EXHIBIT 10.4
EXECUTION COPY
HUNTSMAN COMPANY LLC
AMENDED AND RESTATED
CREDIT AGREEMENT
WITH
DEUTSCHE BANK TRUST COMPANY
AMERICAS (F/K/A BANKERS TRUST COMPANY),
AS ADMINISTRATIVE AGENT,
AND
THE FINANCIAL INSTITUTIONS PARTY HERETO
DATED AS OF SEPTEMBER 30, 2002
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS...............................................................2
1.1 Definitions............................................................................2
1.2 Accounting Terms; Financial Statements................................................34
ARTICLE II AMOUNT AND TERMS OF CREDIT....................................................................35
2.1 The Term Loans........................................................................35
2.2 Term Notes............................................................................36
2.3 Conversion and Continuation Elections for Eurodollar Loans and Base Rate Loans........36
ARTICLE III INTEREST AND FEES.............................................................................37
3.1 Interest..............................................................................37
3.2 Fees..................................................................................38
3.3 Computation of Interest and Fees......................................................39
3.4 Compensation For Funding Losses.......................................................39
3.5 Increased Costs, Illegality, Etc......................................................40
3.6 Replacement of Lenders................................................................42
3.7 Change of Lending Office..............................................................43
ARTICLE IV PAYMENTS AND PREPAYMENTS......................................................................43
4.1 Voluntary Prepayments.................................................................43
4.2 Mandatory Prepayments.................................................................44
4.3 Application of Prepayments............................................................47
4.4 Method and Place of Payment by Borrower...............................................48
4.5 Net Payments..........................................................................49
4.6 Sharing of Payments; etc..............................................................52
ARTICLE V CONDITIONS OF CREDIT..........................................................................53
5.1 Conditions Precedent to the Effectiveness of the Agreement............................53
5.2 Extension of Forbearance and Interim Maturity.........................................60
ARTICLE VI REPRESENTATIONS AND WARRANTIES................................................................61
6.1 Corporate Status......................................................................61
6.2 Corporate Power and Authority.........................................................61
6.3 No Violation..........................................................................61
6.4 Governmental and Other Approvals......................................................62
6.5 Financial Statements; Financial Condition; Undisclosed Liabilities; etc...............62
6.6 Litigation............................................................................63
6.7 True and Complete Disclosure..........................................................64
6.8 Margin Regulations....................................................................64
6.9 Tax Returns and Payments..............................................................64
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6.10 Compliance With ERISA.................................................................65
6.11 Ownership of Property.................................................................65
6.12 Capitalization of Borrower............................................................65
6.13 Subsidiaries..........................................................................66
6.14 Compliance With Law, etc..............................................................66
6.15 Investment Company Act................................................................67
6.16 Public Utility Holding Company Act....................................................67
6.17 Environmental Matters.................................................................67
6.18 Labor Relations.......................................................................68
6.19 Intellectual Property.................................................................68
6.20 Certain Fees..........................................................................68
6.21 Security Documents....................................................................69
6.22 Charitable Contributions..............................................................70
6.23 Asbestos Matters......................................................................70
ARTICLE VII AFFIRMATIVE COVENANTS.........................................................................70
7.1 Financial Statements..................................................................70
7.2 Certificates; Other Information.......................................................71
7.3 Notices...............................................................................72
7.4 Maintenance of Existence..............................................................74
7.5 Payment of Obligations................................................................74
7.6 Inspection of Property, Books and Records.............................................74
7.7 ERISA.................................................................................75
7.8 Maintenance of Property; Insurance....................................................76
7.9 Environmental Laws....................................................................77
7.10 Additional Security; Further Assurances...............................................77
7.11 End of Fiscal Years; Fiscal Quarters..................................................80
7.12 Operating Accounts....................................................................80
7.13 Polymers Notes........................................................................80
7.14 Compensation..........................................................................80
ARTICLE VIII NEGATIVE COVENANTS............................................................................80
8.1 Liens.................................................................................80
8.2 Indebtedness..........................................................................82
8.3 Fundamental Changes...................................................................84
8.4 Dividends or Other Distributions......................................................84
8.5 Issuance of Stock.....................................................................85
8.6 Disposition of Assets.................................................................85
8.7 Loans and Investments.................................................................86
8.8 Transactions with Affiliates..........................................................87
8.9 Sale-Leasebacks.......................................................................87
8.10 Lines of Business.....................................................................88
8.11 Fiscal Year...........................................................................88
8.12 Amendments to Organizational and Other Documents......................................88
8.13 Limitation on Certain Restrictions on Subsidiaries....................................88
8.14 Accounting Changes....................................................................89
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8.15 Restrictions on Certain Unrestricted Subsidiaries.....................................90
8.16 Amendments, Modifications or Supplements to Priority
Credit Agreement.................90
8.17 Charitable Contributions..............................................................90
8.18 Collateral Account Agreements.........................................................90
8.19 Borrowings Under Priority
Credit Agreement............................................91
ARTICLE IX FINANCIAL COVENANTS...........................................................................91
9.1 Leverage Ratio........................................................................91
9.2 Interest Coverage Ratio...............................................................91
9.3 Fixed Charge Coverage Ratio...........................................................92
9.4 Capital Expenditures..................................................................92
ARTICLE X EVENTS OF DEFAULT.............................................................................92
10.1 Events of Default.....................................................................92
10.2 Rights Not Exclusive..................................................................95
ARTICLE XI ADMINISTRATIVE AGENT..........................................................................96
11.1 Appointment...........................................................................96
11.2 Nature of Duties......................................................................96
11.3 Rights, Exculpation, Etc..............................................................96
11.4 Reliance..............................................................................97
11.5 Indemnification.......................................................................97
11.6 Administrative Agent in its Individual Capacity.......................................98
11.7 Notice of Defaults....................................................................98
11.8 Holders of Obligations................................................................98
11.9 Resignation by Administrative Agent...................................................98
ARTICLE XII MISCELLANEOUS.................................................................................99
12.1 No Waiver; Modifications in Writing...................................................99
12.2 Further Assurances...................................................................101
12.3 Notices, Etc.........................................................................102
12.4 Costs, Expenses and Taxes............................................................102
12.5 Confirmations........................................................................104
12.6 Adjustment...........................................................................104
12.7 Execution in Counterparts............................................................105
12.8 Binding Effect; Assignment; Addition and Substitution of Lenders.....................105
12.9 CONSENT TO JURISDICTION; MUTUAL WAIVER OF JURY TRIAL.................................108
12.10 GOVERNING LAW........................................................................109
12.11 Severability of Provisions...........................................................109
12.12 Transfers of Notes...................................................................109
12.13 Registry.............................................................................109
12.14 Headings.............................................................................110
12.15 Termination of Agreement.............................................................110
12.16 Confidentiality......................................................................110
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12.17 Concerning the Collateral and the Loan Documents.....................................111
12.18 Certain Guarantee Obligations........................................................114
12.19 Steering Committee...................................................................114
12.20 Effectiveness........................................................................114
12.21 Effect of Amendment and Restatement..................................................115
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EXHIBITS
Exhibit 2.2(a) Form of Term Note for Term A Loan
Exhibit 2.2(b) Form of Term Note for Term B Loan
Exhibit 2.3(b) Form of Notice of Conversion or Continuation
Exhibit 4.5(d)(ii) Lender Certificate
Exhibit 5.1(b)(ii) Form of Security Agreement
Exhibit 5.1(b)(iii)(A) Form of Amended and Restated Subsidiary Guarantee Agreement
Exhibit 5.1(b)(iii)(B) Form of HSCC Subsidiary Guarantee Agreement
Exhibit 5.1(b)(iv) Form of Collateral Account Agreement
Exhibit 5.1(b)(v) Form of Pledge Agreement
Exhibit 5.1(c)(i) Form of GOF Restructuring Agreement
Exhibit 5.1(c)(ii) Form of Holdco Term Sheet
Exhibit 5.1(e)(i) Priority
Credit Agreement Term Sheet
Exhibit 5.1(f)(i) Form of Officer's Certificate Pursuant to Section 5.1(f)(i)
Exhibit 5.1(f)(ii)-1 Form of Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Exhibit 5.1(f)(ii)-2 Form of Opinion of Stoel Rives LLP
Exhibit 5.1(g) Form of Tax Sharing Agreement
Exhibit 5.2(a) Form of Original Credit Forbearance Extension Agreements
Exhibit 5.2(b) Form of Original Term Loan Forbearance Extension Agreements
Exhibit 7.2(a) Form of Auditor's Certificate
Exhibit 7.2(b)-1 Form of Certificate of Responsible Financial Officer Pursuant to Section 7.2b)
Exhibit 7.2(b)-2 Form of Certificate of Responsible Officer pursuant to Section 7.2(b)
Exhibit 12.8(c) Form of Assignment and Assumption Agreement
SCHEDULES
Schedule 1.1 Permitted Turnaround Capital Expenditures
Schedule 1.1(a) Restructuring Charges
Schedule 1.1(c) Unrestricted Subsidiaries
Schedule 4.2(b) Asset Dispositions
Schedule 6.3 Approvals and Consents
Schedule 6.4 Governmental Approval
Schedule 6.5(a) Historical Financial Statements
Schedule 6.5(d) Indebtedness and Other Material Liabilities
Schedule 6.5(e) Pro Forma Balance Sheet
Schedule 6.5(f) Financial Projections
Schedule 6.12 Capitalization of Borrower
Schedule 6.13 Restricted Subsidiaries
Schedule 6.17 Environmental Matters
Schedule 6.21(c) Real Property
Schedule 6.21(d) Deposit Accounts
Schedule 8.1(a) Existing Liens
Schedule 8.7 Investments
Schedule 8.15 Restrictions on HSCC and HSCHC
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Schedule 8.18(a) Procedures for IRIC with respect to Insurance Proceeds
Schedule 8.18(b) Foreign Deposit Accounts
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AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED
CREDIT AGREEMENT is dated as of September
30, 2002 and is made by and among Huntsman Company LLC, a Utah limited liability
company ("BORROWER"), the financial institutions party hereto, including
Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company), in their
capacities as lenders hereunder (collectively, the "LENDERS," and each
individually, a "LENDER"), and Deutsche Bank Trust Company Americas (f/k/a
Bankers Trust Company), as agent ("ADMINISTRATIVE AGENT") for the Lenders.
W I T N E S S E T H:
WHEREAS, Borrower, Administrative Agent, Deutsche Bank Trust Company
Americas (f/k/a Bankers Trust Company) and the other financial institutions
parties thereto have entered into that certain
Credit Agreement dated as of
January 29, 1996, as amended and restated as of February 23, 1996, as amended by
the First Amendment to Amended and Restated
Credit Agreement dated as of
September 27, 1996, the Second Amendment to Amended and Restated
Credit
Agreement dated as of July 2, 1997, the Third Amendment to Amended and Restated
Credit Agreement dated as of November 4, 1998, the Fourth Amendment to Amended
and Restated Credit Agreement dated as of November 20, 1998, the Fifth Amendment
to Amended and Restated Credit Agreement dated as of March 26, 1999, the Second
Amended and Restated Credit Agreement dated as of March 30, 2000, the First
Amendment to Second Amended and Restated Credit Agreement dated as of December
8, 2000, the Second Amendment, Forbearance and Waiver Agreement to Second
Amended and Restated Credit Agreement dated as of December 20, 2001, the Third
Amendment to Second Amended and Restated Credit Agreement dated as of March 15,
2002, the Fourth Amendment, Forbearance and Waiver Agreement to Second Amended
and Restated Credit Agreement dated as of June 28, 2002, the Original Credit
Forbearance Extension Agreement dated as of August 14, 2002 and the Limited
Waiver and Consent under Second Amended and Restated Credit Agreement dated as
of August 19, 2002 (as amended, restated or otherwise modified, the "ORIGINAL
CREDIT AGREEMENT");
WHEREAS, Borrower, Administrative Agent, Deutsche Bank Trust Company
Americas (f/k/a Bankers Trust Company) and the other financial institutions
parties thereto have entered into that certain Term Loan Agreement dated as of
October 23, 1996, as amended by the First Amendment to the Term Loan Agreement
dated as of July 2, 1997, the Second Amendment to the Term Loan Agreement dated
as of November 4, 1998, the Third Amendment to the Term Loan Agreement dated as
of November 20, 1998, the Fourth Amendment to the Term Loan Agreement dated as
of March 26, 1999, that certain Amended and Restated Term Loan Agreement dated
as of March 30, 2000, that certain First Amendment to Amended and Restated Term
Loan Agreement dated as of December 8, 2000, the Second Amendment, Forbearance
and Waiver Agreement to the Amended and Restated Term Loan Agreement dated as of
December 20, 2001, the Third Amendment to the Amended and Restated Term Loan
Agreement dated as of March 15, 2002, the Forbearance and Waiver Agreement to
Amended and Restated Term Loan Agreement dated as of June 28, 2002, the Original
Term Loan Forbearance Extension Agreement dated as of August 14, 2002 and the
Limited Waiver and Consent under Amended and Restated Term Loan Agreement dated
as of August 19, 2002 (as amended, restated or otherwise modified, the "ORIGINAL
TERM LOAN AGREEMENT");
WHEREAS, the Lenders on the Closing Date are lenders under either the
Original Credit Agreement or the Original Term Loan Agreement or both
(collectively, the "EXISTING LENDERS") with loans outstanding under such credit
facilities and obligations under existing Hedging Agreements (collectively, the
"ORIGINAL LOANS");
WHEREAS, Borrower has requested that the Lenders enter into this
Agreement in order to amend and restate the Original Credit Agreement and the
Original Term Loan Agreement and reconstitute the principal Obligations (as
defined in the Original Credit Agreement) and the principal Obligations (as
defined in the Original Term Loan Agreement) to reflect combined Obligations
hereunder of up to $1,388,067,490.87 in the aggregate to be provided by the
Lenders to Borrower on the terms and conditions set forth herein; and
WHEREAS, the Lenders are willing to, as further provided for in this
Agreement, convert the Original Loans into loans hereunder and to permit the
loans hereunder to remain outstanding for the purposes specified herein and only
on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree that the Original Credit
Agreement and the Original Term Loan Agreement are hereby amended and restated
as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIONS.
As used herein, and unless the context requires a different meaning,
the following terms have the meanings indicated:
"ACQUISITION" means, with respect to Borrower or any Restricted
Subsidiary, any transaction or series of related transactions for the purpose
of, or resulting directly or indirectly in, the acquisition by Borrower or any
Restricted Subsidiary of all or a significant part of the assets of another
Person, any Investment in any Person which, after the Closing Date as a result
of such Investment, becomes a Subsidiary of Borrower or, except as permitted by
SECTION 8.3(a), any merger, consolidation or amalgamation with any other Person.
"ADDITIONAL SECURITY DOCUMENTS" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to SECTION 7.10 with respect to additional Collateral.
"ADMINISTRATIVE AGENT" shall mean Deutsche Bank Trust Company Americas
(f/k/a Bankers Trust Company) in its capacity as administrative agent hereunder,
and any successor agents in such capacity.
"AFFILIATE" means, with respect to any Person, any Person or group
acting in concert in respect of the Person in question that, directly or
indirectly, controls (including but not limited to all directors and officers of
such Person) or is controlled by or is under common
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control with such Person; PROVIDED, that neither DB nor any Affiliate of DB
shall be deemed to be an Affiliate of Borrower. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise. A Person shall be deemed to control a corporation or other entity if
such Person possesses, directly or indirectly, the power to vote 10% or more of
the securities having ordinary voting power for the election of directors of
such corporation or other entity.
"AGREEMENT" means this Amended and Restated Credit Agreement, as the
same may at any time be amended, supplemented, waived or otherwise modified in
accordance with the terms hereof and in effect.
"AIRSTAR AIRCRAFT FINANCING DOCUMENTS" means Operating Leases and
related documents entered into by Airstar Corporation relating to aircraft owned
or acquired by it and any agreements or documents entered into by Airstar
Corporation.
"AMENDED AND RESTATED POLYMERS INDENTURE" means that certain
indenture, as amended and restated dated as of June 14, 2002 by Polymers and
HSBC Bank USA, a copy of which is attached as Appendix M to the Disclosure
Materials.
"AMENDED AND RESTATED SENIOR NOTES INDENTURES" means that certain
indenture as amended by that certain amendment, dated as of June 14, 2002 by and
between Borrower, as Issuer, each of the Guarantors named therein and Wilmington
Trust Company, as Trustee and that certain indenture as amended by that certain
amendment dated as of June 14, 2002 by and between Borrower, as Issuer, each of
the Guarantors named therein and Wilmington Trust Company, as Trustee, a copy of
which is attached as Appendix M to the Disclosure Materials.
"AMENDED AND RESTATED SUBSIDIARY GUARANTEE AGREEMENT" has the meaning
assigned to that term in SECTION 5.1(b)(iii)(A).
"APPLICABLE BASE RATE MARGIN" means at any date (i) with respect to
Term A Loans, 3.5%; PROVIDED, HOWEVER, that to the extent that a Minimum Term B
Prepayment is made on or prior to December 31, 2004, the Applicable Base Rate
Margin applicable to Term A Loans shall be 2.75% beginning on the first Business
Day after such prepayment, and (ii) with respect to Term B Loans, 5.0% and shall
without further action increase by .50% on the first Business Day after the
6-month anniversary of the Closing Date if this Agreement becomes effective
pursuant to SECTION 12.20(a) (or, if this Agreement becomes effective pursuant
to SECTION 12.20(b) the first Business Day after the 12-month anniversary of the
Closing Date) and, in each case, on each 3-month anniversary thereafter up to a
maximum of 8.0%.
"APPLICABLE EURODOLLAR MARGIN" means at any date (i) with respect to
Term A Loans, 4.5%; PROVIDED, HOWEVER, that to the extent that a Minimum Term B
Prepayment is made on or prior to December 31, 2004, the Applicable Eurodollar
Margin applicable to Term A Loans shall be 3.75% beginning on the first Business
Day after such prepayment, and (ii) with respect to Term B Loans, 6.0% and shall
without further action increase by .50% on the first Business
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Day after the 6-month anniversary of the Closing Date if this Agreement becomes
effective pursuant to SECTION 12.20(a) (or, if this Agreement becomes effective
pursuant to SECTION 12.20(b), the first Business Day after the 12-month
anniversary of the Closing Date) and, in each case, on each 3-month anniversary
thereafter up to a maximum of 9.0%.
"ASSET DISPOSITION" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) of
all or any part of an interest in shares of Capital Stock of a Restricted
Subsidiary of Borrower (other than directors' qualifying shares and similar
arrangements required by applicable law with respect to any Foreign Subsidiary),
property or other assets (each referred to for the purposes of this definition
as a "disposition" or any variation thereof) by Borrower or any of its
Restricted Subsidiaries; PROVIDED, THAT (i) any disposition by Borrower or a
Subsidiary to the Borrower or a Wholly-Owned Subsidiary which is not an
Unrestricted Subsidiary, (ii) the disposition of equipment the proceeds of which
are used to purchase other equipment used in Borrower's or any of its Restricted
Subsidiaries' business within 180 days from the date of sale (provided that
pending any such purchase the Net Sale Proceeds thereof are used to repay Loans
(as defined in the Priority Credit Agreement) outstanding on the date of receipt
of such proceeds) and (iii) dispositions permitted by SECTION 8.4 or SECTIONS
8.6(b), (e), (f), (g), (h) OR (i) shall not constitute an Asset Disposition for
purposes of this definition.
"ASSIGNEE" has the meaning assigned to that term in SECTION 12.8(c) of
this Agreement.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means an Assignment and
Assumption Agreement substantially in the form of EXHIBIT 12.8(c) annexed hereto
and made a part hereof by any applicable Lender, as assignor, and such Lender's
assignee in accordance with SECTION 12.8 of this Agreement.
"ATTORNEY COSTS" means all reasonable fees and disbursements of any
law firm or other external counsel and the reasonable allocated cost of internal
legal services, including all reasonable disbursements of internal counsel.
"AUSTRALIAN JOINT VENTURES INTERESTS" means CPH's 50% equity interest
in HCPH Holdings Pty Limited, 50% equity interest in Huntsman Chemical Australia
Unit Trust and 20% equity interest in Huntsman Surfactants Technology
Corporation.
"AVAILABLE LIQUIDITY" means, as of any date of termination, Cash or
Cash Equivalents of the Borrower and its Restricted Subsidiaries, but excluding
amounts on deposit in any Lock-Box (as defined in the Priority Credit Agreement)
or Lock-Box Account (as defined in the Priority Credit Agreement) and the Master
Collection Account (as defined in the Priority Credit Agreement).
"BASE RATE" means the greater of (i) the rate most recently announced
by DB at its principal office as its "prime rate", which is not necessarily the
lowest rate made available by DB or (ii) the Federal Funds Rate plus 1/2 of 1%
per annum. The "prime rate" announced by DB is evidenced by the recording
thereof after its announcement in such internal publication or publications as
DB may designate. Any change in the interest rate resulting from a change in
4
such "prime rate" announced by DB shall become effective without prior notice to
Borrower as of 12:01 A.M. (
New York City time) on the Business Day on which each
change in such "prime rate" is announced by DB. DB may make commercial or other
loans to others at rates of interest at, above or below its "prime rate".
"BASE RATE LOAN" means any Loan which bears interest at a rate
determined with reference to the Base Rate.
"BASF NOTE" shall mean that certain Promissory Note dated March 4,
1997 of HSCC to BASF Corporation in the original principal amount of
$75,000,000, as in effect on the Closing Date.
"BOARD" means the Board of Governors of the Federal Reserve System.
"BORROWER" has the meaning assigned to that term in the introduction
to this Agreement.
"BUSINESS DAY" as it relates to any payment, determination, funding or
notice to be made or given in connection with any Loan, or otherwise to be made
or given to or from Administrative Agent, a day other than a Saturday, Sunday or
other day on which commercial banks in
New York City are authorized or required
by law to close; PROVIDED, HOWEVER, that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market. For purposes of this Agreement (other than for purposes of determining
the end of any applicable Interest Period), "Business Day" shall not include
Pioneer Day as recognized in the State of Utah in any year.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated)
of such Person's capital stock, partnership interests, membership interests or
other equivalent interests and any rights (other than debt securities
convertible into or exchangeable for capital stock), warrants or options
exchangeable for or convertible into such capital stock or other equity
interests.
"CAPITALIZED LEASE" means, at the time any determination thereof is to
be made, any lease of property, real or personal, in respect of which the
present value of the minimum rental commitment is capitalized on the balance
sheet of the lessee in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a Capitalized
Lease which would at such time be required to be capitalized on the balance
sheet of the lessee in accordance with GAAP.
"CASH" means money, currency or the available credit balance in a
Deposit Account.
"CASH EQUIVALENTS" means any Investment in (i) a marketable
obligation, maturing within one year after issuance thereof, issued or
guaranteed by the USA or an instrumentality or agency thereof, (ii) a
certificate of deposit or banker's acceptance, maturing within one year after
issuance thereof, issued by any Lender, or a national or state bank or trust
5
company or a European, Canadian or Japanese bank, in each case having capital,
surplus and undivided profits of at least $100,000,000 and whose long-term
unsecured debt has a rating of "A" or better by S&P or A2 or better by Xxxxx'x
or the equivalent rating by any other nationally recognized rating agency
(provided that the aggregate face amount of all Investments in certificates of
deposit or bankers' acceptances issued by the principal offices of or branches
of such European or Japanese banks located outside the USA shall not at any time
exceed 33-1/3% of all Investments described in this definition), (iii) open
market commercial paper, maturing within 270 days after issuance thereof, which
has a rating of A-1 or better by S&P or P-1 or better by Xxxxx'x, or the
equivalent rating by any other nationally recognized rating agency, (iv)
repurchase agreements and reverse repurchase agreements with a term not in
excess of one year with any financial institution which has been elected primary
government securities dealers by the Federal Reserve Board or whose securities
are rated AA- or better by S&P or Aa3 or better by Xxxxx'x or the equivalent
rating by any other nationally recognized rating agency relating to marketable
direct obligations issued or unconditionally guaranteed by the USA or any agency
or instrumentality thereof and backed by the full faith and credit of the USA,
(v) "Money Market" preferred stock maturing within six months after issuance
thereof or municipal bonds issued by a corporation organized under the laws of
any state of the USA, which has a rating of "A" or better by S&P or Xxxxx'x or
the equivalent rating by any other nationally recognized rating agency and (vi)
tax exempt floating rate option tender bonds backed by letters of credit issued
by a national or state bank whose long-term unsecured debt has a rating of AA or
better by S&P or Aa2 or better by Xxxxx'x or the equivalent rating by any other
nationally recognized rating agency.
"CASH INTEREST EXPENSE" means Net Interest Expense but excluding,
however, Interest Expense not currently payable in cash.
"CHANGE OF CONTROL" means (i) prior to an Initial Public Offering, (x)
the failure by Xx. Xxx X. Xxxxxxxx, his spouse, direct descendants, an entity
controlled by any of the foregoing and/or by a trust of the type described
hereafter, and/or a trust for the benefit of any of the foregoing (the "HUNTSMAN
GROUP"), collectively to own and control at least 51% of the outstanding voting
Capital Stock of Borrower, Holdco I and Holdco II, (y) any sale, assignment,
transfer or other disposition by GOF or the Huntsman Group of any membership
interests of Holdco I held by GOF or the Huntsman Group on the Closing Date,
other than a Permitted Transfer or (z) the failure of Borrower to be a
Wholly-Owned Direct Subsidiary of Holdco II or of Holdco II to be a Subsidiary
of Holdco I (except in the case of the Borrower, in respect of (i) the preferred
interests held by Huntsman Cancer Foundation on the Closing Date and (ii) the
interests held by Huntsman Chemical Corporation or any other Wholly-Owned
Subsidiary of Borrower on the Closing Date for so long as such interests are
held by a Wholly-Owned Subsidiary of Borrower) or (ii) after an Initial Public
Offering, the occurrence of the following: (x) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Securities and Exchange Act of
1934, as amended (the "EXCHANGE ACT")), other than GOF or one or more members of
the Huntsman Group, is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 35% or more of the then outstanding voting
Capital Stock of Borrower or Issuer other than in a transaction having the
approval of the board of directors of Borrower at least a majority of which
6
members are Continuing Directors; or (y) Continuing Directors shall cease to
constitute at least a majority of the directors constituting the board of
directors of Borrower or Issuer.
"CLOSING DATE" means September 30, 2002.
"CODE" means the Internal Revenue Code of 1986, as from time to time
amended, including the regulations proposed or promulgated thereunder, or any
successor statute and the regulations proposed or promulgated thereunder.
"COLLATERAL" means, collectively, "Collateral" as such term is defined
in any Security Document or any other collateral pledged by any Credit Party to
secure the Obligations.
"COLLATERAL ACCOUNT AGREEMENT" has the meaning assigned to such term
in SECTION 5.1(b)(iv) of this Agreement.
"COLLATERAL AGENT" means DB acting in the capacity of Collateral Agent
as such term is defined in the Security Agreement until a successor is approved
pursuant to Article XI of the Security Agreement and thereafter shall mean such
successor and all successors thereto.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for Borrower and its
Restricted Subsidiaries, for any period, the aggregate of all expenditures
(whether paid in cash or accrued as liabilities and including in all events all
Capitalized Lease Obligations) by the Borrower and its Restricted Subsidiaries
during that period that, in conformity with GAAP, are or are required to be
included in the property, plant or equipment reflected in the consolidated
balance sheet of the Borrower; PROVIDED that Consolidated Capital Expenditures
shall not include any portion of expenditures to replace destroyed or damaged
property, plant or equipment to the extent such capital expenditures are
financed with casualty insurance proceeds not required to be applied to prepay
the obligations hereunder.
"CONSOLIDATED DEBT" means, without duplication, the sum of (i)
Indebtedness of Borrower and its Restricted Subsidiaries (other than the Horizon
Subordinated Note) to the extent reflected on a consolidated balance sheet of
Borrower, determined on a consolidated basis in accordance with GAAP (but net of
Cash and Cash Equivalents) and (ii) Indebtedness of Borrower and its Restricted
Subsidiaries of the type referred to in clauses (x) and (xi) of the definition
of such term.
"CONSOLIDATED FIXED CHARGES" means, for any period, for Borrower and
its Restricted Subsidiaries, the sum of (without duplication) (i) Cash Interest
Expense, (ii) all scheduled payments of principal on Indebtedness of Borrower
and its Restricted Subsidiaries (including, without limitation, principal
payments in respect of Capitalized Leases), (iii) net income taxes paid in cash
(excluding the effect of cash taxes on extraordinary items to the extent of cash
proceeds on such items to the extent that such cash proceeds are excluded in
computing EBITDA and net of tax distributions received from HIH), and (iv)
Consolidated Capital Expenditures payable in cash, as each of the foregoing is
made during such period of determination in accordance with GAAP on a
consolidated basis.
"CONSOLIDATED NET INCOME" and "CONSOLIDATED NET LOSS" mean,
respectively, with respect to any period, the aggregate of the net income (loss)
of Borrower for such period,
7
determined in accordance with GAAP on a consolidated basis, PLUS or MINUS, to
the extent not included therein, the net income (loss) of any Restricted
Subsidiary attributable to a minority interest in such Restricted Subsidiary,
less the amount of cash dividends paid on any preferred stock of Borrower in
such period; PROVIDED, that the net income (loss) of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded in computing Consolidated Net Income PROVIDED
FURTHER, that as used in the definition of Restricted Subsidiary Adjusted
Earnings, Consolidated Net Income and Consolidated Net Loss shall be determined
without giving effect to non-cash adjustments (whether positive or negative)
(the "Equity Deferral Plan Non-Cash Adjustments") attributable (without
duplication) to changes in employees' accounts due to (i) the matching amount in
any "Employer Credit Accounts" (as defined in the Equity Deferral Plan) and
matching associated with Expatriate Credits (as defined in the Equity Deferral
Plan), (ii) changes in the value of employees' "Deferral Accounts" (as defined
in the Equity Deferral Plan) resulting from changes in the value of the Employer
Stock (as defined in the Equity Deferral Plan) and (iii) changes in the value of
the vested portion of such "Employer Credit Accounts" (as defined in the Equity
Deferral Plan) and the vested portion of Expatriate Credits (as defined in the
Equity Deferral Plan) resulting from changes in the value of the Employer Stock
(as defined in the Equity Deferral Plan), PROVIDED STILL FURTHER, that any
amounts paid or distributed in cash (the "Equity Deferral Plan Cash
Adjustments") pursuant to the Equity Deferral Plan attributable to such changes
in employees' accounts described in CLAUSES (i), (ii) AND (iii) above shall, to
the extent not otherwise deducted in determining Consolidated Net Income or
Consolidated Net Loss, be deemed to be expenses at the time of payment thereof
and shall, for such period, be deducted in determining Consolidated Net Income
and Consolidated Net Loss as used in the definition of Restricted Subsidiary
Adjusted Earnings.
"CONSOLIDATED TOTAL ASSETS" means, with respect to any Person, the
book value, determined on a consolidated basis in accordance with GAAP, of all
assets of such Person and its Subsidiaries.
"CONTAMINANT" means any pollutant, contaminant (as those terms are
defined in 42 U.S.C. Section 9601(33)), toxic pollutant (as that term is defined
in 33 U.S.C. Section 1362(13)), hazardous substance (as that term is defined in
42 U.S.C. Section 9601(14)), hazardous chemical (as that term is defined by 29
CFR Section 1910.1200(c)), hazardous waste (as that term is defined in 42 U.S.C.
Section 6903(5)), or any state or local equivalent of such laws and regulations,
including, without limitation, radioactive material, special waste,
polychlorinated biphenyls, asbestos, petroleum, including crude oil or any
petroleum-derived substance, waste, or breakdown or decomposition product
thereof, or any constituent of any such substance or waste, including but not
limited to polychlorinated biphenyls and asbestos.
"CONTINUATION DATE" shall mean, with respect to Eurodollar Loans, the
day, which shall be the last day of an Interest Period with respect thereto, on
which a Eurodollar Loan has been continued pursuant to SECTIONS 2.3(a) or 2.3(c)
of this Agreement.
"CONTINUING DIRECTORS" means, as of any date, the collective reference
to (i) all members of the board of directors of Borrower or Issuer who have held
office continuously since a date no later than twelve months prior to the
Initial Public Offering, and (ii) all members of the board of directors of
Borrower or Issuer who assumed office after such date and whose
8
appointment or nomination for election by shareholders of Borrower or Issuer was
approved by a vote of at least 50% of the Continuing Directors in office
immediately prior to such appointment or nomination.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
Securities issued by such Person or of any indenture or credit agreement or any
agreement, instrument or other undertaking to which such Person is a party or by
which it or any of its property is bound.
"CONVERSION DATE" shall mean with respect to Eurodollar Loans, the
day, which shall be the last day of an Interest Period, on which Borrower has
elected to convert its Eurodollar Loans into Base Rate Loans pursuant to SECTION
2.3(a)(ii) of this Agreement.
