EXHIBIT 4.4
EXECUTION VERSION
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REVOLVING CREDIT AGREEMENT,
dated as of December 19, 2002,
among
STERLING CHEMICALS, INC.
AND
EACH OF ITS SUBSIDIARIES
PARTIES HERETO FROM TIME TO TIME,
as the Borrowers,
VARIOUS FINANCIAL INSTITUTIONS PARTIES HERETO FROM TIME TO TIME,
as the Lenders,
and
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender and as the Administrative Agent
TABLE OF CONTENTS
Section Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS................................................................. 1
SECTION 1.1. Defined Terms..................................................................... 1
SECTION 1.2. Use of Defined Terms.............................................................. 36
SECTION 1.3. Cross-References.................................................................. 36
SECTION 1.4. Accounting and Financial Determinations........................................... 36
ARTICLE II TERMS OF COMMITMENTS AND LOANS.................................................................. 36
SECTION 2.1. Commitments....................................................................... 36
2.1.1. Loan Commitments.................................................................. 36
2.1.2. Letter of Credit Commitment....................................................... 37
2.1.3. Lenders Not Permitted or Required to Make Loans................................... 37
SECTION 2.2. Reduction of the Commitment Amounts............................................... 37
2.2.1. Optional.......................................................................... 37
2.2.2. Mandatory......................................................................... 38
2.2.3. Termination of Agreement.......................................................... 38
SECTION 2.3. Borrowing Procedures and Funding Maintenance...................................... 39
2.3.1. Borrowing Revolving Credit Loans.................................................. 39
2.3.2. Borrowing Swing Line Loans........................................................ 40
2.3.3. Joint and Several Liability; Rights of Contribution............................... 42
SECTION 2.4. Continuation and Conversion Elections............................................. 44
SECTION 2.5. Funding........................................................................... 44
SECTION 2.6. Letter of Credit Issuance Procedures.............................................. 44
2.6.1. Other Lenders' Participation...................................................... 45
2.6.2. Disbursements: Conversion to Loans................................................ 46
2.6.3. Reimbursement..................................................................... 47
2.6.4. Deemed Disbursements.............................................................. 47
2.6.5. Additional Letter of Credit Provisions............................................ 47
SECTION 2.7. Register; Notes; Obligation Account; Reserves..................................... 49
ARTICLE III PAYMENTS; PREPAYMENTS; INTEREST AND FEES....................................................... 51
SECTION 3.1. Payments; Application; Lockbox Accounts; Power of Attorney;
Charges to Obligation Account; No Discharge....................................... 51
3.1.1. Repayments and Prepayments........................................................ 52
3.1.2. Application....................................................................... 53
3.1.3. Matters Relating to Lockbox Accounts.............................................. 54
3.1.4. Power of Attorney................................................................. 56
3.1.5. Charges to Obligation Account..................................................... 56
SECTION 3.2. Interest Provisions............................................................... 57
3.2.1. Rates............................................................................. 57
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3.2.2. Post-Maturity Rates............................................................... 57
3.2.3. Payment Dates..................................................................... 58
SECTION 3.3. Fees.............................................................................. 58
3.3.1. Commitment Fees................................................................... 58
3.3.2. The Administrative Agent's Fees................................................... 59
3.3.3. Letter of Credit Fees............................................................. 59
3.3.4. Early Termination Fee............................................................. 59
3.3.5. LIBO Rate Loan Fee................................................................ 59
ARTICLE IV CERTAIN LIBO RATE AND GUARANTY PROVISIONS....................................................... 59
SECTION 4.1. LIBO Rate Lending Unlawful........................................................ 59
SECTION 4.2. Deposits Unavailable.............................................................. 60
SECTION 4.3. Increased LIBO Rate Loan Costs, etc............................................... 60
SECTION 4.4. Funding Losses.................................................................... 60
SECTION 4.5. Increased Capital Costs........................................................... 61
SECTION 4.6. Taxes............................................................................. 61
SECTION 4.7. Payments; Computations, etc....................................................... 65
SECTION 4.8. Sharing of Payments............................................................... 65
SECTION 4.9. Setoff............................................................................ 66
SECTION 4.10. Guaranty Provisions............................................................... 66
4.10.1. Guaranty.......................................................................... 66
4.10.2. Guaranty Absolute, etc............................................................ 67
4.10.3. Reinstatement, etc................................................................ 67
4.10.4. Waiver, etc....................................................................... 67
4.10.5. Postponement of Subrogation. etc.................................................. 68
ARTICLE V CONDITIONS TO CREDIT EXTENSIONS.................................................................. 68
SECTION 5.1. Initial Credit Extension.......................................................... 68
5.1.1. Resolutions, etc.................................................................. 68
5.1.2. Confirmation Order................................................................ 69
5.1.3. Payment and Termination of Existing Credit Agreement.............................. 69
5.1.4. Projections....................................................................... 69
5.1.5. Intercreditor Agreement........................................................... 69
5.1.6. Closing Date Certificate.......................................................... 69
5.1.7. Delivery of Notes................................................................. 69
5.1.8. Minimum Opening Liquidity Amount.................................................. 70
5.1.9. Closing; Fees; Expenses, etc...................................................... 70
5.1.10. Financial Information, etc........................................................ 70
5.1.11. Borrowing Base Certificate........................................................ 70
5.1.12. Opinions of Counsel............................................................... 70
5.1.13. Merger............................................................................ 70
5.1.14. U.C.C. and Other Searches......................................................... 71
5.1.15. Pledge Agreements................................................................. 71
5.1.16. Security Agreements, etc.......................................................... 71
5.1.17. Insurance......................................................................... 71
5.1.18. Lien Terminations and Releases.................................................... 71
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5.1.19. Lockbox Accounts.................................................................. 71
5.1.20. Perfection Certificate............................................................ 71
5.1.21. Plan of Reorganization Effective.................................................. 71
5.1.22. Management Team................................................................... 72
5.1.23. Senior Secured Note Documents..................................................... 72
5.1.24. Updated Field Examination......................................................... 72
5.1.25. No Material Adverse Change........................................................ 72
5.1.26. Required Consents and Approvals................................................... 72
5.1.27. Satisfactory Legal Form........................................................... 72
SECTION 5.2. All Credit Extensions............................................................. 72
5.2.1. Compliance With Warranties; No Default, etc....................................... 72
5.2.2. Credit Extension Request, etc..................................................... 73
5.2.3. Borrowing Base Certificate........................................................ 73
5.2.4. Payment of Fees................................................................... 73
5.2.5. Post-Closing U.C.C................................................................ 73
5.2.6. Satisfactory Legal Form........................................................... 74
ARTICLE VI REPRESENTATIONS AND WARRANTIES.................................................................. 74
SECTION 6.1. Organization, etc................................................................. 74
SECTION 6.2. Due Authorization. Non-Contravention, etc......................................... 74
SECTION 6.3. Government Approval; Regulation, etc.............................................. 74
SECTION 6.4. Validity, etc..................................................................... 75
SECTION 6.5. Financial Information............................................................. 75
SECTION 6.6. No Material Adverse Change........................................................ 75
SECTION 6.7. Litigation; Labor Controversies, etc.............................................. 75
SECTION 6.8. Subsidiaries...................................................................... 75
SECTION 6.9. Ownership of Properties........................................................... 76
SECTION 6.10. Taxes............................................................................. 76
SECTION 6.11. Pension and Welfare Plans......................................................... 76
SECTION 6.12. Environmental Warranties.......................................................... 76
SECTION 6.13. Accuracy of Information........................................................... 77
SECTION 6.14. Regulations U and X............................................................... 78
SECTION 6.15. Senior Secured Notes.............................................................. 78
SECTION 6.16. Solvency.......................................................................... 78
SECTION 6.17. Intellectual Property Collateral.................................................. 78
SECTION 6.18. Ownership of Stock................................................................ 79
SECTION 6.19. Material Contracts................................................................ 79
ARTICLE VII COVENANTS...................................................................................... 79
SECTION 7.1. Affirmative Covenants............................................................. 79
7.1.1. Financial Information; Reports; Notices, etc...................................... 79
7.1.2. Maintenance of Existence; Compliance With Laws, etc............................... 82
7.1.3. Maintenance of Properties......................................................... 83
7.1.4. Insurance......................................................................... 83
7.1.5. Books and Records................................................................. 83
7.1.6. Intentionally Deleted............................................................. 84
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7.1.7. Use of Proceeds................................................................... 84
7.1.8. Borrowers; Security; etc.......................................................... 84
7.1.9. Lockbox Accounts.................................................................. 84
7.1.10. Environmental Covenant............................................................ 84
7.1.11. As to Intellectual Property Collateral............................................ 85
7.1.12. ANEXCO Receivables................................................................ 86
SECTION 7.2. Negative Covenants................................................................ 86
7.2.1. Business Activities............................................................... 87
7.2.2. Indebtedness...................................................................... 87
7.2.3. Liens............................................................................. 88
7.2.4. Investments....................................................................... 90
7.2.5. Restricted Payments. etc.......................................................... 91
7.2.6. Excess Availability and Monthly Minimum EBITDA.................................... 91
7.2.7. No Prepayment of Senior Secured Notes............................................. 92
7.2.8. New Subsidiaries; Capital Securities.............................................. 93
7.2.9. Consolidation, Merger, etc........................................................ 93
7.2.10. Permitted Dispositions............................................................ 93
7.2.11. Modification of Certain Agreements................................................ 94
7.2.12. Transactions With Affiliates...................................................... 94
7.2.13. Restrictive Agreements, etc....................................................... 94
7.2.14. Sale and Leaseback................................................................ 94
7.2.15. Disposition of the Texas City Facility............................................ 95
7.2.16. Capital Expenditures.............................................................. 95
7.2.17. Sale or Discount of Receivables................................................... 95
7.2.18. Unconditional Purchase Obligations................................................ 95
7.2.19. Lockbox Accounts.................................................................. 96
7.2.20. Excluded Subsidiaries............................................................. 96
ARTICLE VIII EVENTS OF DEFAULT............................................................................. 96
SECTION 8.1. Listing of Events of Default...................................................... 96
8.1.1. Non-Payment of Obligations........................................................ 96
8.1.2. Breach of Warranty................................................................ 97
8.1.3. Non-Performance of Certain Covenants and Obligations.............................. 97
8.1.4. Non-Performance of Other Covenants and Obligations................................ 97
8.1.5. Default on Other Indebtedness..................................................... 97
8.1.6. Judgments......................................................................... 97
8.1.7. Pension Plans..................................................................... 98
8.1.8. Change in Control................................................................. 98
8.1.9. Bankruptcy, Insolvency, etc....................................................... 98
8.1.10. Impairment of Security, etc....................................................... 99
SECTION 8.2. Action if Event of Default........................................................ 99
ARTICLE IX THE ADMINISTRATIVE AGENT........................................................................ 100
SECTION 9.1. Actions........................................................................... 100
SECTION 9.2. Funding Reliance, etc............................................................. 100
SECTION 9.3. Exculpation....................................................................... 101
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SECTION 9.4. Successor......................................................................... 101
SECTION 9.5. Credit Extensions by Administrative Agent and Issuer.............................. 102
SECTION 9.6. Credit Decisions.................................................................. 102
SECTION 9.7. Copies, etc....................................................................... 102
SECTION 9.8. Reliance by Administrative Agent.................................................. 103
SECTION 9.9. Defaults.......................................................................... 103
ARTICLE X MISCELLANEOUS PROVISIONS......................................................................... 103
SECTION 10.1. Waivers; Amendments, etc.......................................................... 103
SECTION 10.2. Notices; Time..................................................................... 105
SECTION 10.3. Payment of Costs and Expenses..................................................... 105
SECTION 10.4. Indemnification................................................................... 106
SECTION 10.5. Survival.......................................................................... 108
SECTION 10.6. Severability...................................................................... 108
SECTION 10.7. Headings.......................................................................... 108
SECTION 10.8. Execution in Counterparts; Effectiveness, etc..................................... 108
SECTION 10.9. Governing Law; Entire Agreement................................................... 108
SECTION 10.10. Successors and Assigns............................................................ 108
SECTION 10.11. Sale and Transfer of Loans; Participations in Loans and Notes..................... 109
10.11.1. Assignments....................................................................... 109
10.11.2. Participations.................................................................... 110
SECTION 10.12. Confidentiality................................................................... 111
SECTION 10.13. Other Transactions................................................................ 112
SECTION 10.14. Forum Selection and Consent to Jurisdiction....................................... 112
SECTION 10.15. Waiver of Jury Trial.............................................................. 113
SECTION 10.16. Certain Collateral Matters........................................................ 113
SECTION 10.17. ANEXCO Information................................................................ 114
SECTION 10.18. Interest.......................................................................... 116
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages; LIBO Office; Domestic Office
SCHEDULE III - Account Debtor Schedule
SCHEDULE IV - Approved Depository Banks
SCHEDULE V - Existing Letters of Credit
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Swing Line Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Closing Date Certificate
EXHIBIT E - Form of Borrowing Base Certificate
EXHIBIT F - Form of Pledge Agreement
EXHIBIT G - Form of Security Agreement
EXHIBIT H - Form of Joinder Agreement
EXHIBIT I - Form of Intercreditor Agreement
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EXHIBIT J - Form of Lender Assignment Agreement
EXHIBIT K - Form of Perfection Certificate
EXHIBIT L - Form of Exemption Certificate
EXHIBIT M-1 - Form of Lockbox Agreement
EXHIBIT M-2 - Form of Control Agreement
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of December 19, 2002, among
STERLING CHEMICALS, INC., a Delaware corporation (the "Company"), STERLING
CHEMICALS ENERGY, INC., a Delaware corporation ("Energy"), and each other Person
who becomes a party hereto pursuant to Section 7.1.8 (each such Person, together
with the Company and Energy, each individually a "Borrower" and collectively,
the "Borrowers"), the various financial institutions as are or may become
parties hereto from time to time (collectively, the "Lenders"), and THE CIT
GROUP/BUSINESS CREDIT, INC. ("CIT"), as the administrative agent (in such
capacity, the "Administrative Agent") for the Lenders.
R E C I T A L S:
A. Each of the Company and Energy is a debtor and debtor-in-
possession in a case pending under Chapter 11 of the Bankruptcy Code and,
together with the other Debtors named therein, have proposed that certain Joint
Plan of Reorganization under Chapter 11, Xxxxx 00, Xxxxxx Xxxxxx Code, of
Sterling Chemicals Holdings, Inc., et al., Debtors, filed with the United States
Bankruptcy Court, Southern District of Texas, Houston Division, on October 14,
2002, as modified prior to the Confirmation Date (the "Plan of Reorganization").
B. It is a condition to the consummation of the Plan of
Reorganization that the Company enter into a new revolving credit agreement to
provide a portion of the funds necessary to make payments required on the Plan
Effective Date (as defined below), as well as funds for working capital and
other general corporate purposes after the Plan Effective Date.
C. The Company has requested the Lenders to provide such
revolving credit facility to the Company and each of its now existing or
hereafter created or acquired Subsidiaries (as defined below) that are not
Foreign Subsidiaries (as defined below) in an aggregate principal amount not to
exceed $100,000,000.
D. The Lenders desire to provide the Company and such
Subsidiaries with a revolving credit line of up to $100,000,000 in the
aggregate, subject to and in reliance upon, the terms, conditions,
representations and warranties contained herein.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acceptable Account" means any Foreign Account for which the Account
Debtor has long-term debt ratings, or is a Wholly-Owned Subsidiary of a Person
having long-term debt ratings, of at least A- and A3 or short-term debt ratings
of at least A2 and P2, in each case by S&P and Xxxxx'x, respectively.
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"Account" means all of each Borrower's now existing and future: (a)
accounts (which shall mean any "account" as such term is defined in Section
9-102 of the U.C.C.), and any and all other receivables, including all accounts
created by, or arising from, all sales, leases, rentals of goods or renditions
of services of the Borrowers to their customers, including but not limited to,
those accounts arising under any trade names or styles of the Borrowers, or
through any division of any Borrower; (b) "instruments", "documents", "chattel
paper" (including electronic chattel paper) (as each of those terms are defined
in Section 9-102 of the U.C.C.); (c) unpaid seller's or lessor's rights
(including rescission, replevin, reclamation, repossession and stoppage in
transit) relating to the foregoing or arising therefrom; (d) rights to any goods
represented by any of the foregoing, including rights to returned, reclaimed or
repossessed goods; (e) reserves and credit balances arising in connection with
or pursuant thereto; (f) guarantees, supporting obligations, "payment
intangibles" and "letter-of-credit rights" (as "payment intangibles" and
letter-of-credit rights" are defined in Section 9-102 of the U.C.C.); (g)
insurance policies or rights relating to any of the foregoing; (h) "general
intangibles" (as that term is defined in Section 9-102 of the U.C.C.) pertaining
to any and all of the foregoing (including all rights to payment, including
those arising in connection with bank and non-bank credit cards), and including
books and "records" (as that term is defined in Section 9-102 of the U.C.C.) and
any electronic media and software thereto; (i) notes, deposits or property of
Account Debtors securing the obligations of any such Account Debtors to any
Borrower; and (j) cash and non-cash "proceeds" (as defined in Section 9-102 of
the U.C.C.) of any and all of the foregoing.
"Account Debtor" means any Person obligated on any Account of any
Borrower.
"Account Debtor Schedule" means the Account Debtor Schedule attached
hereto as Schedule III, as it may be supplemented or otherwise modified from
time to time by the Borrowers upon the written consent of the Administrative
Agent and provided that any Account Debtor added to the Account Debtor Schedule
meets all of the requirements set forth in the definition of "Acceptable
Account."
"Administrative Agent" is defined in the Introductory Statement and
includes each other Person appointed as the successor Administrative Agent
pursuant to Section 9.4.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. As used in this definition "control" of a Person means:
(a) the power, directly or indirectly, to vote 10% or
more of the Capital Securities (on a fully diluted basis) having
ordinary voting power for the election of directors, managing members
or general partners (as applicable);
(b) beneficial ownership of 10% or more of any class of
the Voting Stock of such Person or 10% or more of all outstanding
Capital Securities of such Person; or
(c) the power, directly or indirectly, to direct or
cause the direction of the management and policies of such Person
(whether by contract or otherwise).
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"Agreement" means, on any date, this Revolving Credit Agreement as
originally in effect on the Effective Date and as thereafter from time to time
amended, supplemented, amended and restated or otherwise modified from time to
time and in effect on such date.
"Alternate Base Rate" means, for any day and with respect to all Base
Rate Loans, the higher of (a) 0.50% per annum above the latest Federal Funds
Rate and (b) the rate of interest in effect for such day as most recently
publicly announced or established by JPMorgan Chase Bank in New York, New York
(the "Reference Bank"), as its "Base Rate". (The "Base Rate" is a rate set by
the Reference Bank based upon various factors including the Reference Bank's
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above
or below such announced rate.) Any change in the Alternate Base Rate established
or announced by the Reference Bank shall take effect at the opening of business
on the day of such establishment or announcement.
"ANEXCO" means ANEXCO, LLC, a Delaware limited liability company.
"ANEXCO Account" is defined in the definition of Eligible Accounts.
"ANEXCO LLC Agreement" means the Limited Liability Company Agreement of
ANEXCO, as amended, supplemented, amended and restated or otherwise modified
from time to time pursuant to Section 7.1.12.
"Applicable Margin" means for (a) LIBO Rate Loans, 2.75%, and (b) Base
Rate Loans, 0.75%.
"Application" means an "Application and Agreement for Letters of
Credit" or similar instruments or agreements, entered into between any Borrower
and an Issuer in connection with any Letter of Credit.
"Approved Depository Bank" means any financial institution described on
Schedule IV hereto and any other financial institution which the Administrative
Agent may hereafter designate as an "Approved Depository Bank" by written notice
to the Company; provided, that, the Administrative Agent may, in its reasonable
discretion, notify the Company that a financial institution which was an
"Approved Depository Bank" no longer qualifies as such for purposes of this
Agreement, in which event such financial institution shall not be considered an
"Approved Depository Bank" for purposes of the Loan Documents from and after the
date specified in such notice.
"Asset Sale Offer" means "Asset Sale Offer" as that term is defined in
the Indenture.
"Assignee Lender" is defined in Section 10.11.1.
"Assignor Lender" is defined in Section 10.11.1.
"Authorized Officer" is defined in clause of Section 5.1.1.
"Availability Block" means $8,000,000.
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"Availability Reserve" means the sum of (without duplication), at the
Administrative Agent's election, reserves: (a) for any matters affecting the
priority of the Liens securing the Obligations, including (i) rental payments or
similar charges for any Borrower's leased premises or other locations where
Collateral is located or deemed to be located and for which the Borrowers have
not delivered to the Administrative Agent a landlord's waiver or mortgagee's
waiver or other similar subordination agreement, as applicable, all in form and
substance reasonably satisfactory to the Administrative Agent, and (ii)
estimated payments due by the Borrowers to any applicable warehousemen or third
party processor, for which the Borrowers have not delivered to the
Administrative Agent a waiver or some other similar subordination agreement as
determined by and in form and substance satisfactory to the Administrative
Agent; provided, that any of the foregoing amounts shall be adjusted from time
to time hereafter upon (A) delivery to the Administrative Agent of any such
acceptable waiver or subordination agreement, (B) the opening or closing of a
location where Collateral is located or deemed to be located for which the
Borrowers have not delivered such an acceptable waiver or subordination
agreement, and/or (C) any change in the amount of rental, storage or processor
payments or similar charges; plus (b) for any amounts as otherwise provided
pursuant to the explicit terms of this Agreement; plus (c) as the Administrative
Agent may require from time to time in the reasonable judgment of the
Administrative Agent.
"Backed By Letter of Credit" means an Account (a) that is backed by a
letter of credit (payable in Dollars) in form and substance reasonably
acceptable to the Administrative Agent and that is issued or confirmed by an
issuer having ratings of at least A2 or P2 by S&P and Xxxxx'x, respectively, or
a rating of at least A2 by International Bank Credit Analysis, Ltd. or at least
LC-1 by Thomson Bank Watch or (b) for which a guaranty agreement guaranteeing
the payment of such Account has been executed by a U.S. corporation that is an
Affiliate of the Account Debtor both in form and substance and from a U.S.
corporation reasonably satisfactory to the Administrative Agent.
"Bankruptcy Code" means The Bankruptcy Reform Act of 1978, as amended,
and codified as 11 U.S.C. Sections 101 et seq.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of Texas, Houston Division, or any other court having
jurisdiction over the Chapter 11 Case from time to time, including, but not
limited to, the United States District Court for the Southern District of Texas
if and to the extent it withdraws the reference with respect to the Chapter 11
Case, any part thereof, or any matter or proceeding therein.
"Base Rate" is defined in the definition of Alternate Base Rate.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Borrower" and "Borrowers" are as defined in the Introductory
Statement.
"Borrowing" means a borrowing of Loans of the same Type and, in the
case of LIBO Rate Loans, having the same Interest Period, made by all Lenders
required to make such Loans
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on the same Business Day and pursuant to the same Borrowing Request in
accordance with Section 2.1 or a continuation or conversion thereof pursuant to
Section 2.4.
"Borrowing Base Amount" means, at any time, an amount equal to the sum
of (without duplication) (a) 85% of Eligible Accounts, provided that the
Administrative Agent may, in its sole discretion, lower such advance percentage
on Eligible Accounts to the extent that the Dilution Percentage exceeds five
percent (5%) calculated on a rolling ninety (90) day period; plus (b) the lesser
of (i) 65% of Eligible Inventory and (ii) $50,000,000. The Administrative Agent
shall have the right to review computations of the Borrowing Base Amount and if,
in its reasonable judgment, such computations have not been computed in
accordance with the terms of this Agreement, the Administrative Agent shall have
the right to correct such errors.
"Borrowing Base Certificate" means a certificate duly completed and
executed by the treasurer, assistant treasurer, chief accounting or financial
Authorized Officer of the Company, substantially in the form of Exhibit F
hereto, together with such changes thereto as the Administrative Agent may from
time to time reasonably request for the purpose of monitoring the Borrowers'
compliance with the limitations on the amount of Loans that may be outstanding
at any time hereunder.
"Borrowing Request" means a Loan request and certificate duly executed
by an Authorized Officer of the applicable Borrower, substantially in the form
of Exhibit B-1 hereto.
"BP" means BP Chemicals Inc., an Ohio corporation.
"BP Joint Venture Agreement" means the Joint Venture Agreement, dated
March 31, 1999, between the Company and BP, as amended, supplemented, amended
and restated or otherwise modified from time to time pursuant to Section 7.1.12.
"BP Production Agreement" means the Amended and Restated Production
Agreement, dated as of March 31, 1998, between BP and the Company, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a
legal holiday on which banks are authorized or required to be closed in
New York, New York; and
(b) relative to the making, continuing, prepaying or
repaying of any LIBO Rate Loans, any day which is a Business Day
described in clause (a) above and which is also a day on which dealings
in Dollars are carried on in the London interbank eurodollar market.
"Capital Expenditures" means, for any period, the aggregate amount of
all expenditures of the Borrowers for fixed or capital assets made during such
period which, in accordance with GAAP, would be classified as capital
expenditures.
"Capital Securities" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such
5
Person's equity (including any instruments convertible into equity), whether now
outstanding or issued after the Effective Date.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrowers under any leasing or similar arrangement which have been (or, in
accordance with GAAP, should be) classified as capitalized leases, and for
purposes of each Loan Document, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a premium or a penalty.
"Cash Collateralize" means, with respect to a Letter of Credit, the
deposit of immediately available funds into a cash collateral account maintained
with (or on behalf of) the Administrative Agent, on terms and conditions
satisfactory to the Administrative Agent, in an amount equal to the Stated
Amount of such Letter of Credit.
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or unconditionally
guaranteed by) the United States or a State (or any agency or political
subdivision thereof, to the extent such obligations are supported by
the full faith and credit of the United States or a State) maturing not
more than one year after such time;
(b) commercial paper maturing not more than 270 days from
the date of issue, which is issued by
(i) a corporation (other than an Affiliate of
any Borrower or any Subsidiary of any Borrower) organized
under the laws of any State and rated A-1 or higher by S&P or
P-1 or higher by Xxxxx'x, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers
acceptance, maturing not more than one year after its date of issuance,
which is issued by either
(i) any bank organized under the laws of the
United States (or any State) and which has (x) a credit rating
of P-1 or higher from Xxxxx'x or A-1 or higher from S&P and
(y) a combined capital and surplus greater than $500,000,000,
or
(ii) any Lender;
(d) any repurchase agreement having a term of 30 days or
less entered into with any Lender or any commercial banking institution
satisfying the criteria set forth in clause (c)(i) which
(i) is secured by a fully perfected security
interest in any obligation of the type described in clause
(a), and
6
(ii) has a market value at the time such
repurchase agreement is entered into of not less than 100% of
the repurchase obligation of such commercial banking
institution thereunder;
(e) any money market mutual fund with a daily right of
redemption and a net asset value of $1.00 per share substantially all
the assets of which are comprised of investments of the types
described in the preceding clauses (a) through (d); or
(f) participations in loans (for a tenor of not more than
90 days) to Persons having short term credit ratings of at least A-1
and P-1 by S&P and Xxxxx'x, respectively.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) a "Change in Control", as defined in the Indenture;
(b) a change resulting when (i) any Unrelated Person or
any Unrelated Persons, other than the designated shareholders listed on
Item 1.1 of the Disclosure Schedule ("Designated Shareholders"), acting
together, which would constitute a Group (as defined in Section 13(d)
of the Exchange Act) together with any Affiliates or Related Persons
thereof (in each case also constituting Unrelated Persons) shall at any
time either (x) Beneficially Own (as defined in Rule 13d3 of the
Exchange Act) more than 30% of the aggregate voting power of all
classes of Voting Stock of the Company or (y) succeed in having a
sufficient number of its or their nominees elected to the Board of
Directors of the Company such that such nominees, when added to any
existing director remaining on the Board of Directors of the Company
after such election who is an Affiliate or Related Person of such
Person or Group (as defined in Section 13(d) of the Securities Exchange
Act), shall constitute a majority of the Board of Directors of the
Company or (ii) the Designated Shareholders shall cease to own 40% or
more of all classes of Voting Stock of the Company. As used herein (A)
"Unrelated Person" shall mean at any time any Person other than the
Company or any of its Subsidiaries and other than any trust for any
employee benefit plan of the Company or any of its Subsidiaries and (B)
"Related Person" of any Person shall mean any other Person owning (1)
5% or more of the outstanding common stock of such Person or (2) 5% or
more of the Voting Stock of such Person;
(c) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors of the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election by
the shareholders of the Company, as the case may be, was approved by a
majority of the directors of the Company, as the case may be, then
still in office who were either directors at the beginning of such
period or whose election or nomination for
7
election was previously so approved), cease for any reason to
constitute a majority of the Board of Directors of the Company, as the
case may be, then in office; or
(d) the failure of the Company at any time to directly or
indirectly own and control beneficially or of record on a fully
diluted basis 100% of the outstanding Capital Securities of each other
Borrower and each Subsidiary (other than director's qualifying shares
or investments by foreign nationals mandated by applicable laws), such
Capital Securities to be held free and clear of all Liens (other than
Liens securing the Obligations).
Notwithstanding anything to the contrary contained in this definition, a "Change
in Control" shall not include the issuance of Capital Securities of the Company
pursuant to the Plan of Reorganization.
"Chapter 11 Case" means the "Chapter 11 Case" as defined in the Plan
of Reorganization.
"CIT" is defined in the Introductory Statement.
"Closing Date" means the date all of the conditions precedent set forth
in Article V have been satisfied and the initial Credit Extensions are made;
provided that in no event shall such date be later than February 28, 2003.
"Closing Date Certificate" means the closing date certificate executed
and delivered by each Borrower pursuant to the terms of this Agreement,
substantially in the form of Exhibit D hereto.
"Code" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"Collateral" means (a) the Capital Securities of each now existing or
hereafter created or acquired Borrower (other than the Company) or Subsidiary of
a Borrower (other than any Foreign Subsidiary) and (b) any and all other assets
of the Borrowers of the type or types described in and subject to the Liens,
privileges, priorities and security interests purported to be created by any
Security Document.
"Commitment" means, as the context may require, the then applicable
Revolving Credit Commitment, Letter of Credit Commitment and/or Swing Line Loan
Commitment.
"Commitment Amount" means, as the context may require, the Revolving
Credit Commitment Amount, the Letter of Credit Commitment Amount and/or the
Swing Line Loan Commitment Amount.
"Commitment Fee" is defined in Section 3.3.1.
"Commitment Termination Date" means the earliest of (a) the Maturity
Date; (b) the date on which any of the Commitment Amounts are terminated in full
or permanently reduced to zero pursuant to the terms of this Agreement
(including Section 2.2); and (c) the date on which any
8
Commitment Termination Event occurs. Upon the occurrence of any event described
in the preceding clauses, all of the Commitments shall terminate automatically
and without any further action.
"Commitment Termination Event" means the occurrence and continuance of
any Event of Default in respect of which all or any portion of the Loans are
accelerated or otherwise declared to be due and payable or the Commitments are
terminated, in each case pursuant to Section 8.2.
"Commodity Hedging Agreements" means with respect to any Person, all
liabilities of such Person under exchange agreements, swap agreements, cap
agreements, future agreements, forward agreements and all other agreements or
arrangements (of a strictly non-speculative nature) designed to protect such
Person against fluctuations in commodity prices.
"Company" is defined in the Introductory Statement.
"Concentration Account" is defined in clause (a) of Section 3.1.3.
"Condemnation Proceeds " means all awards, proceeds or payments
received by any Borrower or any Subsidiary of any Borrower relating to the
condemnation of any Properties of any Borrower or any Subsidiary of any
Borrower.
"Confirmation Date" means "Confirmation Date" as defined in the Plan of
Reorganization.
"Confirmation Deposit" means the "Confirmation Deposit" as defined in
the Plan of Reorganization.
"Confirmation Order" is defined in Section 5.1.2.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise, to assure a creditor against loss) the Indebtedness of any
other Person, or guarantees the payment of dividends or other distributions upon
the Capital Securities of any other Person; provided, however, that the term
"Contingent Liability" shall not include endorsements for collection or deposits
in the ordinary course of the Borrowers' businesses. The amount of any Person's
obligation under any Contingent Liability shall (subject to any limitation set
forth therein) be deemed to be the outstanding principal amount of the debt,
obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
applicable Borrower (or the Company on behalf of such Borrower), substantially
in the form of Exhibit C hereto.
"Control Agreement" is defined in the definition of Lockbox Agreements.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under
9
common control which, together with the Company or any Subsidiary, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.
"Credit Extension" means, as the context may require, (a) the making of
any Loan (including the Loans to be made pursuant to clause (c) of Section
2.3.1) by a Lender; or (b) the issuance of any Letter of Credit (including the
deemed issuance of any Letter of Credit pursuant to clause (c) of Section
2.3.1), or the extension of any Stated Expiry Date of any existing Letter of
Credit or the increase in the Stated Amount of any existing Letter of Credit, in
each case by the Issuer.
"Creditors Committee" means the "Creditors Committee" as defined in the
Plan of Reorganization.
"Debtors" means "Debtors" as defined in the Plan of Reorganization.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Dilution" shall mean a reduction as reasonably determined by the
Administrative Agent in the value of Accounts of the Borrowers caused by
write-offs, returns, allowances, discounts, credits, and/or any other offsets
asserted by customers having the effect of reducing the collections of Accounts.
"Dilution Percentage" shall mean, with respect to the Borrowers, the
ratio of Dilution to the total Accounts of the Borrowers.
"Disbursement" is defined in Section 2.6.2.
"Disbursement Date" is defined in Section 2.6.2.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrowers with the prior written
consent of the Required Lenders.
"Disposition" (or similar words such as "Dispose") means any sale,
transfer, lease, contribution or other conveyance (including by way of
condemnation or merger) of, or the granting of options, warrants or other rights
to, any Properties of the Borrowers or any Subsidiaries of the Borrowers,
including Accounts and Capital Securities, to any other Person in a single
transaction or series of transactions.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Account" means any Account for which the Account Debtor is
subject to the personal jurisdiction of federal or state courts in the United
States (and is subject to service of process in the U.S.).
"Domestic Office" means the office of a Lender designated as its
"Domestic Office" on Schedule II hereto or in a Lender Assignment Agreement, or
such other office within the United
10
States as may be designated from time to time by notice from such Lender to the
Administrative Agent and the Company.
"Early Termination Fee" (a) means the fee the Administrative Agent, on
behalf of the Lenders, shall charge the Borrowers in the event all or any
portion of the Revolving Credit Commitment Amount or the Revolving Credit
Commitments are reduced or terminated; and (b) is determined by multiplying (i)
in the case of any reduction in the Revolving Credit Commitment Amount or the
Revolving Credit Commitments, the amount of any such reduction and (ii) in the
case of a termination of all of the Revolving Credit Commitments, the original
Revolving Credit Commitment Amount by (x) one percent (1.00%), if the Revolving
Credit Commitments or Revolving Credit Commitment Amount are terminated or
reduced, as applicable, on or before the first anniversary of the Closing Date,
(y) one-half of one percent (0.50%) if the Revolving Credit Commitments or
Revolving Credit Commitment Amount are terminated or reduced, as applicable,
after the first anniversary of the Closing Date but on or before the second
anniversary of the Closing Date and (z) one-quarter of one percent (0.25%) if
the Revolving Credit Commitments or Revolving Credit Commitment Amount are
terminated or reduced, as applicable, at any time after the second anniversary
of the Closing Date but prior to the Maturity Date.
"EBITDA" shall mean, for any period and without duplication, all
earnings of the Borrowers before all (a) interest and income tax obligations,
(b) depreciation, and (c) amortization, in each case for such period, all
determined in accordance with GAAP on a basis consistent with the latest audited
financial statements of the Borrowers, but in all cases excluding the effect of
any non-cash extraordinary and non-recurring gains or losses for such period.
"EBITDA Covenant Release Date" means the thirtieth (30th) day of any
period of at least thirty (30) days during which Excess Availability, plus cash
on hand which is on deposit with an Approved Depository Bank that is a party to
a Control Agreement, is greater than or equal to $40,000,000 on each day during
such period.
"EBITDA Covenant Trigger Date" means the fifteenth (15th) day of any
period of at least fifteen (15) consecutive days during which Excess
Availability, plus cash on hand which is on deposit with an Approved Depository
Bank that is a party to a Control Agreement, is less than $20,000,000 on each
day during such period; provided that no additional EBITDA Covenant Trigger Date
shall occur while any EBITDA Measurement Period is in effect.
"EBITDA Measurement Period" means, with respect to the occurrence of
any EBITDA Covenant Trigger Date, the period commencing on the first day of any
calendar month (the "First Measurement Month") in which such EBITDA Covenant
Trigger Date occurs and ending on (and including) the last day of the first
calendar month thereafter in which an EBITDA Covenant Release Date occurs.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 10.8.
"Eligible Account" means, at any time, the invoice or ledger amount
owing on each Account of any Borrower, in each case, net of any reserves
reasonably required by the
11
Administrative Agent from time to time in accordance with the Administrative
Agent's customary practice, for which each of the following statements is
accurate and complete to the reasonable satisfaction of the Administrative Agent
(and the Borrowers, by including an Account in any computation of the Borrowing
Base Amount, shall be deemed to represent and warrant to the Administrative
Agent, each Issuer and each Lender the accuracy and completeness of such
statements):
(a) such Account is a binding and valid obligation of the
Account Debtor thereof and is in full force and effect and such Account
Debtor is not an Affiliate of any Borrower (other than ANEXCO or BP or
any of their respective Affiliates);
(b) such Account is bona fide and to the extent such
Account relates to any receivable arising out of the profit sharing
component of conversion or production contracts or cost reimbursement
obligations or any other obligation to pay money under a Material
Contract or other contract, there is no dispute as to the amount of
such Account; provided, however, that if the parties thereto disagree
as to the amount of such Account, such Account shall constitute an
Eligible Account in an amount equal to the lowest amount of such
Account any party thereto believes to be owing thereunder;
(c) payment of such Account is less than 30 days past due
as determined by the due date stated on the invoice therefor (or if
such Account is not paid by reference to any invoice in the ordinary
course of business but instead by reference to the terms of the
agreements creating such Account, such Account has not remained unpaid
beyond 30 days after the due date therefor);
(d) such Account is not subject to any dispute, setoff
(excluding any Account payable setoff supported by a letter of credit
but including (i) any Exchange Inventory Payable and (ii) any accounts
payable amounts owing by any of the Borrowers to the third party which
owes an Exchange Inventory Receivable to such Borrower), counterclaim
or other claim or defense including rescission, cancellation or
avoidance, whether by operation of law or otherwise, on the part of the
Account Debtor or any other Person denying liability under such
Account; provided, however, that any such Account shall constitute an
Eligible Account to the extent it is not subject to any such dispute,
setoff, counterclaim or other claim or defense;
(e) other than accounts owing to ANEXCO, the
Administrative Agent, on behalf of the Lenders, has a first priority,
perfected Lien covering such Account and, such Account is, and at all
times will be, free and clear of all other Liens;
(f) such Account arose in the ordinary course of
business of any of the Borrowers and such Borrower is the legal owner
of such Account;
(g) such Account is not payable by an Account Debtor who
is more than 30 days past due with regard to 20% or more of the total
Accounts owed to the Borrowers by such Account Debtor or any of its
Affiliates;
(h) all consents, licenses, approvals or authorizations
of, or registrations or declarations with, any Governmental Authority
required to be obtained, effected or given
12
in connection with the execution, delivery and performance of such
Account by each party obligated thereunder have been duly obtained,
effected or given and are in full force and effect;
(i) such Account is not an Account as to which any United
States federal or State Governmental Authority is the Account Debtor,
except to the extent the applicable Borrower has complied with the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Sections. 3727;
41 U.S.C. Sections. 15), by delivering to the Administrative Agent a
notice of assignment in favor of the Administrative Agent under such
Act and in compliance with applicable provisions of 31 C.F.R. Sections.
