtedness
(a) Outstanding funded Consolidated
Indebtedness $___________
(b) Undrawn amount of all Letters of
Credit + $___________
(c) Principal component of all Capitalized
Lease Obligations + $___________
(d) Aggregate amount of Off-Balance Sheet
Liabilities + $___________
(e) Contingent Obligations with respect to
A(1)(a) through A(1)(d) + $___________
(f) Consolidated Funded Indebtedness (Sum
of A)(1)(a) through A(1)(e)) $___________
2. Consolidated EBITDA(3)
(a) Consolidated Net Income $___________
(b) Consolidated Interest Expense + $___________
(c) Expense for taxes paid or accrued + $___________
(d) Depreciation + $___________
(e) Amortization + $___________
---------------
(2) In case of any inconsistency between the provisions of this Schedule and the
provisions of the Credit Agreement, the Credit Agreement shall prevail.
(3) For the periods indicated on Schedule I to the Credit Agreement,
Consolidated EBITDA shall be deemed to be the amounts set forth therein.
(f) Non-cash charges for impairments of
goodwill and intangible assets + $___________
(g) Tax credits under Section 29 of the
Code as a result of Permitted
Alternative Fuel Acquisition [Maximum:
$20,000,000 in any fiscal year] + $___________
(h) Interest income - $___________
(i) Consolidated EBITDA (Sum of A)(2)(a)
through A(2)(h)) = $___________
3. Total Leverage Ratio (Ratio of A(1)(d) to A(2)(i)) _____ to 1.00
4. Maximum Total Leverage Ratio for the applicable
period _____ to 1.00
II. OTHER MISCELLANEOUS PROVISIONS
A. SALE OF ASSETS (Section 6.10)
(1) State whether any asset sales (other than asset
sales permitted pursuant to Sections 6.10(a)(i)
through 6.10(a)(ii) inclusive) have occurred. Yes/No
(2) State whether the Net Cash Proceeds from the
asset sales exceed 1% of Consolidated Total
Assets Yes/No
SCHEDULE II TO COMPLIANCE CERTIFICATE
New Applications to Register Patentable Inventions, Trademarks and Copyrights
SCHEDULE III TO COMPLIANCE CERTIFICATE
New Commercial Tort Claims
[Describe parties, case number (if applicable), nature of dispute]
ANNEX A TO COMPLIANCE CERTIFICATE
FORM OF SECOND LIEN INTELLECTUAL PROPERTY
SECURITY AGREEMENT SUPPLEMENT
This SECOND LIEN INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT
(this "Second Lien IP Security Agreement Supplement") dated September 8, 2004,
is made by the Person listed on the signature page hereof (the "Grantor") in
favor of XXXXXX XXXXXXX & CO. INCORPORATED ("MSI"), as second lien collateral
agent (the "Collateral Agent") for the Holders of the Obligations (as defined in
the Credit Agreement referred to below).
WHEREAS, HEADWATERS INCORPORATED, a Delaware corporation, has entered
into a Second Lien Credit Agreement dated as of September 8, 2004 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), with, among others, XXXXXX XXXXXXX SENIOR FUNDING, INC., as
Administrative Agent, MSI, as Collateral Agent, and the Lenders party thereto.
Terms defined in the Credit Agreement and not otherwise defined herein are used
herein as defined in the Credit Agreement.
WHEREAS, pursuant to the Credit Agreement, the Grantor and certain
other Persons have executed and delivered that certain Second Lien Pledge and
Security Agreement dated September 8, 2004 made by the Grantor and such other
Persons to the Collateral Agent (as amended, amended and restated, supplemented
or otherwise modified from time to time, the "Second Lien Security Agreement")
and that certain Second Lien Intellectual Property Security Agreement dated
September 8, 2004 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Second Lien IP Security Agreement").
WHEREAS, under the terms of the Second Lien Security Agreement, the
Grantor has granted to the Collateral Agent, for the ratable benefit of the
Holders of the Obligations, a security interest in the Additional Collateral (as
defined in Section 1 below) of the Grantor and has agreed as a condition thereof
to execute this IP Security Agreement Supplement for recording with the U.S.
Patent and Trademark Office, the United States Copyright Office and other
governmental authorities.
WHEREAS, in order to secure the obligations under the First Lien Credit
Agreement, the Grantor is concurrently granting to the First Lien Collateral
Agent, for the benefit of the lenders party to the First Lien Credit Agreement,
a first priority lien and security interest in the Collateral (as defined
below), it being understood that the relative rights and priorities of the
grantees under this Second Lien IP Security Agreement Supplement and under the
First Lien Collateral Documents are governed by the Intercreditor Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees as follows:
SECTION 1. Grant of Security. The Grantor hereby grants to the
Collateral Agent, for the ratable benefit of the Holders of the Obligations, a
security interest in all of such Grantor's right, title and interest in and to
the patents, trademarks, copyrights and license agreements set forth in Schedule
A hereto (the "Additional Collateral").
Notwithstanding anything herein to the contrary, the lien and security
interest granted to the Collateral Agent pursuant to this Second Lien IP
Security Agreement Supplement and the exercise of any right or remedy by the
Collateral Agent hereunder are subject to the provisions of the Intercreditor
Agreement, dated as of September 8, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Intercreditor
Agreement"), among Xxxxxx Xxxxxxx & Co. Incorporated, as first lien collateral
agent and as second lien collateral agent and Xxxxxx Xxxxxxx Senior Funding,
Inc. as first lien administrative agent and as second lien administrative agent,
Headwaters Incorporated and certain other persons party or that may become party
thereto from time to time. In the event of any conflict between the terms of the
Intercreditor Agreement and this Second Lien IP Security Agreement Supplement,
the terms of the Intercreditor Agreement shall govern and control.
SECTION 2. Supplement to Second Lien Security Agreement. Exhibit B to
the Second Lien Security Agreement is, effective as of the date hereof, hereby
supplemented to add to such Schedule the Additional Collateral.
SECTION 3. Security for Obligations. The grant of a security interest
in the Additional Collateral by the Grantor under this Second Lien IP Security
Agreement Supplement secures the payment of all Obligations of the Grantor now
or hereafter existing under or in respect of the Loan Documents, whether direct
or indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract
causes of action, costs, expenses or otherwise. Upon the termination of the
pledge and security interest granted under the Second Lien Security Agreement in
accordance with Section 7.4 of the Second Lien Security Agreement, the
Collateral Agent shall execute, acknowledge, and deliver to the Grantor an
instrument in writing releasing the security interest in Additional Collateral
acquired under this Second Lien IP Security Agreement Supplement.
SECTION 4. Recordation. The Grantor authorizes and requests that the
Register of Copyrights, the Commissioner for Patents and the Commissioner for
Trademarks and any other applicable government officer to record this Second
Lien IP Security Agreement Supplement.
SECTION 5. Grants, Rights and Remedies. This Second Lien IP Security
Agreement Supplement has been entered into in conjunction with the provisions of
the Second Lien Security Agreement. The Grantor does hereby acknowledge and
confirm that the grant of the security interest hereunder to, and the rights and
remedies of, the Collateral Agent with respect to the Additional Collateral are
more fully set forth in the Second Lien Security Agreement, the terms and
provisions of which are incorporated herein by reference as if fully set forth
herein.
SECTION 6. Governing Law. This Second Lien IP Security Agreement
Supplement shall be governed by, and construed in accordance with, the laws of
the State of New York.
IN WITNESS WHEREOF, the Grantor has caused this Second Lien IP Security
Agreement Supplement to be duly executed and delivered by its officer thereunto
duly authorized as of the date first above written.
[NAME OF GRANTOR]
By _________________________________
Name:
Title:
Address for Notices:
____________________________________
____________________________________
____________________________________
ANNEX B TO COMPLIANCE CERTIFICATE
FORM OF PLEDGE
AND SECURITY AGREEMENT SUPPLEMENT
This PLEDGE AND SECURITY AGREEMENT SUPPLEMENT (this "Supplement") dated
________, ____, is made by the Person listed on the signature page hereof (the
"Grantor") in favor of XXXXXX XXXXXXX & CO. INCORPORATED, as collateral agent
(the "Collateral Agent") for the Holders of Secured Obligations (as defined in
the Credit Agreement referred to below).