"CPH" means Consolidated Press Holdings Limited, an Australian
corporation.
"CREDIT EXPOSURE" has the meaning set forth in SECTION 12.8(b).
"CREDIT PARTY" shall mean Borrower and any Subsidiary Guarantor.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement designed to protect the Persons entering into same against
fluctuations in currency values.
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens for taxes not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently pursued,
provided that (A) any proceedings commenced for the enforcement of such
Liens shall have been stayed or suspended within 30 days of the
commencement thereof and (B) provision for the payment of all such taxes
known to such Person has been made on the books of such Person to the
extent required by GAAP;
(ii) mechanics', processor's, materialmen's, carriers',
warehousemen's, landlord's and similar Liens arising by operation of law
and arising in the ordinary course of business and securing obligations of
such Person that are not overdue for a period of more than 30 days or are
being contested in good faith by appropriate proceedings diligently
pursued; provided that (A) any proceedings commenced for the enforcement of
such Liens shall have been stayed or suspended within 30 days of the
commencement thereof and (B) provision for the payment of such Liens has
been made on the books of such Person to the extent required by GAAP;
(iii) Liens arising in connection with worker's compensation,
unemployment insurance, old age pensions and social security benefits which
are not overdue or are being contested in good faith by appropriate
proceedings diligently pursued, provided that (A) any proceedings commenced
for the enforcement of such Liens shall have been stayed or suspended
within 30 days of the commencement thereof and (B) provision for the
payment of such Liens has been made on the books of such Person to the
extent required by GAAP;
9
(iv) (A) Liens incurred or deposits made in the ordinary course of
business to secure the performance of bids, tenders, statutory obligations,
fee and expense arrangements with trustees and fiscal agents (exclusive of
obligations incurred in connection with the borrowing of money or the
payment of the deferred purchase price of property) and customary deposits
granted in the ordinary course of business under Operating Leases and (B)
Liens securing surety, indemnity, performance, appeal and release bonds,
provided that full provision for the payment of all such obligations has
been made on the books of such Person to the extent required by GAAP;
(v) such imperfections of title, covenants, restrictions,
easements and other encumbrances on real property (except for such which
are specifically insured for in a lender's title policy delivered pursuant
to the terms of this Agreement) which in each case do not arise out of the
incurrence of any Indebtedness and which as to Mortgaged Properties, do not
interfere with or impair in any material respect the utility, operation,
value or marketability of the real property on which such Lien is imposed
and, as to all other properties, do not impair the value or marketability
of such properties, taken as a whole;
(vi) attachment, judgment or other similar Liens arising in
connection with court or arbitration proceedings involving individually and
in the aggregate liability of $15,000,000 or less at any one time, provided
the same are discharged, or that execution or enforcement thereof is stayed
pending appeal, within 60 days or, in the case of any stay of execution or
enforcement pending appeal, within such lesser time during which such
appeal may be taken;
(vii) leases or subleases granted to others not interfering in any
material respect with the business of Borrower or any of its Subsidiaries
and any interest or title of a lessor under any lease permitted by this
Agreement; and
(viii) Environmental Liens, to the extent that (A) any proceedings
commenced for the enforcement of such Liens shall have been suspended or
are being contested in good faith, (B) provision for all liability and
damages that are the subject of said Environmental Liens has been made on
the books of such Person to the extent required by GAAP and (C) such Liens
do not relate to obligations exceeding $5,000,000 in the aggregate at any
one time.
"DB" means Deutsche Bank Trust Company Americas, a
New York banking
corporation, and its successors.
"DEFAULT RATE" means a variable rate per annum which shall be the
Default Rate Margin PLUS (x) the then applicable interest rate hereunder, or (y)
if there is no such applicable interest rate, the Base Rate plus the Applicable
Base Rate Margin, in respect of the amount on which the Default Rate is being
assessed, but in no event in excess of that permitted by applicable law.
"DEFAULT RATE MARGIN" means two percent (2%) per annum.
10
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DISCLOSURE MATERIALS" means that certain Plan of Reorganization, the
Disclosure Statement to accompany the Plan of Reorganization and the Appendices
thereto, each dated July 15, 2002, and each amendment or supplement thereafter
to the extent posted on Intralinks at least five (5) Business Days prior to the
Closing Date.
"DOLLAR" and "$" means lawful money of the USA.
"DOLLAR EQUIVALENT" means, at any time, (i) as to any amount
denominated in Dollars, the amount thereof at such time, and (ii) as to any
amount denominated in any other currency, the equivalent amount in Dollars as
determined by the Administrative Agent at such time on the basis of the exchange
rate at such time.
"DOMESTIC SUBSIDIARY" means each Subsidiary of Borrower other than a
Foreign Subsidiary.
"EBITDA" means, for any applicable period, Restricted Subsidiary
Adjusted Earnings plus, to the extent deducted in determining the foregoing
amount (i) Net Interest Expense for such period of Borrower and its Restricted
Subsidiaries, (ii) provision for taxes for such period for Borrower and its
Restricted Subsidiaries, (iii) depreciation and amortization expense for such
period for Borrower and its Restricted Subsidiaries, (iv) the Huntsman Polymers
Non-Cash Charge and (v) Restructuring Charges.
"ELIGIBLE ASSIGNEE" means a commercial bank, financial institution,
financial company, fund (whether a corporation, partnership, trust or other
entity) or insurance company in each case, together with its Affiliates or
Related Funds, which extends credit or buys loans in the ordinary course of its
business or any other Person approved by the Administrative Agent and Borrower,
such approval not to be unreasonably withheld.
"ENVIRONMENTAL CLAIM" means any notice of violation, claim, suit,
demand, abatement order or other order or direction (conditional or otherwise)
by any Governmental Authority or any Person for any damage, including personal
injury (including sickness, disease or death), tangible or intangible property
damage, contribution, indemnity, indirect or consequential damages, damage to
the environment, nuisance, pollution, contamination or other adverse effects on
the environment, human health, or natural resources, or for fines, penalties,
restrictions or injunctive relief, resulting from or based upon (a) the
occurrence or existence of a Release or substantial threat of a material Release
(whether sudden or non-sudden or accidental or non-accidental) of, or exposure
to, any Contaminant in, into or onto the environment at, in, by, from or related
to any real estate owned, leased or operated at any time by Borrower or any of
its Subsidiaries (the "PREMISES"), (b) the use, handling, generation,
transportation, storage, treatment or disposal of Contaminants in connection
with the operation of any Premises, or (c) the violation, or alleged violation,
of any statutes, ordinances, codes, orders, rules, regulations, permits, or
licenses or authorizations of or from any Governmental Authority or court
relating to environmental matters connected with Borrower's operations or any
Premises.
11
"ENVIRONMENTAL LAWS" means any and all applicable foreign, federal,
state or local laws, statutes, ordinances, codes, rules, regulations, orders,
decrees, judgments, directives or Environmental Permits and cleanup or action
standards, levels or objectives imposing liability or standards of conduct for
or relating to the protection of health, safety or the environment, including,
but not limited to, the following statutes as now written and amended, and as
amended hereafter: the Federal Water Pollution Control Act, as codified in 33
U.S.C. Section 1251 et seq., the Clean Air Act, as codified in 42 U.S.C. Section
7401 et seq., the Toxic Substances Control Act, as codified in 15 U.S.C. Section
2601 et seq., the Solid Waste Disposal Act, as codified in 42 U.S.C. Section
6901 et seq., the Comprehensive Environmental Response, Compensation and
Liability Act, as codified in 42 U.S.C. Section 9601 et seq., the Emergency
Planning and Community Right-to-Know Act of 1986, as codified in 42 U.S.C.
Section 11001 et seq., and the Safe Drinking Water Act, as codified in 42
U.S.C.Section 300f et seq. and any related regulations, as well as all state and
local equivalents.
"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for (i) any liability under foreign, federal, state or local
environmental laws, regulations or orders of any Government Authority or court,
or (ii) damages arising from, or costs incurred by such Governmental Authority
in response to, a Release or threatened Release of a Contaminant into the
environment.
"ENVIRONMENTAL PERMITS" means all permits, licenses, certificates,
registrations and approvals of Governmental Authorities required by
Environmental Laws or necessary for the business of Borrower or a Subsidiary of
Borrower.
"EQUITY DEFERRAL PLAN" means Borrower's July 1, 1999 Equity Deferral
Plan, as amended from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
from time to time amended.
"ERISA AFFILIATE" means, with respect to any Person, any trade or
business (whether or not incorporated) which, together with such Person, is
under common control as described in Section 414(c) of the Code, is a member of
a controlled group, as defined in Section 414(b) of the Code, or is a member of
an affiliated service group as defined in Section 414(m) of the Code which
includes such Person. Unless otherwise qualified, all references to an "ERISA
Affiliate" in this Agreement shall refer to an ERISA Affiliate of Borrower or
any Subsidiary.
"EURODOLLAR LOAN" means any Loan bearing interest at a rate determined
by reference to the Eurodollar Rate.
"EURODOLLAR RATE" means the arithmetic average (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the offered quotation, if any, to first
class banks in the
New York interbank market by DB for U.S. Dollar deposits of
amounts in immediately available funds comparable to the principal amount of the
applicable Eurodollar Loan to be made or continued by DB for which the
Eurodollar Rate is being determined with maturities comparable to the Interest
Period for which such Eurodollar Rate will apply as of approximately 10:00 A.M.
(
New York City time) on the applicable Interest Rate Determination Date. The
determination of the
12
Eurodollar Rate by Administrative Agent shall be conclusive and binding on
Borrower absent manifest error.
"EURODOLLAR RESERVE RATE" means, with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upwards, if
necessary, to the nearest 1/100th of 1%):
Eurodollar Rate
---------------------------------------
1.00 - Eurodollar Reserve Requirements
"EURODOLLAR RESERVE REQUIREMENTS" means, for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for Eurodollar funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of the Board).
"EVENT OF DEFAULT" has the meaning assigned to that term in SECTION
10.1 of this Agreement.
"EXCESS CASH FLOW" means, for any Fiscal Year (commencing with the
Fiscal Year ending December 31, 2002), an amount not less than zero calculated
by April 30 of such year, equal to (i) the sum of (x) the average daily Unused
Revolver Availability during the period of February 15 through and including
April 15 of such year PLUS (y) the average daily balance of cash, Cash
Equivalents and the amount of Foreign Cash Equivalents (calculated using the
applicable exchange rate used by the Company in its internal financial
statements), held during such period of such year (after giving pro forma effect
to the amount of the Scheduled Term Loan Principal Payments, if any, made during
such period as if such payments were made on February 15), but in any event
excluding any cash from time to time in a Recovery Event Escrow Account in
accordance with SECTION 4.2(h)), MINUS (ii) $200,000,000.
"EXISTING FORBEARANCE AGREEMENTS" means that certain Fourth Amendment,
Forbearance and Waiver to Second Amended and Restated Credit Agreement dated as
of June 28, 2002, by and among the Borrower, Administrative Agent and the
financial institutions party thereto and that certain Forbearance and Waiver to
the Amended and Restated Term Loan Agreement dated as of June 28, 2002, by and
among the Borrower, Administrative Agent and the financial institutions party
thereto.
"EXISTING L/C OBLIGATIONS" shall mean all LC Obligations (as defined
in the Original Credit Agreement) under the Original Credit Agreement,
immediately prior to the Closing Date.
"EXISTING LENDERS" shall have the meaning assigned to that term in the
third recitals to this Agreement.
"EXISTING OBLIGATIONS" shall have the meaning assigned to that term in
SECTION 6.5(d) of this Agreement.
13
"FACILITY" means any of the credit facilities established under this
Agreement.
"FEDERAL FUNDS RATE" means on any one day, the rate per annum equal to
the weighted average (rounded upwards, if necessary, to the nearest 1/100th of
1%) of the rate on overnight federal funds transactions with members of the
Federal Reserve System only arranged by federal funds brokers, as published as
of such day by the Federal Reserve Bank of
New York, or, if such rate is not so
published, the average of the quotations for such day on such transactions
received by DB from three federal funds brokers of recognized standing selected
by DB.
"FINANCE SUBSIDIARY" means any Restricted Subsidiary existing on the
date of this Agreement or subsequently formed in accordance with the terms of
this Agreement, (i) which is a special purpose entity which does not engage in
any business other than borrowing funds from Borrower and lending funds to
Restricted Subsidiaries pursuant to Pledged Intercompany Notes pursuant to
documentation satisfactory to Administrative Agent with all rights of the
Finance Subsidiary under such documentation pledged to the Collateral Agent in a
manner satisfactory to Administrative Agent, (ii) which has provisions in its
articles of incorporation satisfactory to Administrative Agent and (iii) all of
the Capital Stock of which is pledged by the applicable Credit Party to the
Collateral Agent on behalf of the Lenders, pursuant to the Security Documents.
"FIRST MORTGAGE NOTES" means all of the outstanding 11% First Mortgage
Notes due 2004 of Huntsman Petrochemical, issued pursuant to that certain
Indenture between the Borrower and the United States Trust Company of
New York,
a
New York corporation, as trustee, dated as of April 15, 1994, as amended,
supplemented, restated or otherwise modified.
"FISCAL QUARTER" has the meaning assigned to such term in SECTION 7.11
of this Agreement.
"FISCAL YEAR" has the meaning assigned to such term in SECTION 7.11 of
this Agreement.
"FORBEARANCE EXTENSION AGREEMENT" means either the Original Credit
Forbearance Extension Agreement, the Original Term Loan Forbearance Extension
Agreement or both, as the context may require.
"FOREIGN CASH EQUIVALENT" means (i) debt securities with a maturity of
365 days or less issued by any member nation of the European Union, Switzerland
or any other country whose debt securities are rated by S&P and Xxxxx'x A-1 or
P-1, or the equivalent thereof (if a short-term debt rating is provided by
either) or at least AA or Aa2, or the equivalent thereof (if a long-term
unsecured debt rating is provided by either)(each such jurisdiction, an
"APPROVED JURISDICTION"), or any agency or instrumentality of an Approved
Jurisdiction, provided that the full faith and credit of the Approved
Jurisdiction is pledged in support of such debt securities or such debt
securities constitute a general obligation of the Approved Jurisdiction and (ii)
debt securities in an aggregate principal amount not to exceed the Dollar
Equivalent of $2,000,000 with a maturity of 365 days or less issued by any
nation in which the Borrower or its Subsidiaries has cash which is the subject
of restrictions on export or any agency or instrumentality of such
14
nation, provided that the full faith and credit of such nation is pledged in
support of such debt securities or such debt securities constitute a general
obligation of such nation.
"FOREIGN OVERDRAFT FACILITY" means one or more foreign overdraft lines
of credit in a maximum aggregate principal amount of $5,000,000 at any time
outstanding.
"FOREIGN SUBSIDIARY" means any Restricted Subsidiary of Borrower that
(A) is incorporated under the laws of a jurisdiction other than any State of the
U.S., the District of Columbia or any territory or possession of the U.S. and
(B) maintains a majority of its assets outside the U.S.; PROVIDED, HOWEVER, that
Huntsman International Sales Corporation shall be a Foreign Subsidiary for so
long as it is treated as a foreign subsidiary under Section 956 of the Code.
"GAAP" means generally accepted accounting principles in the U.S. as
in effect from time to time.
"GOF" means Matlin Xxxxxxxxx Global Opportunities Partners L.P. (f/k/a
CSFB Global Opportunities Partners L.P.) by its investment advisor Matlin
Xxxxxxxxx Global Advisers LLC (f/k/a CSFB Global Advisers LLC)
"GOF BONDS" means Senior Subordinated Notes and Polymers Senior Notes
held from time to time by gof immediately prior to the Closing Date. For purpose
of this Agreement, all Senior Subordinated Notes and Polymers Senior Notes held
from time to time by CPH or its Affiliate shall be deemed to be GOF Bonds.
"GOF RESTRUCTURING AGREEMENT" has the meaning assigned to that term in
SECTION 5.1(c)(i).
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of government.
"GUARANTEE OBLIGATIONS" means, as to any Person, without duplication,
any direct or indirect obligation of such Person guaranteeing or intended to
guarantee any Indebtedness, dividend, Capitalized Lease or Operating Lease, any
other lease or other obligation ("PRIMARY OBLIGATIONS") of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent:
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor; (ii) to advance or supply funds (a) for the
purchase or payment of any such primary obligation, or (b) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor; (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation; or (iv) otherwise to assure or hold harmless the owner
of such primary obligation against loss in respect thereof PROVIDED, HOWEVER,
that the term Guarantee Obligations shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation at any time shall be deemed to be an amount
equal to the lesser at such time of (x) the stated or determinable amount of the
primary obligation in
15
respect of which such Guarantee Obligation is made or (y) the maximum amount for
which such Person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation; or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof.
"HEADQUARTERS MORTGAGE LOAN DOCUMENTS" means a mortgage or deed of
trust, assignment of rents and leases and other customary mortgage loan
documents entered into by Huntsman Headquarters Corporation, a Utah corporation,
in connection with the mortgaging of the building located at 000 Xxxxxxxx Xxx,
Xxxx Xxxx Xxxx, Xxxx and any agreements or documents entered into by Huntsman
Headquarters Corporation evidencing the renewal, replacement or refinancing of
the Indebtedness governed thereby to the extent such Indebtedness is permitted
by SECTION 8.2(e).
"HEDGING AGREEMENT" means any Interest Rate Agreement, Currency
Agreement, commodity purchase or option agreement or commodity price hedging
agreement or other hedging arrangement.
"HIH" means Huntsman International Holdings, LLC, a Delaware limited
liability company.
"HIH UNIT TRANSFER" shall mean (a) the dividend of one common unit of
HIH (the "TRANSFERRED UNIT") by HSCC to HSCHC, the dividend of the Transferred
Unit from HSCHC to the Borrower, and the dividend of the Transferred Unit from
the Borrower to Holdco II or (b) the transfer of the Transferred Unit from HSCC
to Holdco II; provided, however, that (i) such dividends or transfer shall only
take place on the Business Day prior to the payment of the Alta Interest
Purchase Price (as defined in the ICI Agreement) pursuant to the ICI Agreement,
(ii) the Transferred Unit shall at all times remain subject to the pledge in
favor of the Collateral Agent and (iii) the Transferred Unit shall, promptly (a)
be contributed from Holdco II to Borrower, from Borrower to HSCHC, and from
HSCHC to HSCC or (b) transferred from Holdco II to HSCC, in each case pursuant
to such documentation as may be satisfactory in form and substance to
Administrative Agent.
"HISTORICAL FINANCIAL STATEMENTS" means each of the financial
statements of Borrower or its Subsidiaries set forth on SCHEDULE 6.5(a) hereto.
"HOLDCO AGREEMENT" has the meaning assigned to such term in SECTION
5.1(b)(viii) of this Agreement.
"HOLDCO I" means Huntsman Holdings, LLC, a Delaware limited liability
company.
"HOLDCO II" means HMP Equity Holdings Corporation, a Delaware
corporation.
"HORIZON SUBORDINATION AGREEMENT" has the meaning given thereto in
SECTION 5.1(b)(ix) of this Agreement.
"HORIZON SUBORDINATED NOTE" means that certain Amended and Restated
Subordinated Promissory Note dated July 2, 2001 made by Borrower and payable to
the order of
16
Horizon Ventures, L.C., a Utah limited liability company, as amended or modified
in accordance with the terms hereof.
"HSCC" means Huntsman Specialty Chemicals Corporation, a Delaware
corporation.
"HSCC AGREEMENT" means that certain letter agreement dated as of the
date hereof by and among Borrower, HSCC, the Collateral Agent and the Priority
Collateral Agent, as amended, modified or supplemented from to time.
"HSCHC" means Huntsman Specialty Chemicals Holdings Corporation, a
Utah corporation.
"HSCC SUBSIDIARY GUARANTEE AGREEMENT" has the meaning given thereto in
SECTION 5.1(b)(iii)(B).
"HUNTSMAN GROUP" has the meaning given thereto in the definition of
Change of Control in SECTION 1.1.
"HUNTSMAN PETROCHEMICAL" means Huntsman Petrochemical Corporation, a
Delaware corporation.
"HUNTSMAN POLYMERS NON-CASH CHARGE" means, for any period of four
consecutive Fiscal Quarters that includes the last Fiscal Quarter of 2001, the
one time, actual non-cash write down charge incurred in the last Fiscal Quarter
of 2001 in connection with Polymers asset write-downs.
"ICI" means ICI Alta, Inc., a Delaware corporation.
"ICI AGREEMENT" means the Sale and Purchase Agreement dated as of June
14, 2002 by and among Imperial Chemical Industries PLC, ICI Americas Inc., ICI,
ICI Finance PLC, BNAC Inc. and GOF, as the same may be amended in accordance
with the terms of this Agreement.
"INDEBTEDNESS" means, as applied to any Person (without duplication):
(i) all indebtedness of such Person for borrowed money;
(ii) the deferred and unpaid balance of the purchase price of
assets or services (other than trade payables and other accrued liabilities
incurred in the ordinary course of business that are not overdue by more
than 90 days unless being contested in good faith) which purchase price is
(a) due more than six months from the date of incurrence of the obligation
in respect thereof or (b) evidenced by a note or a similar instrument;
(iii) all Capitalized Lease Obligations;
17
(iv) all indebtedness secured by any Lien (other than Customary
Permitted Liens) on any property owned by such Person, whether or not such
indebtedness has been assumed by such Person or is nonrecourse to such
Person;
(v) notes payable and drafts accepted representing extensions of
credit whether or not representing obligations for borrowed money (other
than such notes or drafts for the deferred purchase price of assets or
services which does not constitute Indebtedness pursuant to clause (ii)
above);
(vi) indebtedness or obligations of such Person, in each case,
evidenced by bonds, notes or similar instruments;
(vii) the face amount of all letters of credit and bankers'
acceptances issued for the account of such Person, and without duplication,
all drafts drawn thereunder other than, in each case, commercial or standby
letters of credit or the functional equivalent thereof issued in connection
with performance, bid or advance payment obligations incurred in the
ordinary course of business, including, without limitation, performance
requirements under workers compensation or similar laws;
(viii) all obligations of such Person under Hedging Agreements;
(ix) Guarantee Obligations of such Person;
(x) the aggregate outstanding amount of Receivables Facility
Attributed Indebtedness or the gross proceeds from any similar transaction,
regardless of whether such transaction is effected without recourse to such
Person or in a manner that would not otherwise be reflected as a liability
on a balance sheet of such Person in accordance with GAAP; and
(xi) the principal balance outstanding under any synthetic lease,
tax retention, operating lease, off-balance sheet loan or similar
off-balance sheet financing product to which such Person is a party, where
such transaction is considered borrowed money indebtedness for tax purposes
but is classified as an operating lease in accordance with GAAP.
PROVIDED, HOWEVER, notwithstanding the foregoing, "Indebtedness" shall not
include deferred taxes or unsecured indebtedness of Borrower and/or its
Restricted Subsidiaries incurred to finance insurance premiums in a principal
amount not in excess of the casualty and other insurance premiums to be paid by
Borrower and/or its Restricted Subsidiaries for a three year period beginning on
the date of any incurrence of such indebtedness.
"INITIAL PRO-RATA SHARE" means, for any Lender, subject to any
adjustments provided pursuant to SECTION 2.1(a), (x) the sum of such Lender's
Original Loans on the Closing Date, immediately prior to giving effect to the
Transactions DIVIDED BY (y) the sum of the total Original Loans of all Lenders
outstanding on the Closing Date, immediately prior to giving effect to the
Transactions.
18
"INITIAL PUBLIC OFFERING" means the initial public offering of the
common equity of Borrower or an entity ("Issuer") of which Borrower is a
Wholly-Owned Subsidiary.
"INTERCOMPANY INDEBTEDNESS" means, Indebtedness of Borrower or any of
its Restricted Subsidiaries which, in the case of Borrower, is owing to any
Subsidiary of Borrower and which, in the case of any Subsidiary of Borrower, is
owing to Borrower or any of its other Subsidiaries.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement,
dated the date hereof, by and among the Collateral Agent, the Priority
Collateral Agent and Borrower, in the form of Exhibit 1.3 to the Security
Agreement, as amended, modified or supplemented in accordance with the terms
thereof.
"INTEREST COVERAGE RATIO" has the meaning assigned to that term in
SECTION 9.2 of this Agreement.
"INTEREST EXPENSE" means, for Borrower and its Restricted Subsidiaries
with respect to any period, the sum of (x) total interest expense for Borrower
and its Restricted Subsidiaries to the extent reflected on a consolidated
financial statement of Borrower, determined on a consolidated basis in
accordance with GAAP and (y) total cash dividends paid on any preferred Capital
Stock of Borrower and its Restricted Subsidiaries to a Person other than
Borrower or any of its Restricted Subsidiaries. As used in this definition, the
term "interest" shall include, without limitation, all interest and fees payable
with respect to the Obligations under this Agreement (other than fees which may
be capitalized as transaction costs in accordance with GAAP), any discount in
respect of sales of accounts receivable and/or related contract rights and the
interest portion of Capitalized Lease Obligations during such period, all as
determined in accordance with GAAP.
"INTEREST PAYMENT DATE" means (a) as to any Base Rate Loan, (x) the
last Business Day of each March, June, September and December to occur while
such Loan is outstanding, (y) the date on which all of the Loans hereunder are
paid in full and (z) if the Closing Date shall not have occurred prior to
September 30, 2002, no later than the tenth Business Day following the Closing
Date, (b) as to any Eurodollar Loan, the last day of the Interest Period
applicable thereto and (c) as to any Eurodollar Loan having an Interest Period
longer than three months, at the end of each three month anniversary of the
first day of the Interest Period applicable thereto; PROVIDED, HOWEVER, that, in
addition to the foregoing, the date upon which any of the Term Loans have been
paid in full shall be deemed to be an "Interest Payment Date" with respect to
any interest which is then accrued hereunder for such Loans.
"INTEREST PERIOD" means with respect to any Eurodollar Loan, the
period commencing on the Business Day such Loan is disbursed or continued (or on
the date on which any Base Rate Loan is converted to a Eurodollar Loan) and
ending on the date one (or such shorter period as may be agreeable to the
Administrative Agent), two, three or six months thereafter, as selected by
Borrower in its Notice of Borrowing, Notice of Continuation or Notice of
Conversion or Continuation;
PROVIDED that:
19
(i) if any Interest Period would otherwise end on a day which is
not a Business Day, that Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Loan, the
result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on
the immediately preceding Business Day;
(ii) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the calendar
month which is one, two, three or six months, as the case may be, after the
calendar month in which such Interest Period began; and
(iii) no Interest Period for any Term Loan shall extend beyond the
final maturity date for such loan.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
futures contract, interest rate option contract or other similar agreement or
arrangement to which Borrower or any Restricted Subsidiary is a party, designed
to protect Borrower or any of its Restricted Subsidiaries against fluctuations
in interest rates.
"INTEREST RATE DETERMINATION DATE" means the date for calculating the
Eurodollar Rate for an Interest Period, which date shall be the second Business
Day prior to the first day of the related Interest Period for such Loan.
"INVESTMENT" means, as applied to any Person, (i) any direct or
indirect purchase or other acquisition by that Person of, or a beneficial
interest in, Securities of any other Person, or a capital contribution by that
Person to any other Person, (ii) any direct or indirect loan or advance to any
other Person (other than prepaid expenses or accounts receivable created or
acquired in the ordinary course of business), including all Indebtedness to such
Person arising from a sale of property by such person other than in the ordinary
course of its business or (iii) any purchase by that Person of all or a
significant part of the assets of a business conducted by another Person
(including by way of merger, consolidation or amalgamation). The amount of any
Investment by any Person on any date of determination shall be the acquisition
price of the gross assets acquired (including any liability assumed by such
Person to the extent such liability would be reflected on a balance sheet
prepared in accordance with GAAP) PLUS all additional capital contributions or
purchase price paid in respect thereof, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment MINUS the amount of all cash returns of principal or capital thereon,
cash dividends thereon and other cash returns on investment thereon or
liabilities expressly assumed by another Person (other than Borrower or another
Subsidiary of Borrower) in connection with the sale of such Investment. Whenever
the term "outstanding" is used in this Agreement with reference to an
Investment, it shall take into account the matters referred to in the preceding
sentence.
"IRIC" means International Risk Insurance Company, a Vermont
corporation.
20
"IRS" means the United States Internal Revenue Service, or any
successor or analogous organization.
"ISSUER" has the meaning assigned to that term within the definition
of Initial Public Offering in this SECTION 1.1.
"LENDER" and "LENDERS" have the respective meanings assigned to those
terms in the introduction to this Agreement and shall include any other Person
which becomes a Lender pursuant to SECTION 12.8; PROVIDED, HOWEVER, that each
Participant shall be deemed to be a Lender for purposes of SECTION 4.5 of this
Agreement.
"LENDING OFFICE" means, with respect to each Lender, the office
specified under such Lender' name on the signature page hereto, or on the
signature page to any Assignment and Assumption Agreement, with respect to each
Type of Loan, as the case may be, or such other office as such Lender may
designate in writing from time to time to Borrower and Administrative Agent with
respect thereto.
"LEVERAGE RATIO" has the meaning as defined in SECTION 9.1 of this
Agreement.
"LIEN" means (i) any judgment lien or execution, attachment, levy,
distraint or similar legal process and (ii) any mortgage, pledge, hypothecation,
collateral assignment, security interest, encumbrance, lien, charge or deposit
arrangement (other than a deposit to a Deposit Account in the ordinary course of
business and not intended as security) of any kind (including, without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof, any agreement to give any of the foregoing, any filing or
agreement or authorization to file a financing statement as debtor under the
Uniform Commercial Code or any similar statute (other than (x) filings for which
an agreement to release such statement has been obtained and delivered to
Administrative Agent, (y) filings improperly made against the Borrower or any of
its Subsidiaries without their consent or (z) filings to reflect ownership by a
third party of property leased or consigned to Borrower or any of its
Subsidiaries under a lease or consignment agreement which is not in the nature
of a conditional sale or title retention agreement, or any sale of receivables
with recourse against the seller or any Affiliate of the seller).
"LOAN" means an extension of credit by a Lender to Borrower pursuant
to Article II, and "Loans" means all of such Loans by all Lenders collectively.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Subsidiary
Guarantee Agreements, the Notes, each Security Document, the Holdco Agreement,
the HSCC Agreement and all other agreements, instruments and documents executed
in connection therewith, in each case as the same may at any time be amended,
supplemented, restated or otherwise modified and in effect.
"MAJORITY LENDERS" as of any date and with respect to any Facility,
means those Lenders that would constitute the Required Lenders under, and as
defined in, this Agreement assuming all outstanding Obligations of the other
Facilities under this Agreement were repaid in full.
21
"MANAGEMENT FEES" means for any period, all management fees or similar
compensation, excluding amounts representing reimbursement of out-of-pocket
expenses incurred in the ordinary course of business in connection with the
performance of management services.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), assets, liabilities or operations
of Borrower and its Restricted Subsidiaries taken as a whole, (b) the ability of
any Credit Party to perform its respective obligations under any Loan Document
to which it is a party, or (c) the validity or enforceability of this Agreement
or any of the Security Documents or the rights or remedies of Administrative
Agent and the Lenders hereunder or thereunder.
"MATERIAL AGREEMENT" means (i) any Contractual Obligation, the breach
of which or the failure to maintain would be reasonably likely to result in a
Material Adverse Effect and (ii) any material Contractual Obligation entered
into in connection with an Acquisition.
"MATERIAL SUBSIDIARY" means any Restricted Subsidiary of Borrower, the
Consolidated Total Assets of which were more than 2% of Borrower's Consolidated
Total Assets as of the end of the most recently completed Fiscal Year of
Borrower for which audited financial statements are available; PROVIDED that, in
the event the aggregate of the Consolidated Total Assets of all Restricted
Subsidiaries that do not constitute Material Subsidiaries exceeds 5% of
Borrower's Consolidated Total Assets as of such date, Borrower (or
Administrative Agent, in the event Borrower has failed to do so within 10 days
of request therefor by Administrative Agent) shall, to the extent necessary,
designate sufficient Restricted Subsidiaries to be deemed to be "Material
Subsidiaries" to eliminate such excess, and such designated Restricted
Subsidiaries shall thereafter constitute Material Subsidiaries. Assets of
Foreign Subsidiaries shall be converted into Dollars at the rates used for
purposes of preparing the consolidated balance sheet of Borrower included in
such audited financial statements.
"MATURITY DATE" means March 31, 2007, or such earlier date as the
outstanding Term Loans shall have been reduced to $0 pursuant to this Agreement.
"MAXIMUM ICI SETTLEMENT AMOUNT" means an amount equal to the sum of
the "B Note Completion Payment" plus the "Alta Interest Purchase Price", as each
such term is defined in the ICI Agreement, minus cash and Cash Equivalents held
by Holdco I and Holdco II (other than the proceeds of the Mezzanine Financing)
as of the date on which any such amounts are paid to ICI.