7-103.8 and 41 C.F.R. Sections. 1-30.7, or with similar State law;
(j) the Account Debtor on such Account is not the subject
of any bankruptcy or insolvency proceeding, has not had a trustee or
receiver appointed for all or a substantial part of its property, has
not made an assignment for the benefit of creditors, nor admitted its
inability to pay its debts as they mature or suspended its business;
(k) with respect to any Foreign Account; such Account is
(without duplication), (i) a Foreign Account which is Backed By Letter
of Credit, (ii) an Acceptable Account that is listed in the Account
Debtor Schedule, provided, however, that any such Acceptable Account
shall be included in Eligible Accounts up to an aggregate amount not to
exceed, at any time, 10% of the total balance due on all Accounts,
(iii) a Foreign Account which is not Backed By Letter of Credit,
provided, however, that any such Foreign Account which is not Backed By
Letter of Credit shall be included in Eligible Accounts up to an
aggregate amount not to exceed, at any time, 5% of the total balance
due on all Accounts, or (iv) the Account Debtor has previously been
approved in writing by Required Lenders as an eligible foreign Account
Debtor for purposes of this Agreement;
(l) in the case of the sale of goods, such goods have
been sold to an obligor on a true sale basis or open account, or
subject to contract, and not on consignment, on approval or on a "sale
or return" basis or subject to any other repurchase or return agreement
(other than for failure to meet specifications), no material part of
such goods has been returned, rejected, lost or damaged, and such
Account is not evidenced by chattel paper or an instrument of any kind
which has not been endorsed and delivered to the Administrative Agent;
(m) each of the representations and warranties set forth
in each Security Agreement with respect to such Account is true and
correct in all material respects on such date; and
(n) such Account has such other characteristics or
criteria as the Administrative Agent, in its reasonable discretion may
specify from time to time in accordance with the Administrative Agent's
customary practice;
provided that, notwithstanding anything to the contrary contained herein (i) any
accounts owing to ANEXCO which (other than the fact that they are owed to
ANEXCO) meet the qualifications
13
in this definition for being an "Eligible Account" and are (A) due and owing
from a Foreign Obligor to ANEXCO and (B) owing from ANEXCO to the Company
pursuant to the ANEXCO LLC Agreement and the BP Joint Venture Agreement, net of
ANEXCO's "Operating Costs" (for purposes of this clause (i) only, as such term
is defined in the BP Joint Venture Agreement), in each case subject to the
requirements of Section 7.1.12, shall also constitute Eligible Accounts for
purposes of this Agreement; provided that such accounts cannot exceed 5% of the
total balance then due of all Eligible Accounts (an "ANEXCO Account"); (ii) if
any Eligible Account, when added to all other Accounts that are obligations of
the same Account Debtor and its Affiliates, results in a total sum that exceeds
20% of the total balance then due on all Eligible Accounts (without giving
effect to any reduction in Eligible Accounts pursuant to this clause), the
amount of such Account in excess of 20% of such total balance then due shall be
excluded from Eligible Accounts and (iii) with respect to any and all Accounts
which meet the above qualifications for an "Eligible Account" but (A) constitute
a right to payment to any Borrower for any goods that have been shipped, or
services that have been provided to, the purchaser thereof, but for which such
purchaser has not yet been billed for payment or (B) are Accounts of the type
described in clause (b) of this definition of "Eligible Account", then the
amount of all such Accounts described in this clause (iii) which exceed
$3,000,000 in aggregate at any time outstanding shall be excluded from Eligible
Accounts.
"Eligible Assignee" is defined in clause (a) of Section 10.11.1.
"Eligible Inventory" means, at any time, all "inventory" (as such term
is defined in Section 9-102 of the U.C.C.) of the Borrowers, including Exchange
Inventory Receivables, net of any reserves reasonably required by the
Administrative Agent from time to time in accordance with the Administrative
Agent's customary practice and, with respect to any inventory acquired by any
Borrower from BP, net of any accounts payable amounts owing by any Borrower to
BP; provided that such amounts do not duplicate those included in clause (d) of
the definition of "Eligible Accounts", for which each of the following
statements is accurate and complete to the reasonable satisfaction of the
Administrative Agent and which at all times continue to be acceptable to the
Administrative Agent in the exercise of its reasonable judgment (and the
Borrowers, by including such inventory in any computation of the Borrowing Base
Amount, shall be deemed to represent and warrant to the Administrative Agents,
each Issuer and each Lender, the accuracy and completeness of such statements):
(a) Such inventory shall be valued at the lower of cost
or market in accordance with GAAP and (i) shall include raw materials
and finished goods but (ii) shall not include goods that are classified
as "work-in-progress", "parts and supplies" or "stores inventories;"
(b) Such inventory is in good condition, meets all
standards imposed by any Governmental Authority having regulatory
authority over it, its use and/or sale and is either currently usable,
undamaged or currently salable in the normal course of business of the
Borrowers;
(c) Such inventory (i) is an Exchange Inventory
Receivable, (ii) is in the possession of the Borrowers, (iii) is in
transit in the ordinary course of business but in respect of which
title remains in the Borrowers and which is fully insured (subject to
14
deductibles consistent with prudent industry standards for similarly
situated companies) and is not located outside the United States or
(iv) is in the possession or control of any warehouseman, bailee or any
agent or processor for or customer of the Borrowers and is not located
outside the United States, provided that, Borrowers shall have notified
(in a manner that effectively under applicable law creates a valid and
first-priority, perfected Lien in favor of the Administrative Agent, on
behalf of the Lenders, in such inventory) such warehouseman, bailee,
agent, processor or customer of the Lien of the Secured Parties and
such warehouseman, bailee, agent, processor or customer has
subordinated or waived any Lien it may claim therein and agreed to hold
all such inventory for the Secured Parties' account subject to the
Administrative Agent's instructions;
(d) Each of the representations and warranties set forth
in the applicable Security Agreement with respect to such inventory is
true and correct in all material respects on such date;
(e) The Administrative Agent, on behalf of the Lenders,
has a first-priority, perfected Lien covering such inventory (subject
to the Lien granted to BP under the BP Production Agreement as in
effect on the Effective Date, securing BP's right to purchase certain
acrylonitrile inventory produced pursuant to such BP Production
Agreement), and such inventory is, and at all time will be, free and
clear of all other Liens (other than inchoate Liens permitted under
Section 7.2.3 or with respect to which all rights of the holder of such
Liens have been waived or subordinated to the satisfaction of the
Administrative Agent);
(f) Such inventory does not include goods that are not
owned by the Borrowers or that are held by the Borrowers pursuant to
any consignment agreement;
(g) To the extent inventory includes any Exchange
Inventory Receivable (i) such Exchange Inventory Receivable shall be
reduced by any accounts payable amounts owing by any of the Borrowers
to the third party which owes such Exchange Inventory Receivable to
such Borrower and (ii) any such accounts payable amount shall be
applied first to clause (d)(ii) of the definition of Eligible Account
and second to clause (g)(i) above, without duplication); and
(h) Such inventory has such other characteristics or
criteria as the Administrative Agent, in its reasonable discretion, may
specify from time to time in accordance with the Administrative Agent's
customary practice.
"Energy" is defined in the Introductory Statement.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"Equipment" is defined in the U.C.C.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each
15
case as in effect from time to time. References to Sections of ERISA also refer
to any successor Sections thereto.
"ERISA Affiliate" means any Person which is in the same Controlled
Group as any Borrower.
"ESOP" means any employee stock ownership plan established by one or
more of the Borrowers.
"Event of Default" is defined in Section 8.1.
"Excess Availability" means, at any time of determination, the amount
by which the Maximum Loan Amount exceeds the aggregate outstanding principal
amount of all Revolving Credit Loans and Swing Line Loans, together with the
aggregate amount of all Letter of Credit Outstandings.
"Excess EBITDA" is defined in clause (b) of Section 7.2.6.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Inventory" means any inventory which is subject to a swap,
exchange or similar agreement or arrangement between any of the Borrowers and
any other Person which is not an Affiliate of a Borrower.
"Exchange Inventory Payable" means the net amount of Exchange Inventory
owing by any of the Borrowers to any other Person which is not an Affiliate of a
Borrower.
"Exchange Inventory Receivable" means the net amount of Exchange
Inventory owed to any Borrower by any other Person which is not an Affiliate of
a Borrower.
"Excluded Subsidiary" means Sterling Canada, Inc., Sterling Pulp
Chemicals US, Inc., and Sterling Pulp Chemicals, Inc.
"Exemption Certificate" is defined in clause (e) of Section 4.6.
"Existing Credit Agreement " means the Revolving Credit Agreement,
dated as of July 19, 2001, among Sterling Chemicals, Inc. and each of its
subsidiaries parties thereto from time to time, each a debtor and
debtor-in-possession, as the borrowers, various financial institutions, as the
lenders and CIT, as a lender and as the Administrative Agent, as amended.
"Existing Letters of Credit" is defined in clause (c) of Section 2.3.1.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to (a) the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York; or (b) if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such
16
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
"Fee Letter" means, collectively, the commitment letter, dated November
19, 2002, between the Company and CIT and the rate and fee letter, dated
November 19, 2002, between the Company and CIT, in each case, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Fibers Buyout Agreement" means the "Fibers Buyout Agreement" as
defined in the Plan of Reorganization.
"First Measurement Month" is defined in the definition of EBITDA
Measurement Period.
"Fiscal Quarter" means a quarter ending on the last day of March, June,
September or December.
"Foreign Account" means any Account (a) for which the Account Debtor is
a Foreign Obligor or (b) due and payable by a Foreign Obligor to ANEXCO.
"Foreign Obligor" means an Account Debtor that is not subject to the
jurisdiction of federal or state courts in the United States .
"Foreign Subsidiary" means any Subsidiary that is not a Subsidiary
incorporated or organized in the United States or any State.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" means generally accepted United States accounting principles,
applied on a consistent basis (except for changes made due to the implementation
of new or revised standards issued by the Financial Accounting Standards Board),
and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the accounting
principles observed in a current period are comparable in all material respects
to those accounting principles applied in a preceding period (excluding changes
in accounting principles required by the implementation of the AICPA's Statement
of Position 90-7, Financial Reporting by Entities in Reorganization under the
Bankruptcy Code).
"Governmental Authority" means the government of the United States ,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
"Government Guaranteed" means Eligible Accounts that are guaranteed by
the full faith and credit of a U.S. or Canadian Governmental Authority.
"Hazardous Material" means (a) any "hazardous substance", as defined by
CERCLA, (b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act, as amended,
17
or (c) any pollutant or contaminant or hazardous, dangerous or toxic chemical,
material or substance (including any petroleum product) within the meaning of
any other applicable federal, state or local law, regulation, ordinance or
requirement (including consent decrees and administrative orders) relating to or
imposing liability or standards of conduct concerning any hazardous, toxic or
dangerous waste, substance or material, all as amended.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under currency exchange agreements, interest rate
swap agreements, interest rate cap agreements, Commodity Hedging Agreements and
interest rate collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates, currency
exchange rates or commodity prices and not entered into for purely speculative
purposes.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in any Loan Document refer to such Loan Document as a whole and not to any
particular Section, paragraph or provision of such Loan Document.
"Highest Lawful Rate" means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Loans or on any
other Obligation, as the case may be, owed to it under the law of any
jurisdiction whose laws may be mandatorily applicable to such Lender
notwithstanding other provisions of this Agreement, or under the law of the
United States applicable to such Lender which would permit such Lender to
contract for, charge, take, reserve or receive a greater amount of interest than
under such jurisdiction's law.
"Impermissible Qualification" means any qualification or exception to
the opinion or certification of any independent public accountant as to any
financial statement of the Borrowers:
(a) which is of a "going concern" or similar nature, other
than with respect to any financial statements covering all or any
portion of time prior to the Plan Effective Date;
(b) which relates to the limited scope of examinations of
matters due to limitations imposed by the Borrowers relevant to such
financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause the Borrowers to be in Default.
"including" and "include" means including, without limiting the
generality of any description preceding such term.
"Indebtedness" of any Person means (without duplication):
(a) all obligations of such Person for borrowed money or
advances and all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments and all Capital Securities
which have redemption provisions exercisable at the option of
18
the holder thereof at any time prior to the date which is one year
after the Maturity Date (in the absence of any contingency) in whole or
in part in cash;
(b) all obligations, contingent or otherwise, relative
to the face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities of such Person;
(d) for purposes of Section 8.1.5 only, all other items
which, in accordance with GAAP, would be included as liabilities on the
liability side of the balance sheet of such Person as of the date at
which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to pay the
deferred purchase price of property or services excluding trade
accounts payable in the ordinary course of business which are not
overdue for a period of more than 60 days or, if overdue for more than
60 days, as to which a dispute exists and adequate reserves in
conformity with GAAP have been established on the books of such Person,
and indebtedness of the types otherwise referred to in this definition
secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) a Lien on
property owned or being acquired by such Person (including Indebtedness
arising under conditional sales or other title retention agreements),
whether or not such Indebtedness shall have been assumed by such Person
or is limited in recourse;
(g) obligations arising under Synthetic Leases; and
(h) all Contingent Liabilities of such Person in respect
of any of the foregoing.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership or joint venture in which such Person is a
general partner) to the extent such Person is liable therefor as a result of
such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness, ownership interest or other
relationship provide that such Person is not liable therefor.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Indenture" means the Indenture, dated as of December 19, 2002, for the
Senior Secured Notes, among the Company, as issuer, Sterling Chemicals Energy,
Inc., as guarantor, and National City Bank, as the trustee, as in effect on the
Effective Date.
"Indenture Collateral" means the "Indenture Collateral" as that term is
defined in the Intercreditor Agreement.
19
"Indenture Collateral Account" means an account to be established at
Bank of America, N.A., in the name of the Company, known as the "Indenture
Collateral Account."
"Indenture Deed of Trust" means that certain Deed of Trust, Assignment
of Leases and Rents, Security Agreement and Fixture Filing, dated as of December
19, 2002, made by the Company to the Trustee for the benefit of the holders of
the Senior Secured Notes, as security for the payment of the Senior Secured
Notes, as in effect on the Effective Date.
"Indenture Security Agreement" means the Security Agreement, dated as
of December 19, 2002, made by the Company and Energy, as assignors, to National
City Bank, as collateral agent, and National City Bank, as indenture trustee for
the benefit of the holders of the Senior Secured Notes, as in effect on the
Effective Date.
"Insurance Proceeds " means all proceeds or payments from any insurance
carrier with respect to any loss, casualty, damage or destruction to any
Properties of any Borrower or any Subsidiary of any Borrower.
"Intellectual Property Collateral" has the collective meaning provided
for such term in the Security Agreements.
"Intercreditor Agreement" means the Intercreditor Agreement executed
and delivered pursuant to the terms of this Agreement by the Administrative
Agent, on behalf of itself and the other Lenders, and the Trustee, and
acknowledged by the Company, substantially in the form of Exhibit I hereto, as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Interest Period" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Sections 2.3 or
2.4 and shall end on (but exclude) the day which numerically corresponds to such
date one, two or three months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), as the applicable
Borrower may select in its relevant notice pursuant to Sections 2.3 or 2.4;
provided, however, that:
(a) such Borrower shall not be permitted to select
Interest Periods to be in effect at any one time which have expiration
dates occurring on more than five (5) different dates;
(b) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day); and
(c) no Interest Period for any Loan may end later than
the Maturity Date for such Loan.
"Investment" means, relative to any Person,
20
(a) any loan, advance, extension of credit or
contribution made by such Person to any other Person, including the
purchase by such Person of any bonds, notes, debentures or other debt
securities of any other Person;
(b) any Contingent Liability of such Person incurred in
connection with loans, advances or extensions of credit made by others
to any other Person; and
(c) any Capital Securities held by such Person in any
other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
"ISP98 Rules" is defined in Section 10.9.
"Issuance Request" means a Letter of Credit request duly executed by an
Authorized Officer of the applicable Borrower, substantially in the form of
Exhibit B-2 hereto.
"Issuer" means, collectively, JPMorgan Chase Bank and/or any other
Person issuing Letters of Credit hereunder, as designated by the Administrative
Agent, in its capacity as Issuer of the Letters of Credit and any other Lender
designated by any Borrower that issues a Letter of Credit with the consent of
the Administrative Agent, which consent shall not be unreasonably withheld.
"Joinder Agreement" means a Joinder Agreement, substantially in the
form of Exhibit H hereto, executed and delivered by each Person who is required
to become (or otherwise becomes, pursuant to the terms of this Agreement) a
Borrower in accordance with Section 7.1.8.
"Lender Assignment Agreement" means an assignment agreement
substantially in the form of Exhibit J hereto.
"Lenders" is defined in the Introductory Statement and includes any
Person that becomes a Lender pursuant to Section 10.11.1.
"Lender's Environmental Liability" means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages),
disbursements or expenses of any kind or nature whatsoever (including reasonable
attorneys' fees at trial and appellate levels and experts' fees and
disbursements and expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against the Administrative
Agent, any Lender or Issuer or any of such Person's Affiliates, shareholders,
directors, officers, employees, and agents in connection with or arising from:
(a) any Hazardous Material on, in, under or affecting all
or any portion of any property of any Borrower or any Subsidiary of any
Borrower, the groundwater
21
thereunder, or any surrounding areas thereof to the extent caused by
Releases from Properties of any Borrower or any Subsidiary of any
Borrower;
(b) any misrepresentation, inaccuracy or breach of any
warranty, contained or referred to in Section 6.12;
(c) any violation or claim of violation by the Company or
any of its Subsidiaries of any Environmental Laws; or
(d) the imposition of any Lien for damages caused by or
the recovery of any costs for the cleanup, release or threatened
release of Hazardous Material by the Company or any of its
Subsidiaries, or in connection with any property owned or formerly
owned by the Company or any of its Subsidiaries.
"Letter of Credit" is defined in clause (a) of Section 2.1.2.
"Letter of Credit Commitment" means, with respect to the Issuer, the
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1.2 and,
with respect to each Lender, the obligations of each such Lender to participate
in such Letters of Credit pursuant to Section 2.6.1.
"Letter of Credit Commitment Amount" means, on any date, the lesser of
(a) the then applicable Maximum Loan Amount on such date and (b) $20,000,000, as
such amount may be permanently reduced from time to time pursuant to Section 2.2
and other provisions of this Agreement.
"Letter of Credit Outstandings" means, on any date, an amount equal to
the sum of (a) the then aggregate amount of all Stated Amounts of all issued and
outstanding Letters of Credit, plus (b) the then aggregate amount of all unpaid
and outstanding Reimbursement Obligations.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans,
the rate per annum equal to the rate at which Dollar deposits are offered for
such Interest Period as set forth on the Telerate Screen LIBO Page, at or about
12:00 noon, New York City time, two Business Days prior to the beginning of such
Interest Period for delivery on the first day of such Interest Period, and in an
amount approximately equal to the amount of the LIBO Rate Loan and for a period
approximately equal to such Interest Period; provided, however, that if there
shall at any time no longer exist a Telerate Screen LIBO Page, "LIBO Rate" shall
mean, with respect to each day during each Interest Period pertaining to a LIBO
Rate Loan, the rate per annum equal to the rate at which the Administrative
Agent or its designee is offered Dollar deposits at or about 12:00 noon, New
York City time, two Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of LIBO Rate Loans are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the LIBO Rate
Loan to be outstanding for a period approximately equal to such Interest Period.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
22
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded, if necessary, to the nearest 1/16 of 1%)
determined pursuant to the following formula:
LIBO Rate LIBO Rate
--------- ---------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.
"LIBOR Office" means the office of a Lender designated as its "LIBOR
Office" on Schedule II hereto or in a Lender Assignment Agreement, or such other
office designated from time to time by notice from such Lender to the Company
and the Administrative Agent, whether or not outside the United States, which
shall be making or maintaining the LIBO Rate Loans of such Lender.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of or including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment for security purposes, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property, or other
priority or preferential arrangement of any kind or nature whatsoever, to secure
payment of a debt or performance of an obligation.
"Loan Documents" means collectively this Agreement, each Letter of
Credit (including Existing Letters of Credit), each Application (including any
reimbursement and/or application agreements executed and delivered in connection
with the Existing Letters of Credit), each Rate Protection Agreement, each Note,
each Security Agreement, each Joinder Agreement, each Pledge Agreement, the
Intercreditor Agreement, each Lockbox Agreement, each agreement pursuant to
which the Administrative Agent or any Lender is granted a Lien to secure the
Obligations and each other agreement, certificate, document or instrument
delivered in connection with any Loan Document (including the agreements
executed from time to time pursuant to Section 7.1.8) by the Borrowers, whether
or not specifically mentioned herein or therein.
"Loans" means, as the context may require, a Revolving Credit Loan or a
Swing Line Loan of any Type.
"Lockbox" means any lockbox established at an Approved Depository Bank
for payment and/or collection of Receipts.
23
"Lockbox Account" is defined in clause (a) of Section 3.1.3.
"Lockbox Agreements" means the deposit account agreements, blocked
account agreements, restricted account agreements, lockbox agreements or similar
agreements, executed by and among the Borrowers, the Administrative Agent and
the Approved Depository Banks at which the Lockbox Accounts are being
maintained, as required pursuant to clause (b) of Section 3.1.3 or at which any
other deposit account of the Borrowers or any of their Subsidiaries are being
maintained in accordance with Section 7.2.19 or any other Loan Document, each in
form and substance substantially similar to Exhibit M-1, with respect to Lockbox
Accounts, and Exhibit M-2, with respect to any such other deposit accounts (a
"Control Agreement"), or otherwise reasonably satisfactory to the Administrative
Agent, as such agreements may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Company or the Company and its Subsidiaries taken
as a whole, (b) the rights and remedies of any Secured Party under any Loan
Document or (c) the ability of the Company or the Company and the other
Borrowers, taken as a whole, to perform their Obligations under the Loan
Documents.
"Material Contracts" means (a) any and all contracts, licenses, leases
or other agreements the cancellation or termination of which could reasonably be
expected to have a Material Adverse Effect and (b) any and all contracts,
licenses, leases or other agreements which (i) are necessary for the continued
operation of the Texas City Facility, or (ii) generate ten percent (10%) or more
of the total Accounts of the Borrowers both before and after giving effect to
any acrylonitrile production.
"Maturity Date" means the earliest to occur of (a) the date which is
the fifty-seventh month anniversary of the Effective Date and (b) the date which
is three months prior to the stated maturity date of the Senior Secured Notes.
"Maximum Loan Amount" means, at any time, the lesser of (a) the
Borrowing Base Amount, minus the sum of (i) the Availability Block, plus (ii)
the amount of any Availability Reserve (as adjusted from time to time pursuant
to the terms of the definition thereof and/or clause (e) of Section 2.7) and (b)
the Revolving Credit Commitment Amount.
"Merge" is defined in Section 7.2.9.
"Merger" means the "Merger" as defined in the Plan of Reorganization.
"Monthly Payment Date" means the last day of each calendar month, or,
if any such day is not a Business Day, the next succeeding Business Day.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Available Cash" means "Net Available Cash" as defined in the
Indenture.
"Net Debt Proceeds" means, with respect to the incurrence, sale or
issuance by any Borrower or any Subsidiary of any Borrower of any Indebtedness
after the Effective Date (other
24
than Indebtedness permitted by Section 7.2.2), the excess of (a) the gross cash
proceeds received by such Borrower or such Subsidiary from such incurrence, sale
or issuance, minus (b) the sum (without duplication) of all reasonable and
customary underwriting commissions and legal, investment banking, brokerage and
accounting and other professional fees, sales commissions and disbursements and
all other reasonable fees, expenses (including any State filing taxes) and
charges, in each case actually incurred in connection with such incurrence, sale
or issuance.
"Net Disposition Proceeds" means, with respect to any casualty,
condemnation and/or Disposition of or with respect to any Properties of any
Borrower or any Subsidiary of any Borrower after the Effective Date, other than
the Dispositions permitted in clauses (a), (b), (c) and (d) of the definition of
"Permitted Disposition" or an issuance or sale of any Capital Securities of any
Borrower or any Subsidiary of any Borrower or warrants or options with respect
thereto (which Dispositions of Capital Securities shall be covered by the
definition of Net Equity Proceeds), the excess of (a) the Insurance Proceeds,
Condemnation Proceeds and/or gross cash proceeds from such casualty,
condemnation and/or Disposition received by any such Borrower or Subsidiary
(including any such proceeds from Dispositions of Indenture Collateral not
constituting Net Available Cash) and any cash payments received in respect of
promissory notes or other non-cash consideration delivered to any such Borrower
or Subsidiary in respect thereof, minus (b) the sum (without duplication) of (i)
all reasonable and customary fees and expenses with respect to legal, investment
banking, brokerage, accounting and other professional fees, sales commissions
and disbursements and all other reasonable fees, expenses and charges, in each
case actually incurred in connection with any such casualty, condemnation and/or
Disposition, (ii) all Taxes and other governmental costs and expenses actually
paid or estimated by any such Borrower or Subsidiary (in good faith) to be
payable in cash in connection with any such casualty, condemnation and/or
Disposition, provided, that if, after the payment of all Taxes with respect to
any such casualty, condemnation and/or Disposition, the amount of estimated
Taxes, if any, pursuant to this clause (b)(ii) exceeded the Tax amount actually
paid in cash in respect of any such casualty, condemnation and/or Disposition,
the aggregate amount of such excess shall be immediately payable, pursuant to
clause (c) of Section 3.1.1, as Net Disposition Proceeds, and (iii) the amount
of Net Available Cash received from any Disposition of Indenture Collateral (but
excluding in all cases any proceeds of Collateral) to be used to replace such
Indenture Collateral in accordance with Section 4.11(2)(A) of the Indenture or
to repurchase the Senior Secured Notes as required under Section 3.09 and
Section 4.11 of the Indenture, provided that such Disposition is permitted under
this Agreement and that no Default or Event of Default then exists or will
result from such repurchase of the Senior Secured Notes, including a Default
under Section 7.2.7; and, provided further that after the replacement of any
Indenture Collateral subject to such Disposition in accordance with Section
4.11(2)(A) of the Indenture and the completion of the Asset Sale Offer (as such
term is defined in the Indenture) with respect to such Disposition of Indenture
Collateral, all Net Available Cash received from such Disposition of Indenture
Collateral which is not used to replace the Indenture Collateral (in accordance
with Section 4.11(2)(A) of the Indenture) and/or to repurchase the Senior
Secured Notes (in accordance with Section 3.09 and Section 4.11 of the
Indenture) is immediately used to prepay the Obligations as provided in Section
3.1.1(c) and Section 3.1.2(b) or deposited in a Lockbox Account subject to a
Lockbox Agreement, as applicable.
"Net Equity Proceeds" means with respect to the (a) sale or issuance by
any Borrower or any Subsidiary of any Borrower to any Person of its own Capital
Securities, warrants or options
25
or the exercise of any such warrants or options, the excess of (i) the gross
cash proceeds received by such Person from such sale, exercise or issuance,
minus (ii) all reasonable and customary underwriting commissions and legal,
investment banking, brokerage and accounting and other professional fees, sales
commissions and disbursements actually incurred (including any State filing
Taxes) in connection with such sale or issuance which have not been paid to
Affiliates of any Borrower or any Subsidiary of any Borrower in connection
therewith, or (b) receipt by any Borrower or any Subsidiary of any Borrower of
any equity or other capital contributions or any dividends from any Capital
Securities owned by any of them, the amount of such contributions or dividends
(other than equity or other capital contribution or dividends from a Borrower or
a Subsidiary to a Borrower).
"New Securities" means "New Securities" as defined in the Plan of
Reorganization.
"No Less Favorable Terms and Conditions" means, with respect to any
refinancing of any Indebtedness permitted hereunder, terms and conditions which
are no less favorable to the Lenders and evidenced by documentation which shall
not (a) increase the principal amount of (as the same may have been permanently
reduced subsequent to the Effective Date) or interest rate on such outstanding
Indebtedness, (b) reduce either the tenor or the average life of such
Indebtedness, (c) change the respective primary obligor(s) on the refinancing
Indebtedness (other than a change from any Borrower to any other Borrower or any
Subsidiary, or a change from any Subsidiary to any other Subsidiary, (d) change
the security, if any, for the refinancing Indebtedness (except to the extent
that less security is granted to holders of such refinancing Indebtedness), (e)
afford the holders of such refinancing Indebtedness other covenants, defaults,
rights or remedies, taken as a whole, more burdensome to the obligor(s) than
those contained in the Indebtedness being refinanced (and in the case of
Subordinated Debt, none of the subordination provisions contained in the
refinancing Indebtedness shall be less favorable to the Lenders, any Issuer or
the Administrative Agent than the Indebtedness being refinanced), or (f) if such
Indebtedness being refinanced is secured by Liens, afford the holders of such
refinancing Indebtedness any Liens which are prior to any of the Liens securing
the Obligations.
"Non-Excluded Taxes" means any Taxes other than net income and
franchise taxes imposed with respect to any Secured Party by (a) any
jurisdiction (or political subdivision thereof) of which such Secured Party is a
citizen or resident, (b) any jurisdiction (or political subdivision thereof) in
which such Secured Party is presently engaged in the active conduct of its
banking business through an office, branch or other permanent establishment, or
(c) the jurisdiction (or any political subdivision thereof) under the laws of
which such Secured Party is organized or in which it maintains its applicable
lending office.
"Non-U.S. Lender" means any Lender that is not a "United States
person", as defined under Section 7701(a)(30) of the Code.
"Note" means, as the context may require, a Revolving Credit Note or a
Swing Line Note.
"Obligation Account" is defined in clause (c) of Section 2.7.
26
"Obligations" means all obligations of every kind and nature, including
principal, fees, interest (including interest which accrues after or would
accrue but for the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of the Borrowers), expenses,
indemnities and all other sums, monetary or otherwise, whether absolute or
contingent, matured or unmatured, of the Borrowers and each other Borrower
arising under, in connection with or relating to the Loans, the Loan
Commitments, any Security Document or any other Loan Document which secures or
guarantees such obligations (including obligations under a Rate Protection
Agreement where the counterparty is a Lender or its Affiliate), in each case, to
the extent such obligations are owed to any Secured Party.
"Old 12 3/8% Secured Notes Indenture Trustee" means the "Old 12 3/8%
Secured Notes Indenture Trustee" as defined in the Plan of Reorganization.
"Old Discount Notes" means the "Old Discount Notes" as defined in the
Plan of Reorganization.
"Organic Document" means, with respect to any Borrower or any
Subsidiary of any Borrower, as applicable, its certificate of incorporation,
by-laws, certificate of partnership, partnership agreement, certificate of
formation, limited liability company agreement and all shareholder agreements,
voting trusts and similar arrangements applicable to any of such Borrower's or
such Subsidiary's partnership interests, limited liability company interests or
authorized shares of Capital Securities.
"Other Secured Claim" means, an "Other Secured Claim" as defined in the
Plan of Reorganization.
"Other Taxes" means any and all stamp, documentary or similar taxes, or
any other excise or property taxes or similar levies that arise on account of
any payment made or required to be made under any Loan Document or from the
execution, delivery, registration, recording or enforcement of any Loan
Document.
"Participant" is defined in Section 10.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Company or any corporation, trade or business that is, along with the Company, a
member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.
"Percentage" means, relative to any Lender, the applicable percentage
set forth opposite its name on Schedule II hereto or set forth in a Lender
Assignment Agreement, as such percentage may be adjusted from time to time
pursuant to Lender Assignment Agreements executed by such Lender and its
Assignee Lender and delivered pursuant to Section 10.11.1.
27
"Perfection Certificate" means the Perfection Certificate executed and
delivered by an Authorized Officer of each Borrower that is a party to a
Security Agreement pursuant to the terms of this Agreement, substantially in the
form of Exhibit K hereto, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Permitted Disposition" means any casualty or condemnation event or
Disposition (excluding in all cases any Disposition not permitted under Section
7.2.15) that is:
(a) Dispositions of inventory in the ordinary course of
business;
(b) Dispositions of any other Properties (other than
Accounts, inventory or Capital Securities of any Borrower or any
Subsidiary of any Borrower) (i) at fair market value, as determined by
the Board of Directors of the Company in good faith, (including as to
the value of all noncash consideration) in the ordinary course of
business and at least 85% of the consideration thereof received is in
the form of cash or cash equivalents, (ii) when, in the reasonable
judgment of the Company, such other Properties are worn out or obsolete
or (iii) when, in the reasonable judgment of the Company, such other
Properties are no longer used or useful in the conduct of the business
of the Borrowers or their Subsidiaries not to exceed $2,000,000 in any
one transaction or series of related transactions;
(c) a Disposition from a Borrower or a Subsidiary to
another Borrower, provided that the Company may not transfer all or
substantially all of its Properties to any Person;
(d) (i) any casualty or condemnation event with respect
to the Texas City Facility or any other Indenture Collateral (provided
such Property is repaired and/or replaced within one year from the date
of such casualty or condemnation, as applicable, with replacement or
repaired assets which are of similar or greater value, useful in the
ordinary course of the business of the Borrowers, meeting all
requirements of Section 7.2.1) and (ii) Disposition of Properties
(other than Accounts, inventory or Capital Securities of any Borrower
or any Subsidiary of any Borrower) in the ordinary course of business
in exchange for or in connection with the purchase (provided such
exchange or purchase is made within one year from the date of such
Disposition) of replacement assets (which are of similar or greater
value) useful in the ordinary course of the business of the Borrowers,
meeting all the requirements of Section 7.2.1; provided, that if the
casualty, condemnation or Disposition is by or pertains to Properties
of a Borrower, such casualty, condemnation or Disposition shall only be
a Permitted Disposition if the replacement assets are acquired by a
Borrower, and provided further that such Dispositions, together with
any casualty or condemnation events described in clause (d)(i) of this
definition, do not exceed $15,000,000, individually or in the
aggregate, during any calendar year;
(e) the granting of leases (including subleases) and
grounds leases of any underutilized or vacant properties of any
Borrower or any Subsidiary to third parties with which such Borrower or
Subsidiary has a production, co-production, co-generation, operating or
other agreement or to third party providers of energy or raw materials
in the
28
ordinary course of business, provided such leases do not materially
interfere with the operation of the business of any Borrower or any
Subsidiary or materially diminish the value of any of the Collateral;
and
(f) the granting of licenses (including sublicenses) of
any Intellectual Property Collateral of the Borrowers to any Person in
the ordinary course of business.
"Permitted Liens" is defined in Section 7.2.3.
"Permitted Real Estate Liens" means:
(a) minor irregularities in title, boundaries or other
survey defects, easements, rights-of-way, restrictions, servitudes,
permits, reservations, exceptions, zoning regulations, conditions,
covenants, mineral or royalty rights or reservations of oil, gas or
mineral leases, rights of others in any property of any Borrower or any
Subsidiary for streets, roads, bridges, pipes, pipelines, railroads,
electric transmission and distribution lines, telegraph and telephone
lines, the removal of oil, gas or other minerals or other similar
purposes, flood control, water rights, rights of others with respect to
navigable waters, sewage and drainage rights and other similar charges
or encumbrances existing as of the Effective Date and disclosed in a
survey (or granted by any Borrower or any Subsidiary in the ordinary
course of business) that do not, in the aggregate, materially impair
the value or ability to sell of the property of any Borrower and the
occupation, use and enjoyment by any Borrower or any Subsidiary of any
of their respective properties in the normal course of business;
(b) Liens securing Indebtedness neither created, assumed
nor guaranteed by any Borrower or any of their Subsidiaries upon lands
over which easements or similar rights are acquired by any Borrower or
any of their Subsidiaries in the ordinary course of business of any
Borrower or any of their Subsidiaries;
(c) terminable or short term leases or permits for
occupancy, which leases or permits expressly grant to any Borrower or
any Subsidiary the right to terminate them at any time on not more than
six months' notice and which occupancy does not interfere with the
operation of the business of any Borrower or any of their Subsidiaries;
(d) any obligations or duties affecting any of the
property of any Borrower or any of their Subsidiaries to any municipal
or public authority with respect to any franchise, grant, license or
permit that do not materially impair the use of such property for the
purpose for which it is held;
(e) Liens on any property in favor of any Governmental
Authority to secure partial, progress, advance or other payments
pursuant to any contract or statute, not yet due and payable;
(f) Liens with respect to the so-called "greenbelt" or
"buffer zone" properties, for as long as those properties are used
solely for "greenbelt" or "buffer zone" purposes;
29
(g) leases and ground leases of underutilized or vacant
properties of any Borrower or any Subsidiary to third parties with
which such Borrower or such Subsidiary has a production, co-production,
co-generation, operating or other arrangement or to third party
providers of energy or raw materials in the ordinary course of business
of such Borrower or such Subsidiary, provided such leases do not
materially interfere with the operations of any Borrower or any
Subsidiary, or materially diminish the value of any Collateral;
(h) easements, rights-of-way, restrictions and other
similar charges or encumbrances granted to others, in each case
incidental to, and not interfering with, the ordinary conduct of the
business of any Borrower or any Subsidiary, provided that such Liens
are not violated by the existing property and do not, in the aggregate,
materially diminish the value or ability to sell such property;
(i) the burdens of any law or governmental regulation or
permit requiring any Borrower or any Subsidiary to maintain certain
facilities or perform certain acts as a condition of its occupancy of
or interference with any public lands or any river or stream or
navigable waters; and
(j) and any extensions, renewals, modifications or
replacements thereof.