WHEREAS, HEADWATERS INCORPORATED, a Delaware corporation, has entered
into a Second Lien Credit Agreement dated as of September 8, 2004 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), with among others, XXXXXX XXXXXXX SENIOR FUNDING, INC., as
administrative agent, the Collateral Agent, and the Lenders party thereto. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
as defined in the Credit Agreement.
WHEREAS, pursuant to the Credit Agreement, the Grantor and certain
other Persons have executed and delivered that certain Second Lien Pledge and
Security Agreement dated September 8, 2004 made by the Grantor and such other
Persons to the Collateral Agent (as amended, amended and restated, supplemented
or otherwise modified from time to time, the "Second Lien Security Agreement").
WHEREAS, the Grantor has identified a new commercial tort claim that is
listed and described on Schedule I hereto as belonging to it (the "Additional
Collateral").
WHEREAS, under the terms of the Second Lien Security Agreement, the
Grantor has agreed to execute and deliver to the Collateral Agent a supplement
to the Second Lien Security Agreement to evidence the grant of a security
interest in the Additional Collateral.
WHEREAS, in order to secure the obligations under the First Lien Credit
Agreement, the Grantor is concurrently granting to the First Lien Collateral
Agent, for the benefit of the lenders party to the First Lien Credit Agreement,
a first priority lien and security interest in the Additional Collateral, it
being understood that the relative rights and priorities of the grantees under
this Supplement and under the First Lien Collateral Documents are governed by
the Intercreditor Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees as follows:
SECTION 1. Grant of Security. The Grantor hereby grants to the
Collateral Agent, on behalf of and for the ratable benefit of the Holders of the
Obligations, a security interest in all of the Grantor's right, title and
interest, in and to the Additional Collateral.
Notwithstanding anything herein to the contrary, the lien and security
interest granted to the Collateral Agent pursuant to this Supplement and the
exercise of any right or remedy by the Collateral Agent hereunder are subject to
the provisions of the Intercreditor Agreement, dated as of September 8, 2004 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Intercreditor Agreement"), among Xxxxxx Xxxxxxx & Co. Incorporated,
as first lien collateral agent and as second lien collateral agent and Xxxxxx
Xxxxxxx Senior Funding, Inc. as first lien administrative agent and as second
lien administrative agent, Headwaters Incorporated and certain other persons
party or that may become party thereto from time to time. In the event of any
conflict between the terms of the Intercreditor Agreement and this Supplement,
the terms of the Intercreditor Agreement shall govern and control.
SECTION 2. Supplement to Second Lien Security Agreement. Exhibit E to
the Second Lien Security Agreement is, effective as of the date hereof, hereby
supplemented to add to such Exhibit the Additional Collateral.
SECTION 3. Security for Obligations. The grant of a security interest
in the Additional Collateral by the Grantor under this Supplement secures the
payment of all Obligations of the Grantor now or hereafter existing under or in
respect of the Loan Documents, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, indemnifications, contract causes of action, costs,
expenses or otherwise. Upon the termination of the pledge and security interest
granted under the Second Lien Security Agreement in accordance with Section 7.4
of the Second Lien Security Agreement, the Collateral Agent shall execute,
acknowledge, and deliver to the Grantor an instrument in writing releasing the
security interest in Additional Collateral acquired under this Supplement.
SECTION 4. Perfection. The Grantor agrees to perform all acts necessary
to perfect the Collateral Agent's security interest in the Additional
Collateral, including the filing of a UCC-1 naming the Collateral Agent as
secured party and describing the collateral in a manner sufficient to perfect
the Collateral Agent's security interest in the Additional Collateral under the
Uniform Commercial Code.
SECTION 5. Grants, Rights and Remedies. This Supplement has been
entered into in conjunction with the provisions of the Second Lien Security
Agreement. The Grantor does hereby acknowledge and confirm that the grant of the
security interest hereunder to, and the rights and remedies of, the Collateral
Agent with respect to the Additional Collateral are more fully set forth in the
Second Lien Security Agreement, the terms and provisions of which are
incorporated herein by reference as if fully set forth herein.
SECTION 6. Governing Law. This Supplement shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the Grantor has caused this Supplement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
[NAME OF GRANTOR]
By ________________________
Name:
Title:
SCHEDULE I
TO THE FORM OF PLEDGE AND
SECOND LIEN SECURITY AGREEMENT SUPPLEMENT
[Described Commercial Tort Claim]
EXHIBIT C
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, the interest in and to all of the
Assignor's rights and obligations in its capacity as a Lender under the Credit
Agreement and any other documents or instruments delivered pursuant thereto that
represents the amount and percentage interest identified below of all of the
Assignor's outstanding rights and obligations under the facility identified
below (including, without limitation, any guaranties included in such facility
and, to the extent permitted to be assigned under applicable law, all claims
(including without limitation contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity), suits, causes of
action and any other right of the Assignor against any Person whether known or
unknown arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby) (the "Assigned Interest"). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
1. Assignor:____________________________________________________________________
2. Assignee:____________________________________ Fund of [identify Lender] (1)
[and is an Affiliate/Approved
3. Borrower: HEADWATERS INCORPORATED
4. Agent: Xxxxxx Xxxxxxx Senior Funding, Inc. as the Administrative Agent under
the Credit Agreement
------------------
(1) Select as applicable.
5. Credit Agreement: The Second Lien Credit Agreement dated as of September 8,
2004 among the Borrower, the Lenders, and the Administrative Agent.
6. Assigned Interest:
--------------------- ------------------------ ------------------ ----------------------
Aggregate Amount of Amount of
Commitment/Loans for all Commitment/Loans Percentage Assigned of
Facility Assigned Lenders* Assigned* Commitment/Loans(2)
--------------------- ------------------------ ------------------ ----------------------
____________ $ $ _______%
____________ $ $ _______%
____________ $ $ _______%
--------------------- ------------------------ ------------------ ----------------------
7. Trade Date: (3)______________________________________________________________
Effective Date: ____________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE
ADMINISTRATIVE AGENT.]
The terms set forth in this Assignment and Assumption are hereby agreed
to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:______________________________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:_______________________________________
Title:
----------------------
*Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
(3) Insert if satisfaction of minimum amounts is to be determined as of the
Trade Date.
[Consented to and](4) Accepted:
XXXXXX XXXXXXX SENIOR FUNDING, INC., as Administrative
Agent
By: ___________________________
Title:
[Consented to:](5)
[HEADWATERS INCORPORATED,
as Borrower]
By: ___________________________
Title:
------------------------
(4) To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.
(5) To be added only if the consent of the Borrower is required by the terms of
the Credit Agreement.
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby. Neither the Assignor nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency, perfection, priority, collectibility,
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document, (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document, (v)
inspecting any of the property, books or records of the Borrower, or any
guarantor, or (vi) any mistake, error of judgment, or action taken or omitted to
be taken in connection with the Loans or the Loan Documents.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Lender thereunder, (iii) agrees that its payment
instructions and notice instructions are as set forth in Schedule 1 to this
Assignment and Assumption, (iv) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under ERISA,
(v) agrees to indemnify and hold the Assignor harmless against all losses, costs
and expenses (including, without limitation, reasonable attorneys' fees) and
liabilities incurred by the Assignor in connection with or arising in any manner
from the Assignee's non-performance of the obligations assumed under this
Assignment and Assumption, (vi) it has received a copy of the Credit Agreement,
together with copies of financial statements and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Administrative Agent or any other
Lender, and (vii) attached as Schedule 1 to this Assignment and Assumption is
any documentation required to be delivered by the Assignee with respect to its
tax status pursuant to the terms of the Credit Agreement, duly completed and
executed by the Assignee and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
2. Payments. The Assignee shall pay the Assignor, on the Effective
Date, the amount agreed to by the Assignor and the Assignee. From and after the
Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the internal law of the State of New York.