"MEMBERSHIP INTERESTS" shall mean the Membership Interests of
Borrower.
"MEZZANINE FINANCING" means (i) a debt offering at Holdco II
consisting of the incurrence or issuance of Indebtedness or (ii) an equity
offering at Holdco I or Holdco II consisting of the issuance of Capital Stock.
"MINIMUM ICI SETTLEMENT AMOUNT" means an amount equal to the sum of
the remaining "B Note Completion Payment" plus the remaining "Alta Interest
Partial Payment", as each such term is defined in the ICI Agreement, minus cash
and Cash Equivalents held by
22
Holdco I and Holdco II (other than the proceeds of the Mezzanine Financing) as
of the date on which any such amounts are paid to ICI.
"MINIMUM TERM B PREPAYMENT" shall mean one or more prepayments of the
principal amount of outstanding Term B Loans which individually or in the
aggregate equal at least $350,000,000 made with the net proceeds of equity or
Permitted Junior Debt of Borrower.
"MIOA" means the Membership Interest Option Agreement by and among
Imperial Chemical Industries PLC, ICI and HSCC dated as of November 2, 2001, as
amended and restated as of December 20, 2001, as the same may be amended in
accordance with the terms of this Agreement.
"MOODY'S" means Xxxxx'x Investors Service, Inc. or any successor to
the rating agency business thereof.
"MORTGAGE SUPPLEMENTS" has the meaning assigned to such term in
SECTION 5.1(b)(vi).
"MORTGAGED PROPERTY" means, collectively, all of the properties of
Borrower and the Subsidiaries of Borrower defined as "Mortgaged Property" in
each of the respective Mortgages including, without limitation, the properties
listed on SCHEDULE 6.21(c) identified as Mortgaged Property and any other
property which becomes Mortgaged Property pursuant to SECTION 7.10.
"MORTGAGES" means, collectively, (i) the mortgage and leasehold
mortgages in form and substance satisfactory to Administrative Agent each dated
as of the Closing Date or a date prior thereto and executed by Borrower or any
Restricted Subsidiary of Borrower, as mortgagor, in favor of the Collateral
Agent (or its designee) for the benefit of the Lenders, as mortgagee, relating
to the Mortgaged Property, and (ii) any other mortgage, deed of trust or similar
agreement executed by Borrower or a Subsidiary of Borrower pursuant to which
such Person shall have granted a mortgage to Administrative Agent (or its
designee) for the benefit of the Lenders, as each such agreement may at any time
be amended, supplemented, restated or otherwise modified in accordance with the
terms thereof and in effect.
"MULTIEMPLOYER PLAN" means any plan described in Section 4001(a)(3) of
ERISA to which contributions are or have within the preceding six years, been
made, or are or were, within the preceding six years, required to be made, by
Borrower or any of its ERISA Affiliates or any Subsidiary of Borrower or ERISA
Affiliates to such Subsidiary.
"NET INTEREST EXPENSE" means, for Borrower and its Restricted
Subsidiaries with respect to any period, Interest Expense net of interest income
on Cash and Cash Equivalents, net of amounts received under Interest Rate
Agreements, to the extent permitted hereunder.
"NET OFFERING PROCEEDS" means the proceeds received from the issuance
of any Capital Stock (other than Capital Stock issued in connection with the
exercise of stock options granted pursuant to the stock option plan described in
SCHEDULE 6.12 hereof) or from any contribution to capital with respect to
existing Capital Stock net of the actual liabilities for reasonably anticipated
cash taxes in connection with such issuance or incurrence, if any, any
23
underwriting, brokerage and other customary selling commissions incurred in
connection with such issuance or incurrence, and reasonable legal, advisory and
other fees and expenses, including title and recording tax expenses, if any,
incurred in connection with such issuance or incurrence.
"NET SALE PROCEEDS" means, with respect to any Asset Disposition the
aggregate cash payments received by Borrower, HSCC, HSCHC or any Restricted
Subsidiary from such Asset Disposition (including, without limitation, cash
received by way of deferred payment pursuant to a note receivable, conversion of
non-cash consideration, cash payments in respect of purchase price adjustments
or otherwise, but only as and when such cash is received) MINUS the direct costs
and expenses incurred in connection therewith (including in the case of any
Asset Disposition, the payment of the outstanding principal amount of, premium,
if any, and interest on any Indebtedness (other than hereunder) required to be
repaid as a result of such Asset Disposition), and any provision for taxes in
respect thereof made in accordance with GAAP PROVIDED that such expenses shall
only include taxes to the extent that taxes are payable in cash in the current
year or the following year as a result of such Asset Disposition. Any proceeds
received in a currency other than Dollars shall, for purposes of the calculation
of the amount of Net Sale Proceeds, be in an amount equal to the Dollar
Equivalent thereof as of the date of receipt thereof by Borrower or any
Restricted Subsidiary of Borrower.
"NOTICE OF CONVERSION OR CONTINUATION" or "NOTICE OF BORROWING" has
the meaning assigned to that term in SECTION 2.3(b) of this Agreement.
"NOTICE OFFICE" means the office of the Administrative Agent located
at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000 or such other office as the
Administrative Agent may designate to Borrower and the Lenders from time to
time.
"OBLIGATIONS" means all liabilities and obligations of Borrower and
any Subsidiary of Borrower now or hereafter arising under this Agreement and all
of the other Loan Documents, whether for principal, interest, fees, expenses,
indemnities or otherwise, and whether primary, secondary, direct, indirect,
contingent, fixed or otherwise (including obligations of performance).
"OPERATING LEASE" of any Person, means any lease (including, without
limitation, leases which may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) by such Person, as lessee, which is
not a Capitalized Lease.
"ORGANIZATIONAL DOCUMENTS" means, with respect to any Person, such
Person's articles or certificate of incorporation, bylaws, partnership
agreement, limited liability company agreement, joint venture agreement or other
similar governing documents and any document setting forth the designation,
amount and/or relative rights, limitations and preferences of any class or
series of such Person's Capital Stock.
"ORIGINAL CREDIT AGREEMENT" has the meaning set forth in the recitals
to this Agreement.
"ORIGINAL CREDIT FORBEARANCE EXTENSION AGREEMENT" means the provisions
of the agreements set forth on EXHIBIT 5.2(a) hereto.
24
"ORIGINAL LOANS" has the meaning set forth in the recitals to this
Agreement.
"ORIGINAL TERM LOAN AGREEMENT" has the meaning set forth in the
recitals to this Agreement.
"ORIGINAL TERM LOAN FORBEARANCE EXTENSION AGREEMENT" means the
provisions of the agreements set forth on EXHIBIT 5.2(b) hereto.
"PARTICIPANTS" has the meaning assigned to that term in SECTION
12.8(b) of this Agreement.
"PAYMENT OFFICE" means, with respect to Administrative Agent, 00 Xxxx
00xx Xxxxxx, Xxx Xxxx, XX 00000 or such other address as Administrative Agent
may from time to time specify in accordance with SECTION 12.3 of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation created by
Section 4002(a) of ERISA.
"PERMITTED JUNIOR DEBT" means Indebtedness which is structured so as
to be junior to the obligations under the Senior Secured Credit Facilities
(including the Obligations) in that it is either (i) unsecured and subordinated
to the Obligations, (ii) unsecured or (iii) secured with Liens that are
expressly subordinated to the Liens securing the Obligations, in each case on
terms and conditions and in form and substance satisfactory to Administrative
Agent; PROVIDED, that such terms and conditions shall not be more restrictive to
Borrower than those set forth herein and shall be at or below a market interest
rate for comparable instruments and, in no event shall any scheduled principal
payments be required to be made prior to the Maturity Date.
"PERMITTED LIENS" has the meaning assigned to that term in SECTION 8.1
of this Agreement.
"PERMITTED MEZZANINE PROCEEDS" means (a) net cash proceeds of
Mezzanine Financing in an aggregate amount not less than the Minimum ICI
Settlement Amount or more than the Maximum ICI Settlement Amount, in each case,
to the extent that such net cash proceeds are used to satisfy the options or
obligations of Holdco II under the ICI Agreement in one or more transactions
where on or before the date of receipt of such cash proceeds by Holdco I or
Holdco II, (i) ICI shall have released (or caused to be released) 210 membership
units of HIH as collateral for the obligations of HSCC under the MIOA and such
released units shall have been pledged to the Collateral Agent in accordance
with SECTION 7.10(f) hereof such that an aggregate of not less than 51% of the
equity interests of HIH shall have been pledged to the Lenders as Collateral and
(ii) the "Completion Payment" (as defined in the MIOA) shall have been reduced
by the Completion Payment Deduction (as defined in the ICI Agreement); PROVIDED,
HOWEVER, that if such net cash proceeds equal or exceed the Maximum ICI
Settlement Amount, (y) the obligations of HSCC under the MIOA (including the
obligation to purchase additional equity interests in HIH and the related pledge
of 300 membership units of HIH as collateral) shall have been terminated and (z)
ICI shall have released (or caused to be released) such 300 membership units of
HIH as collateral and such released units shall have been pledged to the
Collateral Agent in accordance with SECTION 7.10(f) hereof, such that an
aggregate of not
25
less than 60% of the equity interests of HIH shall have been pledged to the
Lenders as Collateral, (b) Reinvestment Mezzanine Proceeds and (c) Permitted
Mezzanine Refinancing Proceeds.
"PERMITTED MEZZANINE REFINANCING PROCEEDS" means net proceeds of a
Mezzanine Financing to the extent that such proceeds are used to refinance,
repay or purchase Indebtedness (and instruments which were issued with such
Indebtedness) the proceeds of which were used solely (i) to make a payment to
ICI under or relating to the ICI Agreement or (ii) for the purposes described in
the definition of "Reinvestment Mezzanine Proceeds", so long as (x) at the time
of such Mezzanine Financing ICI shall have released (or caused to be released)
210 membership units of HIH pledged as collateral for the obligations of HSCC
under the MIOA and such released units shall have been pledged to the Collateral
Agent in accordance with Section 7.10(f) hereof such that an aggregate of not
less than 51% of the equity interests of HIH shall have been pledged to the
Lenders as Collateral and (y) the "Completion Payment" (as defined in the MIOA)
shall have been reduced by the Completion Payment Deduction (as defined in the
ICI Agreement); provided that if the Mezzanine Financing constitutes
Indebtedness, the net proceeds of such Mezzanine Financing shall not exceed the
principal amount of Indebtedness which has been refinanced, repaid or purchased
thereby.
"PERMITTED POLYMERS NOTES REPURCHASE AMOUNT" has the meaning assigned
to that term in SECTION 4.2(e).
"PERMITTED TRANSFER" means from and after the date that the Term B
Loan has been pre-paid in full, the sale or transfer by, GOF or the Huntsman
Group of up to 5% of the Capital Stock of Holdings I held by such party as of
the Closing Date and thereafter, upon the pledge by HSCC of an additional 30% of
Huntsman International Holdings, LLC pursuant to SECTION 7.10(f) hereof, the
sale or transfer by GOF or the Huntsman Group of up to 15% in the aggregate of
the Capital Stock of Holdings I held by each such party as of the Closing Date.
"PERMITTED TURNAROUND CAPITAL EXPENDITURES" means capital expenditures
incurred on or prior to December 31, 2003 not exceeding the amount specified on
SCHEDULE 1.1 for the specific turnaround project identified on such Schedule.
"PERSON" means an individual or a corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"PIK B NOTE" has the meaning assigned to such term in SECTION 3.2(b)
of this Agreement.
"PLAN" means any plan described in Section 4021(a) of ERISA and not
excluded pursuant to Section 4021(b) thereof, which is or has, within the
preceding six years, been established or maintained, or to which contributions
are or have, within the preceding six years, been made, by Borrower or any of
its ERISA Affiliates or any Subsidiary of Borrower or any ERISA Affiliates of
such Subsidiary, but not including any Multiemployer Plan.
"PLAN ADMINISTRATOR" has the meaning assigned to the term
"administrator" in Section 3(16)(A) of ERISA.
26
"PLAN OF REORGANIZATION" means that certain Debtors' Joint Prepackaged
Plan of Reorganization dated as of July 15, 2002, as modified, supplemented or
amended.
"PLAN SPONSOR" has the meaning assigned to the term "plan sponsor" in
Section 3(16)(B) of ERISA.
"PLEDGE AGREEMENT" means, once executed and delivered, the pledge
agreement delivered pursuant to SECTION 5.1(b)(v).
"PLEDGED INTERCOMPANY NOTES" means, collectively, the "Pledged
Intercompany Notes" as defined in the Security Agreement.
"PLEDGED SECURITIES" means, collectively, "Pledged Securities" as
defined in the Security Agreement or any other pledged securities under any
Security Document.
"POLYMERS" means
Huntsman Polymers Corporation, a Delaware
corporation, formerly known as Xxxxxx Corporation.
"POLYMERS SENIOR NOTES" means those certain 11.75% Senior Notes due
2004 of Polymers issued pursuant to the Amended and Restated Polymers Indenture.
"PREFERRED STOCK" means preferred Capital Stock of Borrower which (i)
is not convertible or exchangeable into Indebtedness, (ii) may not, upon the
occurrence of any event or circumstance or otherwise by its terms, be required
to be redeemed by Borrower or be redeemable at the option of the holder thereof,
in each case, at any time prior to the first anniversary of the Term B Loan
Maturity Date and (iii) does not contain other terms (other than customary
market terms for preferred stock of similar companies) which could reasonably be
expected to adversely affect the interests of the Lenders.
"PRIORITY COLLATERAL AGENT" means the Collateral Agent (as defined in
the Priority Credit Agreement).
"PRIORITY CREDIT AGREEMENT" means that certain Revolving Credit
Agreement entered into on the Closing Date by and among Borrower, Deutsche Bank
Trust Company Americas, as administrative agent, and the other financial
institutions and other parties thereto, together with any agreement or
agreements from time to time executed by the Borrower to evidence any
refinancings or successive refinancings of all or any part of the Priority
Loans, together with any amendments, modifications or supplements to, or
restatements of, any of the foregoing providing on the Closing Date for
commitments of the Lenders thereunder to make Priority Loans in an aggregate
principal amount of not more than $275,000,000 on terms and conditions
substantially as set forth on EXHIBIT 1.1-a in conformance with the terms
hereof.
"PRIORITY LOAN DOCUMENTS" means "Loan Documents" as that term is
defined in the Priority Credit Agreement.
"PRIORITY LOANS" means the loans and extensions of credit made or to
be made pursuant to the Priority Credit Agreement.
27
"PRO RATA SHARE" means, when used with reference to any Lender and any
Facility, and any described aggregate or total amount, an amount equal to the
result obtained by multiplying such described aggregate or total amount by a
fraction the numerator of which shall be such Lender's Loans under such Facility
and the denominator of which shall be the aggregate Loans outstanding under such
Facility for all Lenders, and when used with reference to any Lender's
percentage interest, such fraction.
"RECEIVABLES FACILITY ATTRIBUTED INDEBTEDNESS" at any time shall mean
the aggregate net outstanding amount theretofore paid in respect of the accounts
receivable sold or transferred as part of a bulk sale or financing of accounts
receivable by it.
"RECOVERY EVENT" means the receipt by Borrower (or any of its
Restricted Subsidiaries) of any insurance or condemnation proceeds payable (i)
by reason of any theft, physical destruction or damage or any other similar
event with respect to any properties or assets of Borrower or any of its
Restricted Subsidiaries, (ii) by reason of any condemnation, taking, seizing or
similar event with respect to any properties or assets of Borrower or any of its
Restricted Subsidiaries and (iii) under any policy of insurance required to be
maintained under SECTION 7.8; PROVIDED, HOWEVER, that in no event shall payments
made under business interruption insurance constitute a Recovery Event.
"RECOVERY EVENT ESCROW ACCOUNT" has the meaning ascribed to such term
in SECTION 4.2(h).
"REGULATION D" means Regulation D of the Board as from time to time in
effect and any successor to all or a portion thereof establishing reserve
requirements.
"REINVESTMENT MEZZANINE PROCEEDS" means net cash proceeds of a
Mezzanine Financing which (i) are in a net aggregate amount not in excess of $25
million, (ii) are reinvested by Holdco I or Holdco II, directly or indirectly
into HSCC or Huntsman International Holdings in a transaction where such
investment is pledged to the Administrative Agent as Collateral for the Lenders
in a manner satisfactory to the Administrative Agent and (iii) on or before the
date of receipt by Holdco I or Holdco II of such Proceeds, Holdco I or Holdco II
has received Permitted Mezzanine proceeds in an amount equal to the Maximum ICI
Settlement Amount and the Obligations of HSCC under the MIOA shall have been
terminated.
"RELATED FUND" means, with respect to any Lender which is a fund, any
other fund that invests in bank loans and is administered or managed by the same
investment advisor of such Lender or by an Affiliate of such investment advisor.
"RELEASE" means release, spill, emission, leaking, pumping, pouring,
emptying, dumping, injection, deposit, disposal, discharge, dispersal, escape,
leaching, or migration into the indoor or outdoor environment or into or out of
any property of Borrower or its Subsidiaries, or at any other location to which
Borrower or any Subsidiary has transported or arranged for the transportation of
any Contaminant, including the movement of Contaminants through or in the air,
soil, surface water, groundwater or property of Borrower or its Subsidiaries or
at any other location, including any location to which Borrower or any
Subsidiary has transported or arranged for the transportation of any
Contaminant.
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"REMEDIAL ACTION" means actions required to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent or minimize the Release or substantial threat of a
material Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment; or
(iii) perform pre-remedial or post-remedial studies and investigations and
post-remedial monitoring and care.
"REPORTABLE EVENT" means a "reportable event" described in Section
4043(b) of ERISA or in the regulations thereunder with respect to a Plan other
than a reportable event for which the 30-day notice requirement to the PBGC has
been waived, any event requiring disclosure under Section 4063(a) or 4062(e) of
ERISA, receipt of a notice of withdrawal liability with respect to a
Multiemployer Plan pursuant to Section 4202 of ERISA or receipt of a notice of
reorganization or insolvency with respect to a Multiemployer Plan pursuant to
Section 4242 or 4245 of ERISA.
"REQUIRED LENDERS" means as of any date of determination thereof
Lenders having more than 50% of the sum of the unpaid principal amount of the
Loans at such date.
"REQUIREMENT OF LAW" means, as to any Person, any law (including
common law), treaty, rule or regulation or judgment, decree, determination or
award of an arbitrator or a court or other Governmental Authority, including
without limitation, any Environmental Law, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
"RESPONSIBLE FINANCIAL OFFICER" means the Chief Financial Officer,
principal accounting officer, a financial vice president, Controller, Treasurer
or Assistant Treasurer of Borrower.
"RESPONSIBLE OFFICER" means any of the Chairman of the Board of
Directors, the President, any Executive Vice President, Senior Vice President,
the Controller, Chief Financial Officer, Chief Restructuring Officer, any Vice
President, the Treasurer, or the Secretary or any other similar officer or
position.
"RESTRICTED DOMESTIC SUBSIDIARY" means any Restricted Subsidiary which
is also a Domestic Subsidiary.
"RESTRICTED SUBSIDIARY" means any Subsidiary of Borrower that is not
an Unrestricted Subsidiary.
"RESTRICTED SUBSIDIARY ADJUSTED EARNINGS" means, for any applicable
period, Consolidated Net Income or Consolidated Net Loss of Borrower and its
Restricted Subsidiaries plus, to the extent not included therein, and to the
extent paid out of retained or current earnings (and not constituting a return
of capital), the amount of cash dividends or distributions paid to Borrower or a
Restricted Subsidiary from any Unrestricted Subsidiary or from any Person which
is not a Subsidiary during such period; PROVIDED that in computing Consolidated
Net Income or Consolidated Net Loss for purposes of this definition,
extraordinary gains or losses shall be excluded.
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"RESTRUCTURING CHARGES" means (a) non-recurring non-cash restructuring
charges pertaining to the Transactions incurred on or prior to the Closing Date,
(b) non-recurring cash restructuring charges pertaining to the Transactions
incurred on or prior to the Closing Date in an aggregate amount not to exceed
$20,000,000, and (c) non-recurring restructuring charges incurred after the
Closing Date pertaining to the contemplated restructurings described in
SCHEDULE 1.1(a) in an aggregate amount not to exceed the amounts set forth on
SCHEDULE 1.1(a) for such restructuring.
"S&P" means Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor to the rating agency business
thereof.
"SALE AND LEASEBACK TRANSACTION" means any arrangement, directly or
indirectly, whereby a seller or transferor shall sell or otherwise transfer any
real or personal property and then or thereafter lease, or repurchase under an
extended purchase contract, conditional sales or other title retention
agreement, the same or similar property; PROVIDED, HOWEVER, that a sale and
leaseback by the Borrower or any Restricted Subsidiary of railcars acquired
after the date hereof shall not constitute a "Sale and Leaseback Transaction"
for purposes of this Agreement.
"SCHEDULED TERM A LOANS PRINCIPAL PAYMENTS" means, with respect to the
principal payments on the Term A Loans for each date set forth below, the Dollar
amount set forth opposite thereto, as reduced from time to time pursuant to
SECTIONS 4.1 and 4.2 of this Agreement:
SCHEDULED TERM A
DATE LOANS PRINCIPAL PAYMENT
------------------ ---------------------------------------
September 30, 2003 $ 7.5 million
December 31, 2003 $ 7.5 million
March 31, 2004 $ 12.5 million
June 30, 2004 $ 12.5 million
September 30, 2004 $ 15.0 million
December 31, 2004 $ 15.0 million
March 31, 2005 $ 17.5 million
June 30, 2005 $ 17.5 million
September 30, 2005 $ 25.0 million
December 31, 2005 $ 25.0 million
March 31, 2006 $ 37.5 million
June 30, 2006 $ 37.5 million
September 30, 2006 $ 37.5 million
December 31, 2006 $ 37.5 million
March 31, 2007 $ 633,067,490.87, or the then remaining
principal balance
"SCHEDULED TERM LOAN PRINCIPAL PAYMENTS" means Scheduled Term A Loan
Principal Payments.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
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"SECTION 4.5(d)(ii) CERTIFICATE" has the meaning ascribed to such term
in SECTION 4.5(d)(ii) of this Agreement.
"SECURED PARTY" has the meaning assigned to that term in the Security
Agreement.
"SECURITIES" means any stock, shares, voting trust certificates,
bonds, debentures, options, warrants, notes, or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"SECURITY AGREEMENT" has the meaning assigned to that term in SECTION
5.1(b)(ii) of this Agreement.
"SECURITY DOCUMENTS" means, collectively the Pledged Intercompany
Notes, the Security Agreement, the Subsidiary Guarantee Agreements, the
Mortgages and all other agreements, assignments, security agreements,
instruments and documents executed in connection therewith, including, without
limitation, all pledge agreements, charges and other instruments and documents
executed in connection with the granting of a security interest to the
Collateral Agent in the Capital Stock of any Foreign Subsidiary, in each case as
the same may at any time be amended, supplemented, restated or otherwise
modified and in effect. For purposes of this Agreement, "Security Documents"
shall also include all guaranties, security agreements, mortgages, pledge
agreements, collateral assignments, subordination agreements and other
collateral documents in the nature of any thereof entered into by Borrower or
any Subsidiary of Borrower after the date of this Agreement in favor of the
Collateral Agent for the benefit of the Lenders in satisfaction of the
requirements of this Agreement.
"SENIOR SECURED CREDIT FACILITIES" means the Priority Credit Agreement
and this Agreement.
"SENIOR SUBORDINATED NOTES" means those certain (i) 9-1/2% Senior
Subordinated Notes of the Borrower due 2007 and Senior Subordinated Floating
Rate Notes of the Borrower due 2007, each issued pursuant to the applicable
Amended and Restated Senior Notes Indenture, and (ii) 9-1/2% Senior Subordinated
Notes of the Borrower due 2007 issued pursuant to the Amended and Restated
Senior Notes Indentures, in each case, as outstanding after giving effect to the
Transactions.
"SUBSIDIARY" of any Person means any corporation, partnership (limited
or general), limited liability company, trust or other entity of which a
majority of the stock (or equivalent ownership or controlling interest) having
voting power to elect a majority of the board of directors (if a corporation) or
to select the trustee or equivalent controlling interest shall, at the time such
reference becomes operative, be directly or indirectly owned or controlled by
such Person or one or more of the other subsidiaries of such Person or any
combination thereof. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of Borrower.
"SUBSIDIARY GUARANTEE AGREEMENTS" has the meaning assigned to that
term in SECTION 5.1(b)(iii) of this Agreement.
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"SUBSIDIARY GUARANTOR" means any Subsidiary of Borrower that becomes a
party to a Subsidiary Guarantee Agreement.
"SUPERMAJORITY LENDERS" means as of any date of determination thereof,
Lenders holding 75% or more of the sum of the unpaid principal amount of the
Loans as of such date.
"TAX SHARING AGREEMENT" means that certain tax sharing agreement dated
as of the date hereof by and between Borrower and Holdco II, initially
substantially in the form of EXHIBIT 5.1(g), as amended or otherwise modified
from time to time.
"TAXES" has the meaning assigned to that term in SECTION 4.5(a)(v) of
this Agreement.
"TERM A LENDER" means any Lender which is owed a Term A Loan (or a
portion thereof).
"TERM A LOAN" and "TERM A LOANS" have the meanings assigned to those
terms in SECTION 2.1(a) of this Agreement.
"TERM A LOAN MATURITY DATE" means March 31, 2007, or such earlier date
as the outstanding Term A Loans are required to be reduced to $0 pursuant to
this Agreement.
"TERM B LENDER" means any Lender which is owed a Term B Loan (or a
portion thereof).
"TERM B LOAN" and "TERM B LOANS" have the meanings assigned to those
terms in SECTION 2.1(a) of this Agreement.
"TERM B LOAN MATURITY DATE" means March 31, 2007, or such earlier date
as the outstanding Term B Loans are required to be reduced to $0 pursuant to
this Agreement.
"TERM B NOTE" means a note issued in accordance with SECTION 2.2 of
this Agreement to a Term B Lender, evidencing a Lender's Term B Loan and shall
include any PIK B Note.
"TERM LENDERS" means those Lenders providing Term Loans hereunder and
shall include any Person which becomes a Term Lender as contemplated by
SECTION 12.8 of this Agreement.
"TERM LOANS" means a Term A Loan or a Term B Loan, and "Term Loans"
means all of such Term Loans by all Lenders, collectively.
"TERM NOTE" and "TERM NOTES" have the meanings assigned to those terms
in SECTION 2.2 of this Agreement.
"TRANCHE" means a group of Loans of a single Type as in effect on the
Closing Date or thereafter converted or continued by the Lenders on a single
date and in the case of Loans other than Base Rate Loans, as to which a single
Interest Period is in effect.
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"TRANSACTION" shall mean and include the transactions contemplated
hereby.
"TRANSFEREE" has the meaning assigned to that term in SECTION 12.8(d)
of this Agreement.
"TYPE" means as to any Loan its nature as a Base Rate Loan or a
Eurodollar Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the relevant jurisdiction.
"UNMATURED EVENT OF DEFAULT" means an event, act or occurrence which
with the giving of notice or the lapse of time (or both) would become an Event
of Default.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary listed on SCHEDULE
1.1(c) of this Agreement and any Subsidiary thereof, any Subsidiary of Huntsman
International Holdings, LLC, or any Subsidiary of Borrower that at the time of
formation shall be designated an Unrestricted Subsidiary in an officer's
certificate signed by two Responsible Financial Officers of the Borrower and
into which, within ten (10) Business Days after such formation, an existing
Unrestricted Subsidiary is merged or combined; PROVIDED, HOWEVER, that, for
purposes of this Agreement, HCPH Holdings Pty Limited and Huntsman Chemical
Australia Unit Trust shall be deemed to be Unrestricted Subsidiaries of the
Borrower.
"UNUSED REVOLVER AVAILABILITY" means (i) the lesser of (x) the sum of
the Commitments (as defined in the Priority Credit Agreement) and (y) the then
current Borrowing Base (as defined in the Priority Credit Agreement) LESS (ii)
the then outstanding balance of the Loans (as defined in the Priority Credit
Agreement) LESS (iii) the LC Obligations (as defined in the Priority Credit
Agreement).
"USA" means the United States of America.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding principal amount of such Indebtedness into (b) the sum of the
products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.
"WHOLLY-OWNED DIRECT SUBSIDIARY" means with respect to any Person, any
Subsidiary of such Person, all of the outstanding shares of Capital Stock of
which (other than qualifying shares required to be owned by directors, or
similar de minimis issuances of Capital Stock to comply with Requirements of
Law) are at the time owned directly by such Person.
"WHOLLY-OWNED DOMESTIC SUBSIDIARY" means any Wholly-Owned Subsidiary
which is also a Domestic Subsidiary.
"WHOLLY-OWNED SUBSIDIARY" means, with respect to any Person, any
Subsidiary of such Person, all of the outstanding shares of Capital Stock of
which (other than qualifying shares
33
required to be owned by directors, or similar de minimis issuances of Capital
Stock to comply with Requirements of Law) are at the time owned directly or
indirectly by such Person and/or one or more Wholly-Owned Subsidiaries of such
Person; PROVIDED, HOWEVER, that for purposes of this Agreement, Nitroil
Vegyipari Termelo-Fejlesztro Resvenytatsag and its Wholly-Owned Subsidiaries
shall be deemed to be "Wholly-Owned Subsidiaries" of Borrower.
"WRITTEN" or "IN WRITING" means any form of written communication or a
communication by means of telecopier device, or authenticated telex, telegraph
or cable.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. In the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each mean "to but
excluding." The words "herein," "hereof" and words of similar import as used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision in this Agreement. References to "Articles", "Sections",
"paragraphs", "Exhibits" and "Schedules" in this Agreement shall refer to
Articles, Sections, paragraphs, Exhibits and Schedules of this Agreement unless
otherwise expressly provided; references to Persons include their respective
permitted successors and assigns or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such persons; and all references
to statutes and related regulations shall include any amendments of same and any
successor statutes and regulations.
1.2 ACCOUNTING TERMS; FINANCIAL STATEMENTS.
(a) All accounting terms used herein but not expressly defined in
this Agreement shall have the respective meanings given to them in accordance
with GAAP as applied in effect on the date hereof in the USA. Except as
otherwise expressly provided herein (including without limitation, any
modification to the terms hereof pursuant to SECTION 8.14), all computations and
determinations for purposes of determining compliance with the financial
requirements of this Agreement shall be made in accordance with GAAP in effect
in the USA on the date hereof and on a basis consistent with the presentation of
the financial statements delivered pursuant to, or otherwise referred to in,
SECTION 6.5. Notwithstanding the foregoing sentence, the financial statements
required to be delivered pursuant to SECTION 7.1 shall be prepared in accordance
with GAAP in the USA as in effect on the respective dates of their preparation.
For purposes of the financial terms set forth herein, whenever reference is made
to a determination which is required to be made on a consolidated basis (whether
in accordance with GAAP or otherwise) for Borrower and its Restricted
Subsidiaries or for Borrower and its Subsidiaries (other than Unrestricted
Subsidiaries), such determination shall be made as if each Unrestricted
Subsidiary were wholly-owned by a Person not an Affiliate of Borrower.
(b) For purposes of computing the ratios in the financial
covenants in SECTIONS 9.2 AND 9.3 for any portion of any period prior to the
Closing Date, (i) Cash Interest Expense shall be calculated on a pro forma basis
giving effect to the Transactions occurring on the Closing Date as if such
events occurred on the first day of the applicable four fiscal quarter period
with interest rates in effect as of the Closing Date and (ii) xxxxxx xxxxxxx
0000 XXXXXX and Consolidated Capital Expenditures shall be the respective
amounts set forth on or derived
34
from a Compliance Certificate delivered under the Original Credit Agreement,
giving effect to the Forbearance Agreements.
ARTICLE II
AMOUNT AND TERMS OF CREDIT
2.1 THE TERM LOANS.
(a) TERM LOAN A; TERM LOAN B. Each Existing Lender, severally and
for itself alone, hereby agrees, on the terms and subject to the conditions
hereinafter set forth and in reliance upon the representations and warranties
set forth herein and in the other Loan Documents, that, effective on the Closing
Date, its Original Loans are hereby converted into (i) term loans in an amount
equal to such Existing Lender's Initial Pro-Rata Share of the aggregate
outstanding Term A Loans on the Closing Date (each such loan, a "TERM A LOAN"
and collectively, the "TERM A LOANS") and (ii) term loans in an amount equal to
such Existing Lender's Initial Pro-Rata Share of the aggregate outstanding Term
B Loans on the Closing Date (each such loan, a "TERM B LOAN" and collectively,
the "TERM B LOANS"). No amount of a Term Loan which is repaid or prepaid by
Borrower may be reborrowed hereunder. If this Agreement has become effective
pursuant to SECTION 12.20(b), obligations that are currently due under any of
the Borrower's or any Restricted Subsidiary's Interest Rate Agreements that have
been terminated (and are not reinstated or otherwise effective) may, at the
Borrower's option, be converted into Term A Loans and Term B Loans. For the
purpose of determining the amounts of such Term A Loans and Term B Loans: (a)
the provider(s) of such Interest Rate Agreements shall be treated as Existing
Lenders for purposes of the first sentence of this SECTION 2.1(a) and as Lenders
hereunder, and (b) the obligations under such Interest Rate Agreements shall be
Original Loans for purposes of the definition of "Initial Pro-Rata Share." On or
prior to the Closing Date, Administrative Agent shall advise each Lender of such
Lender's Initial Pro-Rata Share of the outstanding Term A Loans and Term B
Loans.