Notwithstanding the foregoing, no such Permitted Real Estate Liens
shall in any way materially impair the value of or ability to sell any
Collateral or materially impact the occupation, right or enjoyment of the
relevant property by the Borrowers or any Subsidiary.
"Person" means any natural person, corporation, limited liability
company, partnership, joint venture, association, trust or unincorporated
organization, Governmental Authority or any other legal entity, whether acting
in an individual, fiduciary or other capacity.
"Plan Effective Date" means the "Effective Date" as defined in the Plan
of Reorganization.
"Plan of Reorganization" is defined in Recital A.
"Pledge Agreement" means each Pledge Agreement executed and delivered
by a Borrower or a Subsidiary of a Borrower to secure the Obligations,
substantially in the form of Exhibit F hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Pledged Subsidiary" means each Borrower (other than the Company) and
each Subsidiary that is not a Foreign Subsidiary in respect of which the
Administrative Agent has been granted a security interest in, or a pledge of any
of, the Capital Securities of such Borrower or Subsidiary, as security for the
Obligations.
"Pre-Petition Credit Facility Agreements" means the "Pre-Petition
Credit Facility Agreements" as defined in the Plan of Reorganization.
30
"Priority Tax Claim" means, a "Priority Tax Claim" as defined in the
Plan of Reorganization.
"Projections" is defined in Section 7.1.1(m).
"Properties" means, as to any Person, any and all interests (of
whatever kind or nature) in or to any kind of property or asset (of whatever
kind or nature), whether real, personal, mixed or tangible or intangible.
"PulpCo Business" means the "PulpCo Business" as defined in the Plan of
Reorganization.
"Purchase Agreement" means the Asset and Stock Purchase Agreement among
the Company and Sterling Canada, Inc., Sterling Pulp Chemicals US, Inc.,
Sterling Pulp Chemicals, Inc. and Sterling Chemicals Acquisitions, Inc., as
sellers, and Superior Propane, Inc., as purchaser, dated as of November 13,
2002.
"Rate Protection Agreement" means, collectively, any interest rate
swap, cap, collar or similar agreement entered into by a Borrower under which
the counterparty of such agreement is (or at the time such agreement was entered
into, was) a Lender or an Affiliate of a Lender.
"Receipts" means any and all sums, collections, payments, funds,
proceeds and/or receipts owing from, or remitted by, any Person to any Borrower
or any Subsidiary of any Borrower of whatever kind or nature (including cash,
checks, credit card sales, promissory notes, instruments, documents of title,
Insurance Proceeds and Condemnation Proceeds) in respect of Accounts and/or any
other Collateral and any and all other property or assets of the Borrowers and
any Subsidiaries of the Borrowers other than Indenture Collateral; provided,
however, that in the event that any proceeds from or of Indenture Collateral
remain after any offer to repurchase the Senior Secured Notes has been
consummated in accordance with the terms of the Indenture and this Agreement, or
upon the payment in full of the Senior Secured Notes, any and all remaining
proceeds from or of the Indenture Collateral shall be deemed to be Receipts.
"Refunded Swing Line Loans" is defined in clause (b) of Section 2.3.2.
"Register" is defined in clause (b) of Section 2.7.
"Reimbursement Obligation" is defined in Section 2.6.3.
"Release" means a "release", as such term is defined in CERCLA.
"Reorganized Debtors" means "Reorganized Debtors" as defined in the
Plan of Reorganization.
"Required Lenders" means, at any time, Lenders holding 51% or more of
the Revolving Credit Commitments (determined on a combined basis), or if any of
the Revolving Credit Commitments have been terminated or are otherwise no longer
in effect, then Lenders holding 51% or more of the Obligations.
31
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
"Restricted Payment" means the declaration or payment of any dividend
(other than dividends payable solely in Capital Securities of the Company) on,
or the making of any payment or distribution on account of, or setting apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of any class of Capital Securities
of the Borrowers or any Subsidiary or any warrants or options to purchase any
such Capital Securities, whether now or hereafter outstanding, or the making of
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property, obligations of the Borrowers or any Subsidiary or
otherwise, other than any such dividends, payments or distributions that are
payable to any Borrower or any Subsidiary (so long as such dividend, payment or
distribution payable to a Subsidiary is not payable from a Borrower).
"Restructuring Transactions" means "Restructuring Transactions" as
defined in the Plan of Reorganization.
"Revolving Credit Commitment" means, relative to any Lender, such
Lender's obligation (if any) to make Loans pursuant to clause (a) of Section
2.1.1, in an amount not to exceed the product of (i) such Lender's Percentage,
multiplied by, (ii) the then applicable Revolving Credit Commitment Amount.
"Revolving Credit Commitment Amount" means, on any date, a maximum
aggregate amount of $100,000,000, as such amount may be permanently reduced from
time to time pursuant to Section 2.2 and other provisions of this Agreement.
"Revolving Credit Note" means a joint and several promissory note of
each Borrower payable to any Lender, in the form of Exhibit A-1 hereto (as such
promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the joint and several aggregate Indebtedness of the Borrowers
to such Lender resulting from outstanding Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"Revolving Credit Loans" is defined in clause (a) of Section 2.1.1.
"S&P" means Standard & Poor's Rating Services, a division of
XxXxxx-Xxxx, Inc.
"SEC" means the Securities and Exchange Commission.
"Secured Claim" means "Secured Claim" as defined in the Plan of
Reorganization.
"Secured Parties" means collectively, the Lenders, the Administrative
Agent, each counterparty to a Rate Protection Agreement that is (or at the time
such Rate Protection Agreement was entered into, was) a Lender or an Affiliate
thereof and (in each case), each of their respective successors, transferees and
assigns to the extent permitted by this Agreement.
"Security Agreement" means each Security Agreement executed and
delivered by a Borrower or a Subsidiary of a Borrower to secure the Obligations,
substantially in the form of
32
Exhibit G hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Security Document" means any and all agreements or instruments now or
hereafter executed and delivered by any Borrower or any other Person as security
for the payment or performance of the Obligations, including all Security
Agreements, Pledge Agreements and Lockbox Agreements, as any of the foregoing
may be amended, modified, renewed, supplemented or restated from time to time.
"Senior Secured Note Documents" means, collectively, the Indenture, the
Senior Secured Notes, the Indenture Deed of Trust, the Indenture Security
Agreement and each of the other security or other collateral agreements,
indentures, note purchase agreements, promissory notes, guarantees, and other
instruments and agreements executed and delivered in connection with the
issuance of the Senior Secured Notes, in each case as in effect on the Effective
Date.
"Senior Secured Notes" means the Company's 10% Senior Secured Notes Due
2007 in the original principal amount of $94,275,000.
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person and its
Subsidiaries on a consolidated basis is greater than the total amount of
liabilities, including Contingent Liabilities, of such Person and its
Subsidiaries on a consolidated basis, (b) the present fair salable value of the
assets of such Person and its Subsidiaries on a consolidated basis, is not less
than the amount that will be required to pay the probable liability of such
Person and its Subsidiaries on a consolidated basis on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not believe
that it or its Subsidiaries will, on a consolidated basis, incur debts or
liabilities beyond the ability of such Person and its Subsidiaries on a
consolidated basis to pay as such debts and liabilities mature, and (d) such
Person and its Subsidiaries on a consolidated basis are not engaged in business
or a transaction, and such Persons and its Subsidiaries on a consolidated basis
are not about to engage in business or a transaction, for which the property of
such Person and its Subsidiaries would constitute an unreasonably small capital.
The amount of Contingent Liabilities at any time shall be computed as the amount
that, in light of all the facts and circumstances existing at such time, can
reasonably be expected to become an actual or matured liability.
"State" means the several states of the United States and the District
of Columbia and their respective political subdivisions.
"Stated Amount" means, on any date and with respect to a particular
Letter of Credit, the total amount then available to be drawn under such Letter
of Credit.
"Stated Expiry Date" is defined in Section 2.6.
"Subordinated Debt" means any Indebtedness of any Borrower or any
Subsidiary subordinated in right of payment to the Obligations pursuant to
documentation containing redemption and other prepayment events, maturities,
amortization schedules, covenants, events of default, remedies, acceleration
rights, subordination provisions and other material terms satisfactory to the
Required Lenders.
33
"Subsidiary" means, with respect to any Person, (a) any corporation,
limited liability company, partnership or other entity of which more than 50% of
the Voting Stock is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more other Subsidiaries of such Person,
or by one or more other Subsidiaries of such Person or (b) any partnership,
joint venture or other entity as to which such Person, such Person and one or
more of its Subsidiaries or one or more Subsidiaries of such Person owns more
than a 50% ownership, equity or similar interest or has power to direct or cause
the direction of management and policies (directly or indirectly), or the power
to elect the managing partner (or the equivalent), of such partnership, joint
venture or other entity, as the case may be. Unless the context otherwise
specifically requires, the term "Subsidiary" or "Subsidiaries" shall (i) be a
reference to a Subsidiary or the Subsidiaries, as applicable, of the Company,
other than the Borrowers and (ii) not include the Excluded Subsidiaries,
provided that in the event the Excluded Subsidiaries have not been liquidated
and dissolved on or before June 19, 2003, then the Excluded Subsidiaries shall
be automatically deemed to be included within the term "Subsidiary" or
"Subsidiaries" of the Company as used in this Agreement and the other Loan
Documents.
"Swing Line Lender" means the Administrative Agent (or another Lender
designated by the Administrative Agent with the consent of the Company (such
consent not to be unreasonably withheld), if such Lender agrees to be the Swing
Line Lender hereunder), in such Person's capacity as the maker of Swing Line
Loans.
"Swing Line Loans" is defined in clause (b) of Section 2.1.1.
"Swing Line Loan Commitment" is defined in clause (b) of Section 2.1.1.
"Swing Line Loan Commitment Amount" means, on any date, the lesser of
(a) the then applicable Maximum Loan Amount and (b) $10,000,000, as such amount
may be permanently reduced from time to time pursuant to Section 2.2 and other
provisions of this Agreement.
"Swing Line Note" means a joint and several promissory note of each
Borrower payable to the Swing Line Lender, in the form of Exhibit A-2 hereto (as
such promissory note may be mended, endorsed or otherwise modified from time to
time), evidencing the joint and several aggregate Indebtedness of the Borrowers
to the Swing Line Lender resulting from outstanding Swing Line Loans, and also
means all other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"Synthetic Lease" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (a) that is not a capital lease in accordance
with GAAP and (b) in respect of which the lessee retains or obtains ownership of
the property so leased for federal income tax purposes, other than any such
lease under which that Person is the lessor.
"Tax Sharing Agreement" means the tax sharing agreement among the
Company and certain Subsidiaries of the Company, effective as of the first day
of the consolidated return year ending September 30, 1996, as amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with Section 7.2.11.
34
"Taxes" means any and all income, stamp or other taxes, duties, levies,
imposts, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, and all
interest, penalties or similar liabilities with respect thereto.
"Telerate Screen LIBO Page" means the display designated as "Page 3750"
on the Telerate System Incorporated Service (or such other page as may replace
Page 3750 on the service or such other service as may be nominated by the
British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association interest settlement rates for Dollar
deposits).
"Termination Date" means the date on which all Obligations have been
paid in full in cash, all Letters of Credit have been terminated, expired or
Cash Collateralized, all Rate Protection Agreements have been terminated and all
Commitments have been permanently terminated.
"Texas City Facility" means the petrochemicals production facilities
owned by the Company that are located in Texas City, Texas, including all of the
real estate, equipment, fixtures and other property associated therewith, all as
more particularly described in, and covered by the Lien granted in, the
Indenture Deed of Trust.
"Trustee" means National City Bank, as trustee under the Indenture.
"Type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"U.C.C." means the Uniform Commercial Code as may be amended and in
effect from time to time in the State of New York; provided that if, with
respect to any U.C.C. financing statement or by reason of any provision of law,
the perfection or the effect of perfection or non-perfection of the security
interests granted to the Administrative Agent pursuant to the applicable Loan
Document is governed by the Uniform Commercial Code as in effect in a
jurisdiction of the United States other than New York, U.C.C. means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions of each Loan Document and any U.C.C. financing
statement relating to such perfection or effect of perfection or non-perfection.
"United States" or "U.S." means the United States of America and all
States.
"Unofficial Secured Noteholders Committee" means the "Unofficial
Secured Noteholders Committee" as defined in the Plan of Reorganization.
"Voting Stock" means, with respect to any Person, Capital Securities of
any class or kind ordinarily having the power to vote (directly or indirectly)
for the election of directors, managers, representatives or other voting members
of the governing body of such Person.
"Welfare Plan" means a "welfare plan", as such term is defined in
Section 3(1) of ERISA.
35
"Wholly-Owned Subsidiary" means, as to any Person, (a) any corporation
100% of whose Capital Securities (other than any director's qualifying shares or
investments by foreign nationals mandated by applicable laws) is at the time
owned by such Person and/or one or more direct or indirect Wholly-Owned
Subsidiaries of such Person and (b) any partnership, limited liability company,
association or other entity in which such Person and/or one or more direct or
indirect Wholly-Owned Subsidiaries of such Person has a 100% equity interest at
such time.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document and the
Disclosure Schedule.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in a Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used in each Loan Document shall be interpreted,
and all accounting determinations and computations hereunder or thereunder shall
be made, in accordance with GAAP. Unless otherwise expressly provided, all
financial covenants and defined financial terms shall be computed on a
consolidated basis for the Borrowers, in each case without duplication.
ARTICLE II
TERMS OF COMMITMENTS AND LOANS
SECTION 2.1. Commitments. Subject to the terms and conditions and
relying on the representations and warranties of the Borrowers in this Agreement
(including Article V and the other Loan Documents), each Lender and each Issuer
severally agrees to make Credit Extensions as set forth in this Section 2.1.
2.1.1. Loan Commitments. From time to time on any Business Day
occurring from and after the Closing Date but prior to the Commitment
Termination Date:
(a) each Lender agrees that it will make revolving credit
loans (relative to such Lender, its "Revolving Credit Loans")
collectively to the Borrowers equal to such Lender's Percentage of the
aggregate amount of each Borrowing of Revolving Credit Loans requested
by the Borrowers to be made on such day, subject to the limits set
forth in Section 2.1.3; and
(b) the Swing Line Lender agrees that it will make loans (its
"Swing Line Loans") collectively to the Borrowers equal to the
principal amount of the Swing Line Loan requested by the Borrowers to
be made on such day, subject to the limits set forth in Section 2.1.3.
The Commitment of the Swing Line Lender to make Swing Line Loans as
provided in this Section 2.1 is herein referred to as its "Swing Line
Loan Commitment".
36
On the terms and subject to the conditions of this Agreement, the Borrowers may
from time to time borrow, repay and reborrow Loans.
2.1.2. Letter of Credit Commitment. From time to time on any
Business Day occurring from and after the Closing Date but prior to the
Commitment Termination Date, each Issuer agrees that it will (a) issue one or
more documentary or standby letters of credit (each, a "Letter of Credit") for
the account of any Borrower in the Stated Amount requested by such Borrower on
such day; or (b) extend the Stated Expiry Date of an existing standby Letter of
Credit previously issued hereunder. No Stated Expiry Date shall extend beyond
the earlier of (i) the Commitment Termination Date and (ii) unless otherwise
agreed to by the relevant Issuer in its sole discretion, one year from the date
of such extension. No Issuer shall be permitted or required to issue any Letter
of Credit if, after giving effect thereto, (A) the aggregate amount of all
Letter of Credit Outstandings would exceed the Letter of Credit Commitment
Amount or (B) the sum of (1) the aggregate amount of all Letter of Credit
Outstandings, plus (2) the aggregate principal amount of all Revolving Credit
Loans then outstanding, plus (3) the aggregate principal amount of all Swing
Line Loans then outstanding, would exceed the then applicable Maximum Loan
Amount.
2.1.3. Lenders Not Permitted or Required to Make Loans.
(a) No Lender shall be required to, and no Borrower shall
request any Lender to, make any Revolving Credit Loan if, after giving
effect thereto, (i) the sum of (A) the aggregate outstanding principal
amount of all the Revolving Credit Loans of all Lenders, plus (B) the
aggregate outstanding principal amount of all Swing Line Loans, plus
(C) the aggregate amount of all Letter of Credit Outstandings, would
exceed the then applicable Maximum Loan Amount; or (ii) the aggregate
outstanding principal amount of all Revolving Credit Loans of such
Lender, plus such Lender's Percentage of the aggregate outstanding
principal amount of all Swing Line Loans, plus such Lender's Percentage
of the aggregate amount of all Letter of Credit Outstandings, would
exceed such Lender's Percentage of the then applicable Maximum Loan
Amount.
(b) The Swing Line Lender shall not be permitted or required
to, and no Borrower shall be permitted to request the Swing Line Lender
to, make any Swing Line Loan if, after giving effect thereto, (i) the
aggregate outstanding principal amount of all the Swing Line Loans
would exceed the then existing Swing Line Loan Commitment Amount or
(ii) the aggregate outstanding principal amount of all the Revolving
Credit Loans of all Lenders, plus the aggregate outstanding principal
amount of all Swing Line Loans, plus the aggregate amount of all Letter
of Credit Outstandings, would exceed the then applicable Maximum Loan
Amount.
SECTION 2.2. Reduction of the Commitment Amounts. Each of the
Commitment Amounts are subject to reduction from time to time pursuant to this
Section 2.2.
2.2.1. Optional. The Company may, from time to time on any
Business Day occurring after the Closing Date, voluntarily reduce the
amount of the Revolving Credit Commitment Amount on the Business Day so
specified by the Company; provided, that (i) the Borrowers shall pay to
the Administrative Agent on the effective date of such
37
reduction the then applicable Early Termination Fee (as provided in the
definition thereof) due with respect to such reduction and (ii) any
such reduction shall require at least one Business Day's prior notice
to the Administrative Agent and be permanent, and any partial reduction
of the then applicable Revolving Credit Commitment Amount shall be in a
minimum amount of $1,000,000 and in an integral multiple of $500,000.
Any optional reduction of the then applicable Revolving Credit
Commitment Amount pursuant to the terms of this Agreement which reduces
the then applicable Revolving Credit Commitment Amount below the sum of
(i) the then applicable Swing Line Loan Commitment Amount and (ii) the
then applicable Letter of Credit Commitment Amount shall result in an
automatic and corresponding reduction of the then applicable Swing Line
Loan Commitment Amount and/or then applicable Letter of Credit
Commitment Amount (as directed by the Company in a notice to the
Administrative Agent delivered together with the notice of such
voluntary reduction in the then applicable Revolving Credit Commitment
Amount) to an aggregate amount not in excess of the then applicable
Revolving Credit Commitment Amount, as so reduced, without any further
action on the part of the Swing Line Lender or the Issuer.
2.2.2. Mandatory. Each of the Commitment Amounts shall be
reduced as set forth below.
(a) Each Commitment Amount shall, without any further action,
automatically and permanently be reduced on the Commitment Termination
Date so that each Commitment Amount equals $0.
(b) Prior to the Commitment Termination Date, any mandatory
reduction of the Revolving Credit Commitment Amount pursuant to Section
3.1.1. or Section 3.1.2. or otherwise which reduces the Revolving
Credit Commitment Amount below the sum of (i) the Letter of Credit
Commitment Amount and (ii) the Swing Line Loan Commitment Amount shall
result in an automatic and corresponding reduction of the Letter of
Credit Commitment Amount and/or the Swing Line Loan Commitment Amount
(as specified by the Company) to an aggregate amount not in excess of
the then applicable Revolving Credit Commitment Amount, as so reduced,
without any further action on the part of any Issuer or the Swing Line
Lender.
2.2.3. Termination of Agreement. The Borrowers may terminate
this Agreement at any time upon forty-five (45) days' prior written notice to
the Administrative Agent; provided that the Borrowers pay to the Administrative
Agent on the effective date of such termination the then applicable Early
Termination Fee. Notwithstanding anything to the contrary contained herein, all
Obligations shall become immediately due and payable and all Commitments shall
automatically be deemed terminated as of any termination of this Agreement,
including any termination under Section 2.2, Section 3.1 or Section 8.2 and,
pending a final accounting, the Administrative Agent may withhold any balances
in the Lockbox Accounts and/or Concentration Account (unless supplied with an
indemnity satisfactory to the Administrative Agent) to cover all of the
Obligations, including an amount equal to 110% of the Stated Amount of any
Letters of Credit outstanding with an expiry date on, or within thirty (30) days
of the effective date of termination of this Agreement. In addition, all of the
Administrative Agent's and the Lenders'
38
rights and Liens shall continue after any termination of the Commitments or this
Agreement until all outstanding Obligations have been paid and satisfied in
full.
SECTION 2.3. Borrowing Procedures and Funding Maintenance. Revolving
Credit Loans shall be made by the Lenders in accordance with Section 2.3.1 and
Swing Line Loans shall be made by the Swing Line Lender in accordance with
Section 2.3.2.
2.3.1. Borrowing Revolving Credit Loans.
(a) Whenever the Borrowers desire to make a Borrowing of
Revolving Credit Loans hereunder, they shall deliver a Borrowing
Request to the Administrative Agent and following such Borrowing
Request, the Administrative Agent shall promptly notify each applicable
Lender thereof. All Borrowing Requests are irrevocable and must be made
no later than (i) 12:00 noon, New York City time, the Business Day of a
proposed Borrowing of Base Rate Loans, and (ii) 12:00 noon, New York
City time, three (3) Business Days prior to a proposed Borrowing of
LIBO Rate Loans and each Borrowing must be made in an aggregate amount
of $500,000 or any larger integral multiple of $100,000 or in the
unused amount of the Revolving Credit Commitment Amount; provided, that
all initial Loans on the Closing Date will be made as Base Rate Loans.
No Borrowing Request shall be required, and the minimum aggregate
amounts specified under this Section 2.3.1 shall not apply, in the case
of (A) charges to the Obligation Account made pursuant to Section
3.1.5, (B) Revolving Credit Loans deemed made under Section 2.6.2 in
respect of unreimbursed Disbursements or (C) Revolving Credit Loans
made under clause (b) of Section 2.3.2 to refund Refunded Swing Line
Loans. On the terms and subject to the conditions of this Agreement,
each Borrowing shall be in the amounts, comprised of the Type of Loans
(and in the case of LIBO Rate Loans, for the Interest Period), and made
on the Business Day, specified in such Borrowing Request.
(b) Provided that a Borrower timely delivers a Borrowing
Request in accordance with Section 2.3.1(a) and subject to all other
terms and conditions of this Agreement, on or before 3:00 p.m., New
York City time, on the same Business Day, in the case of Base Rate
Loans, or on the third Business Day, in the case of LIBO Rate Loans,
each Lender shall deposit with the Administrative Agent same day funds
in an amount equal to such Lender's Percentage of the requested
Borrowing. Such deposit will be made to an account which the
Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the
Administrative Agent shall promptly and in any event prior to 4:00
p.m., New York City time, make such funds available to the Borrowers by
wire transfer to the account the Borrowers shall have specified in
their Borrowing Request. In the event that only one Lender fails to
fund its Percentage of Loans as required above prior to 4:00 p.m., New
York City time, the Administrative Agent shall (subject to the terms of
this Agreement) advance such Loans (or such lesser amount as is
available pursuant to clause (b) of Section 2.1.3) required to be
funded by such Lender and such Loan shall be deemed to be a Swing Line
Loan in the amount of such advance. No Lender shall be responsible for
any default by any other Lender in its obligation to make Revolving
Credit Loans under this Agreement, and each Lender shall be obligated
to make only Revolving Credit Loans provided to be made by it
39
under this Agreement, regardless of the failure of any other Lender to
fulfill its Revolving Credit Commitment hereunder.
(c) In order to provide for the payment of all expenses
described in clauses (a), (b) and (c) of Section 10.3 and fees payable
pursuant to Section 3.3 and Article V (for distribution by
Administrative Agent as applicable) on the Closing Date which are not
paid directly by the Borrowers on such date, the Borrowers hereby agree
to make Borrowings from the Lenders (consisting of Revolving Credit
Loans in amounts determined in accordance with their respective
Percentages) on the Closing Date, in such amount as is necessary to
effect the payment of such expenses and fees. The Borrowers further
agree that the letters of credit outstanding under the Existing Credit
Agreement and listed on Schedule V (the "Existing Letters of Credit")
shall not be replaced but shall be automatically deemed to have been
issued under this Agreement (and to have reduced the amount available
to be borrowed under the then Revolving Credit Commitment Amount by an
amount equal to the aggregate undrawn and/or unreimbursed amounts of or
relating to such Existing Letters of Credit) effective as of the
Closing Date. The Borrowers hereby irrevocably instruct and authorize
the Administrative Agent, on behalf of the Lenders, to make such Credit
Extensions available to the Borrowers on the Closing Date by applying
the proceeds of such Credit Extensions to the payment of such expenses,
fees and obligations (in accordance with the foregoing provisions of
this clause (c)), and the Lenders hereby agree, on the terms and
subject to the conditions of this Agreement, to make such Credit
Extensions to the Borrowers on such date for such purposes and, to deem
such Existing Letters of Credit to have been issued under this
Agreement for all purposes, without need for delivery by the Company of
a Borrowing Request or Issuance Request. The Borrowers acknowledge that
no Issuer shall be required to issue any Letters of Credit on account
of the deemed issuance of the Existing Letters of Credit.
2.3.2. Borrowing Swing Line Loans.
(a) By telephonic notice, promptly followed (within one
Business Day) by the delivery of a confirming Borrowing Request, to the
Swing Line Lender and the Administrative Agent on or before 12:00 noon,
New York City time, on the Business Day the proposed Swing Line Loan is
to be made, any Borrower may from time to time irrevocably request that
a Swing Line Loan be made by the Swing Line Lender in a minimum
principal amount of $100,000 or any larger integral multiple of
$10,000. All Swing Line Loans shall be made as Base Rate Loans and
shall not be entitled to be converted into LIBO Rate Loans. Provided
that a Borrower timely requests a Swing Line Loan and subject to all
other terms and conditions of this Agreement, the proceeds of each
Swing Line Loan shall be made available by the Swing Line Lender, by
3:00 p.m., New York City time, on the Business Day telephonic notice is
received by it as provided in this clause (a), to such Borrower by wire
transfer to the account such Borrower shall have specified in its
notice therefor. The Borrowers hereby waive the right to dispute the
Administrative Agent's record of the terms of any telephonic notice,
absent manifest error.
40
(b) If (i) any Swing Line Loan, (A) shall be outstanding for
more than four Business Days or (B) is or will be outstanding on a date
when any Borrower requests that a Revolving Credit Loan be made or (ii)
any Default shall occur and be continuing, each Lender (other than the
Swing Line Lender) irrevocably agrees that it will, at the request of
the Swing Line Lender (and at the discretion of the Swing Line Lender)
and upon notice from the Administrative Agent, make a Revolving Credit
Loan (which shall initially be funded as a Base Rate Loan) in an amount
equal to such Lender's Percentage of the aggregate principal amount of
all such Swing Line Loans then outstanding (such outstanding Swing Line
Loans hereinafter referred to as the "Refunded Swing Line Loans"). On
or before 12:00 noon, New York City time on the first Business Day
following receipt by each Lender of a request to make Revolving Credit
Loans as provided in the preceding sentence, each such Lender shall
deposit in an account specified by the Swing Line Lender the amount so
requested in same day funds and such funds shall be applied by the
Swing Line Lender to repay the Refunded Swing Line Loans. At the time
the Lenders make the above referenced Revolving Credit Loans, the Swing
Line Lender shall be deemed to have made, in consideration of the
making of the Refunded Swing Line Loans, a Revolving Credit Loan in an
amount equal to the Swing Line Lender's Percentage of the aggregate
principal amount of the Refunded Swing Line Loans. Upon the making (or
deemed making, in the case of the Swing Line Lender) of any Revolving
Credit Loans pursuant to this clause (b), the amount so funded shall
become outstanding under such Lender's Revolving Credit Loans and shall
no longer be owed under the Swing Line Lender's Swing Line Loans. All
interest payable with respect to any Revolving Credit Loans made (or
deemed made, in the case of the Swing Line Lender) pursuant to this
clause (b) shall be appropriately adjusted to reflect the period of
time during which the Swing Line Lender had outstanding Swing Line
Loans in respect of which such Revolving Credit Loans were made.
(c) If, at any time prior to the making of Revolving Credit
Loans to replace any outstanding Swing Line Loans pursuant to clause
(b) of this Section 2.3.2, any Lender is stayed or otherwise prohibited
by any Governmental Authorities from making such a Revolving Credit
Loan, each Lender with a Revolving Credit Commitment (other than the
Swing Line Lender) irrevocably agrees that it will, at the request of
the Swing Line Lender and upon notice from the Administrative Agent,
purchase an undivided participation interest in all such Swing Line
Loans in an amount equal to its Percentage of the aggregate outstanding
amount of such Swing Line Loans and transfer immediately to an account
identified by the Swing Line Lender, in immediately available funds,
the amount of its participation. The Swing Line Lender will deliver to
each such Lender, promptly following receipt of such funds, a
participation certificate, dated the date of receipt of such funds and
in the amount of such Lender's participation if requested to do so by
such Lender.
(d) Each Borrower expressly agrees that, in respect of each
Lender's funded participation interest in any Swing Line Loan, such
Lender shall be deemed to be in privity of contract with each Borrower
and have the same rights and remedies against each Borrower under the
Loan Documents as if such funded participation interest in such Swing
Line Loan were a Revolving Credit Loan.
41
(e) Each Lender's obligation to make Revolving Credit Loans or
purchase participation interests in Swing Line Loans, as contemplated
by clause (b) or (c) of this Section 2.3.2, shall be absolute and
unconditional and without recourse to the Swing Line Lender and shall
not be affected by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender may
have against the Swing Line Lender, any Borrower or any other Person
for any reason whatsoever, (ii) the occurrence or continuance of a
Default, an Event of Default or a Material Adverse Effect, (iii) the
acceleration or maturity of any Loans or the termination of any
Commitment after the making of any Swing Line Loan, (iv) any breach of
this Agreement or any other Loan Document by any Person, or (v) any
other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
2.3.3. Joint and Several Liability; Rights of Contribution.
Each Borrower acknowledges and agrees that: (i) pursuant to this
Agreement, the Borrowers desire to utilize their borrowing potential on
a consolidated basis; (ii) each Borrower has determined that it will
benefit specifically and materially from the Credit Extensions
contemplated by this Agreement; (iii) it is both a condition precedent
to the obligations of the Administrative Agent and the Lenders
hereunder and a desire of each Borrower that each Borrower execute and
deliver to the Lenders this Agreement and the other Loan Documents to
which it is a party; and (iv) each Borrower has requested and bargained
for the structure and terms of and security for the Credit Extensions
contemplated by this Agreement and the other Loan Documents.
(b) Each Borrower hereby irrevocably and unconditionally: (i)
agrees that it is jointly and severally liable to the Administrative
Agent and the Lenders for the full and prompt payment and performance
of the Obligations of each Borrower under this Agreement and each other
Loan Document notwithstanding that such Loan Document may specify that
a particular Borrower is responsible for a given payment or
performance; (ii) agrees to fully and promptly perform all of its
obligations hereunder with respect to each Credit Extension made
hereunder as if such Credit Extension had been made directly to it; and
(iii) agrees as a primary obligation to indemnify the Administrative
Agent and each Lender, on demand, for and against any loss incurred by
the Administrative Agent or any Lender as a result of any of the
Obligations of any Borrower (the "subject Borrower") being or becoming
void, voidable, unenforceable or ineffective for any reason whatsoever,
whether or not known to the subject Borrower or any other Person, the
amount of such loss being the amount which the Administrative Agent or
the Lenders (or any of them) would otherwise have been entitled to
recover from the such subject Borrower.
(c) It is the intent of each Borrower that the indebtedness,
obligations and liabilities under this Agreement of no one of them be
subject to challenge on any basis related to any federal or state law
dealing with fraudulent conveyances or any other law related to
transfers for less than fair or reasonably equivalent value.
Accordingly, as of the date hereof, the liability of each Borrower
under this Section 2.3.3, together with all of its other liabilities to
all Persons as of the date hereof and as of any other date on which a
transfer is deemed to occur by virtue of this Agreement, calculated in
amounts sufficient to pay its probable net liabilities on its existing
indebtedness as the same
42
become absolute and matured ("Dated Liabilities") is and is to be, less
than the amount of the aggregate of a fair valuation of its property as
of such corresponding date ("Dated Assets"). To this end, each Borrower
under this Section 2.3.3 (i) grants to and recognizes in each other
Borrower ratably, rights of subrogation and contribution in the amount,
if any, by which the Dated Assets of such Borrower, but for the
aggregate of subrogation and contribution in its favor recognized
herein, would exceed the Dated Liabilities of such Borrower or
Borrowers, as the case may be, and (ii) acknowledges receipt of and
recognizes its right to subrogation and contribution ratably from the
other Borrowers in the amount, if any, by which the Dated Liabilities
of such Borrower, but for the aggregate of subrogation and contribution
in its favor recognized herein, would exceed the Dated Assets of such
Borrower under this Section 2.3.3. In recognizing the value of the
Dated Assets and the Dated Liabilities, it is understood that each
Borrower will recognize, to at least the same extent of their aggregate
recognition of liabilities hereunder, their rights to subrogation and
contribution hereunder. It is a material objective of this Section
2.3.3 that each Borrower recognizes rights to subrogation and
contribution rather than be deemed to be insolvent (or in contemplation
thereof) by reason of an arbitrary interpretation of its joint and
several obligations hereunder.
(d) Each Borrower agrees and acknowledges that the present
structure of the credit facilities detailed in this Agreement is based
in part upon the financial and other information presently known to the
Administrative Agent and the Lenders regarding each Borrower, the
corporate or other organizational structure of each Borrower and the
present financial condition of each Borrower. Upon the occurrence of an
Event of Default and so long as it is continuing, each Borrower hereby
agrees that the Required Lenders shall have the right, in their sole
credit judgment, to require that any or all of the following changes be
made to the credit facilities contemplated in this Agreement: (i)
restrict loans and advances between the Borrowers, (ii) establish
separate Lockbox Accounts, Concentration Accounts and/or Obligation
Accounts for each Borrower, (iii) separate the Revolving Credit Loans,
Swing Line Loans and Letters of Credit into separate Revolving Credit
Loans, Swing Line Loans and Letters of Credit to each of the Borrowers
as shall be determined by the Required Lenders and (iv) establish such
other procedures as shall be reasonably deemed by the Required Lenders
to be useful in tracking where Revolving Credit Loans, Swing Line Loans
and Letters of Credit are made under this Agreement and the source of
payments received by the Lenders on such Credit Extensions.
(e) Each of the Borrowers hereby irrevocably and
unconditionally agrees that it is jointly and severally obligated in
respect of all Credit Extensions and other Obligations (including
Letter of Credit Obligations), and that the aggregate amount of credit
available hereunder to any of the Borrowers at any time shall be
determined by taking into account all Letters of Credit Outstandings
and all Loans outstanding, regardless of which of the Borrowers may be
the beneficiary of any Letters of Credit or received the proceeds of
any of the Borrowings. By executing this Agreement each of the
Borrowers confirms to the other parties to this Agreement that the
Company shall (and is hereby duly appointed by each of the Borrowers
to) act as agent for the Borrowers for all purposes of requesting Loans
and Letters of Credit, for purposes of allocation (to the extent
permitted herein) of Letters of Credit and the proceeds of Loans, and
for all other purposes of this Agreement
43
pursuant to any provision identifying the Borrowers or any of them to
take any action or receive any communication (regarding uses and the
availability of credit hereunder, and otherwise). Each of the Borrowers
further agrees that each of the Lenders and the Administrative Agent
shall be entitled to deal as to these matters only with the Company and
(to the extent contemplated herein) to act as to these matters in
accordance with instructions or other communications from the Company.
Neither the Lenders nor the Administrative Agent shall have any
responsibility to any Borrower for acting as provided in this
provision, and the Obligations of each of the Borrowers to the
Administrative Agent or the Lenders shall not be affected by any matter
relating to acts or omissions of the Company relating to Credit
Extensions or otherwise as agent for the Borrowers hereunder.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 12:00
noon, New York City time, on a Business Day, the Company may from time to time
irrevocably elect, on not less than one Business Day's notice (in the case of a
conversion of LIBO Rate Loans to Base Rate Loans) or three Business Days' notice
(in the case of a continuation of LIBO Rate Loans or a conversion of Base Rate
Loans into LIBO Rate Loans) nor more than five Business Days' notice (in the
case of any Loans) that all, or any portion in a minimum amount of $500,000 or
an integral multiple of $100,000, of any Loans be, in the case of Base Rate
Loans, converted into LIBO Rate Loans or, in the case of LIBO Rate Loans, be
converted into Base Rate Loans or continued as LIBO Rate Loans (in the absence
of delivery of a Continuation/Conversion Notice with respect to any LIBO Rate
Loan at least three Business Days (but not more than five Business Days) before
the last day of the then current Interest Period with respect thereto, such LIBO
Rate Loan shall, on such last day, automatically convert to a Base Rate Loan);
provided, however, that (a) each such conversion or continuation shall be pro
rated among the applicable outstanding Loans of all Lenders and (b) no portion
of the outstanding principal amount of any Loans may be continued as, or be
converted into, LIBO Rate Loans when any Default has occurred and is continuing.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the joint and several obligation of the
Borrowers to repay such LIBO Rate Loan shall nevertheless be to such Lender for
the account of such foreign branch, Affiliate or international banking facility.