SCHEDULE 1
ADMINISTRATIVE QUESTIONNAIRE
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
US AND NON-US TAX INFORMATION REPORTING REQUIREMENTS
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
EXHIBIT D
FORM OF LOAN/ CREDIT RELATED MONEY TRANSFER INSTRUCTIONS
To Xxxxxx Xxxxxxx Senior Funding, Inc.,
as Administrative Agent (the "Administrative Agent") under the Credit Agreement
described below.
Re: Second Lien Credit Agreement, dated as of September 8, 2004
(as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"),
among Headwaters Incorporated (the "Borrower"), the Lenders,
and the Administrative Agent. Capitalized terms used herein
and not otherwise defined herein shall have the meanings
assigned thereto in the Credit Agreement.
The Administrative Agent is specifically authorized and directed to act
upon the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time until
receipt by the Administrative Agent of a specific written revocation of such
instructions by the Borrower, provided, however, that the Administrative Agent
may otherwise transfer funds as hereafter directed in writing by the Borrower in
accordance with Section 13.1 of the Credit Agreement or based on any telephonic
notice made in accordance with Section 2.12 of the Credit Agreement.
Facility Identification Number(s)______________________________________________
Customer/Account Name Headwaters Incorporated
Transfer Funds To______________________________________________________________
_______________________________________________________________________________
For Account No.________________________________________________________________
Reference/Attention To_________________________________________________________
Authorized Officer (Customer Representative) Date______________________
_______________________________________________ __________________________
(Please Print) Signature
Bank Officer Name Date______________________
_______________________________________________ __________________________
(Please Print) Signature
EXHIBIT E
FORM OF PROMISSORY NOTE
$_______________ September [__], 2004
HEADWATERS INCORPORATED, a Delaware corporation (the "Borrower"),
promises to pay to the order of [LENDER] or its registered assigns (the
"Lender") the aggregate unpaid principal amount of the Loan made by the Lender
to Borrower pursuant to Article II of the Agreement (as hereinafter defined), in
immediately available funds at the main office of Xxxxxx Xxxxxxx Senior Funding,
Inc., as Administrative Agent (the "Administrative Agent"), together with
interest on the unpaid principal amount hereof at the rates and on the dates set
forth in the Agreement. The Borrower shall pay, in Dollars, the principal of and
accrued and unpaid interest on the Loan in full on the Maturity Date. The
principal indebtedness evidenced hereby shall be payable as set forth in Article
II of the Agreement with a final installment payable on the Maturity Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of the Loan and the date and amount of each principal
payment hereunder.
This Promissory Note (this "Note") is one of the Notes issued pursuant
to, and is entitled to the benefits of, the Second Lien Credit Agreement, dated
as of September 8, 2004 (which, as it may be amended, restated, supplemented or
otherwise modified and in effect from time to time, is herein called the
"Agreement"), among the Borrower, the Lenders and the Administrative Agent, to
which Agreement reference is hereby made for a statement of the terms and
conditions governing this Note, including the terms and conditions under which
this Note may be prepaid or its maturity date accelerated. Capitalized terms
used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
This Note is secured by the Collateral Documents. Reference is hereby
made to the Collateral Documents for a description of the collateral thereby
mortgaged, warranted, bargained, sold, releases, conveyed, assigned,
transferred, pledged and hypothecated, the nature and extent of the security for
this Note, the rights of the holder of this Note, the Administrative Agent in
respect of such security and otherwise.
This Note shall be governed by, and construed in accordance with, the
internal laws, but without regard to the conflict of law provisions, of the
State of New York, but giving effect to federal laws applicable to national
banks.
HEADWATERS INCORPORATED, as the Borrower
By: ____________________________________
Name:
Title:
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
PROMISSORY NOTE OF HEADWATERS INCORPORATED
DATED [________]
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
------------- --------------- ---------------- ---------------- ----------------
EXHIBIT F
FORM OF OFFICER'S CERTIFICATE
OFFICER'S CERTIFICATE
I, the undersigned, hereby certify to the Administrative Agent and the
Lenders (each as defined below) that I am the _________________ of HEADWATERS
INCORPORATED, a corporation duly organized and existing under the laws of the
State of Delaware (the "Borrower"). Capitalized terms used herein and not
otherwise defined herein are as defined in that certain Second Lien Credit
Agreement dated as of September 8, 2004 by and among the Borrower, the
institutions from time to time parties thereto as Lenders (the "Lenders") and
Xxxxxx Xxxxxxx Senior Funding, Inc., as the "Administrative Agent" (as the same
may be amended, amended and restated, supplemented or otherwise modified from
time to time, the "Credit Agreement"). Capitalized terms used herein shall have
the meanings set forth in the Credit Agreement.
I further certify to the Administrative Agent and the Lenders, as such
officer and not individually, that, pursuant to Section 6.15.3 of the Credit
Agreement, as of the date hereof:
1. No Default or Unmatured Default exists [other than the
following (describe the nature of the Default or Unmatured
Default and the status thereof)].
IN WITNESS WHEREOF, I hereby subscribe my name on behalf of the
Borrower on this ____ day of ___________, 200_.
HEADWATERS INCORPORATED,
as Borrower
By:_________________________
[Insert Name of Officer]
EXHIBIT G
CLOSING DOCUMENTS NOT OTHERWISE LISTED IN SECTION 4.1
Capitalized terms used herein shall have the meaning ascribed to them in the
Second Lien Credit Agreement (the "Credit Agreement") by and among Headwaters
Incorporated, a Delaware corporation (the "Borrower"), the institutions from
time to time parties thereto as Lenders (the "Lenders"), Xxxxxx Xxxxxxx Senior
Funding, Inc., as Administrative Agent, Joint Lead Arranger, and Joint Book
Runner, Xxxxxx Xxxxxxx & Co. Incorporated as Collateral Agent and JPMorgan Chase
Bank as Syndication Agent, Joint Lead Arranger and Joint Lead Bookrunner.
1. Guaranty made by each Guarantor (each such Guarantor and the Borrower,
herein being the "U.S. Credit Parties") in favor of the Agent for the
benefit of the Holders of the Obligations.
2. Second Lien Pledge and Security Agreement executed by each U.S. Credit
Party evidencing its grant of a security interest in substantially all
of its respective personal property in favor of the Agent for the
benefit of the Holders of the Obligations, together with:
(a) To the extent they exist, certificates representing the
pledged Securities referred to therein accompanied by undated
stock powers executed in blank;
(b) The originals of all Instruments referred to therein indorsed
in blank;
(c) UCC, tax and judgment lien search reports naming each U.S.
Credit Party from the appropriate offices in those
jurisdictions. deemed necessary or advisable by the
Administrative Agent, and copies of all effective financing
statements filed in such jurisdictions that list any of the
U.S. Credit Parties as debtors;
(d) UCC Financing Statements naming each U.S. Credit Party as
debtor and the Agent as secured party as filed with the
appropriate offices in those jurisdictions deemed necessary or
advisable by the Administrative Agent in order to perfect and
protect the second priority liens and security interests
created under the Second Lien Pledge and Security Agreement;
(e) Evidence of the terms of the insurance required by the Credit
Agreement; and
(f) Evidence of completion of all other filings of or with respect
to the Second Lien Pledge and Security Agreement that the
Collateral Agent may deem necessary or desirable in order to
perfect and protect the Liens created thereby.
3. Intercreditor Agreement executed by the Borrower, the First Lien
Administrative Agent, the Second Lien Administrative Agent, the First
Lien Collateral Agent and the Second Lien Collateral Agent.
4. Second Lien Intellectual Property Security Agreement made by the U.S.
Credit Parties, in favor of the Agent for the benefit of the Holders of
the Obligations.
5. Good Standing Certificates (or the equivalent thereof) for each U.S.
Credit Party from its respective jurisdiction of organization and those
other jurisdictions where its ownership, lease or operation of
properties or the conduct of its business requires it to be qualified
to do business and in good standing, dated near the closing date
together with bring downs dated the Closing Date.