(b) EXISTING L/C OBLIGATIONS. From and after the Effective Date,
no Lender shall have any obligation hereunder with respect to Existing L/C
Obligations, it being understood that the Existing L/C Obligations shall be on
the Closing Date deemed outstanding pursuant to, and shall constitute "Letters
of Credit" for all purposes of, the Priority Credit Agreement.
(c) TERM LOANS. The Term Loans shall initially be Base Rate Loans
or Eurodollar Rate Loans to the extent agreed to by the Administrative Agent and
the Lenders but thereafter may from time to time be (i) Eurodollar Loans, (ii)
Base Rate Loans, or (iii) a combination thereof, as determined by Borrower and
notified to Administrative Agent in accordance with SECTION 2.3; PROVIDED,
HOWEVER, that (i) at no time shall there be outstanding more than ten (10)
Interest Periods with respect to Tranches of Eurodollar Loans for each of the
Term A Loans and Term B Loans and (ii) an amount of Term Loans satisfactory to
Administrative Agent shall be maintained as Base Rate Loans for a time period
satisfactory to Administrative Agent of up to 10 Business Days following the
Closing Date.
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2.2 TERM NOTES. The Loans of each Lender shall, if requested by
such Lender, be evidenced by a promissory note (each, a "TERM NOTE" and,
collectively, the "TERM NOTES") duly executed and delivered by Borrower,
substantially in the form of EXHIBIT 2.2(a) for the Term Note evidencing the
Term A Loan or in the form of EXHIBIT 2.2(b) for the Term Note evidencing the
Term B Loan, with appropriate insertions as to type of Term Loan, payee, date
and principal amount, payable to the order of such Lender. Each Lender is hereby
authorized to record the initial type and amount of each portion of such Loan,
each continuation thereof, each conversion of all or a portion thereof to
another Type, the date and amount of each payment or prepayment of principal
thereof and, in the case of Eurodollar Loans, the length of each Interest Period
with respect thereto, on the schedule annexed to and constituting a part of its
Term Note (or otherwise on the records of such Lender), and any such recordation
shall (in the absence of manifest error) constitute prima facie evidence of the
accuracy of the information so recorded; provided, however, that the failure of
a Lender to make any such recordation (or any error in such recordation) on its
records or on its Term Note shall not affect the obligations of Borrower
thereunder or under this Agreement. Each Term Note shall (x) be dated the
Closing Date, (y) be stated to mature on the Maturity Date and (z) provide for
the payment of interest in accordance with SECTION 3.1 and the payment of
principal on the Maturity Date.
2.3 CONVERSION AND CONTINUATION ELECTIONS FOR EURODOLLAR LOANS AND
BASE RATE LOANS.
(a) Borrower may upon notice to Administrative Agent in accordance
with SECTION 2.3(b):
(i) elect to convert on any Business Day, any Base Rate
Loans (or any part thereof in an aggregate amount not less than Ten Million
Dollars ($10,000,000)) into Eurodollar Loans; or
(ii) elect to convert on a Conversion Date any Eurodollar
Loans (or any part thereof in an aggregate amount not less than Ten Million
Dollars ($10,000,000)) into Base Rate Loans; or
(iii) elect to continue on a Continuation Date any Eurodollar
Loans (or any part thereof in an aggregate amount not less than Ten Million
Dollars ($10,000,000));
PROVIDED, that any conversion or continuation of Term A Loans shall be to
other Term A Loans and any conversion or continuation of Term B Loans shall
be to other Term B Loans.
(b) If Borrower desires to convert or continue any Eurodollar Loan
or Base Rate Loan pursuant to SECTION 2.3(a), it shall irrevocably request a
conversion or continuation (if by telephone, to be confirmed promptly in
writing) in a Notice of Conversion or Continuation in the form of EXHIBIT 2.3(b)
(a "NOTICE OF CONVERSION OR CONTINUATION") to be received by Administrative
Agent not later than 12:00 Noon (
New York City time) at least (i) three Business
Days in advance of the Conversion Date or Continuation Date, if the Loans are to
be converted into or continued as Eurodollar Loans; and (ii) on the same
Business Day as the Conversion Date, if the Loans are to be converted into Base
Rate Loans, specifying:
36
(A) the proposed Conversion Date or Continuation Date;
(B) the aggregate amount of Eurodollar Loans or Base Rate Loans to
be converted or continued;
(C) the nature of the proposed conversion or continuation;
(D) the duration of the requested Interest Period, if the Loans
are to be converted into or continued as Eurodollar Loans; and
(E) whether such Loans are a part of the Term A Loans or the
Term B Loans.
(c) If prior to the time set forth in SECTION 2.3(b), (i) Borrower
has failed to give a timely Notice of Conversion or Continuation with respect to
a Eurodollar Loan, or (ii) Borrower has failed to select a new Interest Period
to be applicable to a Eurodollar Loan, Borrower shall be deemed to have elected
to continue such loan as a Eurodollar Loan with an Interest Period of one month.
(d) Upon receipt of a Notice of Conversion or Continuation,
Administrative Agent will promptly notify each applicable Lender thereof, or, if
no timely notice is provided, Administrative Agent will promptly notify each
applicable Lender of the details of any automatic conversion or continuation.
Each conversion or continuation of Term Loans shall be allocated among Term
Loans of the Term Lenders, in accordance with their Pro Rata Shares.
(e) Notwithstanding the foregoing, Borrower shall not be entitled
to specify or elect in any Notice of Borrowing or Notice of Conversion or
Continuation that any Loans shall be or become Eurodollar Loans if an Event of
Default shall have occurred and be continuing unless the Required Lenders shall
have notified Administrative Agent that additional Eurodollar Loans shall be
made available while such Event of Default is continuing. If an Event of Default
shall occur then, unless Administrative Agent shall receive such notice from the
Required Lenders or all Events of Default have been cured or waived, each
outstanding Eurodollar Loan shall be converted to a Base Rate Loan on the last
day of its Interest Period. The foregoing is without prejudice to the other
rights and remedies available hereunder upon an Event of Default.
ARTICLE III
INTEREST AND FEES
3.1 INTEREST.
(a) RATE OF INTEREST. Subject to SECTION 3.1(e), each Term Loan
shall bear interest on the outstanding principal amount thereof from the date
when made until it becomes due or is prepaid in full at a rate per annum equal
to (i) in the case of Base Rate Loans, the Base Rate PLUS the Applicable Base
Rate Margin or (ii) in the case of Eurodollar Loans, the Eurodollar Rate PLUS
the Applicable Eurodollar Margin.
(b) PAYMENT OF INTEREST. Interest on each Loan shall be payable in
arrears on each Interest Payment Date; PROVIDED, HOWEVER, that interest accruing
pursuant to SECTION 3.1(d)
37
shall be payable from time to time on demand. Interest shall also be payable on
the date of any prepayment of the Term Loans for the portion of the Loans so
prepaid and upon payment (including prepayment) in full of all of the Loans.
(c) NOTIFICATION OF RATE. Administrative Agent, upon determining
the interest rate for any Tranche of Eurodollar Loans for any Interest Period,
shall promptly notify Borrower and the applicable Lenders thereof. Such
determination shall, absent manifest error and subject to SECTION 3.5, be final,
conclusive and binding upon all parties hereto.
(d) DEFAULT INTEREST. Notwithstanding the rates of interest
specified herein, effective on the date 30 days after the occurrence and
continuance during such 30 day period of any Event of Default (other than the
failure to pay Obligations when due) and for so long thereafter as any such
Event of Default shall be continuing, and effective immediately upon any failure
to pay any Obligations or any other amounts due under any of the Loan Documents
when due, whether by acceleration or otherwise, the principal balance of each
Loan then outstanding and, to the extent permitted by applicable law, any
interest payment on each Loan not paid when due or other amounts then due and
payable, shall bear interest payable on demand, after as well as before
judgment, at a rate per annum equal to the Default Rate.
(e) MAXIMUM INTEREST. If any interest payment or other charge or
fee payable hereunder exceeds the maximum amount then permitted by applicable
law, Borrower shall be obligated to pay the maximum amount then permitted by
applicable law and Borrower shall continue to pay the maximum amount from time
to time permitted by applicable law until all such interest payments and other
charges and fees otherwise due hereunder (in the absence of such restraint
imposed by applicable law) have been paid in full.
(f) WAIVER OF ACCRUED DEFAULT INTEREST. Each Lender hereby waives
and discharges the obligation of Borrower to pay to such Lender that portion of
interest representing the Default Rate Margin accrued and payable to such Lender
under the Original Credit Agreement and the Original Term Loan Agreement through
and including the Closing Date.
3.2 FEES
(a) UPFRONT FEES. In the event that this Agreement becomes
effective pursuant to SECTION 12.20(a), Borrower shall pay to Administrative
Agent on the Closing Date for the account of each Lender a commitment fee equal
to 1.0 % of such Lender's Term Loans as of the Closing Date. In the event that
this Agreement becomes effective pursuant to and in accordance with
SECTION 12.20(b), Borrower shall pay to Administrative Agent on the Closing Date
for the account of each Lender a commitment fee equal to .25% of such Lender's
Term Loans as of the Closing Date.
(b) TERM B LOAN SUPPLEMENTAL FEE. If (i) this Agreement becomes
effective pursuant to SECTION 12.20(a) and the Minimum Term B Prepayment is not
made on or before May 31, 2003 or (ii) this Agreement becomes effective pursuant
to SECTION 12.20(b) and the Minimum Term B Prepayment is not made on or before
the date which is one year after the Closing Date, then no later than the first
Business Day after May 31, 2003, or the first Business Day after the date which
is one year after the Closing Date, as the case may be (the
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"SUPPLEMENTAL FEE PAYMENT DATE"), the Borrower shall pay to each Term B Lender a
fee equal to two percent (2%) of the principal amount of such Lender's Term B
Loan on such date by adding such amount to the then outstanding principal
balance of such Lender's Term B Loan. On the Supplemental Fee Payment Date the
principal amount of each Term B Lender's Term B Loan shall without further
action by the Borrower or such Lender increase by two percent (2%) and
thereafter all references hereunder to the Term B Loan of such Lender shall,
unless the context clearly requires otherwise, mean the principal amount as so
adjusted. At the request of any Term B Lender, the Borrower will deliver a Term
B Note (the "PIK B Note") which Note will be identical to the Term B Note
attached hereto as EXHIBIT 2.2(b), except that such Note will be dated the
Supplemental Fee Payment Date.
3.3 COMPUTATION OF INTEREST AND FEES.
(a) Interest on all Eurodollar Loans and all fees hereunder shall
be computed on the basis of the actual number of days elapsed over a year of 360
days. Interest on all Base Rate Loans shall be computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be. Each determination of an interest rate by Administrative Agent pursuant to
any provision of this Agreement shall be conclusive and binding on Borrower and
the Lenders in the absence of manifest error. Administrative Agent shall, at any
time and from time to time upon request of Borrower or any Lender, deliver to
Borrower or any Lender a statement showing the quotations used by Administrative
Agent in determining any interest rate applicable to Loans pursuant to this
Agreement.
3.4 COMPENSATION FOR FUNDING LOSSES.
Borrower shall compensate each Lender, upon its written request (which
request shall set forth the basis for requesting such amounts, showing the
calculation thereof in reasonable detail), for all losses, expenses and
liabilities (including, without limitation, any interest paid by such Lender to
lenders of funds borrowed by it to make or carry its Loans to the extent not
recovered by the Lender in connection with the liquidation or reemployment of
such funds and including the compensation payable by such Lender to a Person to
which the Lender has participated all or a portion of such Loan) and any loss
sustained by such Lender in connection with the liquidation or re-employment of
such funds (including, without limitation, a return on such liquidation or
re-employment that would result in such Lender receiving less than it would have
received had such Loan remained outstanding until the last day of the Interest
Period applicable to such Loans) which the Lender may sustain as a result of:
(i) for any reason (other than a default by such Lender or Administrative Agent)
a continuation of, or conversion from or into, Eurodollar Loans does not occur
on a date specified therefor in a Notice of Conversion or Continuation (whether
or not withdrawn); (ii) any payment, prepayment or conversion or continuation of
any of its Eurodollar Loans occurring for any reason whatsoever on a date which
is not the last day of an Interest Period applicable thereto; (iii) any
repayment of any of its Eurodollar Loans not being made on the date specified in
a notice of payment given by Borrower; or (iv)(A) any other failure by Borrower
to repay its Eurodollar Loans when required by the terms of this Agreement or
(B) an election made by Borrower pursuant to SECTION 3.6. Each Lender shall
submit its written request as to additional amounts owed such Lender under this
SECTION 3.4 to Borrower and Administrative Agent within ten Business Days of the
event
39
giving rise to such request, which request shall, absent manifest error, be
final, conclusive and binding for all purposes.
3.5 INCREASED COSTS, ILLEGALITY, ETC.
(a) GENERALLY. Except as otherwise provided in SECTION 4.5, in the
event that any Lender shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto but,
with respect to clause (i) below, may be made only by Administrative Agent):
(i) on any Interest Rate Determination Date that, by reason
of any changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of the Eurodollar Rate applicable to such Loan for the
applicable Interest Period, then, the obligation of the Lenders to convert,
continue or maintain Eurodollar Loans hereunder shall be suspended until
Administrative Agent revokes such notice thereof in writing;
(ii) at any time that any Lender shall incur increased costs
or reduction in the amounts received or receivable hereunder with respect
to any Eurodollar Loan because of any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to (A) a change in the basis of
taxation of payments to any Lender of the principal of or interest on the
Notes or any other amounts payable hereunder (except for (a) changes in the
rate of tax on, or determined by reference to, the net income or profits of
such Lender imposed by the jurisdiction in which its principal office or
applicable lending office is located and (b) USA withholding taxes, which
shall be governed by the provisions of SECTION 4.5) or (B) a change in
official reserve requirements (but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate) and/or (y) other circumstances since the date of this
Agreement affecting such Lender or the interbank Eurodollar market or the
position of such Lender in such market (excluding, however, differences in
a Lender's cost of funds from those of Administrative Agent which are
solely the result of credit differences between such Lender and
Administrative Agent); or
(iii) at any time that continuance of or conversion to any
Eurodollar Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Lender in good
faith with any governmental request (whether or not having force of law) or
(z) impracticable as a result of a contingency occurring after the date of
this Agreement which materially and adversely affects the interbank
Eurodollar market;
then, and in any such event, such Lender (or Administrative Agent in the case of
clause (i) above) shall promptly give notice (by telephone, telefax or
telecopier confirmed in writing) to Borrower and, except in the case of clause
(i) above, to Administrative Agent of such
40
determination (which notice Administrative Agent shall promptly transmit to each
of the other Lenders). Thereafter (A) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as Administrative
Agent notifies Borrower and the Lenders that the circumstances giving rise to
such notice by Administrative Agent no longer exist, and any Notice of
Conversion or Continuation given by Borrower with respect to Eurodollar Loans
(other than with respect to conversions to Base Rate Loans) which have not yet
been incurred (including by way of conversion) shall be deemed rescinded by
Borrower, (B) in the case of clause (ii) above, Borrower shall pay to such
Lender, upon written demand therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender in its sole discretion shall determine) as shall be required to
compensate such Lender for such increased costs or reductions in amounts
received or receivable hereunder (a written notice as to the additional amounts
owed to such Lender, showing the basis for the calculation thereof, submitted to
Borrower by such Lender shall, absent manifest error, be final and conclusive
and binding on all the parties hereto; however the failure to give any such
notice shall not release or diminish Borrower's obligations to pay additional
amounts pursuant to this SECTION 3.5(a); PROVIDED, HOWEVER, if the respective
Lender has intentionally withheld or delayed such notice, the respective Lender
shall not be entitled to receive additional amounts pursuant to this SECTION
3.5(a) for periods occurring prior to the 180th day before the giving of such
written demand) and (C) in the case of clause (iii) above, Borrower shall take
one of the actions specified in SECTION 3.5(b) as promptly as possible and, in
any event, within the time period required by law. In determining such
additional amounts pursuant to clause (B) of the immediately preceding sentence,
each Lender shall act reasonably and in good faith and will, to the extent the
increased costs or reductions in amounts receivable relate to such Lender's
loans in general and are not specifically attributable to a Loan hereunder, use
averaging and attribution methods which are reasonable and which cover all loans
similar to the Loans made by such Lender whether or not the loan documentation
for such other loans permits the Lender to receive increased costs of the type
described in this SECTION 3.5(a).
(b) EURODOLLAR LOANS. At any time that any Eurodollar Loan is
affected by the circumstances described in SECTION 3.5(a)(ii) or (iii), Borrower
may (and, in the case of a Eurodollar Loan affected by the circumstances
described in SECTION 3.5(a)(iii), shall) if any affected Loan is a Eurodollar
Loan then outstanding, upon at least three Business Days' written notice to
Administrative Agent, require the affected Lender to convert such Eurodollar
Loan into a Base Rate Loan, provided that if more than one Lender is affected at
any time, then all affected Lenders must be treated the same pursuant to this
SECTION 3.5(b).
(c) CAPITAL REQUIREMENTS. If, at any time after the date hereof,
any Lender determines that the introduction of or any change in any applicable
law or governmental rule, regulation, order, guideline or request (whether or
not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender's Loans hereunder
or its obligations hereunder, then Borrower shall pay to such Lender, upon its
delivery of the written notice hereafter referred to, therefor, such additional
amounts as shall be required to compensate such Lender or such other corporation
for the increased cost to such Lender or such other corporation or the reduction
in the rate of return to such Lender or such other corporation as a result of
such increase of
41
capital. In determining such additional amounts, each Lender will act reasonably
and in good faith and will use averaging and attribution methods which are
reasonable and which will, to the extent the increased costs or reduction in the
rate of return relates to such Lender's commitments or obligations in general
and are not specifically attributable to the obligations hereunder, cover all
commitments and obligations similar to the obligations of such Lender hereunder
whether or not the loan documentation for such other commitments or obligations
permits the Lender to make the determination specified in this SECTION 3.5(c),
and such Lender's determination of compensation owing under this SECTION 3.5(c)
shall, absent manifest error, be final and conclusive and binding on all the
parties hereto. Each Lender, upon determining that any additional amounts will
be payable pursuant to this SECTION 3.5(c) will give prompt written notice
thereof to Borrower, which notice shall show the basis for calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish any of Borrower's obligations to pay additional amounts
pursuant to this SECTION 3.5(c); PROVIDED, HOWEVER, if the respective Lender has
intentionally withheld or delayed such notice, the respective Lender shall not
be entitled to receive additional amounts pursuant to this SECTION 3.5(c) for
periods occurring prior to the 180th day before the giving of such notice.
(d) EFFECT OF RESERVE REQUIREMENTS. In the event that any
Governmental Authority shall impose any Eurodollar Reserve Requirements which
increase the cost to any Lender of making or maintaining Eurodollar Loans, then
Borrower shall thereafter pay in respect of the Term Loans of such Lender a rate
of interest based upon the Eurodollar Reserve Rate (rather than upon the
Eurodollar Rate). From and after the delivery by a Lender to Borrower of a
notice indicating that the cost to any Lender has increased as a result of such
Eurodollar Reserve Requirement, all references contained in this Agreement to
the Eurodollar Rate (other than that in the definition of Eurodollar Reserve
Rate) shall be deemed to be references to the Eurodollar Reserve Rate with
respect to each such affected Lender.
3.6 REPLACEMENT OF LENDERS.
If any Lender is owed increased costs under SECTION 3.5(a)(ii) or
(iii) or SECTION 3.5(c) or Borrower is required to make any payments under
SECTION 4.5(c) to any Lender materially in excess of those of the other Lenders
or as provided in SECTION 12.1(b) in the case of certain refusals by a Lender to
consent to certain proposed amendment, changes, supplements, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Lenders, Borrower shall have the right, if no Default or Event of
Default then exists, to replace such Lender (the "REPLACED LENDER") with one or
more other Eligible Assignee or Assignees (collectively, the "REPLACEMENT
LENDER") acceptable to Administrative Agent, or, at the option of the Borrower,
in the case of a replacement as provided in SECTION 12.1(b) where the consent of
the respective Lender is required with respect to less than all of its Loans, to
replace only the affected Loans with identical Loans provided by the Replacement
Lender; PROVIDED that (i) at the time of any replacement pursuant to this
SECTION 3.6, the Replaced Lender and Replacement Lender shall enter into one or
more assignment agreements, in form and substance satisfactory to such parties
and Administrative Agent, pursuant to which the Replacement Lender shall acquire
all or a portion, as the case may be, of the outstanding Loans of the Replaced
Lender and (ii) all obligations of Borrower owing to the Replaced Lender
relating to the Loans so replaced (including, without limitation, such increased
costs and excluding those specifically described in clause (i) above in respect
of which the assignment purchase price has been, or is
42
concurrently being paid) shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
assignment documentation, the payment of amounts referred to in clauses (i) and
(ii) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Note or Notes executed by Borrower, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to be a Lender hereunder with respect to such replaced Loans, except with
respect to indemnification provisions under this Agreement, which shall survive
as to such Replaced Lender. The Replaced Lender shall be required to deliver for
cancellation its Notes to be cancelled on the date of replacement, or if any
such Note is lost or unavailable, such other assurances or indemnification
therefor as Borrower may reasonably request.
3.7 CHANGE OF LENDING OFFICE.
Each Lender agrees that upon the occurrence of any event giving rise
to increased costs or other special payments under SECTIONS 3.5(a)(ii) and
(iii), SECTION 3.5(c) or SECTION 4.5(c) with respect to such Lender, it will, if
requested by Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another Lending Office for any Loans
affected by such event, PROVIDED that such designation is made on such terms
that, such Lender and its Lending Office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of such Section. Nothing in this SECTION 3.7 shall affect
or postpone any of the Obligations of the Borrower or the rights of any Lender
provided in this Agreement.
ARTICLE IV
PAYMENTS AND PREPAYMENTS
4.1 VOLUNTARY PREPAYMENTS.
Borrower shall have the right to prepay any Loan in whole or in part
from time to time on the following terms and conditions: (i) Borrower shall give
an irrevocable written notice (or telephonic notice promptly confirmed in
writing) to Administrative Agent, which such notice shall state Borrower's
intent to prepay such Loans, the amount of such prepayment and the Loans to
which such prepayment is to be applied, which notice shall be given by Borrower
to Administrative Agent by 12:00 Noon (
New York City time) at least three
Business Days prior to the date of such prepayment if a prepayment of Eurodollar
Loans or one Business Day for any other Loans and which notice shall promptly be
transmitted by Administrative Agent to each of the applicable Lenders; (ii) each
partial prepayment of any Borrowing shall be in an aggregate principal amount of
at least $1,000,000; (iii) Eurodollar Loans may only be prepaid pursuant to this
SECTION 4.1 on the last day of an Interest Period applicable thereto, or on any
other day subject to SECTION 3.4; and (iv) a partial prepayment of Eurodollar
Loans shall not be made that would result in the remaining aggregate outstanding
principal amount thereof being less than the minimum principal amount that would
be required in respect of a similar Eurodollar Loans. Voluntary prepayments of
Term Loans shall be applied first to the Term A Loans, with up to 50% of such
prepayment applied pro rata to the Scheduled Term A Loan Principal Payments to
be made within the twelve-month period following the date of such prepayment and
the remaining portion of such prepayments shall be applied in inverse order of
maturity. The notice
43
provisions, the provisions with respect to the minimum amount of any prepayment
and the provisions requiring prepayments in integral multiples above such
minimum amount are for the benefit of Administrative Agent and may be waived
unilaterally by Administrative Agent.
4.2 MANDATORY PREPAYMENTS.
(a) SCHEDULED TERM LOANS PRINCIPAL PAYMENTS. Borrower shall cause
to be paid Scheduled Term A Loans Principal Payments on the Term A Loans until
the Term A Loans are paid in full in the amounts and at the times specified in
the definition of Scheduled Term A Loans Principal Payments to the extent that
prepayments have not previously been applied to such Scheduled Term A Loans
Principal Payments (and such Scheduled Term A Loans Principal Payments have not
otherwise been reduced) pursuant to the terms hereof. Borrower shall cause to be
paid on the Term B Loan Maturity Date all outstanding Term B Loans.
(b) MANDATORY PREPAYMENT UPON CERTAIN SALES. If Borrower, HSCHC,
HSCC or any of Borrower's Restricted Subsidiaries receives any Net Sale Proceeds
attributable to any Asset Disposition, then to the extent such Net Sale
Proceeds, together with the Net Sale Proceeds of all other Asset Dispositions
occurring in such Fiscal Year exceed $15,000,000 ("EXCESS NET SALE PROCEEDS"),
Borrower shall on such date repay the Term Loans in an aggregate amount equal to
100% of such Excess Net Sale Proceeds; PROVIDED, HOWEVER, that, in addition to
the foregoing, the Borrower shall be permitted to retain up to $10,000,000 in
the aggregate of the Net Sale Proceeds resulting from one or more Asset
Dispositions described on SCHEDULE 4.2(b). Notwithstanding the foregoing, for
purposes of this SECTION 4.2(b), the Net Sale Proceeds attributable to any Asset
Disposition shall not include such proceeds to the extent (i) such proceeds are
directly attributable to the sale or transfer of accounts receivables or
inventory comprising a portion of the "Borrowing Base," as such term is defined
in the Priority Credit Agreement and (ii) an adjustment to such "Borrowing Base"
is made on the date of such Asset Disposition pursuant to Section 4.5(e) of the
Priority Credit Agreement. All prepayments of principal hereunder made by
Borrower pursuant to this SECTION 4.2(b) shall be applied in the manner set
forth in SECTION 4.3.
(c) MANDATORY PREPAYMENT WITH EXCESS CASH FLOW. As soon as
practicable, and in any event by April 30th of each Fiscal Year, (A) Borrower
shall calculate the Excess Cash Flow for such Fiscal Year and (B) Borrower shall
make a mandatory prepayment of the Term Loans in an amount equal to (i) one
hundred percent (100%) or (ii) after the Minimum Term B Prepayment is made,
seventy-five percent (75%) of such Excess Cash Flow ("TOTAL PREPAYMENT AMOUNT").
All prepayments of principal made hereunder made by Borrower pursuant to this
SECTION 4.2(c) shall be applied first to the Term A Loans, with up to 50% of
such prepayment applied pro rata to the Scheduled Term A Loan Principal Payments
to be made within the twelve-month period following the date of such prepayment
and the remaining portion of such prepayments shall be applied in inverse order
of maturity.
(d) MANDATORY PREPAYMENT WITH PROCEEDS OF CAPITAL STOCK. If
Holdco I, Holdco II, Borrower, any of Borrower's Restricted Subsidiaries, HSCHC
or HSCC receives any Net Offering Proceeds from any offering of Capital Stock or
contribution to capital after the Closing Date, other than the Permitted
Mezzanine Proceeds, Borrower shall on the date of the receipt by such Person of
such proceeds prepay the Term Loans in an amount equal to such Net
44
Offering Proceeds. All prepayments of principal hereunder made by Borrower
pursuant to this SECTION 4.2(d) shall be applied in the manner set forth in
SECTION 4.3.
(e) MANDATORY PREPAYMENT WITH PROCEEDS OF PERMITTED JUNIOR DEBT.
No later than the Business Day of receipt by Borrower of the cash proceeds (net
of underwriting discounts, similar placement fees and commissions and other
reasonable costs and expenses associated therewith) from the issuance of any
Permitted Junior Debt of Borrower, Borrower shall prepay the Term Loans in an
aggregate amount equal to such net cash proceeds. All prepayments of principal
hereunder made by Borrower pursuant to this SECTION 4.2(e) shall be applied in
the manner set forth in SECTION 4.3. Notwithstanding the foregoing, in the event
that Borrower shall have made the Minimum Term B Prepayment, Borrower may retain
an amount of proceeds of Permitted Junior Debt not greater than the then current
outstanding principal amount of Polymers Senior Notes (the "PERMITTED POLYMERS
NOTES REPURCHASE AMOUNT") solely for the purpose of purchasing and/or redeeming
any outstanding Polymers Senior Notes (the "PURCHASED POLYMERS NOTES") from the
holders thereof at a purchase or redemption price less than or equal to the par
value of the Polymers Senior Notes; PROVIDED, HOWEVER, that (i) pending
application of the Permitted Polymers Notes Repurchase Amount in the manner
permitted hereunder, the Permitted Polymers Notes Repurchase Amount shall be
promptly applied by Borrower to reduce the Loans outstanding under the Priority
Credit Agreement or, if there shall be no Loans outstanding under the Priority
Credit Agreement, such funds shall be promptly deposited into the Borrower's
operating account at DB. All Purchased Polymers Notes shall, promptly following
their being purchased or redeemed by Borrower hereunder, be cancelled and
extinguished. In the event that the aggregate purchase price for such Polymers
Senior Notes (whether purchased or redeemed) is less than the Permitted Polymers
Notes Repurchase Amount, Borrower shall promptly, but in no event later than
December 2, 2004 prepay the Term Loans in an amount equal to such difference.
(f) MANDATORY PREPAYMENT WITH PROCEEDS OF OTHER DEBT. No later
than the Business Day following receipt by Holdco I, Holdco II, Borrower, any of
Borrower's Restricted Subsidiaries, HSCHC or HSCC of the cash proceeds (net of
underwriting discounts, similar placement fees and commissions, and other
reasonable costs and expenses associated therewith) from the issuance or
incurrence of Indebtedness (other than Permitted Mezzanine Proceeds and the
proceeds of Indebtedness which is expressly permitted under SECTION 8.2 hereof),
Borrower shall prepay the Term Loans in an amount equal to such net cash
proceeds. All prepayments of principal made by Borrower pursuant to this SECTION
4.2(f) shall be applied in the manner set forth in SECTION 4.3.
(g) MANDATORY PREPAYMENT UPON A CHANGE OF CONTROL. Simultaneously
with any Change of Control, Borrower shall prepay, in full, the outstanding
principal amount of any outstanding Loans, together with all accrued interest,
fees and other expenses incurred by the Administrative Agent or the Lenders as a
result of such Change in Control and prepayment.
(h) MANDATORY PREPAYMENT UPON RECOVERY EVENT. Within two (2)
Business Days following each date on which Borrower or any of its Restricted
Subsidiaries receives any proceeds from any Recovery Event, an amount equal to
100% of the proceeds of such Recovery Event (net of taxes and reasonable costs
incurred in connection with such Recovery Event) shall be applied as a mandatory
prepayment of principal of the Term Loans,
45
applied in the manner set forth in SECTION 4.3, provided that (1) so long as no
Event of Default then exists, if the net proceeds from any single or series of
related Recovery Events are less than $5,000,000, then no prepayment shall be
required pursuant to this SECTION 4.2(h), and (2) so long as no Event of Default
then exists, with respect to any single or series of related Recovery Events the
net proceeds therefrom which are equal to or greater than $5,000,000 but less
than 10% of net property, plant or equipment as set forth on the most recently
delivered quarterly financial statements of Borrower (the "THRESHOLD"), such
proceeds shall not be required to be so applied on such date to the extent that
(x) Borrower has delivered a certificate to the Administrative Agent on or prior
to such date stating that such proceeds shall be used to replace or restore any
properties or assets in respect of which such proceeds were paid within 365 days
following the date of the receipt of such proceeds (which certificate shall set
forth the estimates of the proceeds to be so expended) and (y) such proceeds are
deposited in an escrow account with the Administrative Agent for the benefit of
the Secured Parties (the "RECOVERY EVENT ESCROW ACCOUNT") or, with consent of
the Administrative Agent, are applied to the outstanding Priority Loans with a
reserve established for usage of such amounts in accordance with this SECTION
4.2(h), from which escrow account (or revolver reserve) amounts may be withdrawn
only to repay the Loans or to be used for the purposes described in clause (x)
above; PROVIDED, FURTHER, that
(i) if the amount of such proceeds from any single or
series of related Recovery Events exceeds the Threshold, then the entire
amount and not just the portion in excess of the Threshold shall be applied
as a mandatory repayment of Term Loans as provided above in this SECTION
4.2(h),
(ii) if all or any portion of such proceeds not required to
be applied to the repayment of Term Loans pursuant to the first proviso of
this SECTION 4.2(h) are not so used (or contractually committed to be used)
within 365 days after the day of the receipt of such proceeds, such
remaining portion shall be applied on the last day of such period as a
mandatory repayment of principal of the Term Loan as provided in this
SECTION 4.2(h);
(iii) if all or any portion of such proceeds are not required
to be applied on the 365th day referred to in clause (ii) above because
such amount is contractually committed to be used and subsequent to such
date such contract is terminated or expires without such portion being so
used, then such remaining portion shall be applied on the date of such
termination or expiration as a mandatory repayment of principal of
outstanding Term Loans as provided in this SECTION 4.2(h); and
(iv) Notwithstanding the foregoing, for purposes of this
SECTION 4.2(h), the proceeds of any Recovery Event shall not include such
proceeds to the extent (i) such proceeds are directly attributable to
inventory or any other component comprising a portion of the "Borrowing
Base," as such term is defined in the Priority Credit Agreement and (ii) an
adjustment to such "Borrowing Base" is made on the date of the event giving
rise to the Recovery Event pursuant to Section 4.5(g) of the Priority
Credit Agreement.