SECTION 2.6. Letter of Credit Issuance Procedures. By delivering to an
Issuer and the Administrative Agent an Issuance Request on or before 12:00 noon,
New York City time, on a Business Day, the Company may, from time to time
irrevocably request, on not less than three nor more than ten Business Days'
notice (or such shorter or longer notice as may be acceptable to such Issuer),
in the case of an initial issuance of a Letter of Credit, and not less than
three nor more than ten Business Days' notice (unless a shorter or longer notice
period is acceptable to such Issuer) prior to the then existing Stated Expiry
Date of a Letter of Credit, in the case of a request for the extension of the
Stated Expiry Date of a Letter of Credit, that such Issuer issue, or extend the
Stated Expiry Date of, as the case may be, an irrevocable Letter of Credit on
behalf of
44
any Borrower in such form as may be requested by the Borrowers and approved by
such Issuer; provided, however, that no extension of the Stated Expiry Date of
an outstanding Letter of Credit may provide for a Stated Expiry Date subsequent
to the earlier of (a) the Commitment Termination Date and (b) one year from the
date of such extension. Notwithstanding anything to the contrary contained
herein or in any separate application for any Letter of Credit, each Borrower
hereby jointly and severally acknowledges and agrees that it shall be obligated
to reimburse the applicable Issuer upon each Disbursement paid under a Letter of
Credit, and it shall be deemed to be the obligor for purposes of each such
Letter of Credit issued hereunder (whether the account party on such Letter of
Credit is such Borrower or any other Borrower). Upon timely receipt of an
Issuance Request and subject to all other terms and conditions of this
Agreement, the Administrative Agent shall promptly notify the relevant Issuer
and each Lender thereof and shall cause: (i) the Letter of Credit requested by
the Issuance Request to be issued and (ii) the relevant Issuer to (A) comply
with the terms and conditions of this Agreement relating to the Letter of Credit
and (B) to fulfill the duties and obligations of an Issuer hereunder. Each
Letter of Credit shall by its terms be stated to expire on a date (each, a
"Stated Expiry Date") no later than one year from the date of its issuance.
2.6.1. Other Lenders' Participation. Upon the issuance of
each Letter of Credit issued by an Issuer pursuant hereto, and without
further action, each Lender (other than the Issuer) that has a
Revolving Credit Commitment shall be deemed to have irrevocably
purchased from the Issuer, to the extent of its Percentage of each such
Letter of Credit, and the Issuer shall be deemed to have irrevocably
granted and sold to each such Lender a participation interest in each
such Letter of Credit (including the Contingent Liability and any
Reimbursement Obligation and all rights with respect thereto), and each
such Lender shall, to the extent of its Percentage of each such Letter
of Credit, be responsible for reimbursing promptly (and in any event
within one Business Day) the Issuer for Reimbursement Obligations which
have not been reimbursed by the Borrowers in accordance with Section
2.6.2 and Section 2.6.3. In addition, each such Lender shall, to the
extent of its Percentage of each such Letter of Credit, be entitled to
promptly receive a ratable portion of the Letter of Credit fees payable
pursuant to Section 3.3.3 with respect to each Letter of Credit and of
interest payable pursuant to Section 3.2 with respect to any
Reimbursement Obligation. To the extent that any Lender has reimbursed
the Issuer for a Disbursement as required by this Section 2.6.1 and
Section 2.6.2, such Lender shall be entitled to receive its ratable
portion of any amounts subsequently received (from the Borrowers or
otherwise) in respect of such Disbursement.
(b) Each Lender's obligation to reimburse the Issuer and
purchase participation interests in Letters of Credit, as contemplated
by this Section 2.6.1, Section 2.6.2 and Section 2.6.3, shall be
absolute and unconditional and without recourse to the Issuer and shall
not be affected by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender may
have against the Issuer, any Borrower or any other Person for any
reason whatsoever, (ii) the occurrence or continuance of a Default, an
Event of Default or a Material Adverse Effect, (iii) the acceleration
or maturity of any Loans or the termination of any Commitment after the
issuance of a Letter of Credit, (iv) any breach of this Agreement or
any other Loan Document by any Person, or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing.
45
2.6.2. Disbursements: Conversion to Loans. The Issuer will
notify the Company and the Administrative Agent promptly of the presentment for
payment of any drawing under any Letter of Credit issued by the Issuer, together
with notice of the date (the "Disbursement Date") such payment is required to be
made (each such payment, a "Disbursement"); provided that the failure of an
Issuer to give such notice shall not affect the Reimbursement Obligations of the
Borrowers hereunder. Subject to the terms and provisions of such Letter of
Credit, the Issuer shall make such payment to the beneficiary (or its designee)
of such Letter of Credit on the Disbursement Date. Immediately, and in any event
prior to 12:00 noon, New York City time, on the Disbursement Date, the Borrowers
will (jointly and severally) reimburse the Administrative Agent, for the account
of the Issuer, for all amounts which the Issuer has disbursed under such Letter
of Credit, without presentment, demand, protest or other formalities of any
kind. Unless a Borrower has notified the Administrative Agent no later than one
Business Day prior to the Disbursement Date that it will reimburse the Issuer
for the applicable Disbursement with funds other than the proceeds of Revolving
Credit Loans or delivered to the Administrative Agent a Borrowing Request for
Revolving Credit Loans in an amount equal to such Disbursement, the Borrowers
will be deemed to have given a Borrowing Request to the Administrative Agent
requesting that the Lenders make Revolving Credit Loans which shall be Base Rate
Loans on the Disbursement Date in an amount equal to such Disbursement (or
lesser amount if the aggregate amount of the Revolving Credit Loans available
pursuant to Section 2.1.3 is less than the Disbursement); provided, that, such
Revolving Credit Loans shall be subject to (A) the satisfaction of the
conditions in Article V and (B) the existence of Revolving Credit Loan
availability pursuant to Section 2.1.3 hereof (after giving effect to repayment
of the applicable Reimbursement Obligations with the proceeds of the proposed
Revolving Credit Loans). Subject to the preceding sentence, if so requested by
the Administrative Agent, each of the Lenders shall, on the date of such
Disbursement, make such Revolving Credit Loans in an amount equal to such
Lender's Percentage of such Borrowing or the aggregate amount of the Revolving
Credit Loans available pursuant to Section 2.1.3, as applicable, the proceeds of
which shall be applied directly by the Administrative Agent to reimburse the
applicable Issuer to the extent of such proceeds. If the Borrowers fail to
reimburse the applicable Issuer as provided above for any reason, including
failure to satisfy the conditions of Article V or insufficient unused Revolving
Credit Loan availability pursuant to Section 2.1.3, such Issuer shall promptly
notify the Administrative Agent and the Administrative Agent shall notify each
Lender of the unreimbursed amount of such Disbursement and of such Lender's
respective participation therein based on such Lender's Percentage. Each Lender
will pay to the Administrative Agent for the account of the applicable Issuer on
the date of such notice, in immediately available funds, an amount equal to such
Lender's Percentage of such unreimbursed Disbursement (or, if such notice is
made after 1:00 p.m. (New York, New York time) on such date, on the next
succeeding Business Day). If any Lender fails to make available to such Issuer,
in immediately available funds, the amount of such Lender's Percentage in such
unreimbursed Disbursement as provided in this Section 2.6.2, such Issuer shall
be entitled to recover such amount on demand from such Lender together with
interest at the Federal Funds Rate for one Business Day and thereafter at the
Base Rate for each day such amount remains unpaid to the Issuer. Nothing in this
Section 2.6.2 shall be deemed to prejudice the right of any Lender to recover
from such Issuer any amounts made available by such Lender to such Issuer
pursuant to this Section 2.6.2 if it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit by such Issuer
was wrongful and such wrongful payment was the result of gross negligence or
willful misconduct on the part of such Issuer. The applicable Issuer shall pay
to the Administrative Agent, and the
46
Administrative Agent to each Lender, such Lender's Percentage of all amounts
received from the Borrowers for payment, in whole or in part, of the
Reimbursement Obligations in respect of any Letter of Credit, but only to the
extent such Lender has made payment to such Issuer in respect of such Letter of
Credit pursuant to this Section 2.6.2.
2.6.3. Reimbursement. The joint and several obligation (a
"Reimbursement Obligation") of the Borrowers under Section 2.6.2 to reimburse
the Issuer with respect to each Disbursement (including interest thereon) not
converted into Revolving Credit Loans constituting a Base Rate Loan pursuant to
Section 2.6.2, and, upon such Borrower failing to reimburse the Issuer and the
giving of notice thereof by the Administrative Agent to the Lenders, each
Lender's obligation under Section 2.6.1 and Section 2.6.2 to reimburse the
Issuer or fund its Percentage of any unreimbursed Disbursement converted into a
Base Rate Loan, shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which any Borrower or such Lender, as the case may be, may have or have had
against the Issuer or any such Lender, including any defense based upon the
failure of any Disbursement to conform to the terms of the applicable Letter of
Credit or any non-application or misapplication by the beneficiary of the
proceeds of such Letter of Credit or any other reason whatsoever, including
those set forth in clause (b) of Section 2.6.5 below; provided, however, that
after paying in full its Reimbursement Obligation (or, in the case of the
Lenders, their Percentage of such Reimbursement Obligation) hereunder, nothing
herein shall adversely affect the right of any Borrower or Lender, as the case
may be, to commence any proceeding against the Issuer for any wrongful
Disbursement made by the Issuer under a Letter of Credit as a result of acts or
omissions constituting gross negligence or willful misconduct on the part of the
Issuer.
2.6.4. Deemed Disbursements. Upon the occurrence and during
the continuation of any Event of Default, after notice from the Administrative
Agent, (a) an amount equal to all Letter of Credit Outstandings shall, without
demand upon or notice to any Borrower or any other Person, be deemed to be due
and payable to the Issuer (notwithstanding that such amount may not in fact have
been so paid or disbursed); and (b) each Borrower shall be immediately jointly
and severally obligated to Cash Collateralize all Letter of Credit Outstandings.
At such time as the Event of Default giving rise to the obligation to Cash
Collateralize all Letter of Credit Outstanding hereunder shall have been cured
or waived, the Administrative Agent shall return all amounts then on deposit
with the Administrative Agent pursuant to this Section 2.6.4 to the Company,
together with accrued interest at the Federal Funds Rate, which have not been
applied to the satisfaction of such Obligations.
2.6.5. Additional Letter of Credit Provisions.
(a) The issuance by the applicable Issuer of each Letter of
Credit shall, in addition to the conditions precedent set forth in
Article V, be subject to the conditions precedent that such Letter of
Credit shall be in the form and contain such terms as shall be
reasonably satisfactory to such Issuer, and that the Borrowers shall
have executed and delivered such other instruments and agreements
relating to the Letter of Credit as such Issuer shall have reasonably
requested and that are not inconsistent with the terms of this
Agreement, including the applicable Bank's Application therefor. In the
event of a
47
conflict between the terms of this Agreement and the terms of any
Application, the terms of this Agreement shall control.
(b) EACH BORROWER AND, TO THE EXTENT SET FORTH IN SECTION
2.6.1, SECTION 2.6.2 AND SECTION 2.6.3, EACH LENDER, SHALL ASSUME ALL
RISKS OF THE ACTS AND OMISSIONS OF OR MISUSE OF THE LETTERS OF CREDIT
ISSUED BY SUCH ISSUER BY THE RESPECTIVE BENEFICIARIES OF SUCH LETTER OF
CREDIT. IN FURTHERANCE AND NOT IN LIMITATION OF THE FOREGOING, SUCH
ISSUER SHALL NOT BE RESPONSIBLE: (1) FOR THE FORM VALIDITY,
SUFFICIENCY, ACCURACY, GENUINENESS OR LEGAL EFFECT OF ANY DOCUMENT
SUBMITTED BY ANY PERSON IN CONNECTION WITH THE APPLICATION FOR OR
ISSUANCE OF SUCH LETTERS OF CREDIT, EVEN IF IT SHOULD IN FACT PROVE TO
BE IN ANY OR ALL RESPECTS INVALID, INSUFFICIENT, INACCURATE, FRAUDULENT
OR FORGED; (2) FOR THE VALIDITY OR SUFFICIENCY OF ANY INSTRUMENT
TRANSFERRING OR ASSIGNING OR PURPORTING TO TRANSFER OR ASSIGN ANY SUCH
LETTER OF CREDIT OR THE RIGHTS OR BENEFITS THEREUNDER OR PROCEEDS
THEREOF, IN WHOLE OR IN PART, WHICH MAY PROVE TO BE INVALID OR
INEFFECTIVE FOR ANY REASON; (3) FOR ERRORS, OMISSIONS, INTERRUPTIONS OR
DELAYS IN TRANSMISSION OR DELIVERY OF ANY MESSAGES, BY MAIL, CABLE,
TELEGRAPH, TELEX OR OTHERWISE, WHETHER OR NOT THEY ARE IN CIPHER; (4)
FOR ERRORS IN INTERPRETATION OF TECHNICAL TERMS; (5) FOR ANY LOSS OR
DELAY IN THE TRANSMISSION OR OTHERWISE OF ANY DOCUMENT REQUIRED IN
ORDER TO MAKE A DRAWING UNDER ANY SUCH LETTER OF CREDIT OR OF THE
PROCEEDS THEREOF; (6) FOR THE MISAPPLICATION BY THE BENEFICIARY OF ANY
SUCH LETTER OF CREDIT OF THE PROCEEDS OF ANY DRAWING UNDER SUCH LETTER
OF CREDIT; AND (7) FOR ANY CONSEQUENCES ARISING FROM CAUSES BEYOND THE
CONTROL OF SUCH ISSUER, INCLUDING THE ACTIONS OF ANY GOVERNMENTAL
AUTHORITY. NONE OF THE ABOVE SHALL AFFECT, IMPAIR, OR PREVENT THE
VESTING OF ANY OF SUCH ISSUER'S RIGHTS OR POWERS HEREUNDER. ANY ACTION
TAKEN OR OMITTED TO BE TAKEN BY ANY ISSUER IN GOOD FAITH (AND NOT
CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) SHALL BE BINDING
UPON EACH BORROWER AND EACH LENDER, AND SHALL NOT PUT THE ISSUER UNDER
ANY RESULTING LIABILITY TO ANY BORROWER OR ANY LENDER AS THE CASE MAY
BE. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN CLAUSE (7)
ABOVE, NEITHER THE BORROWERS NOR ANY LENDER SHALL HAVE ANY OBLIGATION
TO INDEMNIFY ANY ISSUER IN RESPECT OF ANY LIABILITY INCURRED BY SUCH
ISSUER ARISING SOLELY OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF SUCH ISSUER, AS DETERMINED BY A FINAL NON-APPEALABLE JUDGMENT OF A
COURT OF COMPETENT JURISDICTION.
48
(c) Each Issuer will send to the Company and the
Administrative Agent immediately upon issuance of any Letter of Credit,
or an amendment thereto, a true and complete copy of such Letter of
Credit, or such amendment thereto. Upon issuance of any Letter of
Credit or an amendment thereto, the Administrative Agent shall promptly
notify each Lender of the terms of such Letter of Credit or amendment
thereto, and of such Lender's Percentage of the amount of such Letter
of Credit or amendment thereto, and the Administrative Agent shall
provide to each Lender a copy of such Letter of Credit or such
amendment thereto. Upon cancellation or termination of any Letter of
Credit, the applicable Issuer shall promptly notify the Administrative
Agent and the Company, and the Administrative Agent will then promptly
notify each Lender of such cancellation or termination.
SECTION 2.7. Register; Notes; Obligation Account; Reserves.
(a) Each Lender may maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the
Borrowers to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder. In the case of a Lender that
does not request, pursuant to clause (b)(ii) of this Section 2.7,
execution and delivery of a Note evidencing the Loans made by such
Lender to the Borrowers, such account or accounts shall, to the extent
not inconsistent with the notations made by the Administrative Agent in
the Register, be conclusive and binding on each Borrower absent
manifest error; provided, however, that the failure of any Lender to
maintain such account or accounts shall not limit or otherwise affect
any Obligations.
(b) (i) Each Borrower hereby designates the Administrative
Agent to serve as the Borrowers' agent, solely for the purpose of this
clause (b), to maintain a register (the "Register") on which the
Administrative Agent will record each Lender's Commitment, the Loans
made by each Lender and each repayment in respect of the principal
amount of the Loans of each Lender and annexed to which the
Administrative Agent shall retain a copy of each Lender Assignment
Agreement delivered to the Administrative Agent pursuant to Section
10.11.1. Failure to make any recordation, or any error in such
recordation, shall not affect any Obligations. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Administrative Agent and the Lenders shall treat each
Person in whose name a Loan (and as provided in clause (b)(ii) of this
Section 2.7, the Note evidencing such Loan, if any) is registered as
the owner thereof for all purposes of this Agreement, notwithstanding
notice or any provision herein to the contrary. A Lender's Commitment
and the Loans made pursuant thereto may be assigned or otherwise
transferred in whole or in part only by registration of such assignment
or transfer in the Register. Any assignment or transfer of a Lender's
Commitment or the Loans made pursuant thereto shall be registered in
the Register only upon delivery to the Administrative Agent of a Lender
Assignment Agreement duly executed by the Assignor thereof. No
assignment or transfer of a Lender's Commitment or the Loans made
pursuant thereto shall be effective unless such assignment or transfer
shall have been recorded in the Register by the Administrative Agent as
provided in this Section 2.7.
49
(ii) Each Borrower agrees that, upon written request to
the Administrative Agent by any Lender, each Borrower will execute and
deliver to such Lender, as applicable, a Note evidencing the Loans made
by such Lender. Each Borrower hereby irrevocably authorizes each Lender
to make (or cause to be made) appropriate notations on the grid
attached to such Lender's Notes (or on any continuation of such grid),
which notations, if made, shall evidence, inter alia, the date of, the
outstanding principal amount of, and the interest rate and Interest
Period applicable to the Loans evidenced thereby. Such notations shall,
to the extent not inconsistent with the notations made by the
Administrative Agent in the Register, be conclusive and binding on the
Borrowers absent manifest error; provided, however, that the failure of
any Lender to make any such notations shall not limit or otherwise
affect any Obligations. Subject to the provisions of Section 10.11.1, a
Note and the obligation evidenced thereby may be assigned or otherwise
transferred in whole or in part only by registration of such assignment
or transfer of such Note and the obligation evidenced thereby in the
Register. Any assignment or transfer of all or part of an obligation
evidenced by a Note shall be registered in the Register only upon
delivery to the Administrative Agent of a Lender Assignment Agreement
duly executed by the assignor thereof and the compliance by the parties
thereto with the other requirements of Section 10.11.1, and thereupon,
if requested by the assignee, one or more new Notes shall be issued to
the designated assignee. No assignment of a Note and the obligation
evidenced thereby shall be effective unless it shall have been recorded
in the Register by the Administrative Agent as provided in this Section
2.7.
(c) In order to utilize the collective borrowing powers of the
Borrowers in the most efficient and economical manner, and in order to
facilitate the handling of the accounts of the Borrowers on the
Administrative Agent's books, the Borrowers have requested, and the
Administrative Agent has agreed (subject to the provisions of clause
(d) of Section 2.3.3) to handle accounts of the Borrowers on the
Administrative Agent's books on a combined basis, all in accordance
with the following provisions:
(i) In lieu of maintaining separate accounts on
the Administrative Agent's books in the name of each of the
Borrowers, the Administrative Agent shall maintain one account
under the name of the Company (the "Obligation Account").
Credit Extensions made by the Lenders or any Issuer to the
Borrowers or any of them will be charged to the Obligation
Account, along with any and all fees, charges, expenses,
indemnities or any other monies due under any Loan Document.
The Obligation Account will be credited with all amounts
received by the Administrative Agent from any of the Borrowers
or from others for their account, including all amounts
received by the Administrative Agent in payment of the
applicable Obligations.
(ii) Each month the Administrative Agent will
render to the Company one extract of the Obligation Account,
which shall be deemed to be an account stated as to each of
the Borrowers and which will be deemed correct and accepted by
all of the Borrowers unless the Administrative Agent receives
a written statement of exceptions from them within 30 days
after such extract has been rendered by the Administrative
Agent. Each of the Borrowers agrees that the
50
Administrative Agent, and the Lenders as applicable, shall
have no obligation to account separately to any of the
Borrowers.
(iii) In furtherance of the provisions set forth
in Section 2.3.3, requests for Loans may be made by the
Company as agent for the Borrowers and the Administrative
Agent is hereby authorized and directed to accept, honor and
rely on such instructions and requests, subject to the terms,
conditions and provisions set forth in this Agreement. Each of
the Borrowers agrees that the Administrative Agent shall have
no responsibility to inquire into the correctness of the
apportionment, allocation or disposition of (A) any Credit
Extensions made to any of the Borrowers or (B) any of the
Administrative Agent's or any other Lender's expenses and
charges relating thereto. All Credit Extensions are made for
the Obligation Account.
(iv) Each Borrower hereby states, acknowledges
and agrees (A) that the handling of the accounts of the
Borrowers in a combined fashion is done solely as an
accommodation to the Borrowers and at their request, and that
neither the Administrative Agent nor any Lender shall incur
any liability to the Borrowers as a result hereof and (B) that
each of the Borrowers requested and bargained for the
structure and terms of and security for the advances
contemplated by this Agreement and expects to derive benefit
specifically and materially from the advances of credit
contemplated by this Agreement, directly or indirectly, and
from such availability.
(d) Each Borrower and each Lender hereby agree with the
Administrative Agent and each other Lender that, on each date on which
any payment of interest, fees, principal or other amounts are due and
owing under this Agreement or under any of the other Loan Documents,
the Administrative Agent may, in its sole discretion, but without any
obligation to do so and subject to all other terms of this Agreement
(other than any of the conditions in Article V or any request for
delivery of a Borrowing Request) cause a Borrowing of Revolving Credit
Loans (which shall be Base Rate Loans) to be made on such date in an
amount sufficient to satisfy in full all such payments of interest,
fees, principal or other amounts which are then due hereunder, and,
subject to Section 4.7 and Section 9.2, the Administrative Agent shall
disburse the proceeds of such Borrowing to each Lender to satisfy all
such Obligations which are then due and the Administrative Agent shall
give the Borrowers notice of such advances.
(e) Without limiting any other rights or remedies of the
Administrative Agent or any of the Secured Parties under any Loan
Document, all Loans and Letters of Credit otherwise available to the
Borrowers shall be subject to the Administrative Agent's continuing
right, in its sole discretion, to establish an Availability Reserve.
ARTICLE III
PAYMENTS; PREPAYMENTS; INTEREST AND FEES
SECTION 3.1. Payments; Application; Lockbox Accounts; Power of
Attorney; Charges to Obligation Account; No Discharge. Each Borrower hereby
unconditionally, jointly and
51
severally, promises to pay to the Administrative Agent for the account of each
Lender, the then unpaid principal amount of each Loan and all unpaid and
outstanding Reimbursement Obligations and to Cash Collateralize all outstanding
Letters of Credit, in each case on the Maturity Date (or such earlier date on
which the Obligations become due and payable pursuant to Article VIII). The
Borrowers hereby further, jointly and severally, agree to pay interest on the
unpaid Obligations from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 3.2. In addition, the Borrowers agree that the Loans shall be repaid and
prepaid pursuant to the following terms.
3.1.1. Repayments and Prepayments. The Borrowers shall jointly
and severally repay in full the unpaid principal amount of each Loan on the
Commitment Termination Date. Prior thereto, payments and prepayments of Loans
shall or may be made as set forth below.
(a) From time to time on any Business Day, any Borrower may
make a voluntary prepayment, in whole or in part, of the outstanding
principal amount of any Loans on the same Business Day, subject to
advance notice received by the Administrative Agent on or before 1:00
p.m., New York City, time, on the Business Day of such prepayment;
provided, however, that except to the extent the Obligations are paid
pursuant to Section 3.1.3, each such partial prepayment shall be, in
the case of LIBO Rate Loans, in an aggregate minimum amount of $500,000
and an integral multiple of $100,000 and, in the case of Base Rate
Loans, in an aggregate minimum amount of $100,000 and an integral
multiple of $10,000. Each notice of intent to make a prepayment shall
specify the prepayment date, which Loans are being prepaid, the
principal amount of the Loans to be prepaid and shall be irrevocable
and shall commit the Borrowers to prepay such Loans by the amount and
on the date stated therein. The Administrative Agent shall, promptly
after receiving any notice given by the Company hereunder, notify each
Lender of the principal amount of the Loans held by such Lender which
are to be prepaid, the prepayment date and the manner of application of
the prepayment. In the event the Borrowers fail to prepay any Loan on
the date specified in any prepayment notice delivered pursuant to
clause (a) of Section 3.1.1, the Borrowers on demand by any Lender
shall pay to the Administrative Agent for the account of such Lender
any amounts required to compensate such Lender for any loss incurred by
such Lender as a result of such failure to prepay, including any loss,
cost or expenses incurred by reason of the acquisition of deposits or
other funds by such Lender to fulfill deposit obligations incurred in
anticipation of such prepayment. Each Lender shall deliver to the
Borrowers from time to time one or more certificates setting forth the
amount of such loss as determined by such Lender.
(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Revolving Credit Loans and Swing Line Loans and
(ii) the aggregate amount of all Letter of Credit Outstandings exceeds
the then applicable Maximum Loan Amount, the Borrowers shall make a
mandatory prepayment of Revolving Credit Loans or Swing Line Loans or,
if necessary, Cash Collateralize all Letter of Credit Outstandings, as
specified by the Company, in an aggregate amount equal to such excess.
(c) Concurrently with the receipt of any Net Disposition
Proceeds by any Borrower or any Subsidiary of any Borrower, the Company
shall deliver to the
52
Administrative Agent a calculation of the amount of such Net
Disposition Proceeds and the Borrowers or any of them shall make a
mandatory prepayment of the Obligations in an amount equal to 100% of
such Net Disposition Proceeds, to be applied as set forth in clause (b)
of Section 3.1.2.
(d) Concurrently with the receipt of any Net Debt Proceeds by
any Borrower or any Subsidiary of any Borrower, the Company shall
deliver to the Administrative Agent a calculation of the amount of such
Net Debt Proceeds and the Borrowers or any of them shall make a
mandatory prepayment of the Obligations in an amount equal to 100% of
such Net Debt Proceeds, to be applied as set forth in clause (c) of
Section 3.1.2.
(e) Concurrently with the receipt of any Net Equity Proceeds
by any Borrower or any Subsidiary of any Borrower, the Company shall
deliver to the Administrative Agent a calculation of the amount of such
Net Equity Proceeds and the Borrowers or any of them shall make a
mandatory prepayment of the Obligations in an amount equal to 100% of
such Net Equity Proceeds, to be applied as set forth in clause (c) of
Section 3.1.2.
(f) Promptly upon any acceleration of the Obligations pursuant
to Section 8.2, the Borrowers shall jointly and severally pay in full
all outstanding Loans and all unpaid and outstanding Reimbursement
Obligations and Cash Collateralize, as applicable, all outstanding
Letters of Credit, unless, pursuant to Section 8.2, only a portion of
all the Obligations is so accelerated (in which case the portion so
accelerated shall be so repaid and/or Cash Collateralized, as
applicable).
(g) The Borrowers shall pay, together with each payment and/or
prepayment of Loans and Reimbursement Obligations made as set forth in
this Section 3.1.1 and elsewhere in this Agreement, accrued interest on
the amount paid and/or prepaid and any amounts required pursuant to
Section 4.4.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4.
3.1.2. Application. Amounts paid and/or prepaid pursuant to
Section 3.1.1 shall be applied as set forth in this Section 3.1.2.
(a) Subject to clause (b) of this Section 3.1.2, each payment
and/or prepayment of the principal of the Loans shall be applied, to
the extent of such payment and/or prepayment, first, to the principal
amount thereof being maintained as Base Rate Loans, and second, subject
to the terms of Section 4.4, to the principal amount thereof being
maintained as LIBO Rate Loans.
(b) Each prepayment of Obligations pursuant to clause (c) of
Section 3.1.1 shall be applied first, to a mandatory prepayment of the
outstanding Swing Line Loans until all outstanding Swing Line Loans
have been repaid in full, second, to a mandatory prepayment of all
outstanding Revolving Credit Loans until all outstanding Revolving
Credit Loans have been repaid in full, and third, to Cash Collateralize
all Letter of Credit Outstandings (provided that to the extent that the
Lenders have funded their pro rata share of unpaid and outstanding
Reimbursement Obligations to the Issuer, then such amounts
53
shall be deemed to be part of Revolving Credit Loans for purposes of
this clause (b) of Section 3.1.2). In addition, the Revolving Credit
Commitment Amount shall be automatically and permanently reduced by the
aggregate amount of Net Available Cash (as such term is defined in the
Indenture) which is used to repurchase any Senior Secured Notes.
(c) Each prepayment of Obligations made pursuant to clauses
(d) and (e) of Section 3.1.1 shall be applied pro rata to a mandatory
prepayment of the outstanding amount of all Swing Line Loans, Revolving
Credit Loans and Letter of Credit Obligations until the outstanding
amount of all Obligations has been reduced to zero and all Letters of
Credit have been Cash Collateralized. In addition, the Revolving Credit
Commitment Amount shall be automatically and permanently reduced by the
aggregate amount of Net Debt Proceeds and Net Equity Proceeds.
3.1.3. Matters Relating to Lockbox Accounts. All Receipts
shall be managed as provided in this Section 3.1.3, except as otherwise
expressly provided in this Agreement.
(a) The Borrowers shall, and shall cause each Subsidiary of
each Borrower to, establish and maintain at their expense, with an
Approved Depository Bank which has entered into a Lockbox Agreement
with the Administrative Agent and the applicable Borrower or
Subsidiary, deposit accounts (herein "Lockbox Accounts"), styled with
names acceptable to the Administrative Agent to indicate the interests
therein of the Administrative Agent and the Lenders. The Borrowers
shall, and shall cause each Subsidiary of each Borrower to, ensure that
all Receipts are either (i) paid directly from the relevant Account
Debtors or other Persons, as applicable, into the Lockbox Accounts or
(ii) following receipt by any Borrower or any Subsidiary of any
Borrower, immediately deposited into a Lockbox Account, in each case in
accordance with procedures and arrangements acceptable to the
Administrative Agent and subject only to such changes as may be
approved in advance by the Administrative Agent. The Borrowers shall,
and shall cause each Subsidiary of each Borrower to, ensure that all
Receipts, deposited and/or paid into the Lockbox Accounts are
transferred directly or indirectly (in accordance with the
aforementioned procedures and arrangements), on each Business Day, in
immediately available funds, into a deposit account maintained by the
Administrative Agent at a commercial bank selected by the
Administrative Agent in its sole discretion and communicated to the
Company (the "Concentration Account"). The Borrowers acknowledge that
they waive and shall have no right to object to or seek to delay any
such transfer to the Concentration Account or to cause any other
application of any Receipts, deposited and/or paid into the Lockbox
Accounts. The Borrowers shall accurately report on a weekly basis to
the Administrative Agent all amounts deposited and/or paid into the
Lockbox Accounts to ensure the proper transfer of funds as set forth
above.
(b) Prior to the initial Credit Extensions, the Borrowers
shall cause each Approved Depository Bank at which the Lockbox Accounts
are maintained to enter into Lockbox Agreements providing for these
daily transfers, acknowledging that the Receipts paid into, received or
deposited in the Lockbox Accounts maintained with them are subject to
the Lien of the Administrative Agent, for the benefit of the
Administrative
54
Agent and the Lenders, that such Approved Depository Bank has no Lien
upon or right of setoff against any Lockbox Account and/or
Concentration Account maintained with it or any of the Receipts
received for deposit or deposited from time to time therein, and that,
upon the request of the Administrative Agent, such Approved Depository
Bank will wire or otherwise transfer, in immediately available funds,
on each Business Day, all Receipts paid into, received or deposited in
all Lockbox Accounts maintained with it to the Concentration Account.
(c) The Borrowers acknowledge that the Administrative Agent at
all times will maintain the Concentration Account in its own name and
that the Concentration Account and the Lockbox Accounts will be subject
to the sole dominion and control of the Administrative Agent pursuant
to this Agreement and the Lockbox Agreements, and the Borrowers agree
(and agree to confirm to all Persons) that neither the Borrowers nor
any Subsidiary of any Borrower shall at any time have any right to make
any withdrawal from or give any instructions to any Approved Depository
Bank with respect to the Lockbox Accounts or the Concentration Account.
(d) At all times when no Credit Extensions are outstanding and
no Default or Event of Default is continuing, the Administrative Agent
shall automatically cause the funds transferred to the Concentration
Account pursuant to this Section 3.1.3 and the Lockbox Agreements to be
released as promptly as practicable to the Borrowers, to such account
with an Approved Depository Bank, which is subject to a Control
Agreement, as may be designated by notice from the Company to the
Administrative Agent. At all times when any Credit Extensions are
outstanding or a Default or an Event of Default is continuing, the
Administrative Agent shall apply (subject to the provisions of Section
3.1.1 and Section 3.1.2), on a daily basis, all funds transferred into
the Concentration Account pursuant to this Section 3.1.3 and the
Lockbox Agreements (i) first, to the payment of any and all fees and
expenses then due and owing to the Administrative Agent; (ii) second,
to the payment of any and all fees and expenses then due and owing to
the other Lenders in accordance with their respective Percentages;
(iii) third, to the payment of all accrued and unpaid interest on Swing
Line Loans; (iv) fourth, to the payment of all accrued and unpaid
interest on Revolving Credit Loans, to each Lender in accordance with
each Lender's respective Percentage; (v) fifth, to reduce all Swing
Line Loans until all outstanding Swing Line Loans have been paid in
full; (vi) sixth, to the payment to the Lenders of, in accordance with
their respective Percentages, all outstanding Revolving Credit Loans
until all outstanding Revolving Credit Loans have been paid in full;
(vii) seventh, to reduce all unpaid and outstanding Reimbursement
Obligations; (viii) eighth, to Cash Collateralize all Letters of
Credit; (ix) ninth, to the ratable payment of all other unpaid and
outstanding Obligations, to each Secured Party in accordance with the
proportion that the unpaid and outstanding Obligations to such Secured
Party bears to the unpaid and outstanding Obligations to all Secured
Parties; and (x) tenth, when a Default or Event of Default is
continuing, for so long as any of the Obligations then due and payable
are outstanding or this Agreement and/or the Commitments have not been
terminated, any remaining funds shall continue to be held by the
Administrative Agent as security for the Obligations pursuant to the
terms hereof and the other Loan Documents and applied to any
outstanding Obligations in accordance with clauses (i) through (ix)
above until all Obligations have been paid in full, and all
55
Commitments and this Agreement have been terminated. To the extent that
any Receipts are not sent directly to the appropriate Lockbox Account
but are received by any Borrower or any Subsidiary of any Borrower,
such Receipts shall be held in trust for the benefit of the
Administrative Agent and the Lenders and immediately remitted, in the
form received, to the appropriate Lockbox Account for transfer to the
Concentration Account. Each Borrower acknowledges and agrees that its
compliance with the terms of this Section 3.1.3 is essential.
(e) All funds transferred from the Concentration Account for
application to amounts owing by the Borrowers under this Agreement will
be credited against the Obligation Account of the Borrowers on the next
Business Day after the Administrative Agent's receipt of "collected
funds" at the Concentration Account, if received no later than 12:00
noon (New York City time), or on the second succeeding Business Day, if
received after 12:00 noon (New York City time). No checks, drafts or
other instrument received in either a Lockbox Account or the
Concentration Account shall be treated as received unless and until
such checks, drafts or instruments have actually been collected. Except
as otherwise expressly provided in this Agreement (including Section
3.1.1), the Administrative Agent shall, for value at the time specified
above in this provision, apply the funds credited to the Concentration
Account, first, to any expenses, indemnifications or fees owing
pursuant to this Agreement or any other Loan Document, second, to
interest on the Loans and Reimbursement Obligations being repaid and,
third, to reduce the outstanding balance of the Loans and Reimbursement
Obligations being repaid.
3.1.4. Power of Attorney. Each of the Borrowers hereby
irrevocably appoints and makes each of the officers of the Administrative Agent
the true and lawful attorney for such Borrower (without requiring any of them to
act as such) with full power of substitution to, do the following: (a) endorse
the name of such Borrower upon any and all checks, drafts, money orders, and
other instruments for the payment of money that are payable to such Borrower and
constitute Receipts of such Borrower; (b) execute in the name of such Borrower
any financing statements, schedules, assignments, instruments, documents, and
statements that such Borrower is obligated to give to the Administrative Agent
or any Lender under this Agreement or any other Loan Document; and (c) do such
other and further acts and deeds in the name of such Borrower as the
Administrative Agent may deem necessary or desirable to enforce the provisions
of this Agreement or any other Loan Document or perfect the security interest in
or Lien on any Collateral that is granted pursuant to any Loan Document to the
Administrative Agent or any Lenders. In addition, if any Borrower breaches its
obligation hereunder to direct Receipts to the appropriate Lockbox Account, the
Administrative Agent, as the true and lawful attorney for such Borrower pursuant
to this Section 3.1.4, and subject to any applicable law or regulation, may, by
the signature or other act of any of the Administrative Agent's officers
(without requiring any of them to do so), direct any Account Debtor or other
applicable Person to make payments of or with respect to Receipts to the
appropriate Lockbox Account.
3.1.5. Charges to Obligation Account. Each of the Borrowers
hereby authorizes the Administrative Agent (in its sole discretion, but without
any obligation to do so) to charge the Obligation Account with the amount of any
and all payments due under this Agreement as such payments become due, including
payments due under Sections 2.6, 3.1, 3.2, 3.3, 4.4, 4.5, 4.6, and 10.3. The
Borrowers hereby confirm that any charges which the Administrative Agent
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may so make to the Obligation Account as provided in this Agreement or any other
Loan Document may be made by the Administrative Agent without a Borrowing
Request, whether or not a Default or Event of Default has occurred and without
compliance with any of the other conditions precedent set forth in Article V and
will be made as an accommodation to the Borrowers and solely at the
Administrative Agent's discretion.
SECTION 3.2. Interest Provisions. Interest on outstanding Obligations
shall accrue and be payable in accordance with the terms set forth in this
Section 3.2.
3.2.1. Rates. Subject to Section 2.3.2, pursuant to an
appropriately delivered Borrowing Request or Continuation/Conversion Notice, the
Company may elect that Loans comprising a Borrowing accrue interest at a rate
per annum:
(a) on that portion maintained from time to time as a Base
Rate Loan, equal to the sum of the Alternate Base Rate from time to
time in effect, plus the Applicable Margin; provided that all Swing
Line Loans shall always accrue interest at the relevant Applicable
Margin for Loans maintained as Base Rate Loans; and
(b) on that portion maintained as a LIBO Rate Loan, during
each Interest Period applicable thereto, equal to the sum of the LIBO
Rate (Reserve Adjusted) for such Interest Period, plus the Applicable
Margin.