6. Opinion letters of the Borrower's and the other US Credit Parties'
domestic counsel Pillsbury Winthrop LLP, addressed to the Agent and the
Lenders, relating to, among other things, enforceability, creation and
perfection of security interests (with respect to US Credit Parties
organized under the laws of the States of Delaware, Texas and
California), and non-contravention of applicable laws or of the
indenture in respect of Tapco's 12%:% notes.
7. Opinion letters of local counsel to the U.S.. Credit Parties addressed
to the Agent and the Lenders, relating to, among other things,
perfection of security interests, good standing, incorporation, due
authorization and non-contravention of laws or organizational
documents, etc. with respect to U.S.. Credit Parties organized in
states other than Delaware, Texas and California, as agreed between the
Borrower and the Lenders, except as may be otherwise provided in the
opinion referred to. in paragraph 8 below.
8. Opinion letter of in-house counsel to. the U.S. Credit Parties (other
than Tapco and its Subsidiaries) addressed to the Agent and the
Lenders, relating to, among other things, good standing, incorporation,
due authorization and non-contravention of organizational documents.
EXHIBIT H
DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING ([____________])
by and from
[ ], "Grantor"
to
[_____________], "Trustee"
for the benefit of
XXXXXX XXXXXXX & CO. INCORPORATED, in its capacity as Agent, "Beneficiary"
Dated as of [_______________], 2004
Location: [____________]
Municipality: [____________]
County: [____________]
State: [____________]
THE SECURED PARTY (BENEFICIARY) DESIRES THIS FIXTURE
FILING TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL
ESTATE DESCRIBED HEREIN.
PREPARED BY, RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
Shearman & Sterling LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
File #5822/2942
DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING ([____________])
THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES
AND FIXTURE FILING ([____________]) (this "Deed of Trust") is dated as of
[______], 2004 by and from [_____________], a [___________]
[corporation][limited partnership] ("Grantor"), whose address is
[__________________], to [__________________], a [__________________]
("Trustee"), with an address at [________________________], for the benefit of
XXXXXX XXXXXXX & CO. INCORPORATED, a ________, as collateral agent (in such
capacity, "Agent" or "Collateral Agent") for the Lenders as defined in the
Credit Agreement (defined below), having an address at 0000 Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Agent, together with its successors and
assigns, "Beneficiary").
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. All capitalized terms used herein without
definition shall have the respective meanings ascribed to them in that certain
Credit Agreement dated as of September 8, 2004 as the same may be amended,
amended and restated, supplemented or otherwise modified from time to time (the
"Credit Agreement"), among Headwaters Incorporated ("Borrower"), Agent, Xxxxxx
Xxxxxxx Senior Funding, Inc., ("Administrative Agent"), the Lenders identified
therein and certain other parties named therein. As used herein, the following
terms shall have the following meanings:
(a) "Event of Default": An Event of Default under and as defined in the
Credit Agreement.
(b) "Guaranty": That certain Guaranty Agreement by and from Grantor and
the other guarantors referred to therein for the benefit of the Lender Parties
dated as of even date herewith, as the same may hereafter be amended, amended
and restated, supplemented or otherwise modified from time to time.
(c) "Indebtedness": (1) All indebtedness of Grantor to Beneficiary or
any of the other Lender Parties under the Credit Agreement or any other Loan
Document, including, without limitation (except as otherwise set forth in
Section 2(b) of the Guaranty Agreement), the sum of all (a) principal, interest
and other amounts owing under or evidenced or secured by the Loan Documents, (b)
principal, interest and other amounts which may hereafter be lent by Beneficiary
or any of the other Lender Parties under or in connection with the Credit
Agreement or any of the other Loan Documents, whether evidenced by a promissory
note or other instrument which, by its terms, is secured hereby, and (c)
obligations and liabilities of any nature now or hereafter existing under or
arising in connection with Facility LCs and other extensions of credit under the
Credit Agreement or any of the other Loan Documents and reimbursement
obligations in respect thereof, together with interest and other amounts payable
with respect thereto, and (2) all other indebtedness, obligations and
liabilities now or hereafter existing of any kind of Grantor to Beneficiary or
any of the other Lender Parties under documents which recite that they are
intended to be secured by this Deed of Trust. The Indebtedness secured hereby
includes, without limitation, all interest and expenses accruing after the
commencement by or against Grantor or any of its affiliates of a proceeding
under the Bankruptcy Code (defined below) or any similar law for the relief of
debtors. The Credit Agreement contains a revolving credit facility which permits
Borrower to borrow certain principal amounts, repay all or a portion of such
principal amounts, and reborrow the amounts previously paid to the Lender
Parties, all upon satisfaction of certain conditions stated in the Credit
Agreement. This Deed of Trust secures all advances and re-advances under the
Credit Agreement, including, without limitation, those under the revolving
credit facility contained therein.
(d) "Lender Parties": Any Lender, Administrative Agent and Collateral
Agent.
(e) "Mortgaged Property": The fee interest in the real property
described in Exhibit A attached hereto and incorporated herein by this
reference, together with any greater estate therein as hereafter may be acquired
by Grantor (the "Land"), and all of Grantor's right, title and interest in and
to (1) all improvements now owned or hereafter acquired by Grantor, now or at
any time situated, placed or constructed upon the Land (the "Improvements"; the
Land and Improvements are collectively referred to as the "Premises"), (2) all
materials, supplies, equipment, apparatus and other items of personal property
now owned or hereafter acquired by Grantor and now or hereafter attached to,
installed in or used in connection with any of the Improvements or the Land, and
water, gas, electrical, telephone, storm and sanitary sewer facilities and all
other utilities whether or not situated in easements (the "Fixtures"), (3) all
goods, accounts, inventory, general intangibles, instruments, documents,
contract rights and chattel paper, including all such items as defined in the
UCC (defined below), now owned or hereafter acquired by Grantor and now or
hereafter affixed to, placed upon, used in connection with, arising from or
otherwise related to the Premises (the "Personalty"), (4) all reserves, escrows
or impounds required under the Credit Agreement or any of the other Loan
Documents and all deposit accounts maintained by Grantor with respect to the
Mortgaged Property (the "Deposit Accounts"), (5) all leases, licenses,
concessions, occupancy agreements or other agreements (written or oral, now or
at any time in effect) which grant to any Person a possessory interest in, or
the right to use, all or any part of the Mortgaged Property, together with all
related security and other deposits (the "Leases"), (6) all of the rents,
revenues, royalties, income, proceeds, profits, accounts receivable, security
and other types of deposits, and other benefits paid or payable by parties to
the Leases for using, leasing, licensing possessing, operating from, residing
in, selling or otherwise enjoying the Mortgaged Property (the "Rents"), (7) all
other agreements, such as construction contracts, architects' agreements,
engineers' contracts, utility contracts, maintenance agreements, management
agreements, service contracts, listing agreements, guaranties, warranties,
permits, licenses, certificates and entitlements in any way relating to the
construction, use, occupancy, operation, maintenance, enjoyment or ownership of
the Mortgaged Property (the "Property Agreements"), (8) all rights, privileges,
tenements, hereditaments, rights-of-way, easements, appendages and appurtenances
appertaining to the foregoing, (9) all property tax refunds payable with respect
to the Mortgaged Property (the "Tax Refunds"), (10) all accessions, replacements
and substitutions for any of the foregoing and all proceeds thereof (the
"Proceeds"), (11) all insurance policies, unearned premiums therefor and
proceeds from such policies covering any of the above property now or hereafter
acquired by Grantor (the "Insurance"), and (12) all awards, damages,
remunerations, reimbursements, settlements or compensation heretofore made or
hereafter to be made by any governmental authority pertaining to any
condemnation or other taking (or any purchase in lieu thereof) of all or any
portion of the Land, Improvements, Fixtures or Personalty (the "Condemnation
Awards"). As used in this Deed of Trust, the term "Mortgaged Property" shall
mean all or, where the context permits or requires, any portion of the above or
any interest therein.
(f) "Obligations": All of the agreements, covenants, conditions,
warranties, representations and other obligations of Grantor (including, without
limitation, the obligation to repay the Indebtedness) under the Credit Agreement
and the other Loan Documents to which it is a party.