(i) WAIVER OF CERTAIN MANDATORY PREPAYMENTS BY TERM LENDERS.
Notwithstanding anything to the contrary contained in this SECTION 4.2(i) or
elsewhere in this
46
Agreement (including, without limitation, in SECTION 12.1), Borrower shall have
the option, in its sole discretion, to give the Term Lenders the option to waive
a mandatory prepayment of such Term Loans pursuant to SECTION 4.2(b), (c), (d),
(e), (f) and (h) (each such repayment, a "WAIVABLE MANDATORY PREPAYMENT") upon
the terms and provisions set forth in this SECTION 4.2(i). If Borrower elects to
exercise the option referred to in the preceding sentence, Borrower shall give
to Administrative Agent written notice of its intention to give the Term Lenders
the right to waive a Waivable Mandatory Prepayment at least five (5) Business
Days prior to such repayment which notice Administrative Agent shall promptly
forward to all Term Lenders (indicating in such notice the amount of such
repayment to be applied to each such Term Lender's outstanding Term Loans).
Borrower's offer to permit the Term Lenders to waive any such Waivable Mandatory
Prepayment may apply to all or part of such repayment; provided, that any offer
to waive part of such repayment must be made ratably to the Term Lenders on the
basis of their outstanding Term Loans. In the event any such Term Lender desires
to waive such Term Lender's right to receive any such Waivable Mandatory
Prepayment in whole or in part, such Term Lender shall so advise the
Administrative Agent no later than the close of business two (2) Business Days
after the date of such notice from the Administrative Agent, which notice shall
also include the amount such Term Lender desires to receive in respect of such
prepayment. If any Term Lender does not reply to the Administrative Agent within
the two (2) Business Days after the date of such notice from the Administrative
Agent, it will be deemed not to have waived any part of such prepayment. If any
Term Lender does not specify an amount it wishes to receive, it will be deemed
to have accepted 100% of the total payment. The aggregate amount waived by the
Term Lenders pursuant to the foregoing provisions shall be applied to the Term A
Loans on a pro rata basis to those Term A Lenders that have not elected to waive
such prepayments.
(j) MANDATORY PREPAYMENT ON JUNE 30, 2006. If, as of the close of
business on June 30, 2006, the outstanding principal amount of Term B Loans
shall exceed $100 million, Borrower shall on the following Business Day prepay,
in full, the outstanding principal amount of any outstanding Loans, together
with all accrued interest, fees and other expenses incurred by the
Administrative Agent or the Lenders as a result of such prepayment.
4.3 APPLICATION OF PREPAYMENTS.
(a) PREPAYMENTS. Except as expressly provided in this Agreement,
all prepayments of principal of the Term Loans made by Borrower pursuant to
SECTION 4.2(b), (d), (e), (f) and (h) shall, for so long as any Term B Loans
shall be outstanding, first be applied to the payment of the unpaid principal
amount of the Term B Loans in proportional amounts equal to each Term B Lender's
Pro Rata Share of such prepayment and, after the Term B Loans have been repaid,
applied to the payment of the unpaid principal amount of the Term A Loans in
proportional amounts equal to each Term A Lender's Pro Rata Share of such
prepayment; PROVIDED, HOWEVER, that in the case of prepayments made following
the payment in full of all Term B Loans, up to 50% of such prepayment shall be
applied pro rata to the Scheduled Term A Loans Principal Payments to be made
within the twelve-month period following the date of such prepayment and the
remaining portion of such prepayment shall be applied to Scheduled Term A Loans
Principal Payments in inverse order of maturity. If any prepayment of Eurodollar
Loans shall reduce the outstanding amount of any Tranche of Eurodollar Loans to
an amount less than $10,000,000, such Eurodollar Loans shall immediately be
converted into Base Rate Loans. All
47
prepayments shall include payment of accrued interest on the principal amount so
prepaid, shall be applied to the payment of interest before application to
principal and shall include amounts payable, if any, under SECTION 3.4.
(b) PAYMENTS. All payments of principal on the Term Loans shall be
applied within the applicable Facility (i) first to the payment of Base Rate
Loans and second to the payment of Eurodollar Rate Loans and (ii) with respect
to Eurodollar Rate Loans, in such order as Borrower shall request (and in the
absence of such request, as Administrative Agent shall determine). All payments
shall include payment of accrued interest on the principal amount so paid, shall
be applied to the payment of interest before application to principal and shall
include amounts payable, if any, under SECTION 3.4.
4.4 METHOD AND PLACE OF PAYMENT BY BORROWER.
(a) Except as otherwise specifically provided herein, all payments
(including prepayments) to be made by Borrower on account of principal,
interest, fees and other amounts required hereunder shall be made without setoff
or counterclaim and shall, except as otherwise expressly provided herein, be
made to Administrative Agent for the ratable account of the applicable Lenders
in immediately available funds, no later than 1:00 P.M. (New York City time) on
the date specified herein. Any such payment shall be made to such account of
Administrative Agent as Administrative Agent shall specify by notice to Borrower
provided, that unless and until otherwise specified, all such payments shall be
made to Administrative Agent at its office at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX
00000. Administrative Agent will promptly distribute to each Lender its
applicable Pro Rata Share of the Term A Loan or of the Term B Loan (or other
applicable share as expressly provided herein), as the case may be, of such
principal, interest, fees or other amounts, in like funds as received. Any
payment which is received by Administrative Agent later than 1:00 P.M. (local
time in the place of payment) shall be deemed to have been received on the
immediately succeeding Business Day and any applicable interest or fee shall
continue to accrue until such payment is deemed to have been received.
(b) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be, subject to the provisions
set forth in the definition of "Interest Period" herein.
(c) Unless Administrative Agent shall have received notice from
Borrower prior to the date on which any payment is due to the Lenders hereunder
that Borrower will not make such payment in full, Administrative Agent may
assume that Borrower has made such payment in full to Administrative Agent as
required hereunder on such date and Administrative Agent may (but shall not be
so required), in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent Borrower shall not have made such payment in full to
Administrative Agent, each Lender shall repay to Administrative Agent on demand
such amount distributed to such Lender, together with interest thereon for each
day from the date such amount was distributed to such Lender until the date such
Lender repays such amount to Administrative Agent at the Federal Funds Rate as
in effect for each such day.
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4.5 NET PAYMENTS.
(a) All payments made by Borrower hereunder or under any Loan
Document will be made without setoff, counterclaim or other defense. Except as
provided in SECTION 4.5(d), all payments hereunder and under any of the Loan
Documents (including, without limitation, payments on account of principal and
interest and fees) shall be made by Borrower free and clear of and without
deduction or withholding for or on account of any present or future tax, duty,
levy, impost, assessment or other charge of whatever nature now or hereafter
imposed by any Governmental Authority, but excluding therefrom:
(i) a tax imposed on or measured by the overall net income
(including a franchise tax based on net income) of the Lender or its
lending offices by the USA or jurisdictions or political subdivision or
taxing authority thereof in which such Lender's principal office or lending
offices are located or are resident or in which such Lender is
incorporated;
(ii) in the case of any Lender organized under the laws of
any jurisdiction other than the USA or any state thereof (including the
District of Columbia), any taxes imposed by the USA by means of withholding
at the source unless such withholding results from a change in applicable
law, treaty or regulations or the interpretation or administration thereof
(including, without limitation, any guideline or policy not having the
force of law) by any authority charged with the administration thereof
subsequent to the date such Lender becomes a Lender with respect to the
Loan or portion thereof affected by such change;
(iii) any taxes to which the Lender (to the extent of the tax
rate then in effect) would be subject to (as of the Closing Date) if a
payment hereunder had been received by the Lender and, with respect to any
Lender that becomes a party hereto after the date hereof, any taxes to
which such Lender (to the extent of the tax rate then in effect) would be
subject as of the date it becomes a party hereto if a payment had been
received by the Lender (other than taxes which each other Lender is
entitled to reimbursement pursuant to this Agreement);
(iv) taxes to which the Lender becomes subject subsequent to
the date referred to in clause (iii) above as a result of a change in the
residence, place of incorporation, or principal place of business of the
Lender, a change in the branch or lending office of the Lender
participating in the transactions set forth herein or other similar
circumstances unless such change or similar circumstance shall have been
made at the request of the Borrower, and
(v) taxes as a result of the recognition by the Lender of
gain on the sale, assignment or participation by the Lender of the
participating interests in its creditor positions hereunder (such tax or
taxes, other than excluded tax or taxes, being herein referred to as "TAX"
or "TAXES"). If Borrower is required by law to make any deduction or
withholding of any Taxes from any payment due hereunder or under any of the
Loan Documents, then the amount payable will be increased to such amount
which, after deduction from such increased amount of all such Taxes
required to be withheld or
49
deducted therefrom, will not be less than the amount due and payable
hereunder had no such deduction or withholding been required. A certificate
as to any additional amounts payable to a Lender under this SECTION 4.5
submitted to Borrower by such Lender shall show in reasonable detail the
amount payable and the calculations used to determine in good faith such
amount and shall, absent manifest error, be final, conclusive and binding
upon all parties hereto.
(b) If Borrower makes any payment hereunder or under any of the
Loan Documents in respect of which it is required by law to make any deduction
or withholding of any Taxes, it shall pay the full amount to be deducted or
withheld to the relevant taxation or other authority within the time allowed for
such payment under applicable law and shall deliver to the Lenders within 30
days after it has made such payment to the applicable authority a receipt issued
by such authority evidencing the payment to such authority of all amounts so
required to be deducted or withheld from such payment.
(c) Without prejudice to the other provisions of this SECTION 4.5,
if any Lender, or Administrative Agent on its behalf, is required by law to make
any payment on account of Taxes on or in relation to any amount received or
receivable hereunder or under any of the Loan Documents by such Lender, or
Administrative Agent on its behalf, or any liability for Tax in respect of any
such payment is imposed, levied or assessed against any Lender or Administrative
Agent on its behalf, Borrower will promptly, following receipt of the
certificate described in the immediately following sentence, indemnify such
person against such Tax payment or liability, together with any interest,
penalties and expenses (including reasonable counsel fees and expenses) payable
or incurred in connection therewith, including any tax of any Lender arising by
virtue of payments under this SECTION 4.5(c), computed in a manner consistent
with this SECTION 4.5(c). A certificate prepared in good faith as to the amount
of such payment by such Lender, or Administrative Agent on its behalf, showing
calculations thereof in reasonable detail, absent manifest error, shall be
final, conclusive and binding upon all parties hereto for all purposes.
(d) Each Lender that is not a USA person (as such term is defined
in Section 7701(a)(30) of the Code) agrees to deliver to Borrower and
Administrative Agent on or prior to the Closing Date, or in the case of a Lender
that is an Assignee of an interest under this Agreement (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment), on
the date of such assignment to such Lender, (i) two accurate and complete
original signed copies of IRS Form X-0XXX, X-0XXX or W-8IMY (or successor or
other applicable forms prescribed by the IRS) certifying to such Lender's
entitlement to a complete exemption from or reduced rate of USA withholding tax
on interest payments to be made under this Agreement and under any Note, or (ii)
if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver the applicable form pursuant to clause (i) above, (x) a
certificate substantially in the form of EXHIBIT 4.5(d) (any such certificate, a
"SECTION 4.5(d)(ii) CERTIFICATE") and (y) two accurate and complete original
signed copies of IRS Form X-0 XXX xx X-0XX0 (or successor form) certifying to
such Lender's entitlement to a complete exemption from USA withholding tax on
payments of interest to be made under this Agreement and under any Note;
PROVIDED, HOWEVER, that no Lender shall be required to deliver a an IRS Form
X-0XXX, X-0XXX, W-8IMY, or Section 4.5(d)(ii) Certificate under this SECTION
4.5(d) to the extent that the delivery of such form is not authorized by law;
PROVIDED FURTHER, HOWEVER, that
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in the event that a Lender provides the Borrower or the Administrative Agent
with an IRS Form W-8IMY (or substitute form) indicating that it is a "flow
through" entity, as defined in Treasury Regulations promulgated under Section
1441 of the Code, or otherwise, not a beneficial owner of interest payments
under this Agreement and under any Note, such Lender agrees, on or prior to the
Closing Date, or the date of assignment to such Lender, as applicable, to take
any actions necessary, and to deliver to Borrower and Administrative Agent all
forms necessary, to establish such Lender's entitlement to a complete exemption
from, or a reduction in, USA withholding tax on payments of interest to be made
under this Agreement and under any Note, including causing its partners,
members, beneficiaries, beneficial owners, and their beneficial owners, if any,
to take any actions and deliver any forms necessary to establish such exemption.
Notwithstanding the foregoing, (i) a fiscally transparent entity may provide an
IRS Form W-8BEN to claim a treaty exemption or rate reduction to the extent that
such entity is receiving interest and is not treated as fiscally transparent by
its own jurisdiction, provided the satisfaction of such conditions entitles the
Lender to an exemption or reduction from withholding at the time such Lender
becomes a party to this Agreement and (ii) a withholding foreign partnership,
withholding foreign trust, and qualified intermediary shall only provide such
information as is required by Treasury Regulations promulgated under Code
Section 1441. For purposes of this Agreement, the term "Forms" shall include any
attachments for to IRS Forms W-8IMY required to be filed by the Lender. In
addition, each Lender agrees that from time to time after the Closing Date, when
a lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect, such Lender will deliver to
Borrower and Administrative Agent two new accurate and complete original signed
copies of an IRS Form W-8BEN, W-8ECI, or W-8IMY and a Section 4.5(d)(ii)
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender (or its partners,
members, beneficiaries, or beneficial owners) to a continued exemption from or
reduction in USA withholding Tax on interest payments under this Agreement and
any Note, or it shall immediately notify Borrower and Administrative Agent of
its inability to deliver any such form or certificate; provided, however, that
no Lender shall be required to deliver an IRS Form X-0XXX, X-0XXX, or W-8IMY
under this SECTION 4.5(d) to the extent that the delivery of such form is not
authorized by law; PROVIDED, FURTHER, HOWEVER, that any Lender which does not
deliver the applicable form pursuant to SECTION 4.5(d) shall be entitled to
additional payment pursuant to SECTION 4.5(a) or indemnification under SECTION
4.5(c) only if and to the extent (i) such failure results solely from a change
in law or (ii) the Tax to which such additional payment or indemnification
relates would have been imposed regardless of whether such Lender provided such
forms. Notwithstanding anything to the contrary contained in SECTION 4.5 any
Lender that has not provided to Borrower the IRS Forms required to be provided
to Borrower pursuant to this SECTION 4.5(d) shall not be entitled to any payment
of additional amounts pursuant to SECTION 4.5(a) or indemnification under
SECTION 4.5(c) with respect to any deduction or withholding which would not have
been required if such Lender had provided such forms.
(e) Each Lender that is incorporated or organized under the laws
of the USA or a state thereof shall provide two properly completed and duly
executed copies of IRS Form W-9, or any successor or other applicable form. Each
Lender shall deliver to Borrower and Administrative Agent (provided that such
Lender remains lawfully able to do so), two further duly executed forms and
statements, properly completed in all material respects, at or before the time
any such form or statement expires or becomes obsolete, or otherwise as
reasonably requested by Borrower. Each Lender shall promptly notify Borrower at
any time it determines
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that it is no longer in a position to provide any previously delivered
certificate to Borrower (or any other form or certification adopted by U.S.
taxing authorities for such purpose).
(f) Each Lender agrees that, as promptly as practicable after it
becomes aware of the occurrence of any event or the existence of any condition
that would cause Borrower to make a payment in respect of any Taxes to such
Lender pursuant to SECTION 4.5(a) or a payment in indemnification for any Taxes
pursuant to SECTION 4.5(c), it will use reasonable efforts to make, fund or
maintain the Loan (or portion thereof) of such Lender with respect to which the
aforementioned payment is or would be made through another lending office of
such Lender or take any other action reasonably requested by Borrower if as a
result thereof the additional amounts which would otherwise be required to be
paid by such Borrower in respect of such Loans (or portions thereof) pursuant to
SECTION 4.5(a) or SECTION 4.5(c) would be materially reduced, and if, as
determined by such Lender, in its reasonable discretion, the making, funding or
maintaining of such Loans (or portions thereof) through such other lending
office or taking of such other action would not otherwise materially adversely
affect such Loans or such Lender. Borrower agrees to pay all reasonable expenses
incurred by any Lender in utilizing another lending office of such Lender or
taking of such other action pursuant to this SECTION 4.5(f).
4.6 SHARING OF PAYMENTS; ETC.
(a) If, other than as expressly set forth elsewhere herein, any
Lender shall obtain on account of the Loans made by it, any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) in excess of its applicable Pro Rata Share (or other pro rata share
as expressly provided herein) of payments on account of Loans made or
participated in by all the Lenders under any Facility, such Lender shall
forthwith (x) notify Administrative Agent of such fact, and (y) purchase from
the other Lenders in such Facility, such participations in the Term Loans made
by them and then due, as the case may be, as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender, such purchase shall to that
extent be rescinded and each other Lender shall repay to the purchasing Lender
the purchase price paid therefor together with an amount equal to such paying
Lender's applicable Pro Rata Share (according to the proportion of (i) the
amount of such paying Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender), of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Administrative Agent will keep records (which shall be conclusive and binding in
the absence of manifest error), of participations purchased pursuant to this
SECTION 4.6(a) and will in each case promptly notify the Lenders and Borrower
following any such purchases. Any payments received after the Lenders have taken
action pursuant to this SECTION 4.6(a) shall be allocated ratably among the
Loans.
(b) Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this SECTION 4.6 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
setoff, but subject to SECTION 12.6) with respect to such participation as fully
as if such Lender were the direct creditor of Borrower in the amount of such
participation.
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(c) Nothing herein shall require any Lender to exercise any right
of setoff or similar rights or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of Borrower.
ARTICLE V
CONDITIONS OF CREDIT
5.1 CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THE AGREEMENT.
The effectiveness of the provisions of this Agreement (other than the
provisions of SECTION 5.2) and the obligation of the Lenders to restructure the
Original Loans under this Agreement into the Term Loans as contemplated hereby
shall be subject to the fulfillment, at or prior to the time thereof, of each of
the following conditions:
(a) EFFECTIVENESS OF CREDIT AGREEMENT. The condition to
effectiveness of this Agreement set forth either in SECTION 12.20(a) or
SECTION 12.20(b) shall have been satisfied.
(b) CREDIT DOCUMENTS.
(i) CREDIT AGREEMENT AND NOTES. Borrower shall have duly
executed and delivered to Administrative Agent, with a signed
counterpart for each Lender, the Agreement and, to the extent
requested by any Lender, the Note payable to the order of such
requesting Lender.
(ii) SECURITY DOCUMENTS. Borrower, HSCHC and each Restricted
Domestic Subsidiary of Borrower (other than IRIC) shall have duly
authorized, executed and delivered an Amended and Restated Security
Agreement in substantially the form of EXHIBIT 5.1(b)(ii) (as
modified, supplemented or amended from time to time, the "SECURITY
AGREEMENT") and shall have delivered to the Collateral Agent, all the
Pledged Securities and Pledged Intercompany Notes referred to therein
then owned, if any, by Borrower, (x) endorsed in blank in the case of
promissory notes constituting Pledged Securities and (y) together with
executed and undated stock powers, in the case of Capital Stock
constituting Pledged Securities and the other documents and
instruments required to be delivered under the Security Agreements
together with:
(A) proper financing statements (Form UCC-1 or such
other financing statements or similar notices as shall be
required by local law) fully executed for filing under the UCC
or other appropriate filing offices of each jurisdiction as
may be necessary or, in the opinion of Administrative Agent,
desirable to perfect the security interests purported to be
created by the Security Agreement;
(B) copies of Requests for Information or Copies (Form
UCC-1), or equivalent reports, listing all effective financing
statements or similar notices that name Borrower or its
Restricted Domestic Subsidiaries (by its
53
actual name or any trade name, fictitious name or similar
name), or any division or other operating unit thereof, as
debtor and that are filed in the jurisdictions referred to
in clause (i), together with copies of such other financing
statements (none of which shall cover the Collateral except
to the extent evidencing Permitted Liens or for which
Administrative Agent shall have received satisfactory
evidence of release);
(C) such amendments, modifications or supplements to
the Pledged Intercompany Notes as may be requested by
Administrative Agent, each such amendment, modification or
supplement to be in a form satisfactory to Administrative
Agent; and
(D) all other actions as may be necessary or, in the
opinion of Administrative Agent, desirable to perfect (or be
in a position to perfect by the filing of financing
statements) the security interests intended to be created by
the Security Agreement.
(iii) SUBSIDIARY GUARANTEE AGREEMENTS.
(A) AMENDED AND RESTATED SUBSIDIARY GUARANTEE
AGREEMENT. Each of HSCHC and each Restricted Domestic
Subsidiary of Borrower (other than IRIC) shall have duly
executed and delivered the Amended and Restated Subsidiary
Guarantee Agreement substantially in the form of EXHIBIT
5.1(b)(iii)(A) (as modified, supplemented or amended from time
to time, the "AMENDED AND RESTATED SUBSIDIARY GUARANTEE
AGREEMENT").
(B) SUBSIDIARY GUARANTEE AGREEMENTS. HSCC shall have
duly executed and delivered the Subsidiary Guarantee Agreement
substantially in the form of EXHIBIT 5.1(b)(iii)(B) (as
modified, supplemented or amended from time to time, the "HSCC
SUBSIDIARY GUARANTEE AGREEMENT" and, together with the Amended
and Restated Subsidiary Guarantee Agreement, the "SUBSIDIARY
GUARANTEE AGREEMENTS").
(iv) COLLATERAL ACCOUNT AGREEMENTS. Administrative Agent
shall have received a fully executed Collateral Account Control
Agreement in substantially the form of EXHIBIT 5.1(b)(iv) attached
hereto (each together with such modifications thereto as may be
agreeable to Administrative Agent, a "COLLATERAL ACCOUNT AGREEMENT")
shall have been entered into with respect to each of the Deposit
Accounts referenced in SCHEDULE 6.21(d).
(v) PLEDGE AGREEMENT. HSCC shall have duly executed and
delivered the Pledge Agreement substantially in the form of EXHIBIT
5.1(b)(v) (as modified, supplemented or amended from time to time, the
"PLEDGE AGREEMENT") pursuant to which HSCC shall have pledged 30% of
the membership units of HIH to the Collateral Agent in a manner
satisfactory to Administrative Agent.
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(vi) MORTGAGE SUPPLEMENTS; TITLE INSURANCE; SURVEYS.
Administrative Agent shall have received (A) fully executed
counterparts of mortgages or amendments to mortgages (collectively,
the "MORTGAGE SUPPLEMENTS") in each case in form and substance
satisfactory to Administrative Agent, which mortgages shall cover such
of the Real Property owned by Borrower and its Restricted Subsidiaries
as shall be listed as mortgaged property on SCHEDULE 6.21(c), together
with evidence that counterparts of the Mortgage Supplements have been
delivered to the title insurance company for recording in all places
to the extent necessary or desirable, in the judgment of
Administrative Agent, to create a valid and enforceable lien on each
Mortgaged Property in favor of the Collateral Agent (or such other
trustee as may be required or desired under local law) for the benefit
of the Lenders and the other secured parties under the Security
Agreement, subject only to Permitted Liens; (B) mortgagee title
insurance policies issued by title insurance companies satisfactory to
Administrative Agent (the "MORTGAGE POLICIES") with respect to the
Mortgaged Properties not already subject to title insurance policies
(each, an "UNINSURED MORTGAGED PROPERTY") in amounts satisfactory to
Administrative Agent assuring Administrative Agent that the Mortgage
Supplements with respect to such Mortgaged Properties are valid and
enforceable mortgage liens on the respective Mortgaged Properties,
free and clear of all defects, encumbrances and other Liens except
Permitted Liens, and the Mortgage Policies shall be in form and
substance satisfactory to Administrative Agent and shall include, as
appropriate, any other matter that Administrative Agent in its
discretion may request, shall not include an exception for mechanics'
liens, and shall provide for affirmative insurance and such
reinsurance as Administrative Agent in its discretion may request; and
(C) to the extent requested by Administrative Agent, a survey, in form
and substance satisfactory to Administrative Agent, of each Uninsured
Mortgaged Property dated a recent date acceptable to Administrative
Agent, certified by a licensed professional surveyor satisfactory to
Administrative Agent, PROVIDED, HOWEVER, in the event that any survey
delivered pursuant to this provision is dated on a date which is more
than six (6) months prior to the Closing Date, but less than one (1)
year prior to the Closing Date, such survey shall be acceptable so
long as such survey otherwise complies with the ALTA/ACSM standards
required by Administrative Agent, and the owner and/or lessee of the
Mortgaged Property delivers a "no change survey affidavit" in a form
which is acceptable to the title insurance company issuing the
Mortgage Policy, so that the title insurance company will delete any
general survey exception in such Mortgage Policy.
(vii) PERFECTION. Borrower shall have delivered to
Administrative Agent true and correct copies of Perfection
Certificates, each of which shall be in full force and effect and in
form and substance satisfactory to Administrative Agent as of the
Closing Date.
(viii) HOLDCO AGREEMENT. Holdco I and Holdco II shall have
executed and delivered an agreement in form and substance and on terms
and conditions satisfactory to the Administrative Agent (the "HOLDCO
AGREEMENT").
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(ix) HORIZON SUBORDINATION AGREEMENT. Borrower shall have on
or before the Closing Date, entered into an amended and restated
subordination agreement with Horizon Ventures, LLC in form and
substance and on terms and conditions satisfactory to Administrative
Agent (the "HORIZON SUBORDINATION AGREEMENT").
(c) RESTRUCTURING DOCUMENTS.
(i) RESTRUCTURING AGREEMENT. GOF and Borrower shall have
entered into an Exchange Agreement (the "GOF RESTRUCTURING AGREEMENT")
substantially in the form of EXHIBIT 5.1(c)(i) and such agreement
shall remain in full force and effect.
(ii) HOLDCO MATTERS. Holdco I shall have been formed in the
manner contemplated by the Term Sheet attached hereto as EXHIBIT
5.1(c)(ii), with such changes as are acceptable to the Administrative
Agent or, if adverse to the interests of the Lenders (as determined by
the Administrative Agent in its sole reasonable discretion after
reasonable advance notice of such proposed change), acceptable to the
Required Lenders, and the Administrative Agent shall be satisfied that
such formation shall have occurred in a manner satisfactory to it,
including with respect to all matters pertaining to the governance and
capitalization of Holdco I and Holdco II. Following such formation,
each of the following actions shall have been taken, each on terms and
conditions and in form and substance satisfactory to Administrative
Agent with structural changes to any of the following which are not
adverse to the interests of the Lenders:
(A) GOF shall have contributed (or caused to be
contributed) to Holdco I and Holdco I shall have, in turn,
contributed to Holdco II the rights and obligations under
the ICI Agreement;
(B) The GOF Bonds shall have been exchanged for equity
of Holdco I pursuant to the GOF Restructuring Agreement;
(C) CPH (or its Affiliate) shall have contributed (or
caused to be contributed) all of its GOF Bonds to Holdco I;
(D) Huntsman Family Holdings II Company, LLC shall
have contributed (or caused to be contributed) 19.9% of the
Capital Stock of HSCHC to Holdco I, Holdco I shall have
contributed or cause to be contributed such Capital Stock to
Holdco II and Holdco II shall have, in turn, contributed
such Capital Stock to Borrower such that, after giving
effect to such contributions, Borrower will own 100% of the
equity of HSCHC on the Closing Date;
(E) Huntsman Family Holdings II Company, LLC shall
have contributed (or caused to be contributed) all of the
Capital Stock of Borrower owned or held by it on the Closing
Date to Holdco I, Holdco I shall have contributed such
Capital Stock to Holdco II;
56
(F) Huntsman Family Holdings II Company, LLC shall
have contributed (or caused to be contributed) 20% of the
Capital Stock of JK Holdings to Holdco I, Holdco I shall
have contributed such Capital Stock to Holdco II and Holdco
II shall have, in turn, contributed or cause to be
contributed such equity to Borrower;
(G) Huntsman Family Holdings II Company, LLC shall
have contributed (or caused to be contributed) $500,000 of
preferred equity in Huntsman Petrochemical to Holdco I,
Holdco I shall have contributed such preferred stock to
Holdco II and Holdco II shall have, in turn, contributed or
cause to be contributed such preferred stock to Borrower;
and
(H) Huntsman Family Holdings II Company, LLC shall
have contributed (or caused to be contributed) the
contractual rights or an entity solely holding the
contractual rights to acquire the Australian Joint Venture
Interests to Holdco I, Holdco I shall have contributed such
rights to Holdco II and Holdco II shall have, in turn,
contributed or cause to be contributed such rights to
Borrower.
(iii) RESTRUCTURING. The legal, organizational and financial
structure of Borrower and its Subsidiaries (after giving effect to the
Restructuring) shall be acceptable to the Administrative Agent. In
addition, all financial, legal and tax matters (including any tax
legislation pending before Congress or any committee thereof) relating
to the Restructuring or the financing contemplated hereby shall be
satisfactory to the Administrative Agent.
(d) CREDIT PARTY DOCUMENTS. On or before the Closing Date,
Borrower shall deliver or cause to be delivered to the Administrative Agent the
following with respect to each Credit Party:
(i) Certified copies of its Certificate or Articles of
Incorporation, together with a good standing certificate from the
Secretary of State of the jurisdiction of its incorporation and each
other state in which it is qualified as a foreign corporation to do
business, except where, in the judgment of Administrative Agent, the
failure to be so qualified in a foreign jurisdiction would not be
material and, to the extent generally available, a certificate or
other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of
each of such states, each dated a recent date prior to the Closing
Date;
(ii) Copies of its Bylaws, certified as of the Closing Date
by its corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors (a) approving and
authorizing the execution, delivery and performance of each of the
Loan Documents to which it is a party, and (b) approving and
authorizing the execution, delivery and performance of the other Loan
Documents to which it is a party and all
57
transactions related thereto, in each case certified as of the Closing
Date by its corporate secretary or an assistant secretary as being in
full force and effect without modification or amendments; and
(iv) Signature and incumbency certificates of its officers
executing each of the Loan Documents to which it is a party.
(e) THIRD PARTY CREDIT DOCUMENTS.
(i) PRIORITY CREDIT AGREEMENT. Borrower shall have executed
and delivered the Priority Credit Agreement providing for commitments
of the lenders thereunder to make Priority Loans in an aggregate
principal amount of not more than $275 million on terms and conditions
substantially as set forth on EXHIBIT 5.1(e)(i) and all conditions
precedent to the effectiveness thereof shall have been satisfied or
waived.
(ii) AMENDED AND RESTATED SENIOR NOTES INDENTURES. On or
before the Closing Date, after giving effect to the Transactions, the
Amended and Restated Senior Notes Indentures shall be in full force
and effect.
(iii) AMENDED AND RESTATED POLYMERS INDENTURE. On or before
the Closing Date after giving effect to the Transactions, the Amended
and Restated Polymers Indenture shall be in full force and effect.
(f) CERTIFICATES AND OPINIONS OF PARTIES' COUNSEL.
(i) REPRESENTATIONS AND WARRANTIES; DEFAULT; OFFICER'S
CERTIFICATE. The representations and warranties set forth in ARTICLE
VI hereof shall be true and correct and no Event of Default or
Unmatured Event of Default shall have occurred or be continuing (after
giving effect to this Agreement) and Administrative Agent shall have
received, with a signed counterpart for each Lender, a certificate
executed by a Responsible Officer on behalf of Borrower, dated the
Closing Date and in the form of EXHIBIT 5.1(f)(i) hereto, stating that
the representations and warranties set forth in ARTICLE VI hereof are
true and correct as of the date of the certificate, that no Event of
Default or Unmatured Event of Default has occurred and is continuing
(after giving effect to this Agreement), and that the conditions of
SECTION 5.1 hereof have been fully satisfied or waived.