Subject to Section 3.2.2, the Borrowers agree, jointly and severally, to pay
interest in respect of the unpaid principal amount of each Base Rate Loan from
the date thereof until payment in full thereof at a rate per annum which shall
be, for any day, equal to the sum of the relevant Applicable Margin plus the
Alternate Base Rate in effect on such day, but in no event to exceed the Highest
Lawful Rate. For purposes of this Agreement, any change in the Alternate Base
Rate due to a change in the Federal Funds Rate or the Base Rate shall be
effective as of the opening of business on the effective date of such change in
the Federal Funds Rate or the Base Rate, as the case may be. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive and binding, absent manifest error) that it is unable to ascertain
the Federal Funds Rate for any reason, including the inability of the
Administrative Agent to obtain sufficient bids or publications in accordance
with the terms hereof, the Base Rate shall be the Alternate Base Rate until the
circumstances giving rise to such inability no longer exist. Subject to Section
3.2.2, the Borrowers agree, jointly and severally, to pay interest in respect of
the unpaid principal amount of each LIBO Rate Loan from the date thereof until
payment in full thereof at a rate per annum which shall be equal to the sum of
the relevant Applicable Margin plus the LIBO Rate, but in no event to exceed the
Highest Lawful Rate. All LIBO Rate Loans shall bear interest from and including
the first day of the applicable Interest Period to (but not including) the last
day of such Interest Period at the interest rate applicable to such LIBO Rate
Loan.
3.2.2. Post-Maturity Rates. After the date any principal
amount of any Loan or Reimbursement Obligation is due and payable (whether on
the Maturity Date, upon acceleration or otherwise), or after any other monetary
Obligation of the Borrowers shall have become due and payable, the Borrowers
shall jointly and severally pay, but subject in all cases to Section 10.18,
interest (after as well as before judgment) on such amounts at a rate per annum
equal to
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the Alternate Base Rate from time to time in effect, plus the Applicable Margin,
plus, a margin of 2%.
3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan on the principal amount so
paid or prepaid;
(c) with respect to Base Rate Loans, on each Monthly Payment
Date occurring after the Closing Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period;
(e) with respect to any Base Rate Loans converted into LIBO
Rate Loans on a day when interest would not otherwise have been payable
pursuant to clause (c) of this Section 3.2.3, on the date of such
conversion; and
(f) on that portion of any Loans the Maturity Date of which is
accelerated pursuant to Section 8.2, immediately upon such
acceleration.
Interest accrued on Loans or any other monetary Obligations after the date such
Loan or other monetary Obligation is due and payable (whether on the Maturity
Date, upon acceleration or otherwise) shall be payable upon demand.
SECTION 3.3. Fees. Each Borrower agrees to pay the fees set forth
below. All such fees once paid shall be non-refundable.
3.3.1. Commitment Fees. The Borrowers agree to pay, jointly
and severally, to the Administrative Agent for the account of each Lender, for
the period (including any portion thereof when any Commitments are suspended by
reason of the inability of the Borrowers to satisfy any condition of Article V)
commencing on the Effective Date and continuing through the Commitment
Termination Date, a non-refundable commitment fee, payable monthly in arrears,
equal to, in each case on such Lender's Percentage of, the product of (a) the
difference between (i) the Revolving Credit Commitment Amount and (ii) the sum
of (A) the average daily outstanding balance of all Revolving Credit Loans, plus
(B) the daily average Stated Amount of all outstanding Letters of Credit;
multiplied by (b) one-half of one percent (0.50%) (the "Commitment Fee"). All
Commitment Fees payable pursuant to this Section 3.3.1 shall be calculated on a
year comprised of 360 days and payable by the Borrowers in arrears on each
Monthly Payment Date, commencing with the first Monthly Payment Date following
the Effective Date, and on the Commitment Termination Date. The making of Swing
Line Loans shall not constitute usage of the Revolving Credit Commitment or
otherwise be deducted from the Revolving Credit Commitment Amount for purposes
of calculating the Commitment Fees to be paid by the Borrowers to the Lenders.
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3.3.2. The Administrative Agent's Fees. The Borrowers agree to
pay, jointly and severally, to the Administrative Agent (a) for its own account,
the fees set forth in the letter agreement referred to as the "Rate and Fee
Letter" between CIT and the Company, dated as of November 19, 2002, and (b) the
fees set forth in paragraph 8 of the letter agreement referred to as the
"Commitment Letter" between CIT and the Company, dated as of November 19, 2002,
in each case in the amount and on the date set forth in the applicable Fee
Letter.
3.3.3. Letter of Credit Fees. The Borrowers agree to pay,
jointly and severally, to the Administrative Agent, (a) all charges imposed on
the Administrative Agent by the Issuer for Letters of Credit and (b) for the pro
rata account of each Lender, an aggregate Letter of Credit fee on the daily
average Stated Amount of each Letter of Credit, in each case for the period from
and including the date of issuance of such Letter of Credit to and excluding the
date of expiration or termination of such Letter of Credit computed at a per
annum rate for each day equal to one and three-quarters percent (1.75%), such
fees being payable monthly in arrears on each Monthly Payment Date and on the
Commitment Termination Date. The Borrowers further agree to pay, jointly and
severally, to each Issuer monthly in arrears on each Monthly Payment Date
following the date of issuance of a Letter of Credit until the earlier of the
expiration of such Letter of Credit and the Commitment Termination Date, an
issuance fee agreed to by the Borrowers and the Issuer.
3.3.4. Early Termination Fee. The Borrowers agree to pay,
jointly and severally, to the Administrative Agent, for the account of each
Lender, an Early Termination Fee, in the applicable amount set forth in the
definition thereof, in connection with any reduction or termination of the
Revolving Credit Commitments or the Revolving Credit Commitment Amount or any
termination of this Agreement, including pursuant to Section 2.2, Section 3.1 or
Section 8.2.
3.3.5. LIBO Rate Loan Fee. The Borrowers agree to pay, jointly
and severally, to the Administrative Agent, for its own account, a $500
processing fee for each Borrowing and/or continuation of, or conversion of Loans
into, LIBO Rate Loans, which fee shall be payable to the Administrative Agent on
the date of such Borrowing, continuation and/or conversion, as the case may be.
ARTICLE IV
CERTAIN LIBO RATE AND GUARANTY PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall reasonably
determine (which determination shall, in the absence of manifest error and upon
notice thereof to the Company and the Administrative Agent, be conclusive and
binding on each Borrower) that the introduction of or any change in or in the
interpretation of any law makes it unlawful, or any Governmental Authority
asserts that it is unlawful, for such Lender to make or continue any Loan as, or
to convert any Loan into, a LIBO Rate Loan, the obligations of such Lender to
make, continue or convert any such LIBO Rate Loan shall, upon such
determination, forthwith be suspended until such Lender shall notify the
Administrative Agent that the circumstances causing such suspension no longer
exist, and all outstanding LIBO Rate Loans payable to such Lender shall
automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.
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SECTION 4.2. Deposits Unavailable. If the Administrative Agent shall
have determined that
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to it in its relevant
market; or
(b) by reason of circumstances affecting its relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans;
then, upon notice from the Administrative Agent to the Company and the Lenders,
the obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the Company
and the Lenders that the circumstances causing such suspension no longer exist;
provided that, in such case, the Lenders shall use their reasonable efforts to
obtain funding of the Loans at a rate comparable with the LIBO Rate (Reserve
Adjusted) in other Eurodollar markets.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. Each Borrower agrees,
jointly and severally, to reimburse each Lender and Issuer for any increase in
the cost to such Lender or Issuer of, or any reduction in the amount of any sum
receivable by such Secured Party in respect of, such Secured Party's Commitments
and the making of Credit Extensions hereunder (including the making, continuing
or maintaining (or of its obligation to make or continue) any Loans as, or of
converting (or of its obligation to convert) any Loans into, LIBO Rate Loans)
that arise in connection with any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in after the date
hereof of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority, except
for such changes with respect to increased capital costs and Taxes which are
governed by Sections 4.5 and 4.6, respectively. Each affected Secured Party
shall promptly notify the Administrative Agent and the Company in writing of the
occurrence of any such event, stating the reasons therefor and the additional
amount required fully to compensate such Secured Party for such increased cost
or reduced amount. Such additional amounts shall be payable by the Borrowers
directly to such Secured Party within five days of its receipt of such notice,
and such notice shall, in the absence of manifest error, be conclusive and
binding on the Borrowers.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make or continue any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
not recovered in connection with the redeployment of such funds (and excluding
any loss of anticipated profits) as a result of:
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to
Section 4.1, Section 4.2, Article III or otherwise;
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(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor (unless due to the responsibility
of the Lender or inability of the Lender to fund Credit Extensions in
accordance with the terms hereof); or
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/Conversion Notice
therefor (unless due to the responsibility of the Lender or inability
of the Lender to fund Credit Extensions in accordance with the terms
hereof);
then, upon the written notice of such Lender to the Company (with a copy to the
Administrative Agent), the Borrowers shall, jointly and severally, within five
days of their receipt thereof, pay directly to such Lender such amount as will
(in the reasonable determination of such Lender) reimburse such Lender for such
loss or expense. Such written notice shall set forth the basis for requesting
such amounts and shall, in the absence of manifest error, be conclusive and
binding on each Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(having the force of law) of any Governmental Authority affects or would affect
the amount of capital required or expected to be maintained by any Secured Party
or any Person controlling such Secured Party, and such Secured Party determines
(in good faith but in its sole and absolute discretion) that the rate of return
on its or such controlling Person's capital as a consequence of the Commitments
or the Credit Extensions made, or the Letters of Credit participated in, by such
Secured Party is reduced to a level below that which such Secured Party or such
controlling Person could have achieved but for the occurrence of any such
circumstance, then upon notice from time to time by such Secured Party to the
Company, the Borrowers shall, within five days following receipt of such notice
(which notice shall be sent to the Company promptly (but in no event later than
180 days) after obtaining actual knowledge by such Lender of any such amounts
owed by the Borrowers and the amount shall be conclusively determined by such
Lender), jointly and severally, pay directly to such Secured Party additional
amounts sufficient to compensate such Secured Party or such controlling Person
for such reduction in rate of return to the extent allocable to such Lender's
Commitments or the Credit Extensions made, or the Letters of Credit participated
in by such Lender. A statement of such Secured Party as to any such additional
amount or amounts shall, in the absence of manifest error, be conclusive and
binding on each Borrower. In determining such amount, such Secured Party may use
any method of averaging and attribution that it (in its sole and absolute
discretion) shall deem applicable, provided that the determination of such
amount is made in good faith and in a manner generally consistent with such
Secured Party's standard practice therefor.
SECTION 4.6. Taxes. Each Borrower covenants and agrees as follows with
respect to Taxes:
(a) Any and all payments by the Borrowers under each Loan
Document shall be made without setoff, counterclaim or other defense,
and free and clear of, and without deduction or withholding for or on
account of, any Taxes. In the event that any Taxes are required by law
to be deducted or withheld from any payment required to be made by the
Borrowers to or on behalf of any Secured Party under any Loan Document,
then:
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(i) subject to clause (f) of this Section 4.6,
if such Taxes are Non-Excluded Taxes, the amount of such
payment shall be increased as may be necessary such that such
payment is made, after withholding or deduction for or on
account of such Taxes, in an amount that is not less than the
amount provided for in such Loan Document; and
(ii) the Borrowers shall withhold the full amount
of such Taxes from such payment (as increased pursuant to
clause (a)(i) of this Section 4.6) and shall pay such amount
to the Governmental Authority imposing such Taxes in
accordance with applicable law.
(b) In addition, the Borrowers shall pay any and all Other
Taxes imposed to the relevant Governmental Authority imposing such
Other Taxes in accordance with applicable law.
(c) As promptly as practicable after the payment of any Taxes
or Other Taxes, and in any event within 45 days of any such payment
being due, the Borrowers shall furnish to the Administrative Agent a
copy of an official receipt (or a certified copy thereof) evidencing
the payment of such Taxes or Other Taxes. The Administrative Agent
shall make copies thereof available to any Lender upon request
therefor.
(d) Subject to clause (f) of this Section 4.6, each Borrower,
on a joint and several basis, shall indemnify each Secured Party for
any Non-Excluded Taxes and Other Taxes levied, imposed or assessed on
(and whether or not paid directly by) such Secured Party. Promptly upon
having knowledge that any such Non-Excluded Taxes or Other Taxes have
been levied, imposed or assessed, and promptly upon notice thereof by
any Secured Party, the Borrowers shall pay such Non-Excluded Taxes or
Other Taxes directly to the relevant Governmental Authority. If a
Secured Party receives a refund in respect of any Non-Excluded Taxes or
Other Taxes with respect to which any Borrower has paid additional
amounts pursuant to this Section 4.6, it shall within 30 days from the
date of such receipt pay over to the Borrowers (but only to the extent
of indemnity payments made, or additional amounts paid, by the
Borrowers under this Section 4.6 with respect to the Non-Excluded Taxes
or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of such Secured Party and without interest (other than
interest paid by the relevant jurisdiction or taxing authority with
respect to such refund) the portion of such refund which, in the good
faith judgment of such Secured Party, is attributable to the payment of
such additional amounts by the Borrowers and in an amount as will leave
such Secured Party in no better or worse position than it would have
been in if the payment of such additional amounts had not been
required; provided, however, that the Borrowers, upon the request of
such Secured Party, agree to repay the amount paid over to the
Borrowers (plus penalties, interest or other charges payable to the
relevant jurisdiction or taxing authority) to such Secured Party in the
event such Secured Party is required to repay such refund to such
jurisdiction or taxing authority. In addition, each Borrower, on a
joint and several basis, shall indemnify each Secured Party for any
incremental Taxes that may become payable by such Secured Party as a
result of any failure of the Borrowers to pay any Taxes when due to the
appropriate Governmental Authority or to deliver to the Administrative
Agent, pursuant to clause (c) of this
62
Section 4.6, documentation evidencing the payment of Taxes or Other
Taxes. With respect to indemnification for Non-Excluded Taxes and Other
Taxes actually paid by any Secured Party or the indemnification
provided in the immediately preceding sentence, such indemnification
shall be made within 30 days after the date such Secured Party makes
written demand therefor. Each Borrower acknowledges that any payment
made to any Secured Party or to any Governmental Authority in respect
of the indemnification obligations of the Borrowers provided in this
clause shall constitute a payment in respect of which the provisions of
clause (a) of this Section 4.6, and this clause shall apply.
(e) As of the date on which any Lender becomes a party hereto,
such Lender represents that it is either (i) a corporation organized
under the laws of the United States or any State or is otherwise a
"United States-person" within the meaning of Section 7701(a)(30) of the
Code, (ii) entitled to complete exemption from United States
withholding tax imposed on or with respect to any payments, including
fees, to be made to it pursuant to this Agreement or (iii) entitled to
complete exemption from United States withholding tax on interest
imposed on or with respect to any payments of interest to be made
pursuant to this Agreement (A) under an applicable provision of a tax
convention to which the United States is a party, (B) because such
payments to be received by it hereunder is effectively connected with a
trade or business in the United States or (C) because it is a recipient
of portfolio interest within the meaning of Section 871(h) or 881(c) of
the Code. Each Non-U.S. Lender, on or prior to the date on which such
non-U.S. Lender becomes a Lender hereunder shall deliver to the Company
and the Administrative Agent either:
(i) two duly completed copies of either (x)
Internal Revenue Service Form W-8BEN or (B) Internal Revenue
Service Form W-8ECI, or in either case an applicable successor
form; or
(ii) in the case of a Non-U.S. Lender that is not
legally entitled to deliver either form listed in clause
(e)(i) of this Section 4.6, (x) a certificate of a duly
authorized officer of such Non-U.S. Lender in substantially
the form of Exhibit L attached hereto to the effect that such
Non-U.S. Lender is not (A) a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of any Borrower within the meaning of Section
881(c)(3)(B) of the Code, or (C) a controlled foreign
corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code (such
certificate, an "Exemption Certificate") and (y) two duly
completed copies of Internal Revenue Service Form W-8BEN or
applicable successor form.
In addition, each Non-U.S. Lender shall redeliver to the Company and
the Administrative Agent the forms prescribed by this clause (e) of this Section
4.6 from time to time thereafter upon the request of the Company or the
Administrative Agent or as required by applicable law or regulation and prior to
the date of expiration of the most recently delivered form, but only for so long
as such Non-U.S. Lender is legally entitled to do so.
(f) The Borrowers shall not be obligated to gross up any
payments to any Lender pursuant to clause (a)(i) of this Section 4.6,
or to indemnify any Lender pursuant to
63
clause (d) of this Section 4.6, in respect of United States federal
withholding taxes to the extent imposed as a result of (i) the failure
of such Lender to deliver to the Company the form or forms and/or an
Exemption Certificate, as applicable to such Lender, pursuant to clause
(e) of this Section 4.6, (ii) such form or forms and/or Exemption
Certificate not establishing a complete exemption from U.S. federal
withholding tax or the information or certifications made therein by
the Lender being untrue or inaccurate on the date delivered in any
material respect, or (iii) the Lender designating a successor lending
office at which it maintains its Loans which has the effect of causing
such Lender to become obligated for tax payments in excess of those in
effect immediately prior to such designation; provided, however, that
the Borrowers shall be jointly and severally obligated to gross up any
payments to any such Lender pursuant to clause (a)(i) of this Section
4.6, and to indemnify any such Lender pursuant to clause (d) of this
Section 4.6, in respect of United States federal withholding taxes if
(i) any such failure to deliver a form or forms or an Exemption
Certificate or the failure of such form or forms or Exemption
Certificate to establish a complete exemption from U.S. federal
withholding tax or inaccuracy or untruth contained therein resulted
from a change in any applicable statute, treaty, regulation or other
applicable law or any interpretation of any of the foregoing occurring
after the date hereof, which change rendered such Lender no longer
legally entitled to deliver such form or forms or Exemption Certificate
or otherwise ineligible for a complete exemption from U.S. federal
withholding tax, or rendered the information or certifications made in
such form or forms or Exemption Certificate untrue or inaccurate in a
material respect, (ii) the redesignation of the Lender's lending office
was made at the request of the Borrowers or (iii) the obligation to
gross up payments to any such Lender pursuant to clause (a)(i) of this
Section 4.6, or to indemnify any such Lender pursuant to clause (d) of
this Section 4.6, is with respect to an Assignee Lender that becomes an
Assignee Lender as a result of an assignment made at the request of the
Borrowers.
(g) Each Lender also agrees at the reasonable request of the
Borrowers to deliver to the Borrowers and the Administrative Agent such
other or supplemental forms as may at any time be required as a result
of changes in applicable law or regulation in order to confirm or
maintain in effect its entitlement to exemption from United States
withholding tax on any payments hereunder; provided that the
circumstances of the Lender at the relevant time and applicable laws
make it legally entitled to do so. Each Person that shall become a
Lender or a Participant pursuant to Section 10.11.1 or Section 10.11.2
shall, upon the effectiveness of the related transfer, be required to
provide all of the forms, certifications and statements required
pursuant to this Section 4.6; provided that in the case of a
Participant, such Participant shall furnish all such required forms,
certifications and statements to the Lender from which the related
participation shall have been purchased.
(h) Each Lender agrees that it will use reasonable efforts to
designate an alternate lending office with respect to its LIBO Rate
Loans affected by any of the matters or circumstances described in this
Section 4.6 to reduce the obligation of the Borrowers to gross up any
payments to any Lenders pursuant to clause (a)(i) of this Section 4.6,
or to indemnify any Lenders pursuant to clause (d) of this Section 4.6,
so long as such designation is not disadvantageous to such Lender as
determined by such Lender in its
64
sole discretion; provided that such Lender shall have no obligation to
so designate an alternate lending office located in the United States.
Any Lender claiming any additional amounts payable pursuant to this
Section 4.6 shall use reasonable efforts (consistent with legal and
regulatory restrictions) to deliver to the Borrowers or the
Administrative Agent any certificate or document reasonably requested
by any Borrower or the Administrative Agent if the delivery of such
certificate or document would avoid the need for or reduce the amount
of any such additional amounts that may thereafter accrue and would
not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.
(i) If any Lender that does not make a LIBO Rate Loan pursuant
to Section 4.1 or Section 4.2, is subject to increased costs pursuant
to Section 4.3, or is owed or reasonably anticipates being owed
additional amounts pursuant to this Section 4.6 and fails to take
action required under clause (h) of this Section 4.6, any Borrower
shall have the right, if no Default then exists, to replace such Lender
with another bank or financial institution with the written consent of
the Administrative Agent, which consent shall not be unreasonably
withheld, provided that (i) the obligations of any Borrower owing to
the Lender being replaced (including such increased costs and any
amounts payable under Section 4.4) that are not being assigned to the
replacement Lender shall be paid in full to the Lender being replaced
concurrently with such replacement, (ii) the replacement lender shall
execute a Lender Assignment Agreement pursuant to which it shall become
a party hereto as provided in Section 10.11.1, and (iii) upon
compliance with the provisions for assignment provided in Section
10.11.1 and the payment of amounts referred to in clause (i) of this
Section 4.6, the replacement lender shall constitute a "Lender"
hereunder and the Lender being so replaced shall no longer constitute a
"Lender" hereunder.
SECTION 4.7. Payments; Computations, etc. Unless otherwise expressly
provided in any applicable Loan Document, all payments by the Borrowers pursuant
to each Loan Document shall be made by such Borrower to the Administrative Agent
for the pro rata account of the Secured Parties entitled to receive such
payment. All payments shall be made without setoff, deduction or counterclaim
not later than 12:00 noon New York City time on the date due in same day or
immediately available funds to such account as the Administrative Agent shall
specify from time to time by notice to the Company. Funds received after that
time shall be deemed to have been received by the Administrative Agent on the
next succeeding Business Day. The Administrative Agent shall promptly remit in
same day funds to each Secured Party its share, if any, of such payments
received by the Administrative Agent for the account of such Secured Party. All
interest (including interest on LIBO Rate Loans) and fees shall be computed on
the basis of the actual number of days (including the first day but excluding
the last day) occurring during the period for which such interest or fee is
payable over a year comprised of 360 days (or, in the case of interest on a Base
Rate Loan (calculated at other than the Federal Funds Rate), 365 days or, if
appropriate, 366 days). Payments due on other than a Business Day shall (except
as otherwise required by clause (c) of the definition of the term "Interest
Period") be made on the next succeeding Business Day and such extension of time
shall be included in computing interest and fees in connection with that
payment.
SECTION 4.8. Sharing of Payments. If any Secured Party shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Credit Extension or Reimbursement
Obligation (other than pursuant to the terms of
65
Sections 4.3, 4.4, 4.5, or 4.6) in excess of its pro rata share of payments
obtained by all Secured Parties entitled to receive such payment, such Secured
Party shall purchase from the other Secured Parties such participations in
Credit Extensions made by them as shall be necessary to cause such purchasing
Secured Party to share the excess payment or other recovery ratably (to the
extent such other Secured Parties were entitled to receive a portion of such
payment or recovery) with each of them; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Secured Party, the purchase shall be rescinded and each Secured
Party which has sold a participation to the purchasing Secured Party shall repay
to the purchasing Secured Party the purchase price to the ratable extent of such
recovery together with an amount equal to such selling Secured Party's ratable
share (according to the proportion of (a) the amount of such selling Secured
Party's required repayment to the purchasing Secured Party to (b) total amount
so recovered from the purchasing Secured Party) of any interest or other amount
paid or payable by the purchasing Secured Party in respect of the total amount
so recovered. The Borrowers agree that any Secured Party purchasing a
participation from another Secured Party pursuant to this Section 4.8 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.9) with respect to such participation as fully
as if such Secured Party were the direct creditor of the Borrowers in the amount
of such participation. If under any applicable bankruptcy, insolvency or other
similar law any Secured Party receives a secured claim in lieu of a setoff to
which this Section 4.8 applies, such Secured Party shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Secured Parties entitled under this Section
4.8 to share in the benefits of any recovery on such secured claim.
SECTION 4.9. Setoff. Each Secured Party shall, upon the occurrence and
during the continuance of any Event of Default and following the giving of
notice described in Section 8.2, have the right to appropriate and apply to the
payment of the Obligations owing to it (whether or not then due), and (as
security for such Obligations) each Borrower hereby grants to each Secured Party
a continuing security interest in, any and all balances, credits, deposits,
accounts or moneys of such Borrower then or thereafter maintained with such
Secured Party; provided, however, that any such appropriation and application
shall be subject to the provisions of Section 4.8. Each Secured Party agrees
promptly to notify such Borrower and the Administrative Agent after any such
setoff and application made by such Secured Party; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Secured Party under this Section 4.9 are in
addition to any other rights and remedies (including other rights of setoff
under applicable law or otherwise) which such Secured Party may have under the
Loan Documents, at law or in equity.
SECTION 4.10. Guaranty Provisions. Each Borrower acknowledges and
agrees that, whether or not specifically indicated as such in a Loan Document,
all Obligations shall be joint and several Obligations of each individual
Borrower, and in furtherance of such joint and several Obligations, each
Borrower hereby irrevocably guarantees the payment of all Obligations of each
other Borrower as set forth below.
4.10.1. Guaranty. Each Borrower hereby jointly and severally,
absolutely, unconditionally and irrevocably guarantees the full and punctual
payment when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise, of all Obligations (of each
other Borrower); provided, however, that each Borrower shall only be liable
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under this Agreement for the maximum amount of such liability that can be hereby
incurred without rendering this Agreement, as it relates to such Borrower,
voidable under applicable law (including those relating to fraudulent conveyance
or fraudulent transfer), and not for any greater amount. This guaranty
constitutes a guaranty of payment when due and not of collection, and each
Borrower specifically agrees that it shall not be necessary or required that any
Secured Party exercise any right, assert any claim or demand or enforce any
remedy whatsoever against any Borrower or any other Person before or as a
condition to the obligations of such Borrower hereunder.
4.10.2. Guaranty Absolute, etc. The guaranty agreed to above
shall in all respects be a continuing, absolute, unconditional and irrevocable
guaranty of payment, and shall remain in full force and effect until the
Termination Date. Each Borrower jointly and severally guarantees that the
Obligations of each other Borrower will be paid strictly in accordance with the
terms of each Loan Document under which such Obligations arise, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Secured Party with respect
thereto. The liability of each Borrower under this Agreement shall be joint and
several, absolute, unconditional and irrevocable irrespective of (a) any lack of
validity, legality or enforceability of any Loan Document; (b) the failure of
any Secured Party (i) to assert any claim or demand or to enforce any right or
remedy against any Borrower or any other Person (including any other guarantor)
under the provisions of any Loan Document or otherwise, or (ii) to exercise any
right or remedy against any other guarantor (including any Borrower) of, or
collateral securing, any Obligations; (c) any change in the time, manner or
place of payment of, or in any other term of, all or any part of the
Obligations, or any other extension, compromise or renewal of any Obligation;
(d) any reduction, limitation, impairment or termination of any Obligations for
any reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to (and each Borrower hereby waives any
right to or claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality, irregularity,
compromise, unenforceability of, or any other event or occurrence affecting, any
Obligations or otherwise; (e) any amendment to, rescission, waiver, or other
modification of, or any consent to or departure from, any of the terms of any
Loan Document; (f) any addition, exchange, release, surrender or non-perfection
of any collateral, or any amendment to or waiver or release or addition of, or
consent to or departure from, any other guaranty held by any Secured Party
securing any of the Obligations; or (g) any other circumstance which might
otherwise constitute a defense available to, or a legal or equitable discharge
of, any Borrower, any surety or any guarantor.
4.10.3. Reinstatement, etc. Each Borrower agrees that its
guaranty hereunder shall continue to be effective or be reinstated, as the case
may be, if at any time any payment (in whole or in part) of any of the
Obligations is rescinded or must otherwise be restored by any Secured Party,
upon the insolvency, bankruptcy or reorganization of any other Borrower, any
other Borrower or otherwise, all as though such payment had not been made.
4.10.4. Waiver, etc. Each Borrower hereby waives presentment
for payment, demand, protest, notice of dishonor, promptness, diligence, notice
of acceptance and any other notice (other than any notice expressly required in
Article VIII) with respect to any of the Obligations and this Agreement and any
requirement that any Secured Party protect, secure, perfect or insure any Lien,
or any property subject thereto, or exhaust any right or take any action
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against any other Borrower or any other Person (including any other guarantor)
or entity or any collateral securing the Obligations, as the case may be.
4.10.5. Postponement of Subrogation. etc. Each Borrower agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under any Loan Document to which it is a party, nor shall any
Borrower seek or be entitled to seek any contribution or reimbursement from any
Borrower, in respect of any payment made hereunder, under any other Loan
Document or otherwise, until following the Termination Date. Any amount paid to
any Borrower on account of any such subrogation rights prior to the Termination
Date shall be held in trust for the benefit of the Secured Parties and shall
immediately be paid and turned over to the Administrative Agent for the benefit
of the Secured Parties in the exact form received by such Borrower (duly
endorsed in favor of the Administrative Agent, if required), to be credited and
applied against the Obligations, whether matured or unmatured, in accordance
with Section 4.8; provided, however, that if (a) any Borrower has made payment
to the Secured Parties of all or any part of the Obligations; and (b) the
Termination Date has occurred; then at such Borrower's request, the
Administrative Agent (on behalf of the Secured Parties) will, at the expense of
such Borrower, execute and deliver to such Borrower appropriate documents
(without recourse and without representation or warranty) necessary to evidence
the transfer by subrogation to such Borrower of an interest in the Obligations
resulting from such payment. In furtherance of the foregoing, at all times prior
to the Termination Date, each Borrower shall refrain from taking any action or
commencing any proceeding against any Borrower (or its successors or assigns,
whether in connection with a bankruptcy proceeding or otherwise) to recover any
amounts in the respect of payments made under any Loan Document to any Secured
Party.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension. The obligations of the Lenders
and, if applicable, any Issuer to make the initial Credit Extensions shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 5.1 to the satisfaction of the Lenders.
5.1.1. Resolutions, etc. The Administrative Agent shall have
received from each Borrower and each Subsidiary of a Borrower, (a) recent good
standing certificates, certificates of existence and certificates of foreign
qualification in such jurisdictions as the Administrative Agent shall require,
and (b) a certificate, dated the Closing Date and with counterparts for each
Lender, duly executed and delivered by such Person's secretary or assistant
secretary as to:
(i) resolutions of each such Person's Board of
Directors then in full force and effect authorizing, to the
extent relevant, all aspects of the transactions contemplated
hereby applicable to such Person and the execution, delivery
and performance of each Loan Document to be executed by such
Person and the transactions contemplated hereby and thereby;
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(ii) the incumbency and signatures of those of
its officers authorized to act with respect to each Loan
Document to be executed by such Person (each an "Authorized
Officer"); and
(iii) the completeness, accuracy, full force and
validity of each Organic Document of such Person and copies
thereof;
upon which certificates each Secured Party may conclusively rely until it shall
have received a further certificate of the secretary or assistant secretary of
any such Person canceling or amending the prior certificate of such Person.
5.1.2. Confirmation Order. The Administrative Agent shall have
received (a) a copy of the order entered by the Bankruptcy Court confirming the
Plan of Reorganization (the "Confirmation Order"), which Confirmation Order (i)
is effective and (ii) has not been stayed, vacated or reversed and is not
subject to appeal; and (b) evidence reasonably satisfactory to it that the
Confirmation Date shall have occurred.
5.1.3. Payment and Termination of Existing Credit Agreement.
The Administrative Agent shall have received evidence reasonably satisfactory to
it that all outstanding obligations under the Existing Credit Agreement shall be
paid in full concurrently with the making of the initial Credit Extensions, plus
all associated costs and expenses payable pursuant to the agreements evidencing
such obligations, and all commitments under the Existing Credit Agreement shall
have been terminated.
5.1.4. Projections. The Administrative Agent shall have
received financial projections for each of the Borrowers (including balance
sheets, income statements and statements of cash flows) for each month,
commencing with January 2003, occurring for the next succeeding twelve month
period, all in form and substance reasonably satisfactory to the Administrative
Agent and such other information (financial or otherwise) as may be reasonably
requested by the Administrative Agent.
5.1.5. Intercreditor Agreement. The Administrative Agent shall
have received executed counterparts of the Intercreditor Agreement, dated as of
the Closing Date, in each case duly executed and delivered by all parties
thereto and in form and substance reasonably satisfactory to the Administrative
Agent.
5.1.6. Closing Date Certificate. The Administrative Agent
shall have received, with counterparts for each Lender, the Closing Date
Certificate, dated the Closing Date and duly executed and delivered by an
Authorized Officer of each Borrower, in which certificate each Borrower shall
agree and acknowledge that the statements made therein shall be deemed to be
representations and warranties of such Borrower as of such date, and, at the
time the certificate is delivered, such statements shall in fact be true and
correct in all material respects. All documents and agreements required to be
appended to the Closing Date Certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent.
5.1.7. Delivery of Notes. The Administrative Agent shall have
received, for the account of each Lender that has requested a Note, a Revolving
Credit Note and, if applicable, a Swing Line Note, in the amount of each such
Lender's Revolving Credit Commitment and, if
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applicable, the Swing Line Loan Commitment Amount, each such Note having been
duly executed and delivered by an Authorized Officer of each Borrower.
5.1.8. Minimum Opening Liquidity Amount. The Administrative
Agent shall have received evidence satisfactory to it (including a certificate
and supporting calculations from the chief financial officer of the Company)
that after giving effect to all Credit Extensions to be made on the Closing
Date, the sum of (a) the amount of Excess Availability, plus, (b) the amount of
cash on hand on the Closing Date (after giving effect to the transactions
contemplated herein and in the Plan of Reorganization), is greater than or equal
to $60,000,000.
5.1.9. Closing; Fees; Expenses, etc. The Administrative Agent
shall have received for its own account, or for the account of each Lender, as
the case may be, all fees, costs and expenses due and payable pursuant to
Section 3.3 and Section 10.3.
5.1.10. Financial Information, etc. The Administrative Agent
shall have received, with counterparts for each Lender, (a) audited consolidated
financial statements of the Borrowers and their Subsidiaries for the fiscal year
ended September 30, 2002 and (b) a pro forma consolidated balance sheet of the
Borrowers and their Subsidiaries, as of the Closing Date, certified by the chief
financial or accounting Authorized Officer of the Company or the Treasurer or
any Assistant Treasurer of the Company, giving effect to the consummation of the
initial Credit Extensions and all other transactions contemplated by this
Agreement and the Plan of Reorganization.
5.1.11. Borrowing Base Certificate. The Administrative Agent
shall have received, with copies for each Lender, an initial Borrowing Base
Certificate, dated the Closing Date, in respect of Eligible Accounts and
Eligible Inventory as of November 30, 2002, duly executed by the chief financial
or accounting Authorized Officer, or the Treasurer or Assistant Treasurer of the
Company, showing that Excess Availability (excluding any outstandings under the
Existing Credit Agreement, but after taking into account the initial Credit
Extensions to be made on the Closing Date and based on the Borrowing Base Amount
as of November 30, 2002) is greater than or equal to $20,000,000.
5.1.12. Opinions of Counsel. The Administrative Agent shall
have received opinions, dated the Closing Date and addressed to the
Administrative Agent and all Lenders, from (a) Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, New York counsel to the Borrowers, in form and substance reasonably
satisfactory to the Administrative Agent and (b) the General Counsel to the
Company, in form and substance reasonably satisfactory to the Administrative
Agent.
5.1.13. Merger. The Administrative Agent shall have received
evidence satisfactory to it that (a) the Merger shall have been consummated and
(b) the Old Discount Notes shall have been cancelled and extinguished, in each
case pursuant to and in accordance with the terms and conditions of the Plan of
Reorganization, including Section 6.4 and Article X thereof and the
Administrative Agent shall have received a copy of the certificate of merger
filed under Delaware General Corporation Law Sections 253 and 303 evidencing
the Merger.
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5.1.14. U.C.C. and Other Searches. The Administrative Agent
shall have received (a) the results of U.C.C.-1 searches conducted in State and
county levels designated by the Administrative Agent in jurisdictions in which
the Borrowers and the Subsidiaries of the Borrowers are organized, conduct
business or have assets, which searches shall reflect the absence of Liens,
other than Permitted Liens and Liens for which the Administrative Agent has
received terminations and releases in form and substance reasonably satisfactory
to it; and (b) copies of searches conducted with respect to all patents,
trademarks and copyrights of the Borrowers at the applicable United States
filing office.
5.1.15. Pledge Agreements. The Administrative Agent shall have
received, with counterparts for each Lender, executed counterparts of a Pledge
Agreement from the Borrowers or each of them, dated as of the date hereof, duly
executed and delivered by an Authorized Officer of each Borrower party thereto,
together with certificates evidencing all of the issued and outstanding Capital
Securities of any Subsidiary (other than a Foreign Subsidiary) owned by each
Borrower, which certificate, in each case, shall be accompanied by undated
instruments of transfer duly executed in blank.
5.1.16. Security Agreements, etc. The Administrative Agent
shall have received, with counterparts for each Lender, executed counterparts of
a Security Agreement from the Borrowers or each of them, dated as of the date
hereof, duly executed by an Authorized Officer of each Borrower party thereto,
together with any promissory notes or other instruments or chattel paper to be
delivered to any Secured Party pursuant to the terms thereof.
5.1.17. Insurance. The Administrative Agent shall have
received, with copies for each Lender, certificates of the insurance policies
evidencing coverage required to be maintained pursuant to the Loan Documents.
5.1.18. Lien Terminations and Releases. The Administrative
Agent shall have received executed original copies of all terminations, releases
and other documentation deemed necessary or appropriate by the Lenders to
evidence the termination and release of all Liens (other than Permitted Liens)
of any Person in the Properties of the Borrowers or any Subsidiaries of any
Borrowers, including U.C.C.-3 termination statements.
5.1.19. Lockbox Accounts. The Borrowers and the Subsidiaries
of the Borrowers shall have established the Lockbox Accounts with Approved
Depository Banks as required pursuant to Section 3.1.3, Section 7.1.9 and
Section 7.2.19 and each such Approved Depository Bank shall have entered into a
Lockbox Agreement with the Administrative Agent and each relevant Borrower or
Subsidiary of a Borrower.
5.1.20. Perfection Certificate. The Administrative Agent shall
have received the Perfection Certificate, dated as of the Closing Date, duly
executed and delivered by an Authorized Officer of each Borrower.
5.1.21. Plan of Reorganization Effective. The Administrative
Agent shall have received evidence reasonably satisfactory to it that (a) the
sale of the PulpCo Business shall have been consummated in accordance with the
Purchase Agreement and the Company shall have received net cash proceeds of not
less than $300,000,000 from such sale, (b) the transaction
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contemplated by the Fibers Buyout Agreement shall have been consummated, (c) the
Company shall have executed and delivered the Indenture, (d) the Old 12 3/8%
Secured Notes Indenture Trustee and the Creditors Committee shall have each
executed motions or stipulations of dismissal with prejudice of any actions,
appeals and proceedings filed by or on behalf of them in connection with the
Chapter 11 Case, in form and substance reasonably satisfactory to the Lenders,
and such motions or stipulations shall be in the possession of the Company on
the Plan Effective Date for filing on or immediately after the Plan Effective
Date, (e) the Borrowers shall have received or otherwise retained $80,000,000 in
cash from the proceeds of the sale of the PulpCo Business, (f) the Confirmation
Deposit shall have been made and (g) all other conditions precedent to the Plan
Effective Date set forth in Section 10.3 of the Plan of Reorganization shall
have been satisfied or waived.