(g) "Permitted Liens": Liens described in Section 6.15 of the Credit
Agreement other than those Liens described in Sections 6.15.9 and 6.15.17.
(h) "Security Agreement": That certain Security Agreement by and from
Grantor and the other grantors referred to therein to Agent and the other Lender
Parties dated as of even date herewith, as the same may hereafter be amended,
amended and restated, supplemented or otherwise modified from time to time.
(i) "UCC": The Uniform Commercial Code of [________________] or, if the
creation, perfection and enforcement of any security interest herein granted is
governed by the laws of a state other than [___________________], then, as to
the matter in question, the Uniform Commercial Code in effect in that state.
ARTICLE 2
GRANT
Section 2.1 Grant. To secure the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations, Grantor
GRANTS, BARGAINS, ASSIGNS, SELLS, CONVEYS and CONFIRMS, to Trustee the Mortgaged
Property, subject, however, only to the matters that are set forth on Exhibit B
attached hereto (the "Permitted Encumbrances") and to Permitted Liens, TO HAVE
AND TO HOLD the Mortgaged Property, IN TRUST, WITH POWER OF SALE, and Grantor
does hereby bind itself, its successors and assigns to WARRANT AND FOREVER
DEFEND the title to the Mortgaged Property unto Trustee.
ARTICLE 3
WARRANTIES, REPRESENTATIONS AND COVENANTS
Grantor warrants, represents and covenants to Beneficiary as follows:
Section 3.1 Title to Mortgaged Property and Lien of this Instrument.
Grantor owns the Mortgaged Property free and clear of any liens, claims or
interests, except the Permitted Encumbrances and the Permitted Liens. This Deed
of Trust creates valid, enforceable first priority liens and security interests
against the Mortgaged Property.
Section 3.2 First Lien Status. Grantor shall preserve and protect the
first lien and security interest status of this Deed of Trust and the other Loan
Documents. If any lien or security interest other than a Permitted Encumbrance
or a Permitted Lien is asserted against the Mortgaged Property, Grantor shall
promptly, and at its expense, (a) give Beneficiary a detailed written notice of
such lien or security interest (including origin, amount and other terms), and
(b) pay the underlying claim in full or take such other action so as to cause it
to be released or contest the same in compliance with the requirements of the
Credit Agreement (including the requirement of providing a bond or other
security satisfactory to Beneficiary).
Section 3.3 Payment and Performance. Grantor shall pay the Indebtedness
when due under the Credit Agreement and the other Loan Documents and shall
perform the Obligations in full when they are required to be performed.
Section 3.4 Replacement of Fixtures and Personalty. Grantor shall not,
without the prior written consent of Beneficiary, permit any of the Fixtures or
Personalty owned or leased by Grantor to be removed at any time from the Land or
Improvements, unless the removed item is removed temporarily for maintenance and
repair or is permitted to be removed by the Credit Agreement.
Section 3.5 Inspection. Grantor shall permit Beneficiary and the other
Lender Parties and their respective agents, representatives and employees, upon
reasonable prior notice to Grantor, to inspect the Mortgaged Property and all
books and records of Grantor located thereon, and to conduct such environmental
and engineering studies as Beneficiary or the other Lender Parties may require,
provided that such inspections and studies shall not materially interfere with
the use and operation of the Mortgaged Property.
Section 3.6 Other Covenants. All of the covenants in the Credit
Agreement are incorporated herein by reference and, together with covenants in
this Article 3, shall be covenants running with the Land.
Section 3.7 Insurance; Condemnation Awards and Insurance Proceeds.
(a) Insurance. Grantor shall maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to the
Mortgaged Property against loss or damage of the kinds customarily carried or
maintained under similar circumstances by corporations of established reputation
engaged in similar businesses. Each such policy of insurance shall name
Beneficiary as the loss payee (or, in the case of liability insurance, an
additional insured) thereunder for the ratable benefit of the Lender Parties,
shall (except in the case of liability insurance) name Beneficiary as the
"mortgagee" under a so-called "New York" long form non-contributory endorsement
and shall provide for at least 30 days' prior written notice of any material
modification or cancellation of such policy. In addition to the foregoing, if
any portion of the Mortgaged Property is located in an area identified by the
Federal Emergency Management Agency as an area having special flood hazards and
in which flood insurance has been made available under the National Flood
Insurance Act of 1968 (or any amendment or successor act thereto), then Grantor
shall maintain, or cause to be maintained, with a financially sound and
reputable insurer, flood insurance in an amount sufficient to comply with all
applicable rules and regulations promulgated pursuant to such Act.
(b) Condemnation Awards. Grantor assigns all Condemnation Awards to
Beneficiary and authorizes Beneficiary to collect and receive such Condemnation
Awards and to give proper receipts and acquittances therefor, subject to the
terms of the Credit Agreement (including, without limitation, Section 2.2(b)
thereof).
(c) Insurance Proceeds. Grantor assigns to Beneficiary all proceeds of
any insurance policies insuring against loss or damage to the Mortgaged
Property. Subject to the terms of the Credit Agreement (including, without
limitation, Section 2.2(b) thereof), Grantor authorizes Beneficiary to collect
and receive such proceeds and authorizes and directs the issuer of each of such
insurance policies to make payment for all such losses directly to Beneficiary,
instead of to Grantor and Beneficiary jointly.
ARTICLE 4
[Intentionally Omitted]
ARTICLE 5
DEFAULT AND FORECLOSURE
Section 5.1 Remedies. Upon the occurrence and during the continuance of
an Event of Default, Beneficiary may, at Beneficiary's election and by or
through Trustee or otherwise, exercise any or all of the following rights,
remedies and recourses:
(a) Acceleration. Subject to any provisions of the Loan Documents
providing for the automatic acceleration of the Indebtedness upon the occurrence
of certain Events of Default, declare the Indebtedness to be immediately due and
payable, without further notice, presentment, protest, notice of intent to
accelerate, notice of acceleration, demand or action of any nature whatsoever
(each of which hereby is expressly waived by Grantor), whereupon the same shall
become immediately due and payable.
(b) Entry on Mortgaged Property. Enter the Mortgaged Property and take
exclusive possession thereof and of all books, records and accounts relating
thereto or located thereon. If Grantor remains in possession of the Mortgaged
Property following the occurrence and during the continuance of an Event of
Default and without Beneficiary's prior written consent, Beneficiary may invoke
any legal remedies to dispossess Grantor.
(c) Operation of Mortgaged Property. Hold, lease, develop, manage,
operate or otherwise use the Mortgaged Property upon such terms and conditions
as Beneficiary may deem reasonable under the circumstances (making such repairs,
alterations, additions and improvements and taking other actions, from time to
time, as Beneficiary deems necessary or desirable), and apply all Rents and
other amounts collected by Trustee or Beneficiary in connection therewith in
accordance with the provisions of Section 5.7.
(d) Foreclosure and Sale. Institute proceedings for the complete
foreclosure of this Deed of Trust by judicial action or by power of sale, in
which case the Mortgaged Property may be sold for cash or credit in one or more
parcels as Beneficiary may determine. With respect to any notices required or
permitted under the UCC, Grantor agrees that ten (10) days' prior written notice
shall be deemed commercially reasonable. At any such sale by virtue of any
judicial proceedings, power of sale, or any other legal right, remedy or
recourse, the title to and right of possession of any such property shall pass
to the purchaser thereof, and to the fullest extent permitted by law, Grantor
shall be completely and irrevocably divested of all of its right, title,
interest, claim, equity, equity of redemption, and demand whatsoever, either at
law or in equity, in and to the property sold and such sale shall be a perpetual
bar both at law and in equity against Grantor, and against all other Persons
claiming or to claim the property sold or any part thereof, by, through or under
Grantor. Beneficiary or any of the other Lender Parties may be a purchaser at
such sale. If Beneficiary or such other Lender Party is the highest bidder,
Beneficiary or such other Lender Party may credit the portion of the purchase
price that would be distributed to Beneficiary or such other Lender Party
against the Indebtedness in lieu of paying cash. In the event this Deed of Trust
is foreclosed by judicial action, appraisement of the Mortgaged Property is
waived.