(ii) OPINIONS OF CREDIT PARTIES' COUNSEL. Lenders and their
respective counsel shall have received (i) originally executed copies
of one or more favorable written opinions of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel for the Credit Parties, in form and
substance reasonably satisfactory to Administrative Agent and its
counsel, dated the Closing Date and setting forth substantially the
matters in the opinions designated in EXHIBIT 5.1(f)(ii)-1 annexed
hereto and as to such other matters as Administrative Agent acting on
behalf of Lenders may reasonably request, (ii) originally executed
copies of one or more favorable written opinions of Stoel Rives LLP,
in form and substance reasonably satisfactory to Administrative Agent
and its counsel, dated the Closing Date and
58
setting forth substantially the matters in the opinions designated in
EXHIBIT 5.1(f)(ii)-2 annexed hereto and as to such other matters as
Administrative Agent acting on behalf of Lenders may reasonably
request, (iii) originally executed copies of one or more favorable
written opinions of such other local counsel to the Credit Parties as
Administrative Agent may request in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated the
Closing Date and (iv) evidence satisfactory to Administrative Agent
that Borrower has requested such counsel to deliver such opinions to
Lenders.
(g) TAX SHARING AGREEMENT. Administrative Agent shall have
received a fully executed Tax Sharing Agreement in substantially the form
of EXHIBIT 5.1(g) attached hereto (together with such modifications thereto
as may be agreeable to Administrative Agent, the "TAX SHARING AGREEMENT").
(h) APPROVALS. All necessary governmental (domestic and foreign)
and third party approvals in connection with the Transactions and the
transactions contemplated by the Loan Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents or imposes
materially adverse conditions upon the consummation of all or any part of
such Transactions or the other transactions contemplated by the Loan
Documents and otherwise referred to herein or therein. Additionally, there
shall not exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking injunctive relief or other restraint pending
or notified prohibiting or imposing materially adverse conditions upon all
or any part of the Transactions, the transactions contemplated by the Loan
Documents.
(i) ENVIRONMENTAL REPORTS. Administrative Agent shall have
received copies of the most recent environmental risk assessment reports in
the possession of Borrower or its Subsidiaries or performed at the request
of Borrower or its Subsidiaries for any current and former facilities of
Borrower and its Subsidiaries.
(j) LITIGATION. No litigation by any entity (private or
governmental) shall be pending or, to the best knowledge of Borrower,
threatened (except for litigation that would be rendered moot by, or would
not survive, the consummation of the Plan of Reorganization) with respect
to this Agreement, any other Loan Document or any documentation executed in
connection herewith or the transactions contemplated hereby (including,
without limitation, the Transactions), or which Administrative Agent or the
Required Lenders shall determine could reasonably be expected to have a
Material Adverse Effect.
(k) FEES. Borrower shall have paid to Administrative Agent and the
Lenders all costs, fees and expenses (including, without limitation, legal
fees and expenses) payable to Administrative Agent and the Lenders to the
extent then due.
(l) ADVERSE CHANGE. Since December 31, 2001, nothing shall have
occurred (and the Lenders shall have become aware of no facts or conditions
not previously
59
known) which Administrative Agent or the Required Lenders shall reasonably
determine has, or could have, a Material Adverse Effect.
(m) INSURANCE. Administrative Agent shall be satisfied with the
insurance coverage in effect on the Closing Date pertaining to the assets
of Borrower and its Restricted Subsidiaries, and shall have received
evidence satisfactory to it that Administrative Agent shall have been named
as a loss payee, mortgagee and additional insured on all such policies of
insurance, as appropriate.
(n) RATING. Borrower shall have received a prospective senior
secured debt rating with respect to the Loans from each of S&P and Xxxxx'x.
(o) CORPORATE PROCEEDINGS. All corporate and legal proceedings and
all instruments and agreements in connection with the Transaction and the
other transactions contemplated by this Agreement shall be satisfactory in
form and substance to Administrative Agent and, except as otherwise agreed
by Administrative Agent, shall have been consummated without any waiver of
any conditions or other provisions set forth therein and Administrative
Agent shall have received all information and copies of all documents and
papers, including records of corporate proceedings, governmental approvals,
good standing certificates and bring-down telegrams or certificates, if
any, which Administrative Agent or the Required Lenders reasonably may have
requested in connection therewith, such documents and papers where
appropriate to be certified by a Responsible Officer or by proper corporate
or Governmental Authorities.
Each Lender hereby agrees that by its execution and delivery of its
signature page hereto, such Lender approves of and consents to each of the
matters set forth in SECTION 5.1 which must be approved by, or which must be
satisfactory to, the Administrative Agent (in the case of DB), or the Required
Lenders or Lenders, as the case may be; provided that, in the case of any
agreement or document which must be approved by, or which must be satisfactory
to, the Lenders, Administrative Agent or Borrower shall have delivered a copy of
such agreement or document to such Lender if so requested on or prior to the
Closing Date.
5.2 EXTENSION OF FORBEARANCE AND INTERIM MATURITY.
By its execution hereof, each of the Original Lenders party hereto
agrees that if the conditions set forth in SECTION 5.1 have not been
satisfied or waived but if the Borrower, HSCHC, HSCC, the Administrative
Agent and the holders of at least 66-2/3% of the Original Loans have executed
and delivered this Agreement or a Forbearance Extension Agreement, then (a)
each Lender party to the Original Credit Agreement executing this Agreement
agrees to be bound by the provisions of the Original Credit Forbearance
Extension Agreement, attached hereto as EXHIBIT 5.2(a) as if a party thereto
including all of the terms, conditions and provisions therein and (b) each
Lender party to the Original Term Loan executing this Agreement agrees to be
bound by the provisions of the Term Loan Forbearance Extension Agreement,
attached hereto as EXHIBIT 5.2(b) as if a party thereto including to all of
the terms, conditions and provisions therein. Each Original Lender party
hereto agrees that upon request, such Lender shall execute and deliver the
signature page to the applicable Forbearance Extension Agreement to the
Administrative Agent.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans, Borrower makes the following representations and warranties
(both before and after giving effect to the consummation of the Transactions):
6.1 CORPORATE STATUS.
Each of Borrower and each of its Subsidiaries (i) is a duly organized
and validly existing corporation, partnership, limited liability company, trust
or other entity in good standing under the laws of the jurisdiction of its
organization (or the equivalent thereof in the case of Foreign Subsidiaries)
except where the failure to be in such good standing would not have a Material
Adverse Effect, (ii) has the corporate or partnership or other requisite power
and authority to own its property and assets and to transact the business in
which it is engaged and presently proposed to engage in and (iii) is duly
qualified and is authorized to do business and is in good standing in each other
jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualification, except for such failure to
be so qualified which, in the aggregate, would not have a Material Adverse
Effect.
6.2 CORPORATE POWER AND AUTHORITY.
Each Credit Party has the corporate or other appropriate power and
authority to execute, deliver and perform the terms and provisions of each of
the Loan Documents to which it is party and has taken all necessary corporate or
other appropriate action to authorize the execution, delivery and performance by
it of each of such Loan Documents. Each Credit Party has duly executed and
delivered each of the Loan Documents to which it is party, and each of such Loan
Documents constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
6.3 NO VIOLATION.
The execution, delivery or performance by any Credit Party of the Loan
Documents to which it is a party (including, without limitation, the granting of
Liens pursuant to the Security Documents), nor compliance by it with the terms
and provisions thereof, nor the consummation of the transactions contemplated
therein (i) will contravene any provision of any Requirement of Law applicable
to any Credit Party, (ii) will conflict with or result in any breach of or
constitute a tortious interference with any of the terms, covenants, conditions
or provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Security Documents) upon any of the property or assets of any Credit
Party pursuant to the terms of, any Contractual Obligation to which any Credit
Party is a party or by which it or any of its property or assets is bound or to
which it may be subject, (iii) will violate any provision of any Organizational
Document of any Credit Party or
61
(iv) requires any approval of stockholders or any approval or consent of any
Person (other than a Governmental Authority) except as have been obtained or as
set forth on SCHEDULE 6.3.
6.4 GOVERNMENTAL AND OTHER APPROVALS.
Except as set forth on SCHEDULE 6.4 hereto and except for the
recording of the Mortgage Supplements and the filing of UCC financing
statements, which shall be recorded and filed, respectively, on, or as soon as
practicable after, the date hereof, no order, consent, approval, license,
authorization or validation of, or filing, recording or registration with or
exemption by, any Governmental Authority (except as have been obtained or made
on or prior to the Closing Date), is required to authorize, or is required in
connection with, the execution, delivery and performance of any Loan Document.
6.5 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES; ETC.
(a) FINANCIAL STATEMENTS. The Historical Financial Statements
copies of which have been furnished to Administrative Agent prior to the date
hereof, have been prepared in accordance with GAAP consistently applied (except
as may be indicated in the notes thereto) subject, in the case of interim
statements, to normal year end adjustments. Each Historical Financial Statement
presents fairly the financial condition of the applicable Credit Party as of the
date thereof. The Historical Financial Statements identified on SCHEDULE 6.5(a)
as audited financial statements have been examined by Deloitte & Touche,
independent certified public accountants, who delivered an opinion in respect
thereto, and present fairly the financial condition of the applicable Credit
Party at the date of each respective audited balance sheet. Since December 31,
2001, there has been no Material Adverse Effect.
(b) SOLVENCY. On and as of the Closing Date, after giving effect
to the Transactions and to all Indebtedness (including the Loans) being
incurred, and to be incurred (and the use of proceeds thereof), and Liens
created, and to be created, by Borrower in connection with the transactions
contemplated hereby, (i) the sum of the assets, at a fair valuation, of Borrower
and each other Material Subsidiary will exceed its debts; (ii) neither Borrower
nor any Material Subsidiary has incurred and does not intend to, nor believes
that it will, incur debts beyond its ability to pay such debts as such debts
mature; and (iii) Borrower and each other Material Subsidiary will have
sufficient capital with which to conduct its business. For purposes of this
SECTION 6.5(b) "debt" means any liability on a claim, and "claim" means (y) any
right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured (including all obligations,
if any, under any Plan or the equivalent for unfunded past service liability,
and any other unfunded medical and death benefits) or (z) any right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. In computing the amount of contingent or unliquidated liabilities
at any time, such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
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(c) NO UNDISCLOSED LIABILITIES. Except as fully reflected in the
financial statements and the notes related thereto delivered pursuant to SECTION
6.5(a) and on SCHEDULE 6.5(d) there were, to the best of Borrower's knowledge,
as of the Closing Date (and after giving effect to the Transactions occurring on
such date) no liabilities or obligations with respect to Borrower and its
Restricted Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or in
aggregate, would be material to Borrower.
(d) INDEBTEDNESS. SCHEDULE 6.5(d) sets forth a true and complete
list of (i) all Indebtedness of Borrower, HSCHC and HSCC and its Restricted
Subsidiaries (other than Loans, Intercompany Indebtedness or Priority Loans)
that is outstanding as of the Closing Date and that remains outstanding after
giving effect to the Transactions, to the extent that, in each case, such
Indebtedness is in excess of $1,000,000 (the "EXISTING OBLIGATIONS"), in
aggregate principal amount thereof as of a date not more than three Business
Days prior to the Closing Date (and the aggregate amount of any undrawn
commitments with respect thereto as of the date specified therein), and (ii)
Interest Rate Agreements, the notional amount thereof and the name of the
respective obligor and any other entity which directly or indirectly guaranteed
such debt. No Existing Obligation has been incurred in connection with, or in
contemplation of, the Transactions or the other transactions contemplated
hereby. Borrower has delivered or caused to be delivered to Administrative Agent
a true and complete copy of the form of each instrument evidencing Indebtedness
for money borrowed listed on SCHEDULE 6.5(d) and of each instrument pursuant to
which such Indebtedness for money borrowed was issued.
(e) PRO FORMA. The PRO FORMA balance sheet of Borrower attached
hereto as SCHEDULE 6.5(e) (the "PRO FORMA BALANCE SHEET") presents fairly the
financial condition of Borrower at the date of such balance sheet and presents a
good faith estimate of the PRO FORMA financial condition of Borrower (after
giving effect to the Transactions, and the other transactions contemplated
hereby and thereby) at the date thereof). The Pro Forma Balance Sheet has been
prepared using financial statements of Borrower and its Subsidiaries which were
prepared in accordance with GAAP consistently applied (except as may be
indicated in the notes thereto) subject to normal year-end adjustments.
(f) PROJECTIONS. On and as of the Closing Date, the financial
projections, attached hereto as SCHEDULE 6.5(f) and previously delivered to
Administrative Agent and the Lenders (the "PROJECTIONS") and each of the
Projections delivered after the Closing Date pursuant to SECTION 7.2(f) are, at
the time made, based on good faith estimates and assumptions made by the
management of Borrower, and there are no statements or conclusions in any of the
Projections which, at the time made, are based upon or include information known
to Borrower to be misleading or which fail to take into account material
information regarding the matters reported therein. On the Closing Date,
Borrower believes that the Projections are reasonable and attainable, it being
understood that uncertainty is inherent in any forecasts or projections and that
no assurance can be given that the results set forth in the Projections will
actually be obtained.
6.6 LITIGATION.
There are no actions, suits or proceedings pending or, to the best
knowledge of Borrower, threatened (except for litigation that would be rendered
moot by, or would not
63
survive, the consummation of the Plan of Reorganization) against Borrower or any
of its Subsidiaries (i) with respect to any Loan Document seeking to enjoin
Borrower's or any Subsidiary's performance thereof or (ii) which would
reasonably be expected to have a Material Adverse Effect.
6.7 TRUE AND COMPLETE DISCLOSURE.
All factual information (taken as a whole) heretofore or
contemporaneously furnished by or on behalf of Borrower or any of its
Subsidiaries in writing (including electronically) to any Lender (other than the
Projections as to which SECTION 6.5(f) applies) for purposes of or in connection
with this Agreement or any transaction contemplated herein is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of Borrower or any of its Subsidiaries in writing to any Lender for purposes of
or in connection with this Agreement or any transaction contemplated herein will
be, true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information was provided. The Lenders acknowledge that they have not relied on
Borrower's company brochures.
6.8 MARGIN REGULATIONS.
No part of the proceeds of any Loan has been or will be used to
purchase or carry any margin stock (as defined in Regulation U of the Board),
directly or indirectly, or to extend credit for the purpose of purchasing or
carrying any such margin stock for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause any of the loans or
extensions of credit under this Agreement to be considered a "purpose credit"
within the meaning of Regulation T, U or X of the Board.
6.9 TAX RETURNS AND PAYMENTS.
Each of Borrower and its Subsidiaries have filed or caused to be filed
all tax returns which are required to be filed, except where failure to file any
such returns would not reasonably be expected to have a Material Adverse Effect,
and have paid or caused to be paid all taxes shown to be due and payable on said
returns or on any assessments made against them or any of their respective
material properties and all other material taxes, fees or other charges imposed
on them or any of their respective properties by any Governmental Authority
(other than those the amount or validity of which is contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Borrower or its Subsidiaries, as the
case may be) except where failure to take any such action would not reasonably
be expected to have a Material Adverse Effect; and no tax liens have been filed
and no claims are being asserted with respect to any such taxes, fees or other
charges (other than such liens or claims, the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided) which
would be reasonably expected to have a Material Adverse Effect.
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6.10 COMPLIANCE WITH ERISA.
Each Plan has been operated and administered in a manner so as not to
result in any material liability of Borrower for failure to comply with the
applicable provisions of ERISA and the Code; no Reportable Event which could
reasonably be expected to result in the termination of any Plan has occurred
with respect to a Plan; to the best knowledge of Borrower, no Multiemployer Plan
is insolvent or in reorganization; as of the Closing Date, the aggregate present
value of the accrued benefits as of the Closing Date under each Plan does not
exceed the aggregate fair market value of the assets of such Plan, in each case,
by more than $3,000,000 using the actuarial funding assumptions in effect for
such Plan as of the most recent valuation date; no Plan has an accumulated or
waived funding deficiency or has applied for an extension of any amortization
period within the meaning of Section 412 of the Code; neither Borrower nor any
of its Subsidiaries nor any ERISA Affiliate has incurred any material liability
to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code; no
proceedings have been instituted to terminate any Plan within the last fiscal
year; using actuarial assumptions and computation methods consistent with
subpart 1 of subtitle E of Title IV of ERISA, to the best knowledge of Borrower,
Borrower and its Subsidiaries and its ERISA Affiliates would not have any
material liability to any Plans which are Multiemployer Plans in the event of a
complete withdrawal therefrom, as of the close of the most recent fiscal year of
each such Multiemployer Plan ending prior to the Closing Date; no Lien imposed
under the Code or ERISA on the assets of Borrower or any of its Subsidiaries or
any ERISA Affiliate exists or is likely to arise on account of any Plan; and
Borrower and its Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides
benefits to retired employees (other than as required by Section 601 of ERISA)
or any employee pension benefit plan (as defined in Section 3(2) of ERISA) the
obligations with respect to either of which could reasonably be expected to have
a Material Adverse Effect.
6.11 OWNERSHIP OF PROPERTY.
Each of Borrower and its Restricted Subsidiaries has good and
marketable title in fee simple to, a valid leasehold interest in, or a valid
contractual agreement to use, all its material real property, and good title to,
a valid leasehold interest in, or valid contractual rights to use all its other
material property, and none of such property is subject to any Lien except for
Permitted Liens. As of the Closing Date, Borrower and its Restricted
Subsidiaries have granted mortgages to secure the Obligations on all parcels of
real estate which have an estimated fair market value in excess of $1,000,000.
6.12 CAPITALIZATION OF BORROWER.
On the Closing Date, the capitalization of Borrower is as set forth on
SCHEDULE 6.12 hereto. All shares of Capital Stock of Borrower have been duly
authorized and validly issued and are fully paid and non-assessable. Except as
set forth on SCHEDULE 6.12, no authorized but unissued or treasury shares of
Capital Stock of Borrower are subject to any option, warrant, right to call or
commitment of any kind or character. A complete and correct copy of each of the
certificate of incorporation and by-laws of Borrower in effect on the date of
this Agreement has been delivered to Administrative Agent. Except as set forth
on SCHEDULE 6.12, Borrower does
65
not have any outstanding stock or securities convertible into or exchangeable
for any shares of its Capital Stock, or any rights issued to any Person (either
preemptive or other) to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to
any of its Capital Stock or any stock or securities convertible into or
exchangeable for any of its Capital Stock (other than as set forth in the
certificate of incorporation of Borrower). Neither Borrower nor any of its
Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its Capital Stock or any
convertible securities, rights or options of the type described in the preceding
sentence except for agreements the performance of which would not violate this
Agreement. As of the Closing Date, all of the issued and outstanding shares of
Capital Stock of Borrower are owned of record by the stockholders as set forth
on SCHEDULE 6.12 hereto.
6.13 SUBSIDIARIES.
(a) ORGANIZATION. SCHEDULE 6.13 hereto sets forth, as of the date
hereof, a true, complete and correct list of each Restricted Subsidiary of
Borrower and indicates for each such Subsidiary (i) its jurisdiction of
incorporation and (ii) its ownership (by holder and percentage interest). As of
the date hereof, Borrower has no Restricted Subsidiaries except for those
Restricted Subsidiaries listed as such on SCHEDULE 6.13 hereto.
(b) CAPITALIZATION. All shares of Capital Stock of each Restricted
Subsidiary of Borrower have been duly authorized and validly issued and, to the
extent applicable in the case of Foreign Subsidiaries, are fully paid and
non-assessable and, to the extent owned by Borrower, are owned by Borrower free
and clear of all Liens except for Permitted Liens. No authorized but unissued or
treasury shares of Capital Stock of any Restricted Subsidiary of Borrower are
subject to any option, warrant, right to call or commitment of any kind or
character.
(c) RESTRICTIONS ON OR RELATING TO SUBSIDIARIES. There does not
exist any consensual encumbrance or restriction on the ability of (i) any
Restricted Subsidiary of Borrower to pay dividends or make any other
distributions on its Capital Stock or any other interest or participation in its
profits owned by Borrower or any Restricted Subsidiary of Borrower, or to pay
any Indebtedness owed to Borrower or a Restricted Subsidiary of Borrower, (ii)
any Restricted Subsidiary of Borrower to make loans or advances to Borrower or
any of Borrower's Subsidiaries or (iii) Borrower or any of its Restricted
Subsidiaries to transfer any of its properties or assets to Borrower or any of
its Subsidiaries, except for such encumbrances or restrictions permitted to
exist under SECTION 8.13.
6.14 COMPLIANCE WITH LAW, ETC.
Neither Borrower nor any of its Subsidiaries is in default under or in
violation of any Requirement of Law or Contractual Obligation or under its
Organizational Documents, as the case may be, in each case the consequences of
which default or violation, either in any one case or in the aggregate, would
have a Material Adverse Effect.
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6.15 INVESTMENT COMPANY ACT.
Neither Borrower nor any of its Subsidiaries is an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
6.16 PUBLIC UTILITY HOLDING COMPANY ACT.
Neither Borrower nor any of its Subsidiaries is 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.
6.17 ENVIRONMENTAL MATTERS.
Except as disclosed in SCHEDULE 6.17 hereto: (i) the operations of and
the real property owned or operated by Borrower and each of its Subsidiaries is
in compliance with all applicable Environmental Laws except where the failure to
be in compliance, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; (ii) Borrower and each of its
Subsidiaries has obtained and will continue to maintain all Environmental
Permits, and all such Environmental Permits are in good standing and Borrower
and its Subsidiaries are in compliance with all terms and conditions of such
Environmental Permits, except where failure to so obtain, maintain or comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; (iii) neither Borrower nor any of its Subsidiaries nor
any of their present or past properties or operations (whether owned or leased)
is subject to: (A) any Environmental Claim or other written claim, request for
information, judgment, order, decree or agreement from or with any Governmental
Authority or private party related to any material violation of or material
non-compliance with Environmental Laws or Environmental Permits to the extent
any of the foregoing could reasonably be expected to have a Material Adverse
Effect, (B) any pending or, to the knowledge of Borrower, threatened judicial or
administrative proceeding, action, suit or investigation related to any
Environmental Laws or Environmental Permits which, if determined adversely to
Borrower or any of its Subsidiaries, could reasonably be expected to have a
Material Adverse Effect, (C) any Remedial Action which if not taken could
reasonably be expected to have a Material Adverse Effect or (D) any liabilities,
obligations or costs arising from the Release or substantial threat of a
material Release of a Contaminant into the environment regardless of whether the
Release or substantial threat of a material Release is occurring on Borrower's
or any Subsidiaries present or past properties or at any other location, in each
case where such Release or substantial threat of a Material Release could
reasonably be expected to have a Material Adverse Effect; (iv) there is not now,
nor to the knowledge of Borrower has there ever been, on or from any current or
former property of Borrower or on, in or from the current or former property of
any of its Subsidiaries, to the extent any of the following could reasonably be
expected to have a Material Adverse Effect: (A) except in compliance with
applicable Environmental Laws and Environmental Permits, any generation,
handling, treatment, recycling, storage or off-site disposal of any hazardous
waste as those terms are defined under Environmental Laws, (B) any on-site
disposal of any hazardous waste, substance or material as those terms are
defined under applicable Environmental Laws, (C) except in compliance with
applicable Environmental Laws and Environmental Permits, any
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underground storage tanks or underground injection xxxxx, (D) any surface
impoundments, pits, ponds, lagoons or landfills, (E) except in compliance with
applicable Environmental Laws and Environmental Permits, any friable
asbestos-containing material; or (F) except in compliance with applicable
Environmental Laws and Environmental Permits, any polychlorinated biphenyls
(PCB's) or other Contaminants; (v) neither Borrower nor any of its Subsidiaries
has received any written notice or claim to the effect that Borrower or any of
its Subsidiaries is or may be liable to any Person as a result of the Release or
substantial threat of a material Release of a Contaminant into the environment,
which notice or claim could reasonably be expected to result in a Material
Adverse Effect; and (vi) no Environmental Lien has attached to any property
(whether owned or leased) of Borrower or of any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect, nor are there any
facts or circumstances currently known to Borrower or any of its Subsidiaries
that may reasonably be expected to give rise to such an Environmental Lien.
6.18 LABOR RELATIONS.
Neither Borrower nor any of its Restricted Subsidiaries is engaged in
any unfair labor practice that could reasonably be expected to have a Material
Adverse Effect. There is (i) no significant unfair labor practice complaint
pending against Borrower or any of its Restricted Subsidiaries or, to the best
knowledge of Borrower, threatened against any of them before the National Labor
Relations Board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against Borrower or any of its Restricted Subsidiaries or, to the best
knowledge of Borrower, threatened against any of them, (ii) no significant
strike, labor dispute, slowdown or stoppage is pending against Borrower or any
of its Restricted Subsidiaries or, to the best knowledge of Borrower, threatened
against Borrower or any of its Restricted Subsidiaries and (iii) to the best
knowledge of Borrower, no question concerning union representation exists with
respect to the employees of Borrower or any of its Restricted Subsidiaries,
except (with respect to any matter specified in clause (i), (ii) or (iii) above,
either individually or in the aggregate) such as could not reasonably be
expected to have a Material Adverse Effect.
6.19 INTELLECTUAL PROPERTY.
Each of Borrower and its Restricted Subsidiaries owns or holds
licenses or other rights to or under all of the patents, patent applications,
trademarks, service marks, trademark and service xxxx registrations and
applications therefor, trade secrets, proprietary information, computer
programs, databases, and other proprietary rights (collectively, "INTELLECTUAL
PROPERTY") necessary for the present conduct of its business, without any known
conflict with the rights of others, except such conflicts which could not
reasonably be expected to have a Material Adverse Effect. Neither Borrower nor
any of its Restricted Subsidiaries has knowledge of any existing or threatened
claim by any Person contesting the validity, enforceability, use or ownership of
the Intellectual Property which could reasonably be expected to have a Material
Adverse Effect.
6.20 CERTAIN FEES.
Except as otherwise disclosed to Administrative Agent in writing prior
to the date hereof, no broker's or finder's fees or commissions or any similar
fees or commissions will be
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payable by Borrower or any Restricted Subsidiary with respect to the incurrence
and maintenance of the Obligations, any other transaction under the Loan
Documents or any services rendered in connection with such transactions.
Borrower covenants that it will indemnify Administrative Agent and each Lender
against and hold Administrative Agent and each Lender harmless from any claim,
demand or liability for broker's or finder's fees or similar fees or commissions
alleged to have been incurred in connection with any of the transactions
contemplated hereby.
6.21 SECURITY DOCUMENTS.
(a) SECURITY AGREEMENT COLLATERAL. The provisions of the Security
Documents are effective to create in favor of the Collateral Agent for the
benefit of the secured parties pursuant to the Security Agreement, a legal,
valid and enforceable security interest in all right, title and interest of the
applicable Credit Party in the Collateral owned by such Credit Party, and the
Security Agreement, together with the filings of Form UCC-1 in all relevant
jurisdictions creates a first lien on, and security interest in, all right,
title and interest of Borrower and such Credit Parties in all of the Collateral
described therein, subject to no other Liens other than Permitted Liens. Except
for titled vehicles, vessels and other collateral which may not be perfected
through the filing of financing statements under the Uniform Commercial Code of
the appropriate jurisdiction and which have an aggregate fair market value of
less than $5,000,000, all such liens have been or, upon the filing of the
financing statements delivered on the Closing Date, will be fully perfected
liens except for Permitted Liens. The recordation in the United States Patent
and Trademark Office and in the United States Copyright Office of assignments
for security made pursuant to the Security Agreement will be effective, under
Federal law, to perfect the security interest granted to the Collateral Agent in
the trademarks, patents and copyrights covered by the Security Agreement. The
recordation with the United States Surface Transportation Board of assignments
for security made pursuant to the Security Agreement will be effective under
Federal law, to create a valid first lien in favor of the Collateral Agent the
in the railcars covered by the Security Agreement. Borrower and its Restricted
Subsidiaries have good and marketable title to all Collateral, free and clear of
all Liens except Permitted Liens.
(b) PLEDGED SECURITIES. The security interests created in favor of
the Collateral Agent, as pledgee for the benefit of the Lenders under the
Security Agreement, constitute perfected security interests in the Pledged
Securities and Pledged Intercompany Notes, subject to no security interests of
any other Person other than Permitted Liens. Except as set forth in the Security
Agreement, no filings, registrations or recordings which have not been made or
will not have been made (or submitted for recordation) within 10 Business Days
after the Closing Date are required in order to perfect the security interests
created in the Pledged Securities or Pledged Intercompany Notes under the
Security Agreement. Sixty-five percent (65%) of the Capital Stock of all direct
Foreign Subsidiaries with a net book value and a fair market value in excess of
$250,000 are pledged to the Collateral Agent.
(c) REAL PROPERTY COLLATERAL. The Mortgages create, as security
for the obligations purported to be secured thereby, a valid and enforceable
perfected security interest in and Lien on all of the Mortgaged Property
(including, without limitation, all fixtures and improvements relating to such
Mortgaged Property and affixed or added thereto on or after the Closing Date) in
favor of the Collateral Agent (or such other trustee as may be named therein)
69
for the benefit of the secured parties under the Security Agreement, superior to
and prior to the rights of all third Persons (except that the security interest
created in the Mortgaged Property may be subject to the Permitted Liens related
thereto) and subject to no other Liens (other than Liens permitted under
SECTION 8.1). SCHEDULE 6.21(c) contains a true and complete list as of the
Closing Date of (x) each parcel of real property of Borrower and its Restricted
Subsidiaries with an estimated fair market value in excess of $1,000,000, (y)
the type of interest in such parcel of real property held by Borrower or such
Restricted Subsidiaries and (z) whether or not such parcel of real property is
Mortgaged Property. Borrower or such Restricted Subsidiaries have good and
marketable title to all Mortgaged Property free and clear of all Liens except
those described in the first sentence of this SECTION 6.21(c).
(d) DEPOSIT ACCOUNTS. All domestic Deposit Accounts and
disbursement accounts of Borrower and its Restricted Subsidiaries whose balances
exceed $100,000 as of the Closing Date are listed on SCHEDULE 6.21(d). Neither
the Borrower nor any Subsidiary has granted any interest in any such Deposit
Account or disbursement account to any Person other than pursuant to the
Security Documents or the "Security Documents" as such term is defined in the
Priority Credit Agreement.
6.22 CHARITABLE CONTRIBUTIONS. Since October 31, 2001, neither
Borrower nor any of its Restricted Subsidiaries has made any charitable
contributions except as would have been permitted pursuant to SECTION 8.17 if it
had been in effect at such time.
6.23 ASBESTOS MATTERS. Neither the Borrower nor any Subsidiary of
the Borrower (a) manufactures, produces or sells any product containing
asbestos; or (b) has manufactured, produced or sold any product containing
asbestos prior to the Effective Date which would reasonably be expected to have
a Material Adverse Effect.
ARTICLE VII
AFFIRMATIVE COVENANTS
Borrower hereby agrees that, so long as any Loan remains outstanding
and unpaid or any other amount is owing to any Lender or Administrative Agent
hereunder, Borrower shall:
7.1 FINANCIAL STATEMENTS.
Furnish, or cause to be furnished, to each Lender:
(a) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but in
any event not later than 45 days after the end of each of the first three
quarterly periods of each Fiscal Year of Borrower, (i) the unaudited
consolidated balance sheet of Borrower and its consolidated Subsidiaries as at
the end of such quarter setting forth in comparative form the audited balance
sheet of the Borrower and its consolidated Subsidiaries for the prior Fiscal
Year, (ii) the related unaudited consolidated statement of income of the
Borrower and its consolidated Subsidiaries as at the end of such quarter and for
the portion of the Fiscal Year through the end of such quarter setting forth in
comparative form the figures for the related periods in the prior Fiscal Year
and (iii) the related unaudited consolidated statements of cash flow of Borrower
and its consolidated Subsidiaries for the portion of the Fiscal Year through the
end of such quarter, and setting forth
70
in comparative form figures for the related period in the prior Fiscal Year, all
of which shall be certified by a Responsible Financial Officer of Borrower,
subject to normal year-end audit adjustments and, if Borrower has established
any Unrestricted Subsidiaries, such consolidated statements shall be accompanied
by a balance sheet as of such date, and a statement of income and cash flows for
such period and the prior year comparative period, reflecting on a combined
basis, for Restricted Subsidiaries and on a combined basis for Unrestricted
Subsidiaries, the consolidating entries for each of such types of Subsidiaries;
and
(b) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in any
event within 90 days after the end of each Fiscal Year of Borrower, a copy of
the consolidating and consolidated balance sheet of Borrower and its
consolidated Subsidiaries as at the end of such year and the related
consolidating and consolidated statements of income and of cash flows for such
year, and setting forth in each case in comparative form the figures for the
previous year and such consolidated statements shall be accompanied by a balance
sheet as of such date, and a statement of income and cash flows for such period,
reflecting on a combined basis, for Restricted Subsidiaries and on a combined
basis for Unrestricted Subsidiaries, the consolidating entries for each of such
types of Subsidiaries; all such financial statements shall be complete and
correct in all material respects and shall be prepared in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods and, in the case of the consolidated financial statements referred to in
this SECTION 7.1(b), accompanied by a report thereon of Deloitte & Touche or
such other independent certified public accountants of recognized national
standing, which report shall contain no qualifications with respect to the
continuance of Borrower and its Subsidiaries as going concerns and shall state
that such financial statements present fairly the financial position of Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP.