5.1.22. Management Team. The Administrative Agent shall have
received evidence reasonably satisfactory to it that there has not been any
material change, and no such material change is contemplated or foreseen, with
respect to the Company's senior management team.
5.1.23. Senior Secured Note Documents. The Administrative
Agent shall have received fully executed copies of each Senior Secured Note
Document, certified to be true, correct and complete by an Authorized Officer of
the Company and such Senior Secured Note Documents shall be in form and
substance satisfactory to the Lenders.
5.1.24. Updated Field Examination. If deemed necessary or
appropriate by the Administrative Agent, the Administrative Agent shall have
received an updated field examination of the books and records of the Borrowers,
reasonably satisfactory to the Administration Agent, to be paid for by the
Borrowers.
5.1.25. No Material Adverse Change. The Administrative Agent
shall have received evidence reasonably satisfactory to it that there shall have
been no material adverse change in the financial condition of any of the
Borrowers since September 30, 2002.
5.1.26. Required Consents and Approvals. All required consents
and approvals shall have been obtained and be in full force and effect with
respect to the execution and delivery of this Agreement and the other Loan
Documents and the transactions contemplated herein and in the Plan of
Reorganization.
5.1.27. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of any Borrower shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel
and the Administrative Agent and its counsel shall have received all
information, approvals, opinions, documents or instruments as the Administrative
Agent or its counsel may reasonably request.
SECTION 5.2. All Credit Extensions. The obligation of each Lender and
any Issuer to make any Credit Extension (including the initial Credit
Extensions) shall be subject to the satisfaction of each of the conditions
precedent set forth below.
5.2.1. Compliance With Warranties; No Default, etc. Both
before and after giving effect to any Credit Extension (but, if any Default of
the nature referred to in Section 8.1.5
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shall have occurred with respect to any other Indebtedness; without giving
effect to the application, directly or indirectly, of the proceeds thereof) the
following statements shall be true and correct:
(a) the representations and warranties set forth in this
Agreement and each other Loan Document shall, in each case, be true and
correct in all material respects with the same effect as if then made
(unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date);
(b) the sum of the aggregate outstanding principal amount of
all Revolving Credit Loans and Swing Line Loans, together with the
aggregate amount of all Letter of Credit Obligations, do not exceed the
then applicable Maximum Loan Amount; and
(c) no Default shall have then occurred and be continuing.
5.2.2. Credit Extension Request, etc. Subject to Section 2.3.1
and Section 2.3.2, the Administrative Agent shall have received a Borrowing
Request if Loans are being requested, or an Issuance Request if a Letter of
Credit is being requested or extended. Each of the delivery of a Borrowing
Request or Issuance Request and the acceptance by any Borrower of the proceeds
of such Credit Extension shall constitute a representation and warranty by each
Borrower that on the date of such Credit Extension (both immediately before and
after giving effect to such Credit Extension and the application of the proceeds
thereof) the statements made in Section 5.2.1 are true and correct in all
material respects.
5.2.3. Borrowing Base Certificate. The Administrative Agent
shall have received the timely delivery of the most recent Borrowing Base
Certificate required to be delivered hereunder and Administrative Agent shall
have received such further information regarding changes since the date of such
Borrowing Base Certificate or matters not referred to therein as Administrative
Agent shall deem necessary (including updated collateral as required under
Section 7.1.1(j) or as otherwise deemed necessary by the Administrative Agent)
to determine whether the requested Borrowing will result in a Default, cause the
aggregate amount of outstanding Credit Extensions (including any unpaid and
outstanding Reimbursement Obligations) to exceed the Maximum Loan Amount, or to
otherwise determine if the then applicable Borrowing Base Amount is sufficient
to support the requested Borrowing.
5.2.4. Payment of Fees. The Borrowers shall have paid to
Administrative Agent the then unpaid balance of all fees then due and payable
under and pursuant to this Agreement.
5.2.5. Post-Closing U.C.C. For any Credit Extension occurring
on or after February 19, 2003, the Administrative Agent shall have received the
results of U.C.C.-1 searches conducted in State and county levels designated by
the Administrative Agent in jurisdictions in which the Borrowers or the
Subsidiaries are organized, conduct business or have assets, which searches
shall reflect the (a) the absence of Liens, other than Permitted Liens and Liens
granted to secure the Obligations, and (b) that the Liens securing the
Obligations are Liens senior to all other Liens (other than Permitted Liens).
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5.2.6. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of any Borrower shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel
and the Administrative Agent and its counsel shall have received all
information, approvals, opinions, documents or instruments as the Administrative
Agent or its counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into this Agreement and
the other Loan Documents and to make Credit Extensions hereunder, each Borrower
represents and warrants to each Secured Party as set forth in this Article VI.
SECTION 6.1. Organization, etc. Each of the Borrowers and each of their
respective Subsidiaries is validly organized and existing and in good standing
under the laws of the state or jurisdiction of its incorporation or
organization, is duly qualified to do business and is in good standing as a
foreign entity in each jurisdiction where the nature of its business requires
such qualification (except where the failure to be so qualified and in good
standing as a foreign entity could not reasonably be expected to have a Material
Adverse Effect), and has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and perform its
Obligations under each Loan Document to which it is a party (except for failures
to hold such governmental licenses, permits and other approvals which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect) and to own and hold under lease its material property
and to conduct its business substantially as currently conducted by it.
SECTION 6.2. Due Authorization. Non-Contravention, etc. The execution,
delivery and performance by each Borrower of this Agreement and by each Borrower
and each Subsidiary of each Borrower of each other Loan Document to which it is
a party, are in each case within each such Person's powers, have been duly
authorized by all necessary corporate (or other equivalent) action, and do not:
(a) contravene any (i) Organic Documents of such Person, (ii)
material agreement or indenture (including the Indenture) binding on or
affecting such Person, (iii) court decree or order binding on or
affecting such Person or (iv) law or governmental regulation binding on
or affecting such Person; or
(b) result in, or require the creation or imposition of, any
Lien on any of such Person's Properties (except as contemplated by the
Loan Documents or as otherwise permitted by this Agreement).
SECTION 6.3. Government Approval; Regulation, etc. No material
authorization or material approval or other action by, and no material notice to
or material filing with, any Governmental Authority or regulatory body or other
Person (other than those that have been, or on the Effective Date will be, duly
obtained or made and which are, or on the Effective Date will be, in full force
and effect) is required for the due execution, delivery or performance by any
Borrower or any Subsidiary of any Borrower of any Loan Document to which it is a
party. No
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Borrower and no Subsidiary of a Borrower is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. Each Loan Document has been duly executed
and delivered by the applicable Borrower and/or Subsidiary of a Borrower party
thereto. Each Loan Document is a legal, valid and binding obligation of each
Borrower and each Subsidiary of a Borrower party thereto, enforceable against
each such Borrower and each such Subsidiary in accordance with its terms
(except, in any case, as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and by principles of equity).
SECTION 6.5. Financial Information. The financial statements of the
Borrowers and their Subsidiaries furnished to the Administrative Agent and each
Lender pursuant to Section 5.1.10 have been prepared in accordance with GAAP
consistently applied (except as may be indicated in the notes thereto), and
present fairly subject, in the case of unqualified financial statements and
other unaudited financial information, to normal recurring audit adjustments,
the consolidated financial condition of the Persons covered thereby as at the
dates thereof and the results of their operations for the periods then ended.
All balance sheets, all statements of operations, shareholders' equity and cash
flow and all other financial information of each of the Borrowers and their
Subsidiaries furnished pursuant to Section 7.1.1 have been, and will for periods
following the Effective Date, be prepared in accordance with GAAP consistently
applied (except as may be indicated in the notes thereto), and do or will
present fairly subject, in the case of unqualified financial statements and
other unaudited financial information, to normal recurring audit adjustments,
the consolidated financial condition of the Persons covered thereby as at the
dates thereof and the results of their operations for the periods then ended.
SECTION 6.6. No Material Adverse Change. Since September 30, 2002,
there has been no material adverse change in the financial condition, results of
operations, assets, business, properties or prospects of the Borrowers or their
Subsidiaries, taken as a whole.
SECTION 6.7. Litigation; Labor Controversies, etc. There is no pending
or, to the knowledge of the Borrowers, threatened litigation, action, proceeding
or labor controversy:
(a) affecting the Borrowers or any Subsidiary of the
Borrowers, or any of their respective properties, businesses, assets or
revenues, which could reasonably be expected to have a Material Adverse
Effect, and no adverse development has occurred in any labor
controversy, litigation, arbitration or governmental investigation or
proceeding which could reasonably be expected to have a Material
Adverse Effect; or
(b) which purports to affect the legality, validity or
enforceability of any Loan Document.
SECTION 6.8. Subsidiaries. There are no Subsidiaries of the Borrowers
except those Subsidiaries (a) which are identified in Item 6.8 of the
Disclosure Schedule or (b) which are
75
permitted to have been organized or acquired in accordance with 7.2.4 and which
are in compliance with the provisions of Section 7.1.8. None of the Foreign
Subsidiaries of the Borrowers own any material assets or have any material
liabilities.
SECTION 6.9. Ownership of Properties. Each Borrower and each of their
Subsidiaries owns (a) in the case of owned real property, good and indefeasible
fee title to, and (b) in the case of owned personal property, good and valid
title to, or, in the case of leased real or personal property, valid and
enforceable leasehold interests (as the case may be) in, all of its Properties,
free and clear in each case of all Liens or claims, except for Permitted Liens.
SECTION 6.10. Taxes. Each Borrower and each of their Subsidiaries has
filed all tax returns and reports required by any Governmental Authority to have
been filed by it and has paid all Taxes and other governmental charges levied
upon any of them or upon any of their respective Properties or income which are
due and payable, including interest and penalties, except for Priority Tax
Claims to be paid under the Plan of Reorganization, and except where the failure
to pay or file, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect and except such Taxes and other
governmental charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.
SECTION 6.11. Pension and Welfare Plans. During the twelve consecutive
month period prior to the Effective Date and prior to the date of any Credit
Extension hereunder, no steps have been taken to terminate any Pension Plan
other than a standard termination under Section 4041(b) of ERISA, and no
contribution failure has occurred with respect to any Pension Plan sufficient to
give rise to a Lien under Section 302(f) of ERISA. No condition exists or event
or transaction has occurred with respect to any Pension Plan which could
reasonably be expected to result in the incurrence by the Borrowers or any
member of the Controlled Group of any liability, fine or penalty which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
SECTION 6.12. Environmental Warranties. Except as set forth in Item
6.12 of the Disclosure Schedule:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrowers or any of their
Subsidiaries has been, and continues to be, owned or leased by the
Borrowers and the Subsidiaries in compliance with all Environmental
Laws except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect;
(b) there have been no past, and there are no pending or (to
the knowledge of the Borrowers) threatened (i) claims, complaints,
notices or requests for information received by any Borrower or any of
their Subsidiaries with respect to any alleged violation of any
Environmental Law, or (ii) complaints, notices or inquiries to the
Borrowers or any of their Subsidiaries regarding potential liability
under any Environmental Law which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
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(c) there have been no Releases of Hazardous Materials at, on
or under any property now or previously owned or leased by the
Borrowers or any of their Subsidiaries that have had, or could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;
(d) the Borrowers and each of their Subsidiaries has been
issued and are in compliance with all permits, certificates, approvals,
licenses and other authorizations relating to environmental matters,
except where the failure to do so could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect;
(e) no property now or previously owned or leased by the
Borrowers or any of their Subsidiaries is listed or proposed for
listing (with respect to owned property only) on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar
State list of sites requiring investigation or clean-up which,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrowers or any of their
Subsidiaries that, individually or in the aggregate, have had, or could
reasonably be expected to have, a Material Adverse Effect;
(g) neither the Borrowers nor any of their Subsidiaries has
directly transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar State list or which is the subject of
federal, State or local enforcement actions or other investigations
which may lead to material claims against the Borrowers or any of their
Subsidiaries for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA which, individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the
Borrowers or any of their Subsidiaries that, individually or in the
aggregate, have had, or could reasonably be expected to have, a
Material Adverse Effect; and
(i) no conditions exist at, on or under any property now or
previously owned or leased by the Borrowers or any of their
Subsidiaries which, with the passage of time, or the giving of notice
or both, could reasonably be expected to give rise to material or
contingent liability under any Environmental Law which, individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.13. Accuracy of Information.
(a) None of the factual information heretofore or
contemporaneously furnished in writing to any Secured Party by or on
behalf of any Borrower or any Subsidiary of any Borrower in connection
with any Loan Document or any transaction contemplated hereby contains
any untrue statement of a material fact, or omits to state any material
fact necessary to make any information not misleading, and no other
factual information
77
hereafter furnished in connection with any Loan Document by or on
behalf of any Borrower or any Subsidiary of any Borrower to any Secured
Party will contain any untrue statement of a material fact or will omit
to state any material fact necessary to make any information not
misleading on the date as of which such information is dated or
certified.
(b) All written information prepared by any consultant or
professional advisor on behalf of any Borrower or any Subsidiary of any
Borrower which was furnished to the Administrative Agent or any Lender
in connection with the preparation, execution and delivery of this
Agreement has been reviewed by the Borrowers, and nothing has come to
the attention of the Borrowers in the context of such review which
would lead them to believe that such information (or the assumptions on
which such information is based) is not, taken as a whole, true and
correct in all material respects or that such information, taken as a
whole, omits to state any material fact necessary to make such
information not misleading in any material respect.
(c) Insofar as the Projections or any of the information
described above includes assumptions, estimates, projections or
opinions, the Borrowers have reviewed such matters and nothing has come
to the attention of the Borrowers in the context of such review which
would lead them to believe that such assumptions, estimates,
projections or opinions, omit to state any material fact necessary to
make such assumptions, estimates, projections or opinions reasonable
and not misleading in any material respect. All projections and
estimates have been prepared in good faith on the basis of reasonable
assumptions.
SECTION 6.14. Regulations U and X. No Borrower or Subsidiary of a
Borrower is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Credit Extensions
will be used to purchase or carry margin stock or otherwise for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation U or Regulation
X. Terms for which meanings are provided in F.R.S. Board Regulation U or
Regulation X or any regulations substituted therefor, as from time to time in
effect, are used in this Section 6.14 with such meanings.
SECTION 6.15. Senior Secured Notes. The Senior Secured Notes have been
issued to the holders of Old 12 3/8% Secured Note Claims on or prior to the
Closing Date in accordance with and pursuant to the terms of the Plan of
Reorganization and the Indenture.
SECTION 6.16. Solvency. On and after the Plan Effective Date, the
Borrowers taken as a whole are, and each Borrower individually is, Solvent.
SECTION 6.17. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral owned by the Borrowers or any of their
Subsidiaries, the loss, impairment or infringement of which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part;
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(b) such Intellectual Property Collateral is valid and
enforceable;
(c) the Borrowers and their Subsidiaries have made all
necessary filings and recordations to protect their respective
interests in such Intellectual Property Collateral, including (if
permissible) recordations of all such interests in the Intellectual
Property Collateral in the United States Patent and Trademark Office
and/or the United States Copyright Office;
(d) the Borrowers and their Subsidiaries are the owners of
their respective unencumbered right, title and interest in and to such
Intellectual Property Collateral (except for Liens created under the
Loan Documents and Permitted Liens and except for rights of licensees
under licenses of such Intellectual Property Collateral in the ordinary
course of business) and, to the knowledge of the Borrowers, no claim
has been made that the use of such Intellectual Property Collateral
does or may violate the asserted rights of any third party except for
claims that could not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect; and
(e) the Borrowers and their Subsidiaries have performed all
acts and have paid all required fees and taxes required to maintain the
registrations and applications for any such Intellectual Property
Collateral that is material or necessary to the business of any
Borrower or any of their Subsidiaries.
SECTION 6.18. Ownership of Stock. The Company owns (directly or
indirectly) free and clear of all Liens (other than the Liens securing the
Obligations) 100% of the outstanding Capital Securities (whether voting or
non-voting) of each other Borrower and each Subsidiary of each other Borrower,
in each case on a fully diluted basis. There are no outstanding options,
warrants or convertible securities with respect to the Capital Securities of any
Borrower (other than the Company) or any Subsidiary of any Borrower.
SECTION 6.19. Material Contracts. There are no Material Contracts other
than the agreements listed in Item 6.19 of the Disclosure Schedule, as the same
may be updated by the Company from time to time pursuant to Section 7.1.1(c).
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. Until the Termination Date, each
Borrower agrees that it will, and will cause each of its Subsidiaries to, comply
at all times with each of the following covenants set forth below.
7.1.1. Financial Information; Reports; Notices, etc. The
Borrowers will furnish or cause to be furnished to the Administrative Agent and
each Lender copies of the following financial statements, reports, notices and
information:
(a) (i) as soon as available and in any event within fifty
(50) days after the end of each of the first three Fiscal Quarters of
each calendar year, an unaudited consolidated and consolidating balance
sheet of the Borrowers and their Subsidiaries as of the end of such
Fiscal Quarter and consolidated and consolidating statements of income
and cash
79
flow of the Borrowers and their Subsidiaries for such Fiscal Quarter
and for the period commencing at the end of the previous calendar year
and ending with the end of such Fiscal Quarter, and including (for each
Fiscal Quarter ending on or after March 31, 2004) (in each case), in
comparative form the figures for the corresponding Fiscal Quarter in,
and year to date portion of, the immediately preceding calendar year,
certified as complete and correct by the chief financial or accounting
Authorized Officer of the Company or the Treasurer or any Assistant
Treasurer of the Company and (ii) as soon as available and in any event
within thirty (30) days after the end of each calendar month (starting
with the calendar month ending December 31, 2002), a copy of the
consolidated and consolidating balance sheet of the Borrowers and their
Subsidiaries as of the end of such calendar month, and the related
consolidated and consolidating statements of income and cash flow of
the Borrowers and their Subsidiaries for such calendar month and for
the period commencing at the end of the previous calendar year and
ending with the end of such calendar month, and, in each case the
consolidated balance sheet and statements of income and cash flow shall
set forth in comparative form (x) the figures for the same period from
the Projections and (y) monthly accounting periods ending in the
immediately preceding calendar year (for each month ending on or after
January 31, 2004) and certified by the chief financial or chief
accounting Authorized Officer of the Company or the Treasurer or any
Assistant Treasurer of the Company;
(b) as soon as available and in any event within ninety (90)
days after the end of each calendar year, a copy of the consolidated
and unaudited consolidating balance sheet of the Borrowers and their
Subsidiaries, and the related consolidated and consolidating statements
of income and cash flow of the Borrowers and such Subsidiaries for such
calendar year, setting forth (for each calendar year ending on or after
December 31, 2004) in comparative form the figures for the immediately
preceding calendar year, audited (without any Impermissible
Qualification) by independent public accountants of recognized national
standing and stating that such consolidated financial statements
present fairly the consolidated financial condition as of the end of
such calendar year, and the consolidated results of operations and cash
flows for such calendar year, of the Borrowers and their Subsidiaries
in accordance with GAAP, applied on a consistent basis; provided,
however that any consolidating statements delivered pursuant to this
clause shall be unaudited;
(c) as soon as available and in any event within fifteen (15)
days after the end of each calendar month, together with an updated
Item 6.19 of the Disclosure Schedule, together with copies of any such
new Material Contracts (if necessary), a Borrowing Base Certificate
dated and reflecting amounts as of the close of business on the last
day of such calendar month; provided, however, that, notwithstanding
anything to the contrary contained herein, during any EBITDA
Measurement Period (i) the Borrowers will deliver, in addition to the
foregoing monthly Borrowing Base Certificate, no less frequently than
the last Business Day of each calendar week, a Borrowing Base
Certificate dated and reflecting amounts as of the close of business on
the last day of the preceding calendar week (provided that such weekly
Borrowing Base Certificate shall be calculated based on a methodology
agreed upon between the Company and the Administrative Agent) and (ii)
the Administrative Agent shall have the right in its
80
discretion to require the Company to change the frequency of delivery
of Borrowing Base Certificates;
(d) as soon as possible and in any event within three (3)
Business Days after any Borrower obtains knowledge of the occurrence of
a Default, a statement of an Authorized Officer of the Company setting
forth details of such Default and the action which the Borrowers or any
of them have taken and/or propose to take with respect thereto;
(e) as soon as possible and in any event within three Business
Days after the Borrowers obtain knowledge of (i) the occurrence of any
adverse development with respect to any litigation, arbitration action,
governmental investigation or proceeding or labor controversy or (ii)
the commencement of any litigation, action, proceeding or labor
controversy, in either of such cases which could reasonably be expected
to have a Material Adverse Effect, notice thereof and, to the extent
the Administrative Agent requests, copies of all documentation relating
thereto;
(f) promptly after the sending or filing thereof, copies of
all reports, notices, prospectuses and registration statements which
any Borrower or any Subsidiary of any Borrower files with the SEC or
any national securities exchange;
(g) promptly upon becoming aware of (i) the institution of any
steps by any Person to terminate any Pension Plan other than a standard
termination under 4041(b) of ERISA, (ii) the failure to make a required
contribution to any Pension Plan if such failure is sufficient to give
rise to a Lien under Section 302(f) of ERISA, (iii) the taking of any
action with respect to a Pension Plan which could result in the
requirement that any Borrower or any Subsidiary of any Borrower furnish
a bond or other security to the PBGC or such Pension Plan, or (iv) the
occurrence of any event with respect to any Pension Plan which could
result in the incurrence by any Borrower or any Subsidiary of any
Borrower of any material liability, fine or penalty, notice thereof and
copies of all documentation relating thereto;
(h) promptly upon receipt thereof, copies of all "management
letters" submitted to the Borrowers or any Subsidiary of any Borrower
by the independent public accountants referred to in clause (b) of this
Section 7.1.1 in connection with each audit made by such accountants;
(i) promptly following the mailing or receipt of any notice or
report delivered under the terms of the Senior Secured Note Documents,
copies of such notice or report;
(j) as of such dates as are designated by the Administrative
Agent, the Borrowers shall make available to the Administrative Agent
all information as is necessary for the Administrative Agent or a
designee thereof to prepare a collateral report with respect to the
Eligible Accounts and Eligible Inventory components included in the
Borrowing Base Amount and such other information or materials as the
Administrative Agent shall make the scope of such examination, and the
Borrowers shall pay all travel and other out of pocket costs incurred
by the Administrative Agent or its affiliates with respect to such
collateral reports;
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(k) a summary of the insurance coverages of the Borrowers and
their Subsidiaries in form and substance reasonably satisfactory to the
Administrative Agent; upon renewal of any such insurance policy, a copy
of an insurance certificate summarizing the terms of such policy; and
upon request of the Administrative Agent, copies of the applicable
policies;
(l) such other financial and other information as any Lender
or Issuer through the Administrative Agent may from time to time
reasonably request;
(m) on or before the date which is thirty (30) days prior to
the commencement of each calendar year of the Company, updated
projections (including balance sheets, income statements and statements
of cash flows) for each month occurring during the succeeding twelve
month period (the "Projections"); and
(n) promptly upon the occurrence thereof (and in any event
within three (3) Business Days), notice of (i) any amendment or
replacement of any Material Contract on terms or conditions which are,
in the aggregate, less favorable to the Borrowers in any material
respect than the terms and conditions existing with respect to such
Material Contract prior to such amendment or replacement, (ii) any
termination of any Material Contract, (iii) any Material Adverse Effect
or (iv) any plans to shut down, or cease production from, any facility
at the Texas City Facility (excluding normal recurring shutdowns for
maintenance purposes or any other shutdown that is not expected to last
more than thirty (30) consecutive days);
(o) promptly upon the occurrence thereof (and in any event
within three (3) Business Days), notify the Administrative Agent when
and if any decision is made not to commence the production of
acrylonitrile at the Texas City Facility on or before June 30, 2003,
and, within thirty (30) days after any such notice, deliver revised
Projections reflecting the impact of any such failure to commence such
production; and
(p) on or before the date which is ninety (90) days after the
Closing Date, an audited opening balance sheet for the Company and its
Subsidiaries.
7.1.2. Maintenance of Existence; Compliance With Laws, etc.
Each of the Borrowers will, and will cause each of their Subsidiaries to,
(a) except as otherwise permitted by Section 7.2.9, preserve
and maintain its legal existence; and
(b) comply in all material respects with all applicable laws,
rules, regulations and orders, including the payment (before the same
become delinquent), of all Taxes and governmental charges imposed upon
any of the Borrowers or any of their Subsidiaries or upon their
Properties, except for the payment of any Taxes or governmental charges
which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
have been set aside on the books of the applicable Borrower or
Subsidiary.
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7.1.3. Maintenance of Properties. Each of the Borrowers will,
and will cause each of their Subsidiaries to, maintain, preserve, protect and
keep its and their respective Properties in good repair, working order and
condition (ordinary wear and tear excepted), and make necessary repairs,
renewals and replacements so that the business carried on by the Borrowers and
their Subsidiaries may be properly conducted at all times, unless the Borrowers
have determined in good faith that the continued maintenance of such Property is
no longer economically desirable (provided that any such determination with
respect to any Property material to the operations of any Borrower or any
Subsidiary of any Borrower shall be made only after consultation with the
Administrative Agent).
7.1.4. Insurance. Each of the Borrowers will, and will cause
each of their Subsidiaries to:
(a) maintain insurance on its property with financially sound
and reputable insurance companies against loss and damage in at least
the amounts (and with only those deductibles) customarily maintained,
and against such risks as are typically insured against in the same
general area, by Persons of comparable size engaged in the same or
similar business as the Borrowers and their Subsidiaries; and
(b) all worker's compensation, employer's liability insurance
or similar insurance as may be required under the laws of any state or
jurisdiction in which it may be engaged in business.
Without limiting the foregoing, all insurance policies required pursuant to this
Section 7.1.4 for the Borrowers and their Subsidiaries shall (i) list the
Administrative Agent on behalf of the applicable Secured Parties as mortgagee
(in the case of property insurance) or additional insured (in the case of
liability insurance), as applicable, and provide that no cancellation or
modification of the policies will be made without 30 days' prior written notice
to the Administrative Agent (provided that the Borrowers shall have five (5)
Business Days after notice from the Administrative Agent to correct any
insurance policy delivered to the Administrative Agent which does not comply
with this clause (i)), and (ii) be in addition to any requirements to maintain
specific types of insurance contained in the other Loan Documents.
7.1.5. Books and Records. Each of the Borrowers will, and will
cause each of their Subsidiaries to, keep books and records in accordance with
GAAP which accurately reflect all of its business affairs and transactions and
permit each Secured Party or any of their respective representatives, at
reasonable times and intervals upon reasonable notice to the Company, to visit
the offices of each Borrower to discuss such Borrower's financial matters with
its officers and employees, and its independent public accountants (and each
Borrower hereby authorizes such independent public accountant to discuss the
financial matters of the Borrowers and the Subsidiaries of the Borrowers with
each Secured Party or their representatives whether or not any representative of
such Person is present) and to examine (and photocopy extracts from) any of its
books and records. The Borrowers shall jointly and severally pay any fees of
such independent public accountant incurred in connection with the
Administrative Agent's exercise of its rights pursuant to this Section 7.1.5 at
any time and any other Secured Party's exercise of their rights pursuant to this
Section 7.1.5 if a Default has occurred and is continuing.
83
7.1.6. Intentionally Deleted.
7.1.7. Use of Proceeds. Each Borrower will apply the proceeds
of Credit Extensions for working capital and general corporate purposes of the
Borrowers consistent with this Agreement and for issuing Letters of Credit for
the account of the Borrowers.
7.1.8. Borrowers; Security; etc. Each Borrower will, and will
cause each Subsidiary that is not a Foreign Subsidiary to, execute any
documents, financing statements, agreements and/or instruments, and take all
further action (including filing financing statements) that may be required
under applicable law, or that the Administrative Agent may reasonably request,
in order to effectuate the transactions contemplated by the Loan Documents and
in order to grant, preserve, protect and perfect the validity and first priority
of the security interests created or intended to be created by the Loan
Documents (subject to Permitted Liens). Each Borrower will cause any
subsequently acquired or created Subsidiary, that is not a Foreign Subsidiary,
to become a party to this Agreement, as a "Borrower" hereunder, and to execute
and deliver to the Administrative Agent a Joinder Agreement and each other
applicable Loan Document (including a supplement to the applicable Security
Agreement) in favor of the Secured Parties. In addition, from time to time, the
Borrowers will, at their cost and expense, promptly secure the Obligations by
pledging or creating, or causing to be pledged or created, perfected security
interests with respect to any now existing or hereinafter created or acquired
Collateral, it being understood that it is the intent of the Secured Parties
that the Obligations shall be secured by all Collateral owned by any Borrower
and any Subsidiary of any Borrower, other than any Foreign Subsidiaries. Such
security interests and Liens will be created under the Loan Documents in form
and substance satisfactory to the Administrative Agent, and each Borrower shall
deliver or cause to be delivered to the Lenders all such instruments and/or
documents (including legal opinions, and lien searches) as the Administrative
Agent shall reasonably request to evidence compliance with this Section 7.1.8.
7.1.9. Lockbox Accounts. Each applicable Borrower shall
provide instructions to the appropriate Person as often as necessary to ensure
that any and all Receipts of the Borrowers and the Subsidiaries of the Borrowers
are deposited into Lockbox Accounts and that any and all amounts deposited in
the Lockbox Accounts are transferred, either directly or indirectly, to the
Concentration Account, to be applied against any outstanding Obligations as
provided in clause (e) of Section 3.1.3; and no Borrower shall close or transfer
any Lockbox Account, or, except as otherwise permitted in Section 7.2.19, open
any new deposit account (a) with any financial institution other than an
Approved Depository Bank, (b) without the prior written consent of the
Administrative Agent and (c) without causing the bank where such Lockbox Account
or new deposit account has been opened to be subject to a Lockbox Agreement.
7.1.10. Environmental Covenant. Each Borrower will, and will
cause each of its Subsidiaries to,
(a) use and operate all of its facilities and Properties in
compliance in all material respects with all Environmental Laws, keep
(and, when applicable, obtain in a timely manner) all necessary
material permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain
in compliance in all
84
material respects therewith, and handle all Hazardous Materials
(including the disposition and storing thereof) in compliance with all
applicable Environmental Laws which in the good faith judgment of the
Company are of a material nature, except in each case where the failure
to do so could not reasonably be expected to have a Material Adverse
Effect;
(b) promptly notify the Administrative Agent and provide
copies upon receipt of all written claims, complaints, notices or
inquiries from third parties relating to Releases of Hazardous
Materials from its facilities and Properties or compliance with
Environmental Laws which in the good faith judgment of the Company are
of a material nature and which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; and
(c) provide such information and certifications which the
Administrative Agent may reasonably request from time to time to
evidence compliance with this Section 7.1.10.
7.1.11. As to Intellectual Property Collateral. No Borrower
shall, nor shall any Borrower permit any of its Subsidiaries to, except in the
exercise of its reasonable business judgment, do any act, or omit to do any act,
whereby any item of material Intellectual Property Collateral may lapse or
become abandoned or dedicated to the public or unenforceable other than upon the
natural expiration of protective periods under applicable law. In addition, each
of the Borrowers shall, and shall cause each of their Subsidiaries to:
(a) notify the Administrative Agent as soon as practicable if
it knows that any application or registration relating to any material
item of the Intellectual Property Collateral may become abandoned or
dedicated to the public or placed in the public domain or invalid or
unenforceable (other than upon the natural expiration of protective
periods under applicable law), or of any adverse determination or
development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office or the United States Copyright Office) regarding the
ownership by any Borrower or any Subsidiary of any Borrower of any
material item of the Intellectual Properly Collateral or any Borrower's
or any of its Subsidiaries' right to register the same or to keep and
maintain and enforce the same;
(b) not file any application for the registration of any
Intellectual Property Collateral with the United States Patent and
Trademark Office or the United States Copyright Office, unless it
promptly informs the Administrative Agent, and upon request of the
Administrative Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Administrative Agent may
reasonably request to evidence the Administrative Agent's security
interest in such Intellectual Property Collateral and the goodwill and
general intangibles of any Borrower or any Subsidiary of any Borrower
relating thereto or represented thereby.
(c) unless it is otherwise determined in the exercise of their
reasonable business judgment, take all necessary steps, including in
any proceeding before the United States Patent and Trademark Office or
the United States Copyright Office, to maintain and pursue any
application (and to obtain the relevant registration) filed with
respect to, and
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to maintain any registration of, any material item of the Intellectual
Property Collateral, including the filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and
taxes (except to the extent that dedication, abandonment or
invalidation is permitted under the foregoing clause (a) or (b) of this
Section 7.1.11).
7.1.12. ANEXCO Receivables. No Account owing by ANEXCO to the
Borrowers or any of them shall be counted in the definition of Eligible Accounts
unless the Borrowers (a) have previously granted (with the consent of BP, if
required) to the Administrative Agent, for the benefit of the Lenders, a first
priority security interest in and Lien on the rights of the Borrowers under the
ANEXCO LLC Agreement and the BP Joint Venture Agreement with respect to any
Accounts arising under such agreements, (b) cause all amounts received by ANEXCO
by the applicable Account Debtor to be transferred to the Company at the times
required by the ANEXCO LLC Agreement and the BP Joint Venture Agreement, (c)
cause all amounts received by the Company from ANEXCO to be immediately
transferred to a Lockbox Account as soon as such amounts are paid to the Company
by ANEXCO, (d) promptly remit notice to the Administrative Agent with respect to
any legal action commenced against ANEXCO or any Lien that is imposed on the
assets of ANEXCO, in either case, of which any Borrower or any Subsidiary of any
Borrower becomes aware, (e) to the extent that audited financial statements are
prepared for ANEXCO, promptly provide the Administrative Agent with a copy of
such financial statements (subject to the execution by the Administrative Agent
of an appropriate confidentiality agreement in form and substance reasonably
satisfactory to the Administrative Agent, the Company and BP), (f) provide
notice to the Administrative Agent if the Borrowers have knowledge of the
occurrence of any event with respect to ANEXCO that could reasonably be expected
to have (x) a material adverse effect on the business, condition (financial or
otherwise), operations, performance, properties or prospects of ANEXCO or (y) a
Material Adverse Effect and (g) provide a detailed list of the Account Debtor
with respect to such ANEXCO Account and provide such other information regularly
provided by the Borrowers to the Administrative Agent with respect to all other
Accounts included in Eligible Accounts. In addition, unless the Administrative
Agent otherwise consents in writing, in the event that any Borrower or any
Subsidiary of any Borrower (i) consents to the granting of any Lien by ANEXCO on
any of its Accounts, (ii) transfers any of its rights or obligations under the
ANEXCO LLC Agreement or the BP Joint Venture Agreement, including any membership
interest in ANEXCO, in a manner which will result in the Board of Managers of
ANEXCO being able to authorize the granting of any Lien on the ANEXCO Accounts
without the consent of a Borrower or (iii) amends the ANEXCO LLC Agreement or
the BP Joint Venture Agreement in any manner which extends the period of time
during which ANEXCO must make any payment to any Borrower or any Subsidiary of
any Borrower on account of sales of acrylonitrile to or through ANEXCO or
permits the granting of any Lien on the ANEXCO Accounts without the consent of a
Borrower, then all Accounts owing to the Borrowers by ANEXCO shall immediately
cease to be Eligible Accounts.
SECTION 7.2. Negative Covenants. Until the Termination Date,
each Borrower covenants and agrees with each Lender, each Issuer and the
Administrative Agent that each Borrower will, and will cause each of its
Subsidiaries to, perform or cause to be performed the obligations set forth
below.
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7.2.1. Business Activities. No Borrower will, nor will any
Borrower permit any of its Subsidiaries to, engage in any business activity
except those business activities engaged in on the Effective Date and business
activities reasonably related or incidental thereto.
7.2.2. Indebtedness. The Borrowers will not, and will not
permit any of their Subsidiaries to, create, incur, assume or permit to exist
any Indebtedness, other than (without duplication):
(a) Indebtedness in respect of the Obligations;
(b) Indebtedness identified in Item 7.2.2(b) of the Disclosure
Schedule and, provided that no Default or Event of Default then exists
or would result therefrom, Indebtedness incurred for the purpose of
refinancing the Indebtedness identified in Item 7.2.2(b) of the
Disclosure Schedule on No Less Favorable Terms and Conditions;
(c) unsecured Indebtedness (i) incurred in the ordinary course
of business of the Borrowers and their Subsidiaries (including open
accounts extended by suppliers on normal trade terms in connection with
purchases of goods and services which are not overdue for a period of
more than ninety (90) days or, if overdue for more than ninety (90)
days, as to which a good faith dispute exists and adequate reserves in
conformity with GAAP have been established on the books of such
Borrower or such Subsidiary) and (ii) in respect of performance, surety
or appeal bonds provided in the ordinary course of business, but
excluding (in each case), Indebtedness for borrowed money or Contingent
Liabilities in respect thereof;
(d) Capitalized Lease Liabilities; provided, that the
aggregate amount of all Indebtedness outstanding pursuant to this
clause (d) shall not at any time exceed $5,000,000 in the aggregate in
any calendar year;
(e) unsecured Indebtedness owing by any Borrower to another
Borrower;
(f) obligations for current Taxes which are not yet due or are
being contested in good faith by appropriate action or proceeding
promptly initiated and diligently conducted, if such reserve as shall
be required by GAAP shall have been made therefore and so long as no
Liens, individually or in the aggregate, in excess of $2,000,000
outstanding at any one time have been filed with respect to such
Indebtedness;
(g) Indebtedness of the Company evidenced by the Senior
Secured Notes, and Indebtedness of any other Borrower in respect of its
guaranty of such Senior Secured Notes and, subject to the terms and
conditions of Section 7.2.7, refinancings of such Indebtedness on No
Less Favorable Terms and Conditions;
(h) Indebtedness in respect of Hedging Obligations entered
into in the ordinary course of business;
(i) Indebtedness for the construction or acquisition of
property used in the ordinary course of business of the Borrowers and
their Subsidiaries (provided, that such
87
Indebtedness is incurred within 60 days of the commencement of
construction or acquisition) in an amount not to exceed $2,000,000 in
the aggregate in any calendar year;
(j) Indebtedness, in an amount that does not exceed $10
million in the aggregate at any time outstanding, represented by
premium financing or similar deferred payment obligations incurred with
respect to insurance policies purchased in the ordinary course of
business and consistent with past practice, provided that such premium
financing or similar deferred payment obligations do not impact the
insurance coverage relating thereto;
(k) other unsecured Indebtedness incurred after the Plan
Effective Date and in the ordinary course of business in an aggregate
amount at any time outstanding not to exceed $5,000,000; and
(l) other Indebtedness incurred prior to the Plan Effective
Date, which is an Other Secured Claim, provided that the aggregate of
all such Other Secured Claims does not exceed $100,000 in the aggregate
at any time outstanding, and provided further that all such Other
Secured Claims are paid in full on or before the date which is the
sixth (6th) month anniversary of the Closing Date.
provided, however, that no Indebtedness otherwise permitted by clauses (c), (d),
(g), (h), (i) or (k) shall be assumed or otherwise incurred if a Default has
occurred and is then continuing or would result therefrom.