(e) Receiver. Make application to a court of competent jurisdiction
for, and obtain from such court as a matter of strict right and without notice
to Grantor or regard to the adequacy of the Mortgaged Property for the repayment
of the Indebtedness, the appointment of a receiver of the Mortgaged Property,
and Grantor irrevocably consents to such appointment. Any such receiver shall
have all the usual powers and duties of receivers in similar cases, including
the full power to rent, maintain and otherwise operate the Mortgaged Property
upon such terms as may be approved by the court, and shall apply such Rents in
accordance with the provisions of Section 5.7.
(f) Other. Exercise all other rights, remedies and recourses granted
under the Loan Documents or otherwise available at law or in equity.
Section 5.2 Separate Sales. The Mortgaged Property may be sold in one
or more parcels and in such manner and order as Trustee in its sole discretion
may elect. The right of sale arising out of any Event of Default shall not be
exhausted by any one or more sales.
Section 5.3 Remedies Cumulative, Concurrent and Nonexclusive. Trustee,
Beneficiary and the other Lender Parties shall have all rights, remedies and
recourses granted in the Loan Documents and available at law or equity
(including the UCC), which rights (a) shall be cumulative and concurrent, (b)
may be pursued separately, successively or concurrently against Grantor or
others obligated under the Loan Documents, or against the Mortgaged Property, or
against any one or more of them, at the sole discretion of Trustee, Beneficiary
or such other Lender Party, as the case may be, (c) may be exercised as often as
occasion therefor shall arise, and the exercise or failure to exercise any of
them shall not be construed as a waiver or release thereof or of any other
right, remedy or recourse, and (d) are intended to be, and shall be,
nonexclusive. No action by Trustee, Beneficiary or any other Lender Party in the
enforcement of any rights, remedies or recourses under the Loan Documents or
otherwise at law or equity shall be deemed to cure any Event of Default.
Section 5.4 Release of and Resort to Collateral. Beneficiary may
release, regardless of consideration and without the necessity for any notice to
or consent by the holder of any subordinate lien on the Mortgaged Property, any
part of the Mortgaged Property without, as to the remainder, in any way
impairing, affecting, subordinating or releasing the lien or security interest
created in or evidenced by the Loan Documents or their status as a first and
prior lien and security interest in and to the Mortgaged Property. For payment
of the Indebtedness, Beneficiary may resort to any other security in such order
and manner as Beneficiary may elect.
Section 5.5 Waiver of Redemption, Notice and Marshalling of Assets. To
the fullest extent permitted by law, Grantor hereby irrevocably and
unconditionally waives and releases (a) all benefit that might accrue to Grantor
by virtue of any present or future statute of limitations or law or judicial
decision exempting the Mortgaged Property from attachment, levy or sale on
execution or providing for any stay of execution, exemption from civil process,
redemption or extension of time for payment, (b) all notices of any Event of
Default or of any election by Trustee or Beneficiary to exercise or the actual
exercise of any right, remedy or recourse provided for under the Loan Documents,
and (c) any right to a marshalling of assets or a sale in inverse order of
alienation.
Section 5.6 Discontinuance of Proceedings. If Trustee, Beneficiary or
any other Lender Party shall have proceeded to invoke any right, remedy or
recourse permitted under the Loan Documents and shall thereafter elect to
discontinue or abandon it for any reason, Trustee, Beneficiary or such other
Lender Party, as the case may be, shall have the unqualified right to do so and,
in such an event, Grantor, Trustee, Beneficiary and the other Lender Parties
shall be restored to their former positions with respect to the Indebtedness,
the Obligations, the Loan Documents, the Mortgaged Property and otherwise, and
the rights, remedies, recourses and powers of Trustee, Beneficiary and the other
Lender Parties shall continue as if the right, remedy or recourse had never been
invoked, but no such discontinuance or abandonment shall waive any Event of
Default which may then exist or the right of Trustee, Beneficiary or any other
Lender Party thereafter to exercise any right, remedy or recourse under the Loan
Documents for such Event of Default.
Section 5.7 Application of Proceeds. The proceeds of any sale
of, and the Rents and other amounts generated by the holding, leasing,
management, operation or other use of the Mortgaged Property, shall be applied
by Beneficiary or Trustee (or the receiver, if one is appointed) in the
following order unless otherwise required by applicable law:
(a) to the payment of the costs and expenses of taking possession of
the Mortgaged Property and of holding, using, leasing, repairing, improving and
selling the same, including, without limitation (1) trustee's and receiver's
fees and expenses, including the repayment of the amounts evidenced by any
receiver's certificates, (2) court costs, (3) attorneys' and accountants' fees
and expenses, and (4) costs of advertisement;
(b) to the payment of the Indebtedness and performance of the
Obligations in such manner and order of preference as Beneficiary in its sole
discretion may determine; and
(c) the balance, if any, to the Persons legally entitled thereto.
Section 5.8 Occupancy After Foreclosure. Any sale of the Mortgaged
Property or any part thereof in accordance with Section 5.1(d) will divest all
right, title and interest of Grantor in and to the property sold. Subject to
applicable law, any purchaser at a foreclosure sale will receive immediate
possession of the property purchased. If Grantor retains possession of such
property or any part thereof subsequent to such sale, Grantor will be considered
a tenant at sufferance of the purchaser, and will, if Grantor remains in
possession after demand to remove, be subject to eviction and removal, forcible
or otherwise, with or without process of law.
Section 5.9 Additional Advances and Disbursements; Costs of
Enforcement.
(a) Upon the occurrence and during the continuance of any Event of
Default, Beneficiary and each of the other Lender Parties shall have the right,
but not the obligation, to cure such Event of Default in the name and on behalf
of Grantor. All sums advanced and expenses incurred at any time by Beneficiary
or any other Lender Party under this Section 5.9, or otherwise under this Deed
of Trust or any of the other Loan Documents or applicable law, shall bear
interest from the date that such sum is advanced or expense incurred, to and
including the date of reimbursement, computed at the highest rate at which
interest is then computed on any portion of the Indebtedness, and all such sums,
together with interest thereon, shall be secured by this Deed of Trust.
(b) Grantor shall pay all expenses (including reasonable attorneys'
fees and expenses) of or incidental to the perfection and enforcement of this
Deed of Trust and the other Loan Documents, or the enforcement, compromise or
settlement of the Indebtedness or any claim under this Deed of Trust and the
other Loan Documents, and for the curing thereof, or for defending or asserting
the rights and claims of Beneficiary in respect thereof, by litigation or
otherwise.
Section 5.10 No Mortgagee in Possession. Neither the enforcement of any
of the remedies under this Article 5, the assignment of the Rents and Leases
under Article 6, the security interests under Article 7, nor any other remedies
afforded to Beneficiary under the Loan Documents, at law or in equity shall
cause Trustee, Beneficiary or any other Lender Party to be deemed or construed
to be a mortgagee in possession of the Mortgaged Property, to obligate Trustee,
Beneficiary or any other Lender Party to lease the Mortgaged Property or attempt
to do so, or to take any action, incur any expense, or perform or discharge any
obligation, duty or liability whatsoever under any of the Leases or otherwise.
ARTICLE 6
ASSIGNMENT OF RENTS AND LEASES
Section 6.1 Assignment. In furtherance of and in addition to the
assignment made by Grantor in Section 2.1 of this Deed of Trust, Grantor hereby
absolutely and unconditionally assigns, sells, transfers and conveys to Trustee
(for the benefit of Beneficiary) and to Beneficiary all of its right, title and
interest in and to all Leases, whether now existing or hereafter entered into,
and all of its right, title and interest in and to all Rents. This assignment is
an absolute assignment and not an assignment for additional security only. So
long as no Event of Default shall have occurred and be continuing, Grantor shall
have a revocable license from Trustee and Beneficiary to exercise all rights
extended to the landlord under the Leases, including the right to receive and
collect all Rents and to hold the Rents in trust for use in the payment and
performance of the Obligations and to otherwise use the same. The foregoing
license is granted subject to the conditional limitation that no Event of
Default shall have occurred and be continuing. Upon the occurrence and during
the continuance of an Event of Default, whether or not legal proceedings have
commenced, and without regard to waste, adequacy of security for the Obligations
or solvency of Grantor, the license herein granted shall automatically expire
and terminate, without notice to Grantor by Trustee or Beneficiary (any such
notice being hereby expressly waived by Grantor to the extent permitted by
applicable law).