(c) MONTHLY FINANCIAL STATEMENTS. As soon as available, but in any
event within thirty (30) days after the end of each month (other than the last
month of any Fiscal Quarter) of Borrower, unaudited financial statements
consisting of a consolidated balance sheet as at the end of such month and
consolidated statements of income and cash flows of Borrower and its Restricted
Subsidiaries, consolidated and business segment statements of operations for
such month and for the Fiscal Year through such month, setting forth in each
case in comparative form the figures for the comparative month for the previous
Fiscal Year, subject to normal year-end audit adjustments all in reasonable
detail and certified on behalf of Borrower by a Responsible Officer of Borrower
as having been prepared in accordance with GAAP consistently applied.
7.2 CERTIFICATES; OTHER INFORMATION.
Furnish to each Lender (or, if specified below, to Administrative
Agent):
(a) ACCOUNTANT'S CERTIFICATES. Concurrently with the delivery of
the financial statements referred to in SECTION 7.1(b), to the extent not
contrary to the then current recommendations of the American Institute of
Certified Public Accountants, a certificate from Deloitte & Touche or other
independent certified public accountants of nationally recognized standing
substantially in the form of EXHIBIT 7.2(a), stating that, in the course of
their annual
71
audit of the books and records of Borrower, no Event of Default or Unmatured
Event of Default, insofar as they relate to accounting and financial matters,
has come to their attention which was continuing at the end of such Fiscal Year
or on the date of their certificate, or if such an Event of Default or Unmatured
Event of Default has come to their attention, the certificate shall indicate the
nature of such Event of Default or Unmatured Event of Default.
(b) OFFICER'S CERTIFICATES. Concurrently with the delivery of the
financial statements referred to in SECTION 7.1, a certificate of a Responsible
Financial Officer substantially in the form of EXHIBIT 7.2(b)-1 stating that, to
the best of such officer's knowledge, such financial statements present fairly,
in accordance with GAAP, the financial condition and results of operations of
Borrower and its Subsidiaries for the period referred to therein (subject to
normal year-end audit adjustments) and concurrently with the delivery of the
financial statements referred to SECTION 7.1(a) and (b), a Certificate of a
Responsible Officer substantially in the form of EXHIBIT 7.2(b)-2, that no Event
of Default or Unmatured Event of Default has occurred except as specified in
such certificate and, if so specified, the action which Borrower proposes to
take with respect thereto, which certificate shall set forth detailed
computations to the extent necessary to establish Borrower's compliance with the
covenants set forth in ARTICLE IX of this Agreement.
(c) AUDIT REPORTS AND STATEMENTS. Promptly following Borrower's
receipt thereof, copies of all consolidated financial or other consolidated
reports or statements, if any, submitted to Borrower or any of its Subsidiaries
by independent public accountants relating to any annual or interim audit of the
books of Borrower or any of its Subsidiaries.
(d) PUBLIC FILINGS. Within 10 days after the same become public,
copies of all financial statements and reports which Borrower may make to, or
file with, the SEC.
(e) OTHER REQUESTED INFORMATION. Such other information respecting
the respective properties, business affairs, financial condition and/or
operations of Holdco I, Holdco II or Borrower or any of their Subsidiaries as
Administrative Agent or any Lender (through Administrative Agent) may from time
to time reasonably request.
(f) PROJECTIONS. As soon as available and in any event within
sixty (60) days following the first day of each Fiscal Year commencing with the
Fiscal Year of Borrower beginning January 1, 2003 projections in form similar to
that delivered on the Closing Date covering the period from the beginning of
such Fiscal Year (on a quarterly basis for the first Fiscal Year and an annual
basis thereafter) through the end of the third Fiscal Year thereafter, prepared
in reasonable detail, with appropriate presentation and discussion of the
principal assumptions upon which such projections are based.
7.3 NOTICES.
Promptly (and in any event within three Business Days in the case of
(a) below, or thirty days in the case of (b)-(c) below) after a Responsible
Officer of Borrower or any Subsidiary obtains knowledge thereof, give notice to
Administrative Agent (which shall promptly provide a copy of such notice to each
Lender) of:
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(a) EVENT OF DEFAULT OR UNMATURED EVENT OF DEFAULT. The occurrence
of any Event of Default or Unmatured Event of Default, accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action Borrower or such Subsidiary proposes
to take with respect thereto.
(b) LITIGATION AND RELATED MATTERS. The commencement of, or any
material development in, any action, suit, proceeding or investigation affecting
Borrower or any of its Restricted Subsidiaries or any of their respective
properties before any arbitrator or Governmental Authority, (i) in which the
amount of any claim, damage, penalty or fine asserted against Borrower or its
Restricted Subsidiaries that Borrower reasonably determines is not covered by
insurance is $3,000,000 or more, (ii) with respect to any Loan Document or any
material Indebtedness or preferred stock of Borrower or any of its Restricted
Subsidiaries or (iii) which, if determined adversely to Borrower or any of its
Subsidiaries, could reasonably be expected to have a Material Adverse Effect.
(c) ENVIRONMENTAL NOTIFICATION.
(i) The occurrence of one or more of the following, to the
extent that any of the following, if adversely determined, would have a material
adverse effect on the financial condition, business or properties of Borrower
and its Subsidiaries taken as a whole or, in any event, could reasonably be
expected to result in liability to Borrower or any of its Restricted
Subsidiaries in excess of $3,000,000 or a fine or penalty in excess of
$1,000,000: (A) written notice, claim or request for information to the effect
that Borrower or any of its Subsidiaries is or may be liable in any material
respect to any Person as a result of the presence of or the Release or
substantial threat of a material Release of any Contaminant into the
environment; (B) written notice that Borrower or any of its Subsidiaries is
subject to investigation by any Governmental Authority evaluating whether any
Remedial Action is needed to respond to the presence or to the Release or
substantial threat of a material Release of any Contaminant into the
environment; (C) written notice that any property, whether owned or leased by,
or operated on behalf of, Borrower or its Subsidiaries is subject to a material
Environmental Lien; (D) written notice of violation to Borrower or any of its
Subsidiaries of any Environmental Laws or Environmental Permits; or (E)
commencement or written threat of any judicial or administrative proceeding
alleging a violation of any Environmental Laws or Environmental Permits;
PROVIDED, HOWEVER, that the provisions of this clause (i) shall not require
Borrower to violate or breach any confidentiality covenants to which it is
bound.
(ii) Upon written request by Administrative Agent, Borrower
or any Restricted Subsidiary shall promptly submit to Administrative Agent and
the Lenders a report providing an update of the status of each environmental,
health or safety compliance, hazard or liability issue identified in any notice
or report required pursuant to clause (i) above and any other environmental,
health and safety compliance obligation, remedial obligation or liability that
could reasonably be expected to have a Material Adverse Effect. All such notices
shall describe in reasonable detail the nature of the claim, investigation,
condition, occurrence or removal or Remedial Action and Borrower's or such
Restricted Subsidiary's response thereto.
(d) NOTICES AND OTHER REPORTS. Notwithstanding the foregoing, to
the extent not otherwise required to be delivered hereunder, Borrower shall
promptly provide to
73
Administrative Agent a copy of all material notices required to be delivered by
the Borrower or any of its affiliates under the Priority Credit Agreement, the
ICI Agreement, the GOF Restructuring Agreement or the MIOA.
7.4 MAINTENANCE OF EXISTENCE.
Preserve, renew and keep in full force and effect its and each
Subsidiary's existence and take all reasonable action to maintain all rights,
privileges and franchises material to its and those of each of its Subsidiaries'
businesses except to the extent that failure to take any such action would not
in the aggregate reasonably be expected to have a Material Adverse Effect, or as
otherwise permitted pursuant to SECTIONS 8.3 and 8.7, and comply and cause each
of its Subsidiaries to comply with all Requirements of Law except to the extent
that failure to comply therewith would not in the aggregate reasonably be
expected to have a Material Adverse Effect.
7.5 PAYMENT OF OBLIGATIONS.
Pay or discharge or otherwise satisfy at maturity or, to the extent
permitted hereby, prior to maturity or before they become delinquent, as the
case may be, and cause each of its Restricted Subsidiaries to pay or discharge
or otherwise satisfy at or before maturity or before they become delinquent, as
the case may be:
(i) all material taxes, assessments and governmental
charges or levies imposed upon any of them or upon any of their income or
profits or any of their respective properties or assets prior to the date
on which penalties attach thereto; and
(ii) all lawful claims prior to the time they become a Lien
(other than Permitted Liens) upon any of their respective properties or
assets;
PROVIDED, HOWEVER, that neither Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such material tax, assessment, charge, levy or
claim (A) while the same is being contested by it in good faith and by
appropriate proceedings diligently pursued so long as Borrower or such
Subsidiary, as the case may be, shall have set aside on its books adequate
reserves in accordance with GAAP (segregated to the extent required by GAAP)
with respect thereto and title to any material properties or assets is not
jeopardized in any material respect or (B) which could not reasonably be
expected to have a Material Adverse Effect.
7.6 INSPECTION OF PROPERTY, BOOKS AND RECORDS.
Keep, or cause to be kept, and cause each of its Subsidiaries to keep
or cause to be kept, adequate records and books of account, in which complete
entries are to be made reflecting its and their business and financial
transactions, such entries to be made in accordance with sound accounting
principles consistently applied and will permit, and cause each of its
Subsidiaries to permit, any Lender or its respective representatives, at any
reasonable time, and from time to time at the reasonable request of such Lender
made to Borrower and upon reasonable notice, to visit and inspect its and their
respective properties, to examine and make copies of and take abstracts from its
and their respective records and books of account, and to discuss its and their
respective affairs, finances and accounts with its and their respective
74
principal officers, directors and with the written consent of Borrower (which
consent shall not be required if any Event of Default has occurred and is
continuing) independent public accountants, provided that Borrower may attend
any such meetings (and by this provision Borrower authorizes such accountants to
discuss with the Lenders and such representatives the affairs, finances and
accounts of Borrower and its Subsidiaries).
7.7 ERISA.
(a) As soon as practicable and in any event within ten (10) days
after Borrower or any of its Subsidiaries or ERISA Affiliates knows or has
reason to know that a Reportable Event has occurred with respect to any Plan
(whether or not the requirement for notice of such Reportable Event has been
waived by the PBGC), deliver, or cause such Subsidiary or ERISA Affiliate to
deliver, to Administrative Agent a certificate of a responsible officer of
Borrower or such Subsidiary or ERISA Affiliate, as the case may be, setting
forth the details of such Reportable Event and the action, if any, which
Borrower or such Subsidiary or ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given;
(b) Upon the request of any Lender made from time to time,
deliver, or cause each Subsidiary or ERISA Affiliate to deliver, to each Lender
a copy of the most recent actuarial report and annual report completed with
respect to any Plan;
(c) as soon as possible and in any event within ten (10) days
after Borrower or any of its Subsidiaries or ERISA Affiliates knows or has
reason to know that any of the following have occurred with respect to any Plan:
(i) such Plan has been terminated, reorganized, petitioned
or declared insolvent under Title IV of ERISA,
(ii) the Plan Sponsor intends to terminate such Plan,
(iii) the PBGC has instituted or will institute proceedings
under Section 515 of ERISA to collect a delinquent contribution to such
Plan or under Section 4042 of ERISA to terminate such Plan,
(iv) that an accumulated funding deficiency has been
incurred or that an application has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or on extension of any
amortization period under Section 412 of the Code,
(v) that Borrower or any Subsidiary of Borrower, or any
ERISA Affiliate will be required to make a deficit reduction contribution
under Code Section 412(l) to any Plan for any Plan year, or
(vi) Borrower or any Subsidiary of Borrower has incurred any
liability that would result in a Material Adverse Effect under any employee
welfare benefit plan (within the meaning of Section 3(1) of ERISA) that
provides benefits to retired employees (other than as required by Section
601 of ERISA) or any employee pension
75
benefit plans (as defined in Section 3(2) of ERISA), deliver, or cause such
Subsidiary or ERISA Affiliate to deliver, to Administrative Agent a written
notice thereof; and
(d) as soon as possible and in any event within thirty days after
Borrower or any of its Subsidiaries or ERISA Affiliates knows that any of them
has caused a complete withdrawal or partial withdrawal (within the meaning of
Sections 4203 and 4205, respectively, of ERISA) from any Multiemployer Plan,
deliver, or cause such Subsidiary or ERISA Affiliate to deliver, to
Administrative Agent a written notice thereof.
For purposes of this SECTION 7.7, Borrower shall be deemed to have knowledge of
all facts known by the Plan Administrator of any Plan of which Borrower is the
Plan Sponsor, and each Subsidiary and ERISA Affiliate of Borrower shall be
deemed to have knowledge of all facts known by the Plan administrator of any
Plan of which such Subsidiary or ERISA Affiliate, respectively, is a Plan
Sponsor. In addition to its other obligations set forth in this ARTICLE VII,
Borrower shall, and shall cause each of its Subsidiaries and ERISA Affiliates
to:
(i) at the request of any Lender, deliver to such Lender
(and a copy to Administrative Agent) a complete copy of the most recent
annual report (Form 5500) of each Plan required to be filed with the
Internal Revenue Service; and
(ii) at the request of any Lender, deliver to such Lender
(and a copy to Administrative Agent) copies of the most recent annual
reports and notices (as requested by such Lender) received by Borrower or
any Subsidiary or any ERISA Affiliate with respect to any Plan no later
than ten (10) days after the date of such request.
7.8 MAINTENANCE OF PROPERTY; INSURANCE.
(i) Keep and cause each of its Restricted Subsidiaries to keep,
all material property useful and necessary in its business in good working order
and condition, reasonable wear and tear excepted, (ii) maintain on behalf of its
Restricted Subsidiaries or shall cause each of its Restricted Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with respect
to its material properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons. Such insurance shall be maintained with
financially sound and reputable insurers, except that a portion of such
insurance program (not to exceed that which is customary in the case of
companies engaged in the same or similar business or having similar properties
similarly situated) may be effected through self-insurance, provided adequate
reserves therefor, in accordance with GAAP, are maintained. All insurance
policies or certificates (or certified copies thereof) with respect to such
insurance (A) shall be endorsed to the Collateral Agent's reasonable
satisfaction for the benefit of the Collateral Agent for the benefit of the
Secured Parties (including, without limitation, by naming the Collateral Agent
as loss payee or additional insured, as appropriate); and (B) shall state that
such insurance policy shall not be cancelled or revised without thirty days'
prior written notice thereof by the insurer to the Collateral Agent.
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7.9 ENVIRONMENTAL LAWS.
(a) ENVIRONMENTAL COMPLIANCE. Borrower shall, and shall cause each
of its Restricted Subsidiaries, in the exercise of its reasonable business
judgment, to take prompt and appropriate action to respond to any material
non-compliance with applicable Environmental Laws or Environmental Permits or to
any material Release or a substantial threat of a material Release of a
Contaminant, and upon request from Administrative Agent, shall regularly report
to Administrative Agent on such response. Without limiting the generality of the
foregoing, whenever Administrative Agent or any Lender has a reasonable basis to
believe that Borrower is not in material compliance with applicable
Environmental Laws or Environmental Permits or that any property of Borrower or
its Subsidiaries, or any property to which Contaminants generated by Borrower or
its Subsidiaries have come to be located ("OFFSITE PROPERTY") has or may become
contaminated or subject to an order or decree such that any non-compliance,
contamination or order or decree could reasonably be anticipated to have a
Material Adverse Effect, then, to the extent Borrower has the legal right to do
so, Borrower agrees to, at Administrative Agent's request and Borrower's
expense: (i) cause an independent environmental engineer reasonably acceptable
to Administrative Agent to conduct such tests of the site where the alleged or
actual non-compliance or contamination has occurred and prepare and deliver to
Administrative Agent, the Lenders and Borrower a report(s) reasonably acceptable
to Administrative Agent setting forth the results of such tests, Borrower's
proposed plan and schedule for responding to any environmental problems
described therein, and Borrower's estimate of the costs thereof; and (ii)
provide Administrative Agent, the Lenders and Borrower a supplemental report(s)
of such engineer whenever the scope of the environmental problems or Borrower's
response thereto or the estimated costs thereof, shall materially change.
Notwithstanding the above, Borrower shall not be obligated (other than as
required by applicable law) to undertake any tests or remediation at any Offsite
Property that (a) is not owned or operated by Borrower or any of its
Subsidiaries and (b) where Contaminants generated by persons other than Borrower
or any of its Subsidiaries have also come to be located.
(b) ENVIRONMENTAL INDEMNITY. Borrower shall, and shall cause each
of its Restricted Subsidiaries, to defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective employees, agents,
officers and directors, from and against any and all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of Borrower, any of its
Subsidiaries or their respective properties, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, reasonable attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor. The agreements
in this SECTION 7.9(b) shall survive repayment of the Notes and all other
Obligations.
7.10 ADDITIONAL SECURITY; FURTHER ASSURANCES.
(a) AGREEMENT TO GRANT ADDITIONAL SECURITY. Promptly, and in any
event within thirty (30) days after the acquisition by Borrower or any
Restricted Domestic Subsidiary
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of assets or real or personal property of the type that would have constituted
Collateral on the date hereof, in each case in which the Collateral Agent does
not have a perfected security interest under the Security Documents (other than
(t) equipment subject to Liens permitted under SECTION 8.1(b) under agreements
which prohibit the creation of additional Liens on such assets, (u) the property
subject to the Headquarters Mortgage Loan Documents, (v) Capital Stock of a
Subsidiary (which is governed by clause (c) below) (w) any parcel of real estate
or leasehold interest acquired after the Closing Date with a fair market value
of less than $1,000,000 or (x) any other asset with a fair market value of less
than $100,000 individually, provided that all such other assets collectively
have a fair market value of less than $5,000,000) or promptly following request
by Administrative Agent or the Collateral Agent with respect to any other
collateral deemed material by Administrative Agent or Required Lenders (the
"ADDITIONAL COLLATERAL"), Borrower will, and will cause each of its Restricted
Domestic Subsidiaries to, take all necessary action, including (i) the filing of
appropriate financing statements under the provisions of the UCC, applicable
foreign, domestic or local laws, rules or regulations in each of the offices
where such filing is necessary or appropriate and (ii) with respect to real
estate, the execution of a mortgage, the obtaining of title insurance policies,
title surveys and real estate appraisals satisfying the Requirements of Law, to
grant the Collateral Agent for the benefit of the secured parties pursuant to
the Security Agreement a perfected Lien (subject only to Permitted Liens) in
such Collateral pursuant to and to the full extent required by the Security
Documents and this Agreement.
(b) ADDITIONAL SUBSIDIARY GUARANTEES AND INTERCOMPANY NOTES.
Borrower agrees to cause each Restricted Domestic Subsidiary (other than IRIC)
to execute and deliver the Amended and Restated Subsidiary Guarantee Agreement
(or a supplement thereto), the Security Agreement (or a supplement thereto) and
to execute and deliver a Pledged Intercompany Note, if applicable.
(c) PLEDGE OF NEW SUBSIDIARY STOCK. Borrower agrees to pledge (or
cause its Restricted Domestic Subsidiaries to pledge) all of the Capital Stock
of each new Restricted Subsidiary established or created to the Collateral Agent
for the benefit of the secured parties pursuant to the Security Agreement;
PROVIDED that the pledge of the Capital Stock of any new Restricted Subsidiary
which is a Foreign Subsidiary, including "loan stock" or other obligations which
are treated as equity under the Code ("LOAN STOCK") shall, (i) only be required
to the extent owned by Borrower or its Restricted Domestic Subsidiaries, (ii) be
limited to 65% of the Capital Stock of any Foreign Subsidiary with a net book
value and a fair market value in excess of $250,000 and (iii) any filings or
recordations with respect to Foreign Subsidiaries will be made (or submitted for
recordation) within 10 Business Days of the acquisition thereof or such longer
period as the Administrative Agent may approve. No Foreign Subsidiary may be or
become a shareholder of a Domestic Subsidiary.
(d) GRANT OF SECURITY BY NEW SUBSIDIARIES. Subject to the
provisions of SECTIONS 7.10(a) and 7.10(c), Borrower will cause each Restricted
Domestic Subsidiary established or created in accordance with SECTION 8.7 to
grant to the Collateral Agent for the benefit of the secured parties pursuant to
the Security Agreement a first priority Lien (subject to Permitted Liens) on all
property (tangible and intangible) of such Subsidiary by executing and
delivering an agreement substantially in the form of EXHIBIT A to the Security
Agreement, or on other terms satisfactory in form and substance to the
Collateral Agent and Administrative Agent.
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Borrower shall cause each Restricted Domestic Subsidiary, at its own expense, to
execute, acknowledge and deliver, or cause the execution, acknowledgment and
delivery of, and thereafter register, file or record in any appropriate
governmental office, any document or instrument reasonably deemed by
Administrative Agent to be necessary or desirable for the creation and
perfection of the foregoing Liens. Borrower will cause each of its Restricted
Domestic Subsidiaries to take all actions requested by Administrative Agent or
the Required Lenders (including, without limitation, the filing of UCC-1's) in
connection with the granting of such security interests.
(e) PLEDGE OF EQUITY IN UNRESTRICTED SUBSIDIARIES. Borrower agrees
to pledge (or cause its Restricted Domestic Subsidiaries to pledge) all of the
Capital Stock owned by Borrower or a Restricted Subsidiary of each new
Unrestricted Subsidiary established or created after the Closing Date to the
Collateral Agent for the benefit of the secured parties pursuant to the Security
Agreement other than a Foreign Subsidiary with Consolidated Total Assets of
$1,000,000 or less as long as the Consolidated Total Assets of all Foreign
Subsidiaries owned directly by Borrower or its Restricted Domestic Subsidiaries
the Capital Stock of which is not pledged hereunder, does not exceed in the
aggregate $10,000,000; PROVIDED that the pledge of the Capital Stock or Loan
Stock of any new Unrestricted Subsidiary which is a Foreign Subsidiary shall,
(i) only be required to the extent owned by Borrower or its Restricted Domestic
Subsidiaries, (ii) be limited to 65% of the Capital Stock (or Loan Stock) of
such Foreign Subsidiary and (iii) any filings or recordations with respect to
Foreign Subsidiaries will be made (or submitted for recordation) within 10
Business Days of the acquisition thereof or such longer period as the
Administrative Agent may approve. Borrower agrees to pledge, or cause its
Restricted Subsidiaries to pledge, to the Collateral Agent for the benefit of
the secured parties pursuant to the Security Agreement all instruments
evidencing indebtedness owed by any Unrestricted Subsidiary to Borrower or any
Restricted Domestic Subsidiary.
(f) PLEDGE OF ADDITIONAL HUNTSMAN INTERNATIONAL HOLDINGS EQUITY.
Immediately upon the release from pledge by ICI of any equity in Huntsman
International Holdings LLC, HSCC shall pledge such equity pursuant to the
Security Agreement.
(g) DOCUMENTATION FOR ADDITIONAL SECURITY. The security interests
required to be granted pursuant to this SECTION 7.10 shall be granted pursuant
to the Annexes to the Security Documents or such other security documentation
satisfactory in form and substance to Administrative Agent and the Required
Lenders and shall constitute valid and enforceable perfected security interests
prior to the rights of all third Persons (other than the "Secured Parties" as
such term is defined in the Priority Loan Documents) and subject to no other
Liens except Permitted Liens. The Additional Security Documents and other
instruments related thereto shall be duly recorded or filed in such manner and
in such places and at such times as are required by law to establish, perfect,
preserve and protect the Liens, in favor of Administrative Agent for the benefit
of the Lenders, required to be granted pursuant to the Additional Security
Document and, all taxes, fees and other charges payable in connection therewith
shall be paid in full by Borrower or its Subsidiaries. At the time of the
execution and delivery of the Additional Security Documents, Borrower shall
cause to be delivered to Administrative Agent such agreements, opinions of
counsel, title surveys, real estate appraisals satisfying any Requirements of
Law, and other related documents as may be reasonably requested by
Administrative Agent or the Required Lenders to assure themselves that this
SECTION 7.10 has been complied with.
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7.11 END OF FISCAL YEARS; FISCAL QUARTERS.
Borrower shall cause its annual accounting period to end December 31
of each year (each a "FISCAL YEAR", with quarterly accounting periods ending on
March 31, June 30, September 30 and December 31 of each Fiscal Year (each a
"FISCAL QUARTER")).
7.12 OPERATING ACCOUNTS. Borrower shall at all times cause its
primary cash operating account to be maintained at Deutsche Bank Trust Company
Americas (or such other institution approved by Administrative Agent).
7.13 POLYMERS NOTES. On or before the maturity date of the Polymers
Senior Notes, Borrower shall have refinanced the then outstanding Polymers
Senior Notes with proceeds of Permitted Junior Debt permitted by SECTION 8.2(i)
and/or shall have redeemed or repurchased such Polymers Senior Notes in
accordance with SECTION 8.7(h).
7.14 COMPENSATION. Borrower and its Restricted Subsidiaries agree
that the base salary, bonus and other compensation or payments to any member of
the Huntsman Group shall be consistent with past practices of Borrower and its
Restricted Subsidiaries and with industry practices for comparable publicly held
companies. Borrower and its Restricted Subsidiaries acknowledge that Xx. Xxx X.
Xxxxxxxx has retired and therefore will not receive any base salary, bonus or
other similar compensation from Borrower or its Restricted Subsidiaries during
the effectiveness of this Agreement.
ARTICLE VIII
NEGATIVE COVENANTS
Borrower hereby agrees that, so long as any Loan remains outstanding
and unpaid or any other amount is owing to any Lender or Administrative Agent
hereunder:
8.1 LIENS.
Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist or agree to create, incur or assume any Lien in, upon or with respect to
any of its properties or assets (including, without limitation, any securities
or debt instruments of any of its Subsidiaries), whether now owned or hereafter
acquired, or assign or otherwise convey any right to receive income to secure
any obligation; except for the following Liens (herein referred to as "PERMITTED
LIENS"):
(a) Liens existing on the Closing Date listed on SCHEDULE 8.1(a)
hereto and any extension, renewal or replacement thereof but only if the
principal amount of the Indebtedness is not increased and such Liens do not
extend to or cover any other property or assets;
(b) (i) Liens (including Liens under Capitalized Leases) in
respect of property or assets acquired or constructed by Borrower or a
Subsidiary after the date hereof, including, without limitation, liens on
rolling stock, which Liens are created at the time of acquisition or completion
of construction of such property or asset or within 120 days thereafter, to
secure
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Indebtedness assumed or incurred to finance all or any part of the purchase
price or cost of construction of such property or asset, (ii) in the case of any
Person that hereafter becomes a Subsidiary or is consolidated with or merged
with or into Borrower or a Subsidiary, Liens existing at the time such Person
becomes a Subsidiary or is so consolidated or merged (and not incurred in
anticipation thereof), (iii) in the case of any property or asset acquired by
Borrower or any Subsidiary after the Closing Date, Liens existing on such
property or asset at the time of acquisition thereof (and not incurred in
anticipation thereof), whether or not the Indebtedness secured thereby is
assumed by Borrower or a Subsidiary; PROVIDED, that in any such case:
(x) no such Lien shall extend to or cover any other
property or assets of Borrower or of such Subsidiary, as the case may
be, and
(y) the aggregate principal amount of the Indebtedness
secured by all such Liens in respect of any such property or assets
shall not exceed 100% of the fair market value of such property or
assets at the time of such acquisition or, in the case of a Lien in
respect of property or assets existing at the time of such Person
becoming a Subsidiary or being so consolidated or merged, the fair
market value of the property or assets acquired at such time and the
amount of Indebtedness secured on the date of issuance of such Liens
shall not be less than 80% of the fair market value unless the
Collateral Agent shall have a perfected second lien on such equipment;
and any extension, renewal or replacement thereof but only if the principal
amount of the Indebtedness secured thereby is not increased and, such Liens do
not extend to or cover any other property or assets, PROVIDED FURTHER, that the
aggregate principal amount of Indebtedness secured by Liens permitted by this
SECTION 8.1(b) does not exceed at any one time outstanding $15,000,000;
(c) Customary Permitted Liens;
(d) Liens granted pursuant to the Security Documents;
(e) Liens consisting of an agreement to sell, transfer or dispose
of any asset (to the extent such sale, transfer or disposition is permitted
hereunder);
(f) Liens on property of Huntsman Headquarters Corporation
incurred pursuant to the Headquarters Mortgage Loan Documents and Liens on
property of Airstar Corporation incurred pursuant to the Airstar Aircraft
Financing Documents;
(g) Lien on the assets of Nitroil Vegyipari Termelo-Fejleszto
Resvenytarsag (Nitroil Chemical Engineering and Production Co., Plc) which
secure not more than $2,000,000 of Indebtedness;
(h) Liens on property of Foreign Subsidiaries securing
Indebtedness permitted by SECTION 8.2(j);
(i) Liens securing Obligations under the Priority Credit Agreement
to the extent such Indebtedness is permitted by SECTION 8.2(b);
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(j) Liens incurred in connection with the sale and leaseback by
the Borrower or any of its Subsidiaries of railcars acquired after the date
hereof;
(k) Liens securing Permitted Junior Debt; and
(l) Liens (other than Liens securing Indebtedness) with respect to
property with a fair market value not exceeding $5,000,000 in the aggregate at
any one time outstanding.
8.2 INDEBTEDNESS.
Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, incur, create, assume directly or
indirectly, or suffer to exist any Indebtedness (including without limitation
any Guarantee Obligation in respect of Indebtedness of its Unrestricted
Subsidiaries and any Receivables Facility Attributed Indebtedness) except for:
(a) Indebtedness incurred pursuant to this Agreement and the other
Loan Documents;
(b) Indebtedness of Borrower or its Subsidiaries which are parties
to the Subsidiary Guarantee Agreement pursuant to the Priority Credit Agreement
and the Loan Documents (as defined in the Priority Credit Agreement) in a
principal amount outstanding not to exceed $275,000,000 and guarantees thereof
by any Subsidiary Guarantor;
(c) Indebtedness with respect to the Senior Subordinated Notes in
an aggregate principal amount not to exceed $60,000,000;
(d) Indebtedness with respect to the Polymers Senior Notes in an
aggregate principal amount not to exceed $37,000,000;
(e) Indebtedness of Huntsman Headquarters Corporation incurred
pursuant to the Headquarters Mortgage Loan Documents in a principal amount not
in excess of $12,000,000;
(f) Indebtedness (other than Intercompany Indebtedness)
outstanding on the Closing Date listed on SCHEDULE 6.5(d) hereto;
(g) Indebtedness not to exceed $30,000 under the First Mortgage
Notes and guarantees thereof by Subsidiaries of Huntsman Petrochemical
Corporation;
(h) Indebtedness resulting from the extension, renewal or
refinancing or successive refinancing (whether in whole or in part) of any
Indebtedness, permitted under SECTIONS 8.2(c), (d), (e) and (f); PROVIDED,
HOWEVER, that (i) the principal amount of any such refinancing Indebtedness (as
determined as of the date of the incurrence of such refinancing Indebtedness in
accordance with GAAP) does not exceed the principal amount of the Indebtedness
refinanced thereby on such date, (ii) the Weighted Average Life to Maturity of
such Indebtedness is not decreased, (iii) the covenants, defaults and similar
provisions applicable to such refinancing Indebtedness or obligations are
customary market terms reasonably satisfactory to the Administrative Agent and
do not conflict in any material respect with the provisions of this Agreement
and (iv) the terms of such refinancing Indebtedness shall be
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reasonably satisfactory to the Administrative Agent. In the case of any
Indebtedness which is subordinated to the Obligations, such refinancing
Indebtedness shall be subordinated to the Obligations on the same terms or on
such other terms as may be approved by the Administrative Agent.