7.2.3. Liens. No Borrower will, nor will any Borrower permit
any of its Subsidiaries to, create, incur, assume or permit to exist any Lien
upon any of its Properties (including revenues and any Capital Securities of any
Person), whether now owned or hereafter acquired, except the following
(collectively, "Permitted Liens"):
(a) Liens securing payment of the Obligations;
(b) Liens existing as of the Effective Date and disclosed in
Item 7.2.3(b) of the Disclosure Schedule, and extensions thereof and
refinancings of such Indebtedness; provided, that no such Lien that
secures Indebtedness shall encumber any additional property and the
amount of Indebtedness secured by such Lien is not increased from that
existing on the Effective Date (as such Indebtedness may have been
permanently reduced subsequent to the Effective Date);
(c) Liens on the Indenture Collateral securing the Senior
Secured Notes or, subject to clause (g) of Section 7.2.2 and Section
7.2.7, extensions, re-grants or renewals thereof in connection with any
refinancing of the Senior Secured Notes on No Less Favorable Terms and
Conditions;
(d) Liens on assets of the Borrowers securing Indebtedness of
the type permitted under clauses (d) and (h) of Section 7.2.2;
provided, that (i) such Liens are granted within 60 days after such
Indebtedness is incurred, (ii) the Indebtedness secured thereby does
not exceed 80% of the lesser of the cost or the fair market value of
the applicable property, improvements or equipment at the time of such
lease, acquisition or
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construction and (iii) such Lien secures only the assets that are the
subject of the Indebtedness referred to in such clause;
(e) Liens in favor of carriers, warehousemen, mechanics,
repairmen, workmen, crews, materialmen and landlords, maritime Liens
and other Liens imposed by law granted or imposed in the ordinary
course of business for amounts not yet due or payable or being
diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set
aside on the books of the Borrowers;
(f) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits, or to
secure performance of tenders, statutory obligations, surety and appeal
bonds, government contracts, performance bonds, bids, leases or other
similar obligations entered into in the ordinary course of business
(exclusive of obligations for the payment of borrowed money);
(g) judgment Liens in existence for less than 45 days after
the entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies and which do not otherwise result in an Event of Default
under Section 8.1.6;
(h) Permitted Real Estate Liens;
(i) Liens for Taxes (i) not at the time delinquent or (ii)
which are being contested in good faith by appropriate action or
proceeding promptly initiated and diligently conducted, if (in the case
of Liens under this clause (ii)) such reserves as shall be required by
GAAP shall have been made therefore and so long as such Liens,
individually or in the aggregate, do not secure Indebtedness in excess
of $2,000,000 outstanding at any one time;
(j) ordinary course of business Liens not described above or
in the definition of Permitted Real Estate Liens that in any case do
not secure any Indebtedness and that are not prior to any Liens
securing the Obligations in an amount not to exceed $2,000,000 in the
aggregate;
(k) the right of BP to purchase the interests of the Company
under the order of the Bankruptcy Court approving the assumption of the
acrylonitrile agreements with BP;
(l) Liens on assets (other than Collateral) that are the
subject of capital projects between the Company and a third party that
has production, operating or similar agreements with the Company,
provided that such Liens are expressly limited to the assets directly
financed by such third party for such capital project;
(m) Liens on assets (other than Collateral) incurred in the
ordinary course of business of the Company and its Subsidiaries that do
not secure Indebtedness and the value of which assets covered by such
Liens do not exceed $10,000,000 in the aggregate;
89
(n) other Liens consented to by Required Lenders; and
(o) Liens securing Other Secured Claims, provided that such
Other Secured Claims do not exceed $100,000 in the aggregate at any
time outstanding, provided further that such Liens are terminated and
released on or before the date which is the sixth (6th) month
anniversary of the Closing Date.
In addition, notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document, no Borrower will, nor will any Borrower
permit any of its Subsidiaries to grant, create, incur, assume or otherwise
permit to exist any Liens on any Accounts, any inventory or any Capital
Securities of any Subsidiary of any Borrower or on any dividends or other
proceeds therefrom, other than Liens securing the Obligations.
7.2.4. Investments. The Borrowers will not, and will not
permit any of their Subsidiaries to, purchase, make, incur, assume or permit to
exist any Investment in any other Person, other than the following
(collectively, "Permitted Investments"):
(a) Investments existing on the Effective Date and identified
in Item 7.2.4(a) of the Disclosure Schedule;
(b) the Company may make Investments in the other Borrowers
which are Wholly-Owned Subsidiaries of the Company;
(c) Cash Equivalent Investments;
(d) the Borrowers may make Investments received in connection
with the bankruptcy or reorganization of, or settlement of delinquent
accounts and disputes with, customers and suppliers, in each case in
the ordinary course of business;
(e) the Borrowers may make Investments which are Capital
Expenditures;
(f) the Borrowers may make Investments in Persons constituting
(i) accounts receivable arising, (ii) trade debt granted, or (iii)
deposits made in connection with the purchase price of goods or
services, in each case, in the ordinary course of business;
(g) the Borrowers may make Investments consisting of routine
loans or advances to employees of such Borrower (including payroll,
travel and related expenses) in the ordinary course of business not to
exceed $25,000 at any time outstanding to any one employee and $500,000
in the aggregate;
(h) Investments consisting of loans to finance the purchase of
homes by employees who have been relocated by any Borrower or any
Subsidiary of any Borrower in an aggregate principal amount outstanding
at any one time not to exceed $500,000;
(i) Investments consisting of loans or advances by any
Borrower to any employee stock ownership plan of, any Borrower;
provided, that (i) the aggregate amount of any such loan or advance
does not exceed 5% of the cash received by the Borrowers (either
90
directly or through a capital contribution from the Company) after the
date hereof from any contemporaneous issuance or sale of any Capital
Securities of the Company made in connection with or to provide part of
the consideration for a direct or indirect acquisition by any Borrower
of the Capital Securities of a third party that is not an Affiliate of
any Borrower or all or substantially all of the assets of a third party
or any business or division of a third party that is not an Affiliate
of any Borrower, (ii) immediately after giving effect to such
acquisition, the entity whose Capital Securities are acquired is a
Borrower or the assets acquired are held by a Borrower, and (iii) any
individuals that become employees of a Borrower in connection with such
acquisition, to the extent eligible, are permitted to participate in
the ESOP;
(j) Investments resulting from purchases of shares of the
Capital Securities of the Company pursuant to put options arising under
any employee stock ownership plan of, any Borrower, but only to the
extent such purchases are expressly required by (i) the provisions of
such employee stock ownership plan as in effect on the date hereof; or
(ii) Section 409(h)(1)(B) of the Code and the regulations thereunder;
(k) the Borrowers may make Investments consisting of any
deferred portion of the sales price or any non-cash portion of the
consideration received by any Borrower in connection with any
Disposition permitted under Section 7.2.10; and
(l) the Borrowers may make other Investments which do not
exceed $2,000,000 in the aggregate at any time outstanding;
provided, however, that (x) any Investment which when made complies with the
requirements of clauses (a), (b) or (c) of the definition of the term "Cash
Equivalent Investment" may continue to be held notwithstanding that such
Investment if made thereafter would not comply with such requirements and (y) no
Investment otherwise permitted by clauses (e), (f), (g), (h), (i), (j), (k) or
(l) shall be permitted to be made if any Default has occurred and is continuing
or would result therefrom.
7.2.5. Restricted Payments. etc. The Borrowers will not, and
will not permit any of their Subsidiaries to, declare or make a Restricted
Payment, or make any deposit for any Restricted Payment, other than Restricted
Payments made by any Borrower to another Borrower or by any Subsidiaries to any
Borrowers, except that (a) the Company may declare and deliver dividends payable
solely in (i) shares of its Capital Securities or in options, warrants or rights
to purchase shares of its Capital Securities or (ii) any cash in lieu of
fractional shares which is payable on its preferred stock in accordance with the
terms of the Company's Organic Documents as in effect as of the Closing Date,
and (b) the Company may make contributions to any employee stock ownership plan
of the Company or any other Borrower on behalf of the employees of the Borrowers
and their Subsidiaries in the aggregate amount in any calendar year not to
exceed 8% of payroll expense during such calendar year attributable to employees
of the Borrowers and their Subsidiaries who are eligible to participate in such
employee stock ownership plan.
7.2.6. Excess Availability and Monthly Minimum EBITDA. (a) The
Borrowers will not permit Excess Availability, plus cash on hand, which is on
deposit with an
91
Approved Depository Bank that is a party to a Control Agreement, at any time to
be less than $20,000,000 for more than fifteen (15) consecutive days; provided
that no Event of Default shall be deemed to have occurred under this clause (a)
of this Section 7.2.6 if the Borrowers are otherwise in compliance with clause
(b) of this Section 7.2.6, and provided further that not more than twice in any
calendar year and in all cases only during any EBITDA Measurement Period, upon
the request of the Administrative Agent or the Required Lenders, the Company (at
its expense) will deliver to the Lenders an updated appraisal of the inventory
of the Borrowers in form and substance reasonably satisfactory to the
Administrative Agent.
(b) The Borrowers will not, at any time during any EBITDA
Measurement Period, permit the EBITDA of the Borrowers to be less than the
following amounts during the following calendar monthly periods set forth below
opposite each such calendar month occurring during any applicable EBITDA
Measurement Period:
APPLICABLE MONTH MINIMUM EBITDA
---------------- --------------
First Measurement Month $ 500,000
Second Month $1,000,000
Third Month $1,500,000
Thereafter, for each month, through and $2,333,000
including the Twelfth Month
Thirteenth Month and for each month $2,000,000
thereafter
provided, however, that for each calendar month period (other than the first 12
calendar month period in each EBITDA Measurement Period, such first 12 calendar
month period being referred to herein as a "First EBITDA Measurement Period")
set forth above that the EBITDA of the Borrowers exceeds the minimum EBITDA
amount set forth above opposite such calendar month period, such excess (the
"Excess EBITDA") shall be carried forward on a cumulative basis to the next
calendar month period's calculation of minimum EBITDA of the Borrowers,
provided, further, that Excess EBITDA from any calendar month period occurring
during any First EBITDA Measurement Period may only be carried forward to a
calendar month in such First EBITDA Measurement Period.
In addition, upon the occurrence of any EBITDA Covenant Trigger Date,
material Availability Reserves may be implemented for Accounts including those
that are subject to any potential (as determined by Administrative Agent)
disputes, set-offs, counterclaims or other claims or defenses, including
rescission, cancellation or avoidance, whether by operation of law of otherwise,
on the part of any Account Debtor or any other Person denying liability under
any Account.
7.2.7. No Prepayment of Senior Secured Notes. The Borrowers
will not, and will not permit any of their Subsidiaries to, refinance, make any
payment or prepayment of principal of, or premium or interest on, the Senior
Secured Notes or any other Indebtedness,
92
other than the Obligations and any Indebtedness permitted under clauses (b),
(c), (d), (e), (h) or (i) of Section 7.2.2; or redeem, retire, purchase, defease
or otherwise acquire any of the Senior Secured Notes or any such other
Indebtedness; or make any deposit (including the payment of amounts into a
sinking fund or other similar fund) for any of the foregoing purposes, except
(a) provided no Default then exists or will result therefrom, the Borrowers may
make regularly scheduled interest payments on the Senior Secured Notes, and (b)
provided no Default then exists or would result therefrom, the Borrowers may
make an "Asset Sale Offer" pursuant to and as required by Section 3.09 of the
Indenture and purchase the principal amount of the Senior Secured Notes required
to be purchased pursuant to Section 4.11 of the Indenture or refinance the
Senior Secured Notes on No Less Favorable Terms and Conditions, provided,
further that (i) with respect to any Asset Sale Offer, the Disposition relating
to such Asset Sale Offer was permitted to be made under the Loan Documents, (ii)
with respect to any Asset Sale Offer, any Net Disposition Proceeds with respect
to such Disposition relating to such Asset Sale have been paid to the
Administrative Agent and/or deposited into a Lockbox Account to be applied as
provided in this Agreement, as the case may be, other than any Net Available
Cash received from any Disposition of Indenture Collateral (but excluding in all
cases any proceeds of Collateral), and (iii) with respect to any Asset Sale
Offer of the Senior Secured Notes as permitted under clause (g) of Section
7.2.2, the Borrowers have delivered evidence satisfactory to the Administrative
Agent and certified to by the chief financial or accounting Authorized Officer
of the Company that the sum of (x) Excess Availability, plus (y) the cash on
hand which is on deposit with an Approved Depository Bank that is subject to a
Control Agreement will, immediately after such purchase of the Senior Secured
Notes, be equal to or greater than $60,000,000 and will continue to be equal to
or greater than $60,000,000 for the 180 day period immediately following such
purchase of the Senior Secured Notes.
7.2.8. New Subsidiaries; Capital Securities. The Borrowers
will not, and will not permit any of their Subsidiaries to, (a) authorize or
issue any Capital Securities (whether for value or otherwise) to any Person,
other than (i) to any Borrower and (ii) any issuances of Capital Securities of
the Company if no Change in Control results therefrom, (b) become liable in
respect of any obligation (contingent or otherwise) to purchase, redeem, retire,
acquire or make any other payment in respect of any Capital Securities of any
Borrower or any Subsidiary of any Borrower or any option, warrant or other right
to acquire any such Capital Securities; (c) create or acquire any new
Subsidiaries of any of them; or (d) authorize or issue any preferred stock or
other equity securities having a mandatory redemption right in favor of the
holder thereof unless such redemption right is not so exercisable (in the
absence of a contingency) on or prior to one year after the Maturity Date.
7.2.9. Consolidation, Merger, etc. The Borrowers will not, and
will not permit any of their Subsidiaries to, liquidate or dissolve, consolidate
with, or merge into or with (collectively, to "Merge") any other Person, or
purchase or otherwise acquire all or substantially all of the assets of any
Person, except any Borrower (other than the Company) may Merge with and into the
Company or another Borrower, and the assets or Capital Securities of any
Borrower (other than the Company) may be purchased or otherwise acquired by any
other Borrower.
7.2.10. Permitted Dispositions. The Borrowers will not, and
will not permit any of their Subsidiaries to, Dispose of any Properties
(including Accounts, inventory and Capital
93
Securities) to any Person in one transaction or series of transactions unless
such Disposition is (a) a Permitted Disposition or (b) permitted by Section
7.2.9.
7.2.11. Modification of Certain Agreements. The Borrowers will
not, and will not permit any of their Subsidiaries to, consent to any amendment,
supplement, waiver or other modification of, or enter into any forbearance from
exercising any rights with respect to the terms or provisions contained in the
Indenture, the Senior Secured Notes, any other Senior Secured Note Document or
the Tax Sharing Agreement or the terms of any preferred stock, if any, in any
manner that is adverse to the Lenders.
7.2.12. Transactions With Affiliates. The Borrowers will not,
and will not permit any of their Subsidiaries to, enter into or cause or permit
to exist any arrangement, transaction or contract (including for the purchase,
lease or exchange of Properties or the rendering of services) with any Affiliate
of any of them (other than between Borrowers or as listed on Item 7.2.12 of the
Disclosure Schedule) unless such arrangement, transaction or contract (a) is on
fair and reasonable terms no less favorable to the Borrowers or such Subsidiary
than they could obtain in an arm's-length transaction with a Person that is not
an Affiliate and (b) is of the kind which would be entered into by a prudent
Person in the position of the Borrowers or such Subsidiary with a Person that is
not one of their Affiliates.
7.2.13. Restrictive Agreements, etc. The Borrowers will not,
and will not permit any of their Subsidiaries to, enter into any contract,
agreement or understanding prohibiting or in any way restricting:
(a) the granting, conveying, creation, imposition or
assumption of any Lien or security interest on or in any Properties
(including revenues) of any Borrower or any Subsidiary, whether now
owned or hereafter acquired or which requires the consent of or notice
to other Persons in connection therewith; .
(b) the ability of any Borrower or any Subsidiary of any
Borrower to amend or otherwise modify any Loan Document; or
(c) the ability of any Subsidiary to make any sales or
transfers or payments, directly or indirectly, to the Borrowers, or the
ability of the Borrowers to make any sales or transactions or payments,
directly or indirectly, to other Borrowers, including by way of
dividends, distributions, advances, repayments of loans, reimbursements
of management and other intercompany charges, expenses and accruals or
other returns on investments.
The foregoing prohibitions shall not apply to restrictions contained (i) in any
Loan Document, (ii) in the Indenture or other Senior Secured Note Documents, or
(iii) in the case of clause (a) of this Section 7.2.13, any agreement governing
any Indebtedness permitted by clause (d) of Section 7.2.2 as to the Properties
permitted to be financed with the proceeds of such Indebtedness.
7.2.14. Sale and Leaseback. The Borrowers will not, and will
not permit any of their Subsidiaries to, directly or indirectly enter into any
agreement or arrangement providing for
94
the sale or transfer by it of any property (now owned or hereafter acquired) to
a Person and the subsequent lease or rental of such property or other similar
property from such Person.
7.2.15. Disposition of the Texas City Facility.
Notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, the Company will not (i) permit any other Person (including
any other Borrower or any Subsidiary of any Borrower) to own or (ii) Dispose of
all or substantially all of, the Texas City Facility.
7.2.16. Capital Expenditures. The Borrowers will not, and will
not permit any of their Subsidiaries to, make any Capital
Expenditures which, in the aggregate for all Borrowers and all Subsidiaries of
all Borrowers, exceed the amounts set forth below opposite each applicable
calendar year (each such amount, the "Limit Amount")
Calendar Year Limit Amount
------------- ------------
2003 $26,125,000
2004 $34,000,000
2005 $34,625,000
2006 $33,875,000
2007 $30,625,000
2008 $28,000,000
2009 $25,000,000
; provided, that, to the extent the aggregate amount of Capital Expenditures
made in any calendar year is less than the Limit Amount set forth opposite such
calendar year (and expressly excluding any Carry-Forward Amount added to the
Limit Amount for such calendar year), then the lesser of (x) $5,000,000 or (y)
the amount of the permitted Capital Expenditures not so made in such calendar
year (such lesser amount, the "Carry-Forward Amount") may be added to the Limit
Amount for the next succeeding calendar year, provided further that no
Carry-Forward Amount may be added to any other calendar year.
7.2.17. Sale or Discount of Receivables. The Borrowers will
not, and will not permit any of their Subsidiaries to, sell, with or without
recourse, for discount or otherwise, any notes receivable or Accounts except for
the collection of Accounts or notes receivables that are not Eligible Accounts
in the ordinary course of business consistent with past practices.
7.2.18. Unconditional Purchase Obligations. The Borrowers will
not, and will not permit any of their Subsidiaries to, enter into or be a party
to, any contract for the purchase of materials, supplies or other property or
services, if such contract requires that payment be made by it regardless of
whether or not delivery is ever made of such materials, supplies or other
property or services, other than contracts for the purchase of natural gas.
95
7.2.19. Lockbox Accounts. The Borrowers will not, and will not
permit any of their Subsidiaries to, have more than $2,500,000 in cash in the
aggregate (as to all Borrowers and all Subsidiaries of the Borrowers) at any
time outstanding which is not (a) on deposit in a Lockbox Account with an
Approved Depository Bank which is subject to a Lockbox Agreement or (b) on
deposit with an Approved Depository Bank which is subject to a Control
Agreement, except that the Borrowers may deposit Net Available Cash from
Dispositions of Indenture Collateral (but excluding in all cases any proceeds of
Collateral) in the Indenture Collateral Account; provided that (i) such
Disposition of Indenture Collateral is permitted under the Loan Documents, (ii)
such Net Available Cash is used to either repurchase the Senior Secured Notes
pursuant to Sections 3.09 and 4.11 of the Indenture (provided that such
repurchase of the Senior Secured Notes is permitted under Section 7.2.7) or to
replace such Indenture Collateral within one year from such Disposition of
Indenture Collateral in accordance with Section 4.11(2)(A) of the Indenture, and
(iii) immediately after the occurrence of both of the events described in the
preceding clause (ii), all remaining Net Available Cash is used to prepay the
Obligations as provided in Section 3.1.2(b) or deposited in a Lockbox Account
subject to a Lockbox Agreement, as applicable.
7.2.20. Excluded Subsidiaries. The Borrowers will not (a)
permit any of the Excluded Subsidiaries to own any material assets or to have
any operations other than the receipt of certain accounts receivable outstanding
as of the Closing Date, the receipt of a tax refund to be paid to the Company
and other Immaterial Operations in connection with the liquidation, winding-up
and dissolution of the Excluded Subsidiaries pursuant to the Plan of
Reorganization; (b) merge with, transfer any Properties to, or make any
Investments in, any Excluded Subsidiary; or (c) permit the Excluded Subsidiaries
to be in existence, and not to have otherwise been liquidated and dissolved,
after June 19, 2003.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following events
or occurrences described in this Article VIII shall constitute an "Event of
Default."
8.1.1. Non-Payment of Obligations. Any Borrower shall:
(a) fail to pay when due any payment or prepayment of
principal on any Loan or any Reimbursement Obligation or fail to make
any deposit of cash to Cash Collateralize any Letter of Credit
Outstandings when required to do so under this Agreement, including
pursuant to Section 2.6.4;
(b) fail to pay when due any interest on any Loan or
Reimbursement Obligation and such failure shall remain unremedied for a
period of three (3) days after such amount was due; or
(c) fail to pay when due any fee described in Article III or
any other monetary Obligation, and such failure shall continue
unremedied for a period of seven (7) days after such fee or other
monetary Obligation was due.
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8.1.2. Breach of Warranty. Any representation or warranty of
any Borrower or any Subsidiary of any Borrower or any of such Person's officers
made or deemed to be made in any Loan Document (including any certificates
delivered pursuant to Article V) shall have been incorrect when made or deemed
to have been made in any material respect.
8.1.3. Non-Performance of Certain Covenants and Obligations.
Any Borrower shall default in the due performance or observance of any of its
obligations under clause (d), (n) or (o) of Section 7.1.1, Section 7.1.4,
Section 7.1.7, Section 7.1.10, or Section 7.2, or any Borrower or any Subsidiary
of any Borrower shall default in the due performance or observance of its
obligations in respect of any such clauses or Sections, as applicable, as such
clauses or Sections, as applicable, are incorporated by reference, or otherwise,
in any Loan Document to which such Borrower or such Subsidiary is a party. Any
Borrower shall default in the due performance or observance of any of its
obligations under Section 3.1.3, clauses (a), (b), (c), (e) or (g) of Section
7.1.1 or Section 7.1.9, and such default shall continue unremedied for a period
of five (5) Business Days.
8.1.4. Non-Performance of Other Covenants and Obligations. Any
Borrower or any Subsidiary of any Borrower shall fail to observe or perform any
of its obligations, covenants or agreements contained in any Loan Document
executed by it (other than those referred to in Section 8.1.3), and, if capable
of being remedied, such failure shall remain unremedied for a period of 30 days
after written notice thereof shall have been given to the Company by the
Administrative Agent or any Lender.
8.1.5. Default on Other Indebtedness. (a) A default shall
occur in the payment of any amount or amounts when due (subject to any
applicable grace period), of any Borrower or any Subsidiary of any Borrower of
any Indebtedness (other than Indebtedness described in Section 8.1.1), in excess
of $5,000,000, whether at stated maturity, by acceleration, on demand or
otherwise or (b) any Borrower or any Subsidiary of any Borrower shall fail to
observe or perform any covenant or agreement contained in any agreement(s) or
instrument(s) relating to Indebtedness (other than the Obligations) of any
Borrower or any Subsidiary of any Borrower in excess of $5,000,000 within any
applicable grace, notice or cure period, or any other event shall occur, if the
effect of such failure or other event is to accelerate or permit the holder of
such Indebtedness or any other Person to accelerate, the maturity of such
Indebtedness or to require any of such Indebtedness to be prepaid, redeemed,
purchased or defeased, or require an offer to purchase or defease any of such
foregoing Indebtedness to be made, prior to its expressed maturity, or which
such default shall continue unremedied for at least 30 days.
8.1.6. Judgments. Any judgment or order for the payment of
money, individually or in the aggregate, in excess of $2,000,000, exclusive of
(a) any amounts covered by insurance (less any applicable deductible) and as to
which the insurer has assumed the defense or has not finally declined coverage,
and (b) any amounts covered by an indemnitor (with a long-term senior unsecured
debt rating greater than BBB and Baa2 by S&P and Xxxxx'x) where such indemnitor
has acknowledged, in writing, in form and substance reasonably satisfactory to
the Administrative Agent, that it will indemnify such judgment or order, shall
be rendered against one or more Borrowers or Subsidiaries of Borrowers and such
judgment shall not have been vacated or discharged or stayed or bonded pending
appeal within 30 days after the
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entry thereof or enforcement proceedings shall have been commenced by any
creditor upon such judgment or order.
8.1.7. Pension Plans. Any of the following events shall occur
with respect to any Pension Plan:
(a) the institution of any steps by any Borrower, any member
of its Controlled Group or any other Person to terminate a Pension Plan
other than a standard termination under Section 4041(b) of ERISA if, as
a result of such termination, any such Borrower or any such member
could be required to make a contribution to such Pension Plan, or could
reasonably expect to incur a liability or obligation to such Pension
Plan, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA.
8.1.8. Change in Control. Any Change in Control shall occur.
8.1.9. Bankruptcy, Insolvency, etc. Any Borrower or any
Subsidiary of any Borrower shall:
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness generally to pay, debts as they
become due;
(b) apply for, consent to, or acquiesce in the appointment of
a trustee, receiver, sequestrator or other custodian for any
substantial part of the property of any thereof, or make a general
assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence in or permit or suffer to exist the appointment of a
trustee, receiver, sequestrator or other custodian for a substantial
part of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60 days;
(d) (i) commence any case, proceeding or other action (A)
under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets; (ii) make a general assignment for the
benefit of its creditors; (iii) have any case, proceeding or other
action of a nature referred to in clause (i) above commenced against it
which (A) results in the entry of an order for relief or any such
adjudication or appointment and (B) remains undismissed, undischarged
or unbonded for a period of 60 days; (iv) have any case, proceeding or
other action commenced against it seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets and which results in the entry of an
order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
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entry thereof; (v) take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii), (iii) or (iv) above; or (vi) generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(e) take any action authorizing, or in furtherance of, any of
the foregoing.
8.1.10. Impairment of Security, etc. Any Loan Document or any
Lien granted thereunder shall (except in accordance with its terms), in whole or
in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Borrower or any Subsidiary of any
Borrower party thereto; any Borrower or any Subsidiary of any Borrower or any
other party shall, directly or indirectly, assert in any pleading filed in any
court or contest in any manner such effectiveness, validity, binding nature or
enforceability; or, except as permitted under any Loan Document, any Lien
securing any Obligation shall, in whole or in part, cease to be a perfected
senior Lien on all Collateral senior to all other Liens, other than Permitted
Liens.
SECTION 8.2. Action if Event of Default. If any Event of
Default described in clauses (a) through (e) of Section 8.1.9 shall occur, the
Commitments (if not theretofore terminated) shall automatically terminate and
the outstanding principal amount of all outstanding Loans and all other
Obligations (including Reimbursement Obligations) shall automatically be and
become due and payable, without notice or demand to any Person, and each
Borrower shall automatically and immediately be obligated to Cash Collateralize
all Letter of Credit Outstandings. If any Event of Default (other than any Event
of Default described in clauses (a) through (e) of Section 8.1.9) shall occur
for any reason, whether voluntary or involuntary, and be continuing, the
Administrative Agent may, and the Administrative Agent shall upon the direction
of the Required Lenders, by notice to the Company, take one or more of the
following actions, at the same or different times:
(a) terminate the Commitments of the Lenders;
(b) declare all or any portion of the Loans and other
Obligations (including Reimbursement Obligations) then outstanding to
be immediately due and payable, whereupon the principal of the Loans
together with accrued interest thereon and any unpaid and/or accrued
fees and any and all other Obligations, shall become immediately due
and payable (and the Borrowers shall automatically and immediately be
obligated to Cash Collateralize all Letter of Credit Outstandings),
without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrowers, anything
contained herein or in any other Loan Document to the contrary
notwithstanding;
(c) set-off amounts in any deposit or other accounts
maintained with any Lender and apply such amounts to the Obligations;
and
(d) exercise any and all remedies under the Loan Documents
and/or under applicable law available to the Administrative Agent and
the Lenders. The enumeration
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of the foregoing rights is not intended to be exhaustive and the
exercise of any right shall not preclude the exercise of any other
rights, all of which shall be cumulative.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1. Actions. Each Lender hereby appoints CIT as its
Administrative Agent under and for purposes of this Agreement and each other
Loan Document. Each Lender authorizes the Administrative Agent to act on behalf
of such Lender under this Agreement and each other Loan Document and, in the
absence of other written instructions from the Required Lenders received from
time to time by the Administrative Agent (with respect to which the
Administrative Agent agrees that it will comply, except as otherwise provided in
this Section 9.1 or as otherwise advised by counsel), to exercise such powers
hereunder and thereunder as are specifically delegated to or required of the
Administrative Agent by the terms hereof and thereof, together with such powers
as may be reasonably incidental thereto. The Administrative Agent may execute
any of its duties under this Agreement and each other Loan Document by or
through its employees, agents and attorneys-in-fact. Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Administrative Agent, pro rata according to such Lender's Percentage of the
Revolving Credit Commitment Amount, from and against any and all liabilities,
obligations, losses, damages, claims, costs or expenses of any kind or nature
whatsoever which may at any time be imposed on, incurred by, or asserted
against, the Administrative Agent in any way relating to or arising out of this
Agreement and any other Loan Document, including reasonable attorneys' fees, and
as to which the Administrative Agent is not reimbursed by any Borrower (and
without limiting the obligation of any Borrower to do so); provided, however,
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, claims, costs or expenses which are
determined by a court of competent jurisdiction in a final proceeding to have
resulted from the Administrative Agent's gross negligence or willful misconduct.
The Administrative Agent shall not be required to take any action hereunder or
under any other Loan Document, or to prosecute or defend any suit in respect of
this Agreement or any other Loan Document, unless it is indemnified hereunder to
the Administrative Agent's satisfaction. If any indemnity in favor of the
Administrative Agent shall be or become, in the Administrative Agent's
determination, inadequate, the Administrative Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
SECTION 9.2. Funding Reliance, etc. Unless the Administrative Agent
shall have been notified by telephone, confirmed in writing, by any Lender by
3:00 p.m., New York City time, on the day prior to a Borrowing, or Disbursement
with respect to a Letter of Credit pursuant to Section 2.6.2, that such Lender
will not make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent and,
in reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Administrative Agent, such Lender and such Borrower
severally agree to repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Administrative Agent made such amount available to
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such Borrower to the date such amount is repaid to the Administrative Agent, at
the interest rate applicable at the time to Credit Extensions comprising such
Borrowing.
SECTION 9.3. Exculpation. Neither the Administrative Agent nor any of
its directors, officers, employees or agents shall be liable to any Lender for
any action taken or omitted to be taken by it under this Agreement or any other
Loan Document, or in connection herewith or therewith, except for its own
willful misconduct or gross negligence, nor responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan Document, nor for
the creation, perfection or priority of any Liens purported to be created by any
of the Loan Documents, or the validity, genuineness, enforceability, existence,
value or sufficiency of any collateral security, nor to make any inquiry
respecting the performance by each Borrower of its obligations hereunder or
under any other Loan Document. Neither the Administrative Agent nor any of its
respective directors, officers, employees or agents 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 (other than a statement, warranty or representation made by the
Administrative Agent in writing), (b) the performance or observance of any of
the covenants or agreements of any Person under any Loan Document, including any
agreement by any Borrower to furnish information directly to each Lender, (c)
the satisfaction of any condition specified in Article V, except receipt of
items required to be delivered solely to the Administrative Agent, (d) the
existence or possible existence of any Default or Event of Default, or (e) the
financial condition of any Borrower or any Subsidiary of any Borrower. Any such
inquiry which may be made by the Administrative Agent or any Issuer shall not
obligate it to make any further inquiry or to take any action. The
Administrative Agent and each Issuer shall be entitled to rely upon advice of
counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which the Administrative Agent or any Issuer, as
applicable, believe to be genuine and to have been presented by a proper Person.
SECTION 9.4. Successor. The Administrative Agent may resign as such at
any time upon at least 30 days' prior notice to the Company and all Lenders. 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 effective on the date specified in such notice. If the
Administrative Agent at any time shall resign or be removed, the Required
Lenders may, with the prior consent of the Company (which consent shall not be
unreasonably withheld or delayed and which shall not be required if an Event of
Default has occurred and is continuing) appoint another Lender as a successor
Administrative Agent which shall thereupon become the Administrative Agent
hereunder. If no successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving notice of resignation or
receiving notice of removal, then the retiring Administrative Agent may, on
behalf of the Lenders, with the consent of the Company, which consent shall not
be unreasonably withheld and which shall not be required if an Event of Default
has occurred and is continuing, appoint a successor Administrative Agent, which
shall be one of the Lenders or a commercial banking institution organized under
the laws of the U.S. (or any State thereof) or a U.S. branch or agency of a
commercial banking institution, and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall be entitled to receive
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from the retiring Administrative Agent such documents of transfer and assignment
as the successor Administrative Agent may reasonably request, and shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent's resignation or removal hereunder as
such, the provisions of (a) this Article IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Administrative Agent
under this Agreement, and (b) Section 10.3 and Section 10.4 shall continue to
inure to its benefit. Notwithstanding anything else to the contrary in this
Section 9.4, the Administrative Agent may at any time, without the consent of
the Company, any Borrower or any Subsidiary of any Borrower or any Lender,
appoint an Affiliate which is a commercial banking institution as a successor
Administrative Agent.
SECTION 9.5. Credit Extensions by Administrative Agent and Issuer. The
Administrative Agent and any Issuer shall have the same rights and powers with
respect to (a) in the case of the Administrative Agent, the Credit Extensions
made by it or any of its Affiliates and (b) in the case of any Issuer, the
Letters of Credit issued by it or any of its Affiliates, as any other Lender and
may exercise the same as if it were not the Administrative Agent or an Issuer.
The Administrative Agent, each Issuer and each of their respective Affiliates
may accept deposits from, lend money to, and generally engage in any kind of
business with the Company or any Subsidiary or Affiliate of the Company as if
the Administrative Agent or Issuer were not the Administrative Agent or Issuer
hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Administrative Agent, any Issuer and each other Lender, and
based on such Lender's review of the financial information of each Borrower,
this Agreement, the other Loan Documents (the terms and provisions of which
being satisfactory to such Lender) and such other documents, information and
investigations as such Lender has deemed appropriate, made its own credit
decision to extend its Commitments. Each Lender also acknowledges that it will,
independently of the Administrative Agent, any Issuer and each other Lender, and
based on such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under the Loan Documents.
SECTION 9.7. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each material notice or material request required or
permitted to be given to the Administrative Agent by the Borrowers pursuant to
the terms of the Loan Documents (unless concurrently delivered to the Lenders by
the Borrowers). The Administrative Agent will distribute to each Lender each
document or instrument received for its account and copies of all other
communications received by the Administrative Agent from the Borrowers for
distribution to the Lenders by the Administrative Agent in accordance with the
terms of the Loan Documents. The Administrative Agent shall have no duty to
disclose to the Lenders information that is not required to be furnished by the
Borrowers to the Administrative Agent, but that may be voluntarily furnished by
the Borrowers to the Administrative Agent (either in their capacity as
Administrative Agent or in its individual capacity).
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SECTION 9.8. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone or telecopy) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper
Person, and upon advice and statements of legal counsel, independent accountants
and other experts selected by the Administrative Agent. As to any matters not
expressly provided for by the Loan Documents, the Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Required Lenders or
all of the Lenders as is required in such circumstance, and such instructions of
such Lenders and any action taken or failure to act pursuant thereto shall be
binding on all Secured Parties. For purposes of applying amounts in accordance
with this Section 9.8, the Administrative Agent shall be entitled to rely upon
any Secured Party that has entered into a Rate Protection Agreement with any
Borrower or any Subsidiary of any Borrower for a determination (which such
Secured Party agrees to provide or cause to be provided upon request of the
Administrative Agent) of the outstanding Obligations owed to such Secured Party
under any Rate Protection Agreement. Unless it has actual knowledge evidenced by
way of written notice from any such Secured Party and any Borrower to the
contrary, the Administrative Agent, in acting in such capacity under the Loan
Documents, shall be entitled to assume that no Rate Protection Agreements or
Obligations in respect thereof are in existence or outstanding between any
Secured Party and any Borrower or any Subsidiary of any Borrower.