Section 6.2 Perfection Upon Recordation. Grantor acknowledges that
Beneficiary and Trustee have taken all actions necessary to obtain, and that
upon recordation of this Deed of Trust Beneficiary and Trustee shall have, to
the extent permitted under applicable law, a valid and fully perfected, first
priority, present assignment of the Rents arising out of the Leases and all
security for such Leases. Grantor acknowledges and agrees that upon recordation
of this Deed of Trust Trustee's and Beneficiary's interest in the Rents shall be
deemed to be fully perfected, "xxxxxx" and enforced as to Grantor and to the
extent permitted under applicable law, all third parties, including, without
limitation, any subsequently appointed trustee in any case under Title 11 of the
United States Code (the "Bankruptcy Code"), without the necessity of commencing
a foreclosure action with respect to this Deed of Trust, making formal demand
for the Rents, obtaining the appointment of a receiver or taking any other
affirmative action.
Section 6.3 Bankruptcy Provisions. Without limitation of the absolute
nature of the assignment of the Rents hereunder, Grantor, Trustee and
Beneficiary agree that (a) this Deed of Trust shall constitute a "security
agreement" for purposes of Section 552(b) of the Bankruptcy Code, (b) the
security interest created by this Deed of Trust extends to property of Grantor
acquired before the commencement of a case in bankruptcy and to all amounts paid
as Rents and (c) such security interest shall extend to all Rents acquired by
the estate after the commencement of any case in bankruptcy.
Section 6.4 No Merger of Estates. So long as part of the Indebtedness
and the Obligations secured hereby remain unpaid and undischarged, the fee and
leasehold estates to the Mortgaged Property shall not merge, but shall remain
separate and distinct, notwithstanding the union of such estates either in
Grantor, Beneficiary, any tenant or any third party by purchase or otherwise.
ARTICLE 7
SECURITY AGREEMENT
Section 7.1 Security Interest. This Deed of Trust constitutes a
"security agreement" on personal property within the meaning of the UCC and
other applicable law and with respect to the Personalty, Fixtures, Leases,
Rents, Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance
and Condemnation Awards. To this end, Grantor grants to Beneficiary a first and
prior security interest in the Personalty, Fixtures, Leases, Rents, Deposit
Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance, Condemnation
Awards and all other Mortgaged Property which is personal property to secure the
payment of the Indebtedness and performance of the Obligations, and agrees that
Beneficiary shall have all the rights and remedies of a secured party under the
UCC with respect to such property. Any notice of sale, disposition or other
intended action by Beneficiary with respect to the Personalty, Fixtures, Leases,
Rents, Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance
and Condemnation Awards sent to Grantor at least ten (10) days prior to any
action under the UCC shall constitute reasonable notice to Grantor. In the event
of any inconsistency between the terms of this Deed of Trust and the terms of
the Security Agreement with respect to the collateral covered both therein and
herein, the Security Agreement shall control and govern to the extent of any
such inconsistency.
Section 7.2 Financing Statements. Grantor shall prepare and deliver to
Beneficiary such financing statements, and shall execute and deliver to
Beneficiary such other documents, instruments and further assurances, in each
case in form and substance satisfactory to Beneficiary, as Beneficiary may, from
time to time, reasonably consider necessary to create, perfect and preserve
Beneficiary's security interest hereunder. Grantor hereby irrevocably authorizes
Beneficiary to cause financing statements (and amendments thereto and
continuations thereof) and any such documents, instruments and assurances to be
recorded and filed, at such times and places as may be required or permitted by
law to so create, perfect and preserve such security interest. Grantor
represents and warrants to Beneficiary that Grantor's jurisdiction of
organization is the State of [________________]. After the date of this Deed of
Trust, Grantor shall not change its name, type of organization, organizational
identification number (if any), jurisdiction of organization or location (within
the meaning of the UCC) without giving at least thirty (30) days' prior written
notice to Beneficiary.
Section 7.3 Fixture Filing. This Deed of Trust shall also constitute a
"fixture filing" for the purposes of the UCC against all of the Mortgaged
Property which is or is to become fixtures. The information provided in this
Section 7.3 is provided so that this Deed of Trust shall comply with the
requirements of the UCC for a mortgage instrument to be filed as a financing
statement. Grantor is the "Debtor" and its name and mailing address are set
forth in the preamble of this Deed of Trust immediately preceding Article 1.
Beneficiary is the "Secured Party" and its name and mailing address from which
information concerning the security interest granted herein may be obtained are
also set forth in the preamble of this Deed of Trust immediately preceding
Article 1. A statement describing the portion of the Mortgaged Property
comprising the fixtures hereby secured is set forth in Section 1.1(c) of this
Deed of Trust. Grantor represents and warrants to Beneficiary that Grantor is
the record owner of the Mortgaged Property, the employer identification number
of Grantor is [_____________] and the organizational identification number of
Grantor is [____________].
ARTICLE 8
CONCERNING THE TRUSTEE
Section 8.1 Certain Rights. With the approval of Beneficiary, Trustee
shall have the right to select, employ and consult with counsel. Trustee shall
have the right to rely on any instrument, document or signature authorizing or
supporting any action taken or proposed to be taken by it hereunder, believed by
it in good faith to be genuine. Trustee shall be entitled to reimbursement for
actual, reasonable expenses incurred by it in the performance of its duties and
to reasonable compensation for Trustee's services hereunder as shall be
rendered. Grantor shall, from time to time, pay the compensation due to Trustee
hereunder and reimburse Trustee for, and indemnify, defend and save Trustee
harmless against, all liability and reasonable expenses which may be incurred by
it in the performance of its duties, including those arising from joint,
concurrent, or comparative negligence of Trustee; provided, however, that
Grantor shall not be liable under such indemnification to the extent such
liability or expenses result solely from Trustee's gross negligence or willful
misconduct. Grantor's obligations under this Section 8.1 shall not be reduced or
impaired by principles of comparative or contributory negligence.
Section 8.2 Retention of Money. All moneys received by Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated in any manner from any
other moneys (except to the extent required by law), and Trustee shall be under
no liability for interest on any moneys received by Trustee hereunder.
Section 8.3 Successor Trustees. If Trustee or any successor Trustee
shall die, resign or become disqualified from acting in the execution of this
trust, or Beneficiary shall desire to appoint a substitute Trustee, Beneficiary
shall have full power to appoint one or more substitute Trustees and, if
preferred, several substitute Trustees in succession who shall succeed to all
the estates, rights, powers and duties of Trustee. Such appointment may be
executed by any authorized agent of Beneficiary and as so executed, such
appointment shall be conclusively presumed to be executed with authority, valid
and sufficient, without further proof of any action.
Section 8.4 Perfection of Appointment. Should any deed, conveyance or
instrument of any nature be required from Grantor by any successor Trustee to
more fully and certainly vest in and confirm to such successor Trustee such
estates, rights, powers and duties, then, upon request by such Trustee, all such
deeds, conveyances and instruments shall be made, executed, acknowledged and
delivered and shall be caused to be recorded and/or filed by Grantor.
Section 8.5 Trustee Liability. In no event or circumstance shall
Trustee or any substitute Trustee hereunder be personally liable under or as a
result of this Deed of Trust, either as a result of any action by Trustee (or
any substitute Trustee) in the exercise of the powers hereby granted or
otherwise.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Notices. Any notice required or permitted to be given under
this Deed of Trust shall be given in accordance with Section 13.1 of the Credit
Agreement.