SECTION 9.9. Defaults. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received a written notice from a Lender or a Borrower
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Administrative Agent receives such a notice of the
occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall (subject to Section 10.1)
take such action with respect to such Default as shall be directed by the
Required Lenders; provided, that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the Lenders
except to the extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the authorization of the
Required Lenders or all Lenders.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers; Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to in writing by each Borrower party thereto and the Required Lenders;
provided, however, that no such amendment, modification or waiver shall be
effective which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders unless
consented to in writing by each Lender;
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(b) (i) modify this Section 10.1, or clause (a) of Section
10.10, (ii) change the definition of "Required Lenders", (iii) reduce
any fees described in Article III, (iv) release all or substantially
all of the Collateral (except in each case as otherwise specifically
provided in this Agreement, the Intercreditor Agreement, a Pledge
Agreement or a Security Agreement) without the written consent of each
Lender adversely affected thereby, (v) amend, modify or waive the
provisions of Section 3.1.1 or Section 3.1.2 or clause (b) of Section
2.2.2 or (vi) extend the Commitment Termination Date, in each case,
without the written consent of each Lender adversely affected thereby;
(c) permit outstanding Credit Extensions to exceed the Maximum
Loan Amount or increase the Revolving Credit Commitment Amount without
the consent of each Lender or increase the Revolving Credit Commitment
of any Lender without the written consent of such Lender;
(d) (i) extend the final Maturity Date, (ii) reduce the
principal amount of or rate of interest on any Loan or reduce any fee
payable to any Lender or (iii) extend the date on which any principal
payment, interest or fees are payable on any Loans, in each case
without the written consent of each Lender (it being understood and
agreed, however, that any vote to rescind any acceleration made
pursuant to Section 8.2 of amounts owing with respect to the Loans and
other Obligations shall only require the vote of the Required Lenders);
(e) increase the Stated Amount of any Letter of Credit unless
consented to by the Issuer of such Letter of Credit;
(f) affect adversely the interests, rights or obligations of
the Administrative Agent, any Issuer or, the Swing Line Lender (in its
capacity as the Administrative Agent, Issuer or, the Swing Line
Lender), unless consented to in writing by the Administrative Agent,
any Issuer or, the Swing Line Lender, as the case may be;
(g) change the definition of "Availability Block," "Borrowing
Base Amount," "Eligible Account," "Eligible Inventory," "Excess
Availability," or "Maximum Loan Amount" or any of the definitions used
within those definitions in each case if the effect of such change
would be to require a Lender to make or participate in a Credit
Extension in an amount that is greater than such Lender would have had
to make or participate in immediately prior to such amendment,
modification or waiver without the written consent of each Lender;
provided, however, nothing contained in this clause shall limit the
Administrative Agent's ability to adjust the Availability Block,
Borrowing Base Amount, the amount of Eligible Accounts, or Eligible
Inventory, the Excess Availability, the Maximum Loan Amount or any of
the definitions used within such definitions, in each case to the
extent otherwise permitted by this Agreement;
(h) have the effect (either immediately or at some later time)
of enabling the Borrowers to satisfy a condition precedent set forth in
Section 5.2 to the making of a Loan or the issuance of a Letter of
Credit without the written consent of the Required Lenders; or
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(i) amend the Security Documents without the consent of the
Required Lenders or the Intercreditor Agreement without the consent of
the Required Lenders.
Notwithstanding anything to the contrary contained in this Section 10.1, the
Administrative Agent may, without the consent of any Lender, execute amendments
or modifications of any Loan Document to cure any ambiguity, omission, defect or
inconsistency therein. No failure or delay on the part of the Administrative
Agent, any Issuer or any Lender in exercising any power or right under this
Agreement or any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No notice to or demand on any Borrower or any Subsidiary of any Borrower in any
case shall entitle it to any notice or demand in similar or other circumstances.
No waiver or approval by the Administrative Agent, any Issuer or any Lender
under this Agreement or any other Loan Document shall, except as may be
otherwise stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.
For purposes of this Section 10.1, the Administrative Agent shall have
primary responsibility, together with the Company, in the negotiation,
preparation and documentation relating to any amendment, modification or waiver
of this Agreement, any other Loan Document or any other agreement or document
related hereto or thereto contemplated pursuant to this Section 10.1.
SECTION 10.2. Notices; Time. All notices, requests and other
communications provided to any party hereto under this Agreement or any other
Loan Document shall be in writing and addressed, delivered or transmitted to
such party at its address or facsimile number set forth on Schedule II hereto
or, in the case of a Lender which becomes a party hereto after the date hereof,
as set forth in the Lender Assignment Agreement pursuant to which such Lender
becomes a Lender hereunder or at such other address or facsimile number as may
be designated by such party in a notice to the other parties. Any notice (a) if
mailed and properly addressed with postage prepaid or if properly addressed and
sent by pre-paid courier service, shall be deemed given when it has been
received or (b) if transmitted by facsimile, shall be deemed given when
transmitted (and telephonic confirmation of receipt thereof has been received).
Unless otherwise indicated, all references to the time of a day in a Loan
Document shall refer to New York City time.
SECTION 10.3. Payment of Costs and Expenses. Each Borrower, jointly and
severally, agrees to pay on demand all reasonable expenses of the Administrative
Agent (including the reasonable fees and out-of-pocket expenses of Xxxxx Xxxxx,
L.L.P., counsel to the Administrative Agent and of local or foreign counsel, if
any, who may be retained by counsel to the Administrative Agent) in connection
with:
(a) the syndication of the Loans, the negotiation,
preparation, execution, and delivery of this Agreement and of each
other Loan Document, including schedules, opinions and exhibits, and
any amendments, waivers, consents, supplements or other modifications
to this Agreement or any other Loan Document as may from time to time
hereafter be required, whether or not the transactions contemplated
hereby are
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consummated and the consummation and administration of the transactions
contemplated hereby and thereby;
(b) the filing, recording or refiling or rerecording of any
Loan Document and/or any U.C.C. financing statements relating thereto
and all amendments, supplements and modifications to any thereof and
any and all other documents or instruments of further assurance
required to be filed or recorded or refiled or rerecorded by the terms
of any Loan Document;
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document;
(d) post-closing lien searches required pursuant to Section
5.2.5;
(e) the enforcement or preservation of any rights under this
Agreement, any Loan Document, or any other document related thereto;
and
(f) all Indemnified Liabilities.
Each Borrower further jointly and severally agrees to pay, and to save the
Administrative Agent and the Lenders harmless from all liability for, any stamp
or other similar Taxes which may be payable in connection with the execution or
delivery of this Agreement, the Borrowings hereunder, the issuance of the Notes,
the issuance of the Letters of Credit or any other Loan Documents. Each Borrower
also agrees to jointly and severally reimburse the Administrative Agent and each
Lender upon demand for all reasonable out-of-pocket expenses (including
attorneys' fees and legal expenses) incurred by the Administrative Agent or such
Lender in connection with (i) the negotiation of any restructuring or "work
out", whether or not consummated, of any Obligations and (ii) the enforcement of
any Obligations. In addition, the Borrowers jointly and severally also agree,
subject to the terms of this Agreement, to reimburse the Administrative Agent on
demand for all reasonable third party administration, audit and monitoring
expenses incurred in connection with determinations in respect of Eligible
Accounts, Eligible Inventory and/or any other matters concerning the Borrowing
Base Amount. The payments to be made under clause (a) of this Section 10.3 shall
be made on the Closing Date and all other payments under this Section 10.3 shall
be made on demand.
SECTION 10.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
each Borrower jointly and severally indemnifies, exonerates and holds the
Administrative Agent, each Issuer and each Lender and each of their respective
partners, trustees, officers, directors, attorneys, employees and agents
(collectively, the "Indemnified Parties") free and harmless from and against any
and all actions, causes of action, suits, losses, costs, liabilities and
damages, and expenses incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for which indemnification
hereunder is sought), including reasonable attorneys' fees and disbursements,
whether incurred in connection with actions between or among the parties hereto
or the parties hereto and third parties (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to:
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(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit
Extension, including all Indemnified Liabilities arising in connection
with the Plan of Reorganization, the Existing Credit Agreement, and all
documents related thereto;
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of any Borrower as the result of any
determination by the Required Lenders pursuant to Article V not to make
any Credit Extension hereunder but excluding any such action in which a
court of competent jurisdiction in a final non-appealable judgment
determined that such Lenders breached their obligations hereunder in
respect of such Credit Extension);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by any Borrower or any Subsidiary
thereof of all or any portion of the Capital Securities or assets of
any Person, whether or not an Indemnified Party is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to
the protection of the environment or the Release by any Borrower or any
Subsidiary thereof of any Hazardous Material;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by any Borrower or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, such Borrower or Subsidiary; or,
(f) each Lender's Environmental Liability (the indemnification
herein shall survive repayment of the Obligations and any transfer of
the property of any Borrower or its Subsidiaries by foreclosure or by a
deed in lieu of foreclosure for any Lender's Environmental Liability,
regardless of whether caused by, or within the control of, such
Borrower or such Subsidiary);
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or willful misconduct. Each Borrower and its permitted successors and
assigns hereby waive, release and agree not to make any claim, or bring any cost
recovery action against, any Indemnified Party under CERCLA or any state
equivalent, or any similar law now existing or hereafter enacted. It is
expressly understood and agreed that to the extent that any Indemnified Party is
strictly liable under any Environmental Laws, such Borrower's obligation to such
Indemnified Party under this indemnity shall likewise be without regard to fault
on the part of such Borrower, to the extent permitted under applicable law, with
respect to the violation or condition which results in liability of an
Indemnified Party. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, such Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
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SECTION 10.5. Survival. The obligations of each Borrower under Sections
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 and the obligations of the Lenders under
Section 9.1, shall in each case survive any termination of this Agreement
(including in the event of any release of any Borrower pursuant to the terms of
this Agreement), the payment in full in cash of all Obligations, the termination
of all Commitments and any assignment from one Lender to another (in the case of
Sections 10.3 and 10.4) and the occurrence of the Termination Date. The
representations and warranties made by each Borrower in this Agreement and in
each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.
SECTION 10.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts; Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original (whether such counterpart is originally
executed or an electronic copy of an original and each party hereto other than
the Administrative Agent and the Company expressly waives its rights to receive
originally executed documents other than with respect to any Notes) and all of
which shall constitute together but one and the same agreement. This Agreement
shall become effective as of the date first above written when counterparts
hereof executed on behalf of each Borrower, the Administrative Agent and each
Lender (or notice thereof satisfactory to the Administrative Agent) shall have
been received by the Administrative Agent.
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT AND EACH
OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN
SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL
STANDBY PRACTICES (ISP98--INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER
590 (THE "ISP98 RULES")) AND, AS TO MATTERS NOT GOVERNED BY THE ISP98 RULES, THE
LAWS OF THE STATE OF NEW YORK. This Agreement and the other Loan Documents
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof and thereof and supersede any prior agreements, written or
oral, with respect thereto.
SECTION 10.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
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(a) no Borrower may assign or transfer its rights or
obligations hereunder without the prior written consent of the
Administrative Agent and all Lenders other than pursuant to Section
7.2.9; and
(b) the rights of sale, assignment and transfer of the Lenders
are subject to Section 10.11.
SECTION 10.11. Sale and Transfer of Loans; Participations in Loans and
Notes. Each Lender may assign, or sell participations in, its Loans and
Commitments to one or more other Persons in accordance with this Section 10.11.
10.11.1. Assignments. Any Lender (an "Assignor Lender") may,
with notice to the Administrative Agent and the Company, and with the written
consent (whether by originally executed counterpart or electronic copy thereof)
of the Company (provided that such consent of the Company shall not be (x)
unreasonably withheld or delayed, (y) required in the case of assignments made
to an Affiliate of either a Lender or the Administrative Agent, or (z) required
at any time when an Event of Default shall have occurred and be continuing),
assign and delegate to any commercial bank, fund which is regularly engaged in
making, purchasing or investing in loans or securities or any other financial
institution or commercial finance company (an "Eligible Assignee"), all or any
fraction of such Lender's total Loans, participations in each Letter of Credit
and Letter of Credit Outstandings with respect thereto and Commitments (each
such Eligible Assignee to whom such assignment and delegation is to be made,
being hereinafter referred to as an "Assignee Lender") in a minimum aggregate
amount equal to the lesser of (i) $5,000,000 or (ii) the then remaining amount
of such Lender's Loans and Commitments; provided, however, that any such
Assignee Lender will comply, if applicable, with the provisions contained in
Section 4.6 and each Borrower and the Administrative Agent shall be entitled to
continue to deal solely and directly with such Lender in connection with the
interests so assigned and delegated to an Assignee Lender until (A) written
notice of such assignment and delegation, together with payment instructions,
addresses and related information with respect to such Assignee Lender, shall
have been given to each Borrower and the Administrative Agent by such Lender and
such Assignee Lender, (B) the Assignor Lender and such Assignee Lender shall
have executed and delivered to each Borrower and the Administrative Agent a
Lender Assignment Agreement, accepted by the Administrative Agent, and (C) the
processing fees described below shall have been paid, if required. From and
after the "Settlement Date" (as that term is defined in each Lender Assignment
Agreement), (i) the Assignee Lender thereunder shall be deemed automatically to
have become a party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender in connection
with such Lender Assignment Agreement, shall have the rights and obligations of
a Lender hereunder and under the other Loan Documents, and (ii) the Assignor
Lender, to the extent that rights and obligations hereunder have been assigned
and delegated by it in connection with such Lender Assignment Agreement, shall
be released from its obligations hereunder and under the other Loan Documents.
Within ten Business Days after its receipt of notice that the Administrative
Agent has received an executed Lender Assignment Agreement, if the Assignor
Lender or Assignee Lender so requests, the Borrowers shall execute and deliver
to the Administrative Agent (for delivery to the relevant Assignee Lender), new
Notes evidencing such Assignee Lender's assigned Loans and Commitments and, if
the Assignor Lender has retained Loans and Commitments hereunder, replacement
Notes in the principal amount of the Loans and
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Commitments retained by the Assignor Lender hereunder (such Notes to be in
exchange for, but not in payment of, those Notes then held by such Assignor
Lender). Each such Note shall be dated the date of the predecessor Notes.
Accrued interest and accrued fees on the Credit Extensions prior to assignment
shall be paid to the Assignor Lender and following assignment shall be paid to
the Assignee Lender at the same time or times provided in this Agreement. Such
Assignor Lender or such Assignee Lender must also pay a processing fee to the
Administrative Agent upon delivery of any Lender Assignment Agreement in the
amount of $3,500, unless such assignment and delegation is by a Lender to its
Affiliate or to a Related Fund, or if such assignment and delegation is by a
Lender to a Federal Reserve Bank (or, if such Lender is an investment fund, to
the trustee under the indenture to which such fund is a party in support of its
obligations to such trustee), as provided below. Any attempted assignment and
delegation not made in accordance with this Section 10.11.1 shall be null and
void. Nothing contained in this Section 10.11.1 shall prevent or prohibit any
Lender from pledging its rights (but not its obligations to make Loans or
participate in Letters of Credit or Letter of Credit Outstandings) under this
Agreement and/or its Loans hereunder (i) to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank or (ii) in the
case of a Lender that is an investment fund, to the trustee under the indenture
to which such fund is a party in support of its obligations to such trustee;
provided, that any such assignment to a trustee shall be subject to the
provisions of this Section 10.11.1. In the event that S&P, Xxxxx'x or Xxxxxxxx'x
BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders that are
insurance companies (or Best's Insurance Reports, if such insurance company is
not rated by Insurance Watch Ratings Service)) shall, after the date that any
Lender with a Commitment to make Revolving Loans or participate in Letters of
Credit becomes a Lender, downgrade the long-term certificate of deposit rating
or long-term senior unsecured debt rating of such Lender, and the resulting
rating shall be below BBB-, Baa3 or C (or BB, in the case of Lender that is an
insurance company (or B, in the case of an insurance company not rated by
InsuranceWatch Ratings Service)) respectively, then the Borrowers (with the
consent of the Administrative Agent, such consent not to be unreasonably
withheld or delayed) shall have the right, but not the obligation, upon notice
to such Lender and the Administrative Agent, to replace such Lender with an
Assignee Lender in accordance with and subject to the restrictions contained in
this Section 10.11.1, and such Lender hereby agrees to transfer and assign
without recourse (in accordance with and subject to the restrictions contained
in this Section 10.11.1) all its interests, rights and obligations in respect of
its Revolving Loan Commitment under this Agreement to such Assignee Lender;
provided, however, that (i) no such assignment shall conflict with any law, rule
and regulation or order of any Governmental Authority and (ii) such Assignee
Lender shall pay to such Lender in immediately available funds on the date of
such assignment the principal of and interest and fees (if any) accrued to the
date of payment on the Loans made, and Letters of Credit participated in, by
such Lender hereunder and all other amounts accrued for such Lender's account or
owed to it hereunder.
10.11.2. Participations. Any Lender may at any time sell to
one or more commercial banks or other Persons (each such commercial bank and
other Person being herein called a "Participant") participating interests in any
of the Loans, Commitments, participations in each Letter of Credit and Letters
of Credit Outstandings or other interests of such Lender hereunder; provided,
however, that
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(a) no participation contemplated in this Section 10.11.2
shall relieve such Lender from its Commitments or its other obligations
hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations and such
Participant shall not become a Lender hereunder unless such Lender and
such Participant comply with the provisions set forth in this Section
10.11.2;
(c) each 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 this Agreement and each of the
other Loan Documents;
(d) no Participant, unless such Participant is an Affiliate of
such Lender, or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such Participant's
consent, agree to any reduction in the interest rate or amount of fees
that such Participant is otherwise entitled to, a decrease in the
principal amount, or an extension of the Maturity Date, of any Loan in
which such Participant has purchased a participating interest or a
release of all or substantially all of the Collateral under the Loan
Documents or any Borrower, in each case except as otherwise
specifically provided in a Loan Document; and
(e) the Borrowers shall not be required to pay any amount
under Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 that is greater than
the amount which it would have been required to pay had no
participating interest been sold.
Each Borrower acknowledges and agrees, subject to clause (a) of this Section
10.11.2, that, to the fullest extent permitted under applicable law, each
Participant, for purposes of Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and
10.4, shall be considered a Lender.
SECTION 10.12. Confidentiality. The Lenders shall hold all non-public
information obtained pursuant to the requirements of this Agreement in
accordance with their customary procedures for handling confidential information
of this nature and in accordance with safe and sound banking practices and in
any event may make disclosure to any of their examiners, Affiliates, outside
auditors, counsel and other professional advisors in connection with this
Agreement or as reasonably required by any bona fide transferee, participant or
assignee or as required or requested by any governmental agency or
representative thereof or pursuant to legal process; provided, however, that
(a) unless specifically prohibited by applicable law or court
order, each Lender shall notify the Company of any request by any
governmental agency or representative thereof (other than any such
request in connection with an examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such
nonpublic information prior to disclosure of such information;
(b) prior to any such disclosure pursuant to this Section
10.12, each Lender shall require any such bona fide transferee,
participant and assignee receiving a disclosure of
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non-public information to agree (i) to be bound by this Section 10.12,
and (ii) to require such Person to require any other Person to whom
such Person discloses such non-public information to be similarly bound
by this Section 10.12; and
(c) except as may be required by an order of a court of
competent jurisdiction and to the extent set forth therein, no Lender
shall be obligated or required to return any materials furnished by any
Borrower or any Subsidiary.
SECTION 10.13. Other Transactions. Nothing contained herein shall
preclude the Secured Parties from engaging in any transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with any
Borrower or any of its Affiliates in which such Borrower or such Affiliate is
not restricted hereby from engaging with any other Person.
SECTION 10.14. Forum Selection and Consent to Jurisdiction. EACH PARTY
TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS FOR ITSELF AND
ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT
IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN NEW YORK COUNTY, NEW YORK.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, EACH ISSUER, THE LENDERS OR THE BORROWERS THAT IS BROUGHT IN THE STATE OF
NEW YORK SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE
OF NEW YORK LOCATED IN NEW YORK COUNTY OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWERS
HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. THE BORROWERS FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS
BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF NEW YORK AND EXPRESSLY AND IRREVOCABLY APPOINTS CT CORPORATION
SYSTEM AS ITS DOMICILE AND ADDRESS FOR SERVICE OF PROCESS FOR PURPOSES OF ANY
ACTION AS TO WHICH IT HAS SUBMITTED TO JURISDICTION AS SET FORTH IN THIS
AGREEMENT, AND AGREES THAT SERVICE UPON SUCH AUTHORIZED AGENT SHALL BE DEEMED IN
EVERY RESPECT SERVICE OF PROCESS UPON ANY BORROWER OR ITS SUCCESSORS AND
ASSIGNS, AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
112
SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON IT. EACH BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN
THIS AGREEMENT SHALL AFFECT THE RIGHT OF ANY AGENT, ANY LENDER OR THE ISSUER TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF
ANY SUCH PERSON TO BRING ANY ACTION OR PROCEEDING AGAINST SUCH BORROWER OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION. TO THE EXTENT THAT ANY
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, EACH BORROWER HEREBY, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.15. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT, THE
LENDERS, EACH ISSUER AND THE BORROWERS HEREBY, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION (WHETHER SOUNDING
IN TORT, CONTRACT OR OTHERWISE) BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT, THE LENDERS, EACH ISSUER OR THE BORROWERS RELATED
THERETO. EACH BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, THE LENDERS AND EACH ISSUER
ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 10.16. Certain Collateral Matters. The Administrative Agent is
authorized on behalf of all the Lenders, without the necessity of any notice to
or further consent from the Lenders, from time to time to take any action with
respect to any Collateral or the Loan Documents which may be necessary to
perfect and maintain perfected the security interest in and Liens upon the
Collateral granted pursuant to the Loan Documents. The Lenders irrevocably
authorize the Administrative Agent, at its option and in its discretion, to
release or modify any security interest or Lien granted to or held by the
Administrative Agent (a) on any Collateral subject to the Security Documents on
the Termination Date; (b) on any property Disposed of as
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part or in connection with any Permitted Disposition; (c) on any property in
which the Borrowers owned no interest at the time the security interest and/or
Lien was granted or at any time thereafter owns no interest; (d) on property
leased to the Borrowers under a lease which has expired or been terminated in a
transaction permitted under this Agreement or is about to expire and which has
not been, and is not intended by the Borrowers to be, renewed or extended; (e)
on an instrument evidencing Indebtedness or other debt instrument, if the
Indebtedness evidenced thereby has been paid in full or (f) if approved,
authorized or ratified in writing by the applicable Required Lenders or each
Lender required by Section 10.1. Upon request by the Administrative Agent at any
time, the Lenders will confirm in writing the Administrative Agent's authority
to release or modify particular types or items of collateral pursuant to this
Section 10.16. Additionally, the Lenders hereby irrevocably authorize the
Administrative Agent to enter into the Intercreditor Agreement and each of the
Lenders agree to be bound by all of the terms and conditions contained therein.
SECTION 10.17. ANEXCO Information.
(a) The Administrative Agent and each of the Lenders agrees
that (i) it shall hold all non-public information of ANEXCO obtained
pursuant to this Agreement (the "ANEXCO Information"), including
account obligor information with respect to the accounts receivable of
ANEXCO, in strict confidence, (ii) it will not disclose any of the
ANEXCO Information to any Person other than (A) the Administrative
Agent or any Lender, (B) its employees who need to know the ANEXCO
Information in connection with the transactions contemplated by this
Agreement, who are informed of the confidential nature of the ANEXCO
Information and who agree to abide by and act in accordance with the
terms of this Section 10.17 to the same extent as if they were parties
hereto, (C) its examiners, outside auditors, counsel and other
professional advisors in connection with this Agreement, (D) any Person
that has become, in accordance with the requirements of this Agreement,
a bona fide transferee, participant or assignee of the interest of any
Lender under this Agreement and (E) any governmental agency or
representative thereof as required or requested pursuant to legal
process, and (iii) it shall use the ANEXCO Information only in
connection with this Agreement and not for any other purpose; provided,
however, this Section 10.17 shall not apply (A) if and to the extent
that any of the ANEXCO Information (x) was or becomes generally
available to the public other than by disclosure by the Administrative
Agent or any Lender or any of their respective employees, agents,
examiners, outside auditors, counsel, other professional advisors,
transferees, participants or assignees or (y) was or becomes available
on a non-confidential basis from a source other than the Borrowers,
ANEXCO or BP, or (B) to the extent reasonably required in connection
with the enforcement of any Loan Document (collectively "Excluded
Information").
(b) The Administrative Agent and each of the Lenders agrees
that:
(i) it will cause its employees, outside
auditors, counsel and other professional advisors to observe
the terms of this Section 10.17 and will be responsible for
any breach of this Section 10.17;
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(ii) any outside auditor, counsel or professional
advisor (other than those outside auditors, counsel or
professional advisors regularly providing such services to
such Lender or to the Administrative Agent) to whom it
proposes to disclose any ANEXCO Information other than the
Excluded Information must be approved by BP or ANEXCO prior to
such disclosure, such approval not to be unreasonably withheld
or delayed;
(iii) prior to disclosing any information to a
transferee, participant or assignee pursuant to this Section
10.17, it will require such transferee, participant or
assignee to agree to be bound by this Section 10.17; and
(iv) unless specifically prohibited by applicable
law or court order, it will (A) notify BP and ANEXCO of any
request by any governmental agency or representative thereof
(other than any request in connection with a routine
examination of its financial condition by such governmental
agency) for disclosure of any ANEXCO Information other than
Excluded Information at least five business days prior to
disclosure of such ANEXCO Information other than Excluded
Information (or if prior notification of such length is not
reasonably practicable under the circumstances, as soon as is
reasonably practicable under the circumstances but in any
event prior to such disclosure) and (B) permit BP and ANEXCO
to file or otherwise make an objection with the relevant
governmental agency or representative thereof to the
disclosure of such ANEXCO Information.
(c) The Administrative Agent and each of the Lenders
acknowledges that the ANEXCO Information other than the Excluded
Information may be of a competitively sensitive nature and agrees to
hold all of the ANEXCO Information other than the Excluded Information
in accordance with it customary procedures for handling confidential
information of that nature and in accordance with safe and sound
banking practices.
(d) Notwithstanding anything to the contrary contained in this
Agreement, each of BP and ANEXCO (i) shall be a third party beneficiary
of this Section 10.17 and shall be entitled to rights and privileges
hereof to the extent that (A) any ANEXCO Information other than the
Excluded Information was obtained by the Company from BP or ANEXCO and
disclosed to the Administrative Agent or any of the Lenders or (B) any
ANEXCO Information other than the Excluded Information is otherwise
obtained by the Administrative Agent or any of the Lenders from BP or
ANEXCO, and (ii) shall be entitled to enforce this Section 10.17
against the Administrative Agent and the Lenders to the same extent as
if BP and ANEXCO were parties hereto.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no amendment, modification or restatement of, or waiver
under, this Section 10.17 which would adversely affect BP or ANEXCO
shall be or become effective without the prior written consent of XX
xxx XXXXXX.
000
(x) All notices, requests and other communications provided to
BP or ANEXCO under this Agreement shall be in writing and addressed,
delivered or transmitted to the following address or facsimile number:
BP Chemicals Inc.
Manager, Planning, Control & Development
Nitriles Business Xxxx
Xxxx. 000-0, N-3 1561
000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
; or at such other address or facsimile number as may be designated by
BP or ANEXCO in a notice to the Administrative Agent. Any notice (i) if
mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given
when it has been received or (ii) if transmitted by facsimile, shall be
deemed given when transmitted (and telephonic confirmation of receipt
thereof has been received).
SECTION 10.18. Interest. It is the intention of the parties hereto to
conform strictly to usury laws applicable to the Administrative Agent, any
Issuer and the Lenders (collectively, the "Financing Parties"). Accordingly, if
any amounts payable under the Loan Documents would be usurious as to any
Financing Party under laws applicable to it, then, notwithstanding anything to
the contrary in the Notes, this Agreement or in any other Loan Document or other
agreement entered into in connection with this Agreement or as security for the
Obligations, it is agreed as follows: (a) the aggregate of all consideration
which constitutes interest under law applicable to any Financing Party that is
contracted for, taken, reserved, charged or received by such Financing Party
under this Agreement or under any of such other Loan Document or agreements or
otherwise in connection with the Obligations shall under no circumstances exceed
the maximum amount allowed by such applicable law, (b) in the event that the
maturity of the Obligations is accelerated for any reason, or in the event of
any required or permitted prepayment, then such consideration that constitutes
interest under law applicable to any Financing Party may never include more than
the maximum amount allowed by such applicable law, and (c) excess interest, if
any, provided for in this Agreement or otherwise in connection with the
Obligations shall be canceled automatically by such Financing Party and, if
theretofore paid, shall be credited by such Financing Party on the principal
amount of the Obligations to such Financing Party (or, to the extent that the
principal amount of the Obligations to such Financing Party shall have been or
would thereby be paid in full, refunded by such Financing Party to the
Borrowers). The right to accelerate the maturity of the Obligations does not
include the right to accelerate any interest which has not otherwise accrued on
the date of such acceleration. All sums paid or agreed to be paid to the
Financing Parties for the use, forbearance or detention of sums included in the
Obligations shall, to the extent permitted by law applicable to such Financing
Party, be amortized, prorated, allocated and spread throughout the full term of
the Obligations until payment in full so that the rate or amount of interest on
account of the Obligations does not exceed the applicable usury ceiling, if any.
As used in this Section 10.18, the terms "applicable law" or "laws applicable to
any Financing Party" shall mean the law of any jurisdiction whose laws may be
mandatorily applicable notwithstanding other provisions of this
116
Agreement, or law of the United States applicable to any Financing Party and the
Obligations which would permit such Financing Party to contract for, charge,
take, reserve or receive a greater amount of interest than under such
jurisdiction's law.
[REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK;
SIGNATURE PAGES TO FOLLOW]
117
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
BORROWERS:
STERLING CHEMICALS, INC.,
as a Borrower
By:____________________________
Title:______________________
STERLING CHEMICALS ENERGY, INC.,
as a Borrower
By:____________________________
Title:______________________
(Signature Page to Revolving Credit Agreement)
LENDERS:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as the Administrative Agent and as a Lender
By:___________________________________________
Title:_____________________________________
FOOTHILL CAPITAL CORPORATION,
as a Lender
By:___________________________________________
Title:_____________________________________
CONGRESS FINANCIAL CORPORATION,
as a Lender
By:___________________________________________
Title:_____________________________________
WHITEHALL BUSINESS CREDIT CORPORATION,
as a Lender
By:___________________________________________
Title:_____________________________________
(Signature Page to Revolving Credit Agreement)
SCHEDULE I
DISCLOSURE SCHEDULE
ITEM 1.1 - DESIGNATED SHAREHOLDERS
1. Resurgence Asset Management, L.L.C., its managed funds and
accounts, and any Affiliates thereof.
2. Any Permitted Transferee with respect to any Person covered by
the preceding clause (1).
3. Any savings or investment plan or employee stock ownership
plan sponsored by Sterling Chemicals, Inc.
ITEM 6.8 - EXISTING SUBSIDIARIES
Sterling Chemicals Energy, Inc.
Sterling Chemicals Marketing, Inc.
ITEM 6.12 - ENVIRONMENTAL MATTERS
None
ITEM 6.19 - MATERIAL CONTRACTS
1. Amended and Restated Production Agreement dated March 31, 1998
between BP Chemicals Inc. and Sterling Chemicals, Inc., as
amended (including pursuant to the order of the bankruptcy
court approving the assumption of such agreement).
2. Amended and Restated Product Sales Agreement dated November 4,
1997 between BASF Corporation and Sterling Chemicals, Inc., as
amended (including pursuant to the order of the bankruptcy
court approving the assumption of such agreement).
3. License Agreement dated August 1, 1986, between Monsanto
Company and Sterling Chemicals, Inc.
4. Second Amended and Restated Production Agreement dated
effective as of August 1, 1996, between BP Chemicals Inc. and
Sterling Chemicals, Inc., as amended (including pursuant to
the order of the bankruptcy court approving the assumption of
such agreement).
5. Joint Venture Agreement dated March 31, 1998, between Sterling
Chemicals, Inc. and BP Chemicals Inc., as amended by First
Amendment to Joint Venture Agreement, dated effective as of
March 31, 1998, between Sterling Chemicals, Inc. and BP
Chemicals Inc., and as further amended (including pursuant to
the order of the bankruptcy court approving the assumption of
such agreement).
6. Product Supply Agreement, dated May 15, 1995, between Praxair
Hydrogen Supply, Inc. and Sterling Chemicals, Inc., as amended
by First Amendment to Product Supply Agreement and Utilities
Agreement dated as of March 29, 1999, as amended.
7. Acetic Acid Technology Agreement, dated December 30, 1997,
among Sterling Chemicals, Inc., BP Chemicals, Ltd., BP
Chemicals Inc. and Sterling Chemicals, Inc.
8. Operating Agreement dated as of October 22, 1999 between
Sterling Chemicals, Inc. and Monsanto Company.
9. Supply Agreement dated as of October 22, 1999 between Sterling
Chemicals, Inc. and Monsanto Company.
ITEM 7.2.2(b) - ONGOING INDEBTEDNESS
None
ITEM 7.2.3(b) - ONGOING LIENS
1. Liens granted under each of the following documents:
(a) Second Amended and Restated Production Agreement
dated as of December 30, 1997 but effective as of
August 1, 1996 between Sterling Chemicals, Inc. and
BP Chemicals Inc., as amended.
(b) Amended and Restated Production Agreement dated as of
March 31, 1998 between Sterling Chemicals, Inc. and
BP Chemicals, Inc., as amended.
(c) Security Agreement dated as of August 1, 1988 between
Sterling Chemicals, Inc. and BP Chemicals America,
Inc., as amended (including the UCC-1 financing
statement filed with the Texas Secretary of State on
February 2, 1994 (continued on September 28, 1998),
as file number 020591, listing Sterling Chemicals,
Inc. as debtor and BP Chemicals Inc. (f/k/a BP
Chemicals America, Inc.) as secured party).
(d) Methanol Production Agreement dated as of September
26, 1996 between Sterling Chemicals, Inc. and BP
Chemicals, Inc., as amended.
(e) Methanol Production Agreement dated as of July 1,
2000 by and between Sterling Chemicals, Inc. and
Methanex Methanol Company.
(f) Interim Methanol Agreement dated as of July 1, 2000
by and between BP Chemicals Inc. and Sterling
Chemicals, Inc.
(g) Agreement dated as of May 2, 1988 between Sterling
Chemicals, Inc. and E.I. du Pont Nemours and Company,
as amended.
(h) Ground Lease Agreement dated as of May 15, 1995
between Sterling Chemicals, Inc. and Praxair Hydrogen
Supply, Inc., as amended.
(i) Ground Lease Agreement dated February 8, 1991 between
Sterling Chemicals, Inc. and S&L Cogeneration
Company, as amended.
(j) Ground Lease Agreement dated October 22, 1999 between
Sterling Chemicals, Inc. and Monsanto Company.
(k) Amended and Restated Products Sales Agreement dated
effective as of January 1, 1998 between Sterling
Chemicals, Inc. and BASF Corporation, as amended.
(l) Security Agreement dated August 1, 1986 between
Sterling Chemicals, Inc. and BASF Corporation, as
amended (including (i) the UCC-1 financing statement
filed with the Delaware Secretary of State on
September 6, 2001, as file number 1097127, listing
Sterling Chemicals, Inc. as debtor and BASF
Corporation as secured party and (ii) the UCC-1
financing statement filed with the Texas Secretary of
State on April 9, 2001, as file number 01-063982,
listing Sterling Chemicals, Inc. as debtor and BASF
Corporation as secured party).
(m) UCC-1 financing statement filed with the Texas
Secretary of State on October 9, 2000, as file number
00-600182, listing Sterling Chemicals, Inc. as debtor
and NMGH Financial Services, Inc. as secured party.
2. Liens identified on Parts A and C of Exhibit B to the
Indenture Deed of Trust.
ITEM 7.2.4(a) - ONGOING INVESTMENTS
133,333 shares of Series "D" Preferred Stock of ChemConnect,
Inc.
2,500 shares of common stock of Primex, Ltd.
4,164 shares of Series "A" Preferred Stock of Primex, Ltd.
1 share of Series "C" Preferred Stock of Primex, Ltd.
50% interest in S&L Cogeneration Company.
50% interest in ANEXCO, LLC.
ITEM 7.2.12 - TRANSACTIONS WITH AFFILIATES
None
SCHEDULE II
PERCENTAGES; LIBOR OFFICE; DOMESTIC OFFICE
THE BORROWERS:
c/o
Sterling Chemicals, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
------------------------------------ ---------------------- ---------------------- ---------------------------------
LIBOR
COMMITMENT COMMITMENT OFFICE/DOMESTIC
LENDER: AMOUNT PERCENTAGE OFFICE
------------------------------------ ---------------------- ---------------------- ---------------------------------
The CIT Group/Business $ 30,000,000 30% Two Lincoln Centre
Credit, Inc.
0000 XXX Xxxxxxx - Xxxxx 000
Xxxxxx, XX 00000
Attn: R. Xxxxx Xxxxx
Fax: (000) 000-0000
----------------------------------- ---------------------- ---------------------- ---------------------------------
------------------------------------ ---------------------- ---------------------- ----------------------------------------
LIBOR
COMMITMENT COMMITMENT OFFICE/DOMESTIC
LENDER: AMOUNT PERCENTAGE OFFICE
------------------------------------ ---------------------- ---------------------- ----------------------------------------
Congress Financial Corporation $ 29,000,000 29% 0000 Xxxx Xxxxxx
(Xxxxxxxxx) Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxx Xxxxx
Fax: 000-000-0000
------------------------------------ ---------------------- ---------------------- ----------------------------------------
Foothill Capital Corporation $ 29,000,000 29% 000 Xxxxxxxxx Xxxx Center
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Lalaine Pechayco
Fax: 000-000-0000
----------------------------------- ---------------------- ---------------------- ----------------------------------------
Whitehall Business Credit $ 12,000,000 12% Xxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx
Fax: 000-000-0000
------------------------------------ ---------------------- ---------------------- -----------------------------------
SCHEDULE III
ACCOUNT OBLIGOR SCHEDULE
------------------------
ACCEPTABLE ACCOUNTS
BASF Group
(including Polioles S.A. de C.V.)
BP Amoco PLC
SCHEDULE IV
APPROVED DEPOSITORY BANKS
- JPMorgan Chase Bank
- Bank One, Texas, NA
SCHEDULE V
EXISTING LETTERS OF CREDIT
--------------------------
US$
---
DATE ISSUED DATE EXPIRED LC# BENEFICIARY AMOUNT
----------- ------------ --- ----------- ------
7/23/1999 Evergreen T-290209 Reliance National Indemnity Company $ 312,932.00
1/1/2002 12/31/2002 T-224206 GE Capital Financial, Inc. $ 500,000.00
7/17/2000 Evergreen T-203320 Pacific Employers Insurance Co. $ 275,000.00
7/1/2002 7/1/2003 T-215001 Zurich American Insurance Co. $ 250,000.00
8/27/99 Evergreen T-290213 United Pacific Insurance Co. $ 264,590.37
3/20/00 Evergreen T-290212 Florida Dept of Environmental Protection $ 342,152.00
3/20/00 Evergreen T-200211 Florida Dept of Environmental Protection $ 1,336,461.00
9/30/02 12/31/02 T-212054 Prior Energy $ 218,709.33
9/1/02 2/17/04 T-228292 Standard Chartered Grindlays Bank
(Local equipment) $ 92,309.94
--------------
TOTAL $ 3,592,154.64