Section 9.2 Covenants Running with the Land. All Obligations contained
in this Deed of Trust are intended by Grantor, Beneficiary and Trustee to be,
and shall be construed as, covenants running with the Land. As used herein,
"Grantor" shall refer to the party named in the first paragraph of this Deed of
Trust and to any subsequent owner of all or any portion of the Mortgaged
Property. All Persons who may have or acquire an interest in the Mortgaged
Property shall be deemed to have notice of, and be bound by, the terms of the
Credit Agreement and the other Loan Documents; provided, however, that no such
party shall be entitled to any rights thereunder without the prior written
consent of Beneficiary.
Section 9.3 Attorney-in-Fact. Grantor hereby irrevocably appoints
Beneficiary as its attorney-in-fact, which agency is coupled with an interest
and with full power of substitution, with full authority in the place and stead
of Grantor and in the name of Grantor or otherwise (a) to execute and/or record
any notices of completion, cessation of labor or any other notices that
Beneficiary deems appropriate to protect Beneficiary's interest, if Grantor
shall fail to do so within ten (10) days after written request by Beneficiary,
(b) upon the issuance of a deed pursuant to the foreclosure of this Deed of
Trust or the delivery of a deed in lieu of foreclosure, to execute all
instruments of assignment, conveyance or further assurance with respect to the
Leases, Rents, Deposit Accounts, Property Agreements, Tax Refunds, Proceeds,
Insurance and Condemnation Awards in favor of the grantee of any such deed and
as may be necessary or desirable for such purpose, (c) to prepare and file or
record financing statements and continuation statements, and to prepare, execute
and file or record applications for registration and like papers necessary to
create, perfect or preserve Beneficiary's security interests and rights in or to
any of the Mortgaged Property, and (d) after the occurrence and during the
continuance of any Event of Default, to perform any obligation of Grantor
hereunder; provided, however, that (1) Beneficiary shall not under any
circumstances be obligated to perform any obligation of Grantor; (2) any sums
advanced by Beneficiary in such performance shall be added to and included in
the Indebtedness and shall bear interest at the highest rate at which interest
is then computed on any portion of the Indebtedness; (3) Beneficiary as such
attorney-in-fact shall only be accountable for such funds as are actually
received by Beneficiary; and (4) Beneficiary shall not be liable to Grantor or
any other person or entity for any failure to take any action which it is
empowered to take under this Section 9.3.
Section 9.4 Successors and Assigns. This Deed of Trust shall be binding
upon and inure to the benefit of Beneficiary, the Lender Parties, Trustee and
Grantor and their respective successors and assigns. Grantor shall not, without
the prior written consent of Beneficiary, assign any rights, duties or
obligations hereunder.
Section 9.5 No Waiver. Any failure by Beneficiary, the other Lender
Parties or Trustee to insist upon strict performance of any of the terms,
provisions or conditions of the Loan Documents shall not be deemed to be a
waiver of same, and Beneficiary, the other Lender Parties and Trustee shall have
the right at any time to insist upon strict performance of all of such terms,
provisions and conditions.
Section 9.6 Credit Agreement. If any conflict or inconsistency exists
between this Deed of Trust and the Credit Agreement, the Credit Agreement
shall govern.
Section 9.7 Release or Reconveyance. Upon payment in full of the
Indebtedness and performance in full of the Obligations or upon a sale or other
disposition of the Mortgaged Property permitted by the Credit Agreement,
Beneficiary, at Grantor's request and expense, shall release the liens and
security interests created by this Deed of Trust or reconvey the Mortgaged
Property to Grantor.
Section 9.8 Waiver of Stay, Moratorium and Similar Rights. Grantor
agrees, to the full extent that it may lawfully do so, that it will not at any
time insist upon or plead or in any way take advantage of any stay, marshalling
of assets, extension, redemption or moratorium law now or hereafter in force and
effect so as to prevent or hinder the enforcement of the provisions of this Deed
of Trust or the Indebtedness or Obligations secured hereby, or any agreement
between Grantor and Beneficiary or any rights or remedies of Trustee,
Beneficiary or any other Lender Party.
Section 9.9 Applicable Law. The provisions of this Deed of Trust
regarding the creation, perfection and enforcement of the liens and security
interests herein granted shall be governed by and construed under the laws of
the state in which the Mortgaged Property is located. All other provisions of
this Deed of Trust shall be governed by the laws of the State of New York
(including, without limitation, Section 5-1401 of the General Obligations Law of
the State of New York).
Section 9.10 Headings. The Article, Section and Subsection titles
hereof are inserted for convenience of reference only and shall in no way alter,
modify or define, or be used in construing, the text of such Articles, Sections
or Subsections.
Section 9.11 Severability. If any provision of this Deed of Trust shall
be held by any court of competent jurisdiction to be unlawful, void or
unenforceable for any reason, such provision shall be deemed severable from and
shall in no way affect the enforceability and validity of the remaining
provisions of this Deed of Trust.
Section 9.12 Entire Agreement. This Deed of Trust and the other Loan
Documents embody the entire agreement and understanding between Grantor and
Beneficiary relating to the subject matter hereof and thereof and supersede all
prior agreements and understandings between such parties relating to the subject
matter hereof and thereof. Accordingly, the Loan Documents may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties. There are no unwritten oral agreements between the parties.
Section 9.13 Beneficiary as Agent; Successor Agents.
(a) Agent has been appointed to act as Agent hereunder by the other
Lender Parties. Agent shall have the right hereunder to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action (including, without limitation, the release or
substitution of the Mortgaged Property) in accordance with the terms of the
Credit Agreement, any related agency agreement among Agent and the other Lender
Parties (collectively, as amended, amended and restated, supplemented or
otherwise modified or replaced from time to time, the "Agency Documents") and
this Deed of Trust. Grantor and all other Persons shall be entitled to rely on
releases, waivers, consents, approvals, notifications and other acts of Agent,
without inquiry into the existence of required consents or approvals of the
Lender Parties therefor.
(b) Beneficiary shall at all times be the same Person that is Agent
under the Agency Documents. Written notice of resignation by Agent pursuant to
the Agency Documents shall also constitute notice of resignation as Agent under
this Deed of Trust. Removal of Agent pursuant to any provision of the Agency
Documents shall also constitute removal as Agent under this Deed of Trust.
Appointment of a successor Agent pursuant to the Agency Documents shall also
constitute appointment of a successor Agent under this Deed of Trust. Upon the
acceptance of any appointment as Agent by a successor Agent under the Agency
Documents, that successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring or removed
Agent as the Beneficiary under this Deed of Trust, and the retiring or removed
Agent shall promptly (i) assign and transfer to such successor Agent all of its
right, title and interest in and to this Deed of Trust and the Mortgaged
Property, and (ii) execute and deliver to such successor Agent such assignments
and amendments and take such other actions, as may be necessary or appropriate
in connection with the assignment to such successor Agent of the liens and
security interests created hereunder, whereupon such retiring or removed Agent
shall be discharged from its duties and obligations under this Deed of Trust.
After any retiring or removed Agent's resignation or removal hereunder as Agent,
the provisions of this Deed of Trust and the Agency Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it under this Deed of
Trust while it was Agent hereunder.
ARTICLE 10
LOCAL LAW PROVISIONS
[To Come]
[The remainder of this page has been intentionally left blank]
IN WITNESS WHEREOF, Grantor has on the date set forth in the
acknowledgement hereto, effective as of the date first above written, caused
this instrument to be duly EXECUTED AND DELIVERED by authority duly given.
GRANTOR: [ ]
a __________ [corporation/limited partnership]
By: __________________________________________
Name:
Title:
[Insert form of notary acknowledgement for applicable state]
State of ______________ )
) ss.
County of _____________ )
On [___], 2004, before me, personally appeared ____________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
[SEAL]
______________________
My Commission expires: Notary Public
______________________________
EXHIBIT A
LEGAL DESCRIPTION
Legal Description of premises located at [_______________________________]:
[See Attached Page(s) For Legal Description]
EXHIBIT B
PERMITTED ENCUMBRANCES
Those exceptions set forth in Schedule B of that certain policy of
title insurance issued to Beneficiary by [___________] on or about the date
hereof pursuant to commitment number [________].