(i) Permitted Junior Debt of Borrower and guarantees thereof by a
Restricted Subsidiary consisting of Permitted Junior Debt of such Restricted
Subsidiary; PROVIDED, that Borrower shall have complied with the mandatory
prepayment requirements of SECTION 4.2(e);
(j) Indebtedness of any Foreign Subsidiary (or, to the extent such
Indebtedness is incurred with respect to its international activities, Huntsman
International Trading Corporation) and guarantees thereof by Borrower and/or its
Subsidiaries pursuant to over-draft lines or similar extensions of credit such
that the aggregate amount of such Indebtedness under this clause outstanding at
any one time does not exceed $5,000,000 (or the dollar equivalent thereof
determined on a quarterly basis);
(k) Indebtedness of Nitroil Vegyipari Termelo-Fejlesztro
Resvenytatsag in a principal amount not in excess of $2,000,000;
(l) Intercompany Indebtedness to the extent permitted by SECTIONS
8.7(c), (e), (f) and (g); PROVIDED, HOWEVER, that in the event of any subsequent
issuance or transfer of any Capital Stock which results in the holder of such
Indebtedness ceasing to be a Restricted Subsidiary of Borrower or any subsequent
transfer of such Indebtedness (other than to Borrower or any of its Restricted
Subsidiaries) such Indebtedness shall be required to be permitted under another
clause of this SECTION 8.2; PROVIDED, FURTHER, HOWEVER, that (x) such
Intercompany Indebtedness arising after the Closing Date shall be evidenced by a
Pledged Intercompany Note and (y) any loan or advance to Borrower shall be
unsecured;
(m) Indebtedness secured by Liens permitted by SECTIONS 8.1(b) and
8.1(j) and any extension, renewal or replacement thereof in accordance with the
terms of SECTIONS 8.1(b) and 8.1(j);
(n) Indebtedness with respect to Hedging Agreements entered into
in the ordinary course of business in order to manage existing or anticipated
interest rate, exchange rate, commodity or other revenue or expense risk, and
not for speculative purposes, in any case;
(o) Indebtedness consisting of Guarantee Obligations of any
Subsidiary of Borrower of the Obligations under any Loan Document or consisting
of a guarantee of obligations of a Restricted Subsidiary under any lease or
other agreement entered into in the ordinary course of business not constituting
Indebtedness and for which the liability with respect thereto is not required to
be reflected on a balance sheet prepared in accordance with GAAP; and
(p) Indebtedness consisting of Guarantee Obligations incurred to
satisfy bonding obligations not in excess of $15,000,000 at any one time which
arise in the ordinary course of business.
For purposes of this SECTION 8.2, any Indebtedness of an entity outstanding when
it becomes a Subsidiary shall be deemed to have been incurred at that time.
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8.3 FUNDAMENTAL CHANGES.
Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) consummate any Acquisition or (ii)
enter into any merger, consolidation or amalgamation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution) or convey, sell,
assign, lease, transfer or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or substantially all of its property, business
or assets; PROVIDED, HOWEVER, that so long as prior to or simultaneously with
such transactions, Borrower has complied with, and has caused its Subsidiaries
to comply with, the provisions of SECTION 7.10:
(a) any Subsidiary of Borrower may be merged or consolidated with
or into Borrower so long as Borrower is the surviving corporation or with or
into any one or more Wholly-Owned Subsidiaries of Borrower (other than an
Unrestricted Subsidiary, Airstar Corporation, Huntsman Headquarters Corporation,
Huntsman Polymers Corporation or IRIC); PROVIDED, HOWEVER, that (i) the
Wholly-Owned Subsidiary or Subsidiaries shall be the surviving corporation and
(ii) in the case of any merger or consolidation between Subsidiaries at least
one of which is a Subsidiary Guarantor, the surviving Person shall be or become
a party to the Amended and Restated Subsidiary Guarantee Agreement);
(b) any Subsidiary of Borrower may sell, lease, transfer or
otherwise dispose of any or all of its assets to Borrower or any other
Wholly-Owned Subsidiary of Borrower (other than an Unrestricted Subsidiary);
(c) any Subsidiary of Borrower (other than a Finance Subsidiary or
Huntsman Polymers Corporation) may voluntarily liquidate, wind-up or dissolve;
(d) any transaction permitted pursuant to SECTIONS 8.6(d) may be
consummated;
(e) agreements to conduct the transactions referred to in CLAUSES
(a) through (d) above may be entered into;
8.4 DIVIDENDS OR OTHER DISTRIBUTIONS.
Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, either: (i) declare or pay any dividend
or make any distribution on or in respect of its Capital Stock or to the direct
or indirect holders of its Capital Stock in respect of such Capital Stock
(except dividends or distributions payable solely in such Capital Stock or in
options, warrants or other rights to purchase such Capital Stock and except
dividends or distributions payable to Borrower or a Wholly-Owned Subsidiary of
Borrower), (ii) purchase, redeem or otherwise acquire or retire for value any of
its Capital Stock (other than Capital Stock held by Borrower or a Wholly-Owned
Subsidiary of Borrower), (iii) make a loan (a "SHAREHOLDER LOAN") to any Holdco
Party (as defined in the Holdco Agreement), (iv) pay any Management Fees or (v)
make any principal payment on, purchase, defease, redeem, prepay, decrease or
otherwise acquire or retire for value, prior to any scheduled final maturity,
any Polymers Senior Notes, Permitted Junior Debt or any Indebtedness that is
subordinate or junior in right of payment to the Obligations (any such
non-excepted dividend, distribution, purchase, redemption, repurchase, other
acquisition, retirement or Shareholder Loan or payment being hereinafter
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referred to as a "RESTRICTED PAYMENT"); PROVIDED, HOWEVER, that (w) Borrower
may, under clause (v) above, use the Permitted Polymers Notes Repurchase Amount
to redeem or repurchase then outstanding Polymers Senior Notes in accordance
with SECTION 4.2(e), to the extent that such amount is not otherwise required to
be applied to prepay Loans pursuant to SECTION 4.2(e), (x) Borrower may make
payments to Holdco II pursuant to the terms of the Tax Sharing Agreement, (y)
the Senior Subordinated Notes may be refinanced with Subordinated Indebtedness
permitted by SECTION 8.2(h) and (z) Borrower and its applicable Subsidiaries may
consummate the HIH Unit Transfer.
8.5 ISSUANCE OF STOCK.
(a) Borrower will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, issue, sell, assign, pledge or
otherwise encumber or dispose of any shares of Capital Stock of any Restricted
Subsidiary of Borrower, except (i) to Borrower, (ii) to another Wholly-Owned
Subsidiary of Borrower which is a Restricted Subsidiary, (iii) to qualify
directors if required by applicable law or similar de minimis issuances of
Capital Stock to comply with Requirements of Law, or (iv) pledges constituting
Permitted Liens pursuant to SECTION 8.1(a) or 8.1(d) OR 8.1 (j). Notwithstanding
the foregoing, Borrower or its Subsidiaries shall be permitted to sell the
outstanding stock of a Subsidiary, subject to SECTIONS 8.3 and 8.6.
(b) Borrower shall not issue any Capital Stock, except for (i)
issuances of additional units of Membership Interests to Holdco II and (ii)
issuances of Capital Stock, where Administrative Agent and the Required Lenders
have consented to the terms and conditions of such offering. In the event any
Capital Stock of Borrower is issued pursuant to this SECTION 8.5(b), Borrower
shall apply the Net Offering Proceeds received in connection with such
disposition in accordance with SECTION 4.2(d).
8.6 DISPOSITION OF ASSETS.
Borrower will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, sell, lease, assign, transfer or otherwise dispose of
any of its assets to any Person, except that:
(a) Borrower or any Subsidiary may engage in a transaction
permitted by SECTION 8.3. Any Foreign Subsidiary which is a Wholly-Owned
Subsidiary may transfer, sell or assign any of its assets to another Foreign
Subsidiary which is a Wholly-Owned Subsidiary;
(b) Borrower or any Subsidiary may sell, transfer or otherwise
dispose of inventory and Cash Equivalents in the ordinary course of business;
(c) Borrower or any Subsidiary may permit to exist Liens upon its
assets which are permitted by SECTION 8.1;
(d) Borrower or any Subsidiary may sell, assign, transfer or
otherwise dispose of an Investment permitted under SECTIONS 8.7(c), 8.7(d) and
8.7(g);
(e) Borrower and any Subsidiary may sell, assign, transfer or
otherwise dispose of its assets to Borrower or any Wholly-Owned Domestic
Subsidiary which is a
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Restricted Subsidiary (other than Airstar Corporation, Huntsman Headquarters
Corporation or IRIC);
(f) Borrower or any Subsidiary may sell, lease or otherwise
dispose of any assets in the ordinary course of business which, in the
reasonable judgment of Borrower, have become uneconomic, obsolete or worn out
and may sell or discount, in each case without recourse and in the ordinary
course of business, overdue accounts receivable arising in the ordinary course
of business, but only in connection with the compromise or collection thereof
consistent with customary industry practice (and not as part of any bulk sale or
financing of receivables not otherwise permitted under clause (i) below);
(g) Borrower or any Subsidiary may enter into operating leases as
lessor in the ordinary course of business which are not substantially equivalent
to sales;
(h) Borrower or any Subsidiary may enter into assignments and
licenses of intellectual property in the ordinary course of business;
(i) Borrower and its Subsidiaries may sell railcars acquired after
the Closing Date in connection with sale and leaseback transactions;
(j) Borrower or any Restricted Subsidiary may dispose of any of
its assets if the aggregate fair market value (at the time of disposition
thereof) of all assets disposed of by Borrower and its Restricted Subsidiaries
subsequent to the Closing Date pursuant to this clause (j) plus the aggregate
fair market value (net, in the case of the real estate owned by Huntsman
Headquarters Corporation, of the debt secured by such real estate) of all the
assets then proposed to be disposed of does not exceed $50,000,000 per annum and
$150,000,000 in the aggregate from and after the Closing Date; and
(k) Borrower and its applicable Subsidiaries may consummate the
HIH Unit Transfer.
8.7 LOANS AND INVESTMENTS.
Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, make any or own any Investments except
that Borrower and its Restricted Subsidiaries may:
(a) acquire and hold Cash and Cash Equivalents;
(b) make or maintain advances to their employees in the ordinary
course of business for travel, relocation and related expenses;
(c) hold (i) its existing Investments in Subsidiaries and (ii) the
other Investments identified on SCHEDULE 8.7 (in each case, as such Investments
may be adjusted due to appreciation, repayment of principal, payment of
interest, return of capital and similar circumstances);
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(d) acquire and hold Investments (including debt obligations)
received in connection with the bankruptcy or reorganization of suppliers and
customers and other Persons having obligations in favor of Borrower or a
Subsidiary in settlement of delinquent obligations of, and other disputes with,
customers and suppliers and such other Persons arising in the ordinary course of
business;
(e) make additional Investments in any Restricted Domestic
Subsidiary; PROVIDED that (i) any such additional equity Investments in
Restricted Domestic Subsidiaries after the Closing Date shall not exceed, in the
aggregate $10,000,000 outstanding, and (ii) any such Investment constituting a
loan or advance to a Restricted Domestic Subsidiary shall be made pursuant to
one of the Pledged Intercompany Notes;
(f) make any Investment by Borrower or any Restricted Domestic
Subsidiary in any Foreign Subsidiary after the Closing Date in an aggregate
amount for all such Investments from and after the Closing Date in excess of
$15,000,000 or any Investment by a Foreign Subsidiary in any other Foreign
Subsidiary;
(g) make any Investment after the Closing Date in Unrestricted
Subsidiaries in an amount not in excess of $10,000,000 in the aggregate from and
after the Closing Date; PROVIDED, that the purpose of any such Investment shall
be to fund a current expenditure of such Unrestricted Subsidiary;
(h) purchase Polymers Senior Notes in an aggregate amount not
exceeding the Permitted Polymers Notes Repurchase Amount to the extent such
amount is available and not required to be prepaid pursuant to SECTION 4.2(e);
and
(i) make one or more Investments in HSCHC (which may be reinvested
by HSCHC in HSCC) when and as interest payments become due and payable on the
BASF Note, each in an amount not to exceed the interest payment required to be
paid in cash by HSCC on the BASF Note.
8.8 TRANSACTIONS WITH AFFILIATES.
Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction with any
Affiliate of Borrower or any of its Subsidiaries (other than the Borrower or any
Restricted Subsidiary), except for (i) transactions that are on terms no less
favorable to Borrower or such Subsidiary, as applicable, than could be obtained
in a comparable arms-length transaction with a Person not an Affiliate of
Borrower or any of its Subsidiaries and are necessary or desirable for Borrower
or its Subsidiary in the conduct of its business, (ii) the Tax Sharing Agreement
and transactions thereunder in accordance with the terms thereof and (iii) the
HIH Unit Transfer.
8.9 SALE-LEASEBACKS.
Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, lease any property as lessee in
connection with Sale and Leaseback Transactions entered into after the Closing
Date.
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8.10 LINES OF BUSINESS.
Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or acquire any line of
business which does not consist of the manufacture, distribution, purchase or
sale of chemicals, plastics or finished products made therefrom or is not
otherwise reasonably related to the business engaged in as of the Closing Date,
except to the extent that after any such entry or acquisition, Borrower and its
Restricted Subsidiaries, taken as a whole, remain substantially engaged in
similar lines of business as are conducted by them as of the Closing Date.
Notwithstanding anything to the contrary in this Agreement, IRIC shall not
engage in any business other than the business of serving as a captive insurance
company for Borrower and its Subsidiaries and engaging in such necessary
activities related thereto as may be permitted to be engaged in by a Vermont
captive insurance company pursuant to applicable Vermont captive insurance
company rules and regulations; PROVIDED, that IRIC shall not hold cash or other
Investments except in a manner consistent with SCHEDULE 8.18(a).
8.11 FISCAL YEAR. Borrower shall not change its Fiscal Year.
8.12 AMENDMENTS TO ORGANIZATIONAL AND OTHER DOCUMENTS.
Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, amend, modify or waive, or permit any
amendment, modification or waiver to its Organizational Documents if such
amendment, modification or waiver could reasonably be expected to adversely
affect the interests of the Collateral Agent, Administrative Agent or the
Lenders. Borrower shall not, nor shall it permit any of its Subsidiaries to
waive or release any interest under any Security Document except as expressly
permitted hereby or thereby. Borrower shall not, and shall not permit any
Subsidiary to, amend, modify or waive or cause to be amended, modified or waived
any provision of (a) the ICI Agreement unless such amendment, modification or
waiver is approved by the Administrative Agent and, if adverse to the interests
of the Lenders (as determined by the Administrative Agent in its sole reasonable
discretion after reasonable advance notice of such proposed change), by the
Required Lenders (b) the BASF Note, unless such amendment, modification or
waiver is approved by the Administrative Agent, (c) the Tax Sharing Agreement,
unless such amendment, modification or waiver is approved by the Administrative
Agent and, if adverse to the interests of the Lenders (as determined by the
Administrative Agent in its sole reasonable discretion after reasonable advance
notice of such proposed change), by the Required Lenders and (d) the Horizon
Subordinated Note, unless such amendment, modification or waiver is approved by
the Administrative Agent and, if adverse to the interests of the Lenders (as
determined by the Administrative Agent in its sole reasonable discretion after
reasonable advance notice of such proposed change), by the Required Lenders.
Neither Borrower or any of its Restricted Subsidiaries shall enter into any tax
sharing agreement with Holdco I or Holdco II except as set forth in the Tax
Sharing Agreement.
8.13 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES.
Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or
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restriction on the ability of any Restricted Subsidiary to (i) pay dividends or
make any other distributions on its Capital Stock or pay any Indebtedness or
other Obligations owed to Borrower or any of its other Subsidiaries, (ii) make
any loans or advances to Borrower or any of its other Subsidiaries, (iii)
transfer any of its property or assets to Borrower or any of its other
Subsidiaries or (iv) enter into any Material Agreement unless such agreement
expressly provides that it may be collaterally assigned to the Collateral Agent
and may be further assigned by the Collateral Agent in any foreclosure, except:
(a) any encumbrance or restriction pursuant to the Priority Credit
Agreement or the agreement governing Permitted Junior Debt or any extension,
replacement or refinancing thereof which is not otherwise prohibited by the
terms of this Agreement;
(b) any such encumbrance or restriction consisting of customary
non-assignment provisions in Contractual Obligations which are not Material
Agreements and are entered into in the ordinary course of business to the extent
such provisions restrict the transfer or assignment of such agreement;
(c) in the case of clause (iii) above, Permitted Liens or other
restrictions contained in security agreements securing Indebtedness permitted
hereby to the extent such restrictions restrict the transfer of the assets
specifically secured by such security agreement;
(d) any restriction on transfer of an asset pursuant to an
agreement to sell such asset to the extent such sale would be permitted under
the terms of this Agreement;
(e) restrictions on Airstar Corporation in the Airstar Aircraft
Financing Documents and restrictions on Huntsman Headquarters Corporation in the
Headquarters Mortgage Loan Documents;
(f) restrictions in Section 4.03 of the Articles of Incorporation
of Huntsman Chemical Corporation; and
(g) restrictions on Foreign Subsidiaries in Foreign Overdraft
Facilities.
8.14 ACCOUNTING CHANGES.
Borrower shall not, nor shall it permit any of its Restricted
Subsidiaries to, make or permit to be made any change in accounting policies
affecting the presentation of financial statements or reporting practices from
those employed by it on the Closing Date, unless (i) such change is required by
GAAP, (ii) such change is disclosed to the Lenders through the Administrative
Agent or otherwise and (iii) relevant prior financial statements that are
affected by such change are restated (in form and detail satisfactory to
Administrative Agent) as may be required by GAAP to show comparative results. If
any changes in GAAP or the financial statements referred to in SECTION 6.5(a)
hereof occur after the Closing Date and such changes result in, in the sole
judgment of Administrative Agent, a meaningful change in the calculation of any
financial covenants or restrictions set forth in this Agreement, then the
parties hereto agree to enter into and diligently pursue negotiations to amend
the covenants employing financial calculations herein so as to equitably reflect
such changes, with the desired result that the criteria
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for evaluating the financial condition and results of operations of Borrower and
its Subsidiaries shall be the same after such changes as if such changes had not
been made.
8.15 RESTRICTIONS ON CERTAIN UNRESTRICTED SUBSIDIARIES. Borrower
will not permit either HSCHC or HSCC to, and HSCHC and HSCC hereby agree that
they will not, except in each case as described on SCHEDULE 8.15, (i) incur any
Indebtedness or other material obligations of any kind; (ii) directly or
indirectly, create, incur, assume or suffer to exist or agree to create, incur
or assume any Lien in, upon or with respect to any of their properties or assets
(including, without limitation any securities or intercompany Indebtedness in
favor of HSCC or HSCHC), except as may be approved by the Administrative Agent
in connection with any settlement entered into between HSCC and ICI and/or its
Affiliates with respect to certain claims of ICI with respect to the membership
interests in HIH held by ICI; (iii) issue any Capital Stock; (iv) dispose of or
transfer any assets; (v) in the case of HSCHC, engage in any business other than
holding securities of its Subsidiaries; or (vi) in the case of HSCC, engage in
any business other than holding securities of Huntsman International LLC;
provided, that this SECTION 8.15 shall not prohibit any amendment to the BASF
Note to the extent not prohibited by SECTION 8.12. Neither HSCHC nor HSCC will
create any additional direct Subsidiaries after the Closing Date.
8.16 AMENDMENTS, MODIFICATIONS OR SUPPLEMENTS TO PRIORITY CREDIT
AGREEMENT. Borrower shall not agree to or permit any of the following terms or
provisions of the Priority Credit Agreement to be amended, modified, waived or
supplemented without the prior consent of (i) in the case of clause (a), Lenders
holding at least 80% of all Loans and (ii) in the case of clauses (b) and (c),
the Supermajority Lenders, in each case in addition to any other vote which may
be required under the Priority Credit Agreement:
(a) Permit the amount of Indebtedness permitted to be outstanding
under the Priority Credit Agreement to be increased above $275,000,000;
(b) The definition of the term "Advance Rate" set forth in the
Priority Credit Agreement (as in effect on the Closing Date); and
(c) The definitions of the terms "Eligible Receivables" and
"Eligible Inventory" as set forth in the Priority Credit Agreement (as in effect
on the Closing Date) if the changes to such definitions has the effect of
increasing the aggregate amount of available credit under the Priority Credit
Agreement.
8.17 CHARITABLE CONTRIBUTIONS. Borrower shall not, nor shall it
permit any of its Restricted Subsidiaries to, make charitable contributions,
except for DE MINIMIS civic and community contributions made in the ordinary
course of business.
8.18 COLLATERAL ACCOUNT AGREEMENTS. Borrower shall not, and shall
not permit any Credit Party or IRIC to, establish or utilize any domestic
Deposit Account, unless a fully executed Collateral Account Agreement shall be
in full force and effect with respect thereto, except with respect to one or
more Deposit Accounts maintained at financial institutions with which no
Collateral Account Agreement shall have previously been entered into with
account balances of any such accounts not to at any time exceed $100,000 and the
aggregate of all such accounts not at any time to exceed $500,000, except in the
case of IRIC, with respect to
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insurance proceeds which may be disbursed and held in accordance with the
procedures set forth on SCHEDULE 8.18(a). Except as set forth on SCHEDULE
8.18(b), at no time shall the Dollar Equivalent of the aggregate balances in all
accounts maintained by Borrower and its Restricted Subsidiaries outside the USA
exceed $500,000.
8.19 BORROWINGS UNDER PRIORITY CREDIT AGREEMENT. In no event shall
Borrower make any borrowing of Priority Loans under the Priority Credit
Agreement if, after giving effect to such borrowing, Borrower would have more
than $50,000,000 of Available Liquidity (but in any event excluding any cash
from time to time in a Recovery Event Escrow Account in accordance with SECTION
4.2(h)).
ARTICLE IX
FINANCIAL COVENANTS
Borrower hereby agrees that, so long as any Loan remains outstanding
and unpaid or in any other amount is owing to any Lender or Administrative Agent
hereunder, Borrower shall not directly or indirectly:
9.1 LEVERAGE RATIO.
Permit the ratio (the "LEVERAGE RATIO") of (a) Consolidated Debt on
the last day of any Fiscal Quarter of Borrower (after giving effect to all
payments and prepayments made on such date) to (b) EBITDA of Borrower for the
four Fiscal Quarter periods ending on such day to exceed the ratio set forth
below at the end of any Fiscal Quarter occurring during the period opposite such
ratio:
DATE RATIO
----------------------------------- -----------
Closing Date - June 30, 2003 8.25 to 1.0
July 1, 2003 - September 30, 2003 8.00 to 1.0
October 1, 2003 - December 31, 2003 7.25 to 1.0
January 1, 2004 - March 31, 2004 6.75 to 1.0
April 1, 2004 - June 30, 2004 6.00 to 1.0
July 1, 2004 - September 30, 2004 5.00 to 1.0
October 1, 2004 - December 31, 2004 4.75 to 1.0
January 1, 2005 - June 30, 2005 3.75 to 1.0
July 1, 2005 - and thereafter 3.25 to 1.0
9.2 INTEREST COVERAGE RATIO.
Permit the ratio (the "INTEREST COVERAGE RATIO") of (i) EBITDA for
each period of four consecutive Fiscal Quarters ending on the last day of any
Fiscal Quarter of Borrower to (ii) the sum of Cash Interest Expense of Borrower
and its Restricted Subsidiaries for such period to be less than the ratio
opposite the applicable period set forth below:
DATE RATIO
---------------------------- -----------
Closing Date - June 30, 2003 1.30 to 1.0
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July 1, 2003 - September 30, 2003 1.40 to 1.0
October 1, 2003 - December 31, 2003 1.50 to 1.0
January 1, 2004 - March 31, 2004 1.75 to 1.0
April 1, 2004 - September 30, 2004 2.00 to 1.0
October 1, 2004 - December 31, 2004 2.25 to 1.0
January 1, 2005 - June 30, 2005 2.50 to 1.0
July 1, 2005 - and thereafter 2.75 to 1.0
9.3 FIXED CHARGE COVERAGE RATIO. Permit the ratio of (i) EBITDA of
Borrower for each period of four consecutive Fiscal Quarters ending on the last
day of any Fiscal Quarter to (ii) Consolidated Fixed Charges for such period to
be less the ratio opposite the applicable period set forth below:
DATE RATIO
-------------------------------- -----------
Closing Date - June 30, 2003 .85 to 1.0
July 1, 2003 - December 31, 2003 .90 to 1.0
January 1, 2004 - June 30, 2004 1.00 to 1.0
July 1, 2004 - and thereafter 1.25 to 1.0
9.4 CAPITAL EXPENDITURES.
Permit, nor permit any of its Restricted Subsidiaries to, make any
Consolidated Capital Expenditures, except that Borrower and its Restricted
Subsidiaries may make such Consolidated Capital Expenditures (i) during 2002,
not in excess of an amount equal to $85,000,000; (ii) during each Fiscal Year
thereafter and until payment in full of all Obligations hereunder, not in excess
of an amount equal to $100,000,000 plus, in each case, Permitted Turnaround
Capital Expenditures; PROVIDED, HOWEVER, that, to the extent that Borrower
consummates the Minimum Term B Prepayment, Borrower and its Restricted
Subsidiaries may make Consolidated Capital Expenditures in each Fiscal Year
commencing on January 1, 2003 in an amount equal to $135,000,000 plus Permitted
Turnaround Capital Expenditures; PROVIDED, FURTHER, HOWEVER, to the extent
Consolidated Capital Expenditures referred to in CLAUSE (ii) for any Fiscal Year
are less than the amount allowable for such Fiscal Year, the difference thereof
may be carried forward to the immediately following fiscal year in an amount not
to exceed $10,000,000.
ARTICLE X
EVENTS OF DEFAULT
10.1 EVENTS OF DEFAULT.
Any of the following events, acts, occurrences or state of facts shall
constitute an "EVENT OF DEFAULT" for purposes of this Agreement:
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. Borrower (i) shall default
in the payment of principal on any of the Loans; or (ii) shall default in the
payment of interest on any of the Loans or default in the payment of any fee or
any other amount owing hereunder or under
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any other Loan Document when due and such default in payment shall continue for
five (5) Business Days; or
(b) REPRESENTATIONS AND WARRANTIES. Any representation or warranty
made by or on the part of Borrower or any Credit Party, as the case may be,
contained in any Loan Document or any document, instrument or certificate
delivered pursuant hereto or thereto shall have been incorrect or misleading in
any material respect when made or deemed made; or
(c) COVENANTS. Any Credit Party shall (i) default in the
performance or observance of any term, covenant, condition or agreement on its
part to be performed or observed under ARTICLE VIII, ARTICLE IX hereof or
SECTIONS 7.1, 7.3(a), 7.9, 7.10, 7.11, and 7.13 or any term of the HSCC
Agreement or (ii) default in the due performance or observance by it of any
other term, covenant or agreement contained in this Agreement and such default
shall continue unremedied for a period of thirty (30) days after written notice
to Borrower by Administrative Agent or any Lender; or
(d) DEFAULT UNDER OTHER LOAN DOCUMENTS. Any Credit Party shall
default in the performance or observance of any term, covenant, condition or
agreement on its part to be performed or observed hereunder or under any Loan
Document (and not constituting an Event of Default under any other clause of
this SECTION 10.1) and such default shall continue unremedied for a period of
thirty (30) days after written or telephonic (immediately confirmed in writing)
notice thereof has been given to Borrower by Administrative Agent; or
(e) VOLUNTARY INSOLVENCY, ETC. Holdco I, Holdco II, Borrower or
any of its Material Subsidiaries which are Restricted Subsidiaries shall become
insolvent or generally fail to pay, or admit in writing its inability to pay,
its debts as they become due, or shall voluntarily commence any proceeding or
file any petition under any bankruptcy, insolvency or similar law or seeking
dissolution (except as permitted by SECTION 8.3(c)) or reorganization or the
appointment of a receiver, trustee, custodian or liquidator for it or a
substantial portion of its property, assets or business or to effect a plan or
other arrangement with its creditors, or shall file any answer admitting the
jurisdiction of the court and the material allegations of an involuntary
petition filed against it in any bankruptcy, insolvency or similar proceeding,
or shall be adjudicated bankrupt, or shall make a general assignment for the
benefit of creditors, or shall consent to, or acquiesce in the appointment of, a
receiver, trustee, custodian or liquidator for a substantial portion of its
property, assets or business, shall call a meeting of its creditors with a view
to arranging a composition or adjustment of its debts or shall take any
corporate action authorizing any of the foregoing; or
(f) INVOLUNTARY INSOLVENCY, ETC. Involuntary proceedings or an
involuntary petition shall be commenced or filed against Holdco I, Holdco II,
Borrower or any of its Material Subsidiaries which are Restricted Subsidiaries
under any bankruptcy, insolvency or similar law or seeking the dissolution or
reorganization of it or the appointment of a receiver, trustee, custodian or
liquidator for it or of a substantial part of its property, assets or business,
or any similar writ, judgment, warrant of attachment, execution or process shall
be issued or levied against a substantial part of its property, assets or
business, and such proceedings or petition shall not be dismissed, or such writ,
judgment, warrant of attachment, execution or similar process
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shall not be released, vacated or fully bonded, within thirty (30) days after
commencement, filing or levy, as the case may be, or any order for relief shall
be entered in any such proceeding; or
(g) DEFAULT UNDER OTHER AGREEMENTS. (i) Holdco I, Holdco II,
Borrower or any of its Restricted Subsidiaries shall default in the payment when
due, whether at stated maturity or otherwise, of any amount pursuant to any
Indebtedness (other than Indebtedness owed to the Lenders under the Loan
Documents) in excess of $5,000,000 (or, in the case of such a default under a
Hedging Agreement, $2,500,000, measured by reference to the xxxx to market
termination value of obligations under the respective Hedging Agreement(s) at
the time) in the aggregate beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created, (ii) a
default shall occur in the performance or observance of any agreement under any
Indebtedness (other than Indebtedness owed to the Lenders under the Loan
Documents) in excess of $5,000,000 or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice of acceleration or similar notice is required), any such
Indebtedness to become due or be repaid prior to its stated maturity or (iii)
any Indebtedness (other than Indebtedness owed to the Lenders under the Loan
Documents) in excess of $5,000,000 of Holdco I, Holdco II, Borrower or any of
its Restricted Subsidiaries shall be declared to be due and payable, or required
to be prepaid other than by a regularly scheduled required prepayment (other
than with proceeds of the event giving rise to such prepayment), prior to the
stated maturity thereof; or
(h) JUDGMENTS. One or more judgments or decrees shall be entered
against Borrower or any of its Restricted Subsidiaries involving, individually
or in the aggregate, a liability (to the extent not paid or covered by a
reputable insurance company which has accepted liability in writing) of
$5,000,000 or more and all such judgments or decrees shall not have been
vacated, discharged, satisfied, stayed or bonded pending appeal within thirty
(30) days from the entry thereof; or
(i) ERISA. Either (i) any Reportable Event which constitutes
grounds for the termination of any Plan by the PBGC or of any Multiemployer Plan
or for the appointment by the appropriate United States District Court of a
trustee to administer or liquidate any Plan or Multiemployer Plan shall have
occurred; (ii) a trustee shall be appointed by a United States District Court to
administer any Plan or Multiemployer Plan; (iii) the PBGC shall institute
proceedings to terminate any Plan or Multiemployer Plan or to appoint a trustee
to administer any Plan; (iv) Borrower or any of its ERISA Affiliates shall
become liable to the PBGC or any other party under Section 4062, 4063 or 4064 of
ERISA with respect to any Plan; or (v) Borrower or any of its Subsidiaries or
any of their ERISA Affiliates shall become liable to make a current payment with
respect to any Multiemployer Plan under Section 4201 et seq. of ERISA; or (vi)
Borrower or any Subsidiary of Borrower, or any ERISA Affiliate shall fail to
make a deficit reduction contribution required under Code Section 412(l) to any
Plan by the due date for such contribution; if as of the date thereof or any
subsequent date, the sum of each of Borrower's and its Subsidiaries' and their
ERISA Affiliates' various liabilities (such liabilities to include, without
limitation, any liability to the PBGC or to any other party under Section 4062,
4063 or 4064 of ERISA with respect to any Plan, or to any Multiemployer Plan
under Section 4201 et
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seq. of ERISA) as a result of such events listed in subclauses (i) through (v)
above exceeds $7,500,000; or
(j) CHANGE IN CONTROL. A Change of Control shall occur; or
(k) SECURITY DOCUMENTS. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect or shall cease to give the Collateral Agent for the benefit of the
Lenders the Liens, rights, powers and privileges purported to be created thereby
(including, without limitation, a first priority perfected security interest in,
and Lien on, all of the Collateral), in favor of the Collateral Agent subject to
no other Liens (except to the extent expressly permitted herein or therein); or
(l) HOLDCO AGREEMENT BREACH. A "Default" (as defined in the Holdco
Agreement) shall occur under the Holdco Agreement.
If any of the foregoing Events of Default shall have occurred and be
continuing, Administrative Agent, at the written direction of the Required
Lenders, shall take one or more of the following actions: (i) by written or oral
or telephonic notice (in the case of oral or telephonic notice confirmed in
writing immediately thereafter) to Borrower declare all sums then owing by
Borrower hereunder and under the Loan Documents to be forthwith due and payable,
whereupon all such sums shall become and be immediately due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by Borrower, (ii) enforce, as Administrative Agent (to the
extent permitted under the applicable Loan Documents) or direct the Collateral
Agent to enforce, pursuant to the terms of the applicable Security Document, all
of the Liens and security interests created pursuant to the Security Documents.
In cases of any occurrence of any Event of Default described in clause (e) or
(f) of this SECTION 10.1, the Loans, together with accrued interest thereon,
shall become due and payable forthwith without the requirement of any such
acceleration or request, and without presentment, demand, protest or other
notice of any kind, all of which are expressly waived by Borrower, any provision
of this Agreement or any other Loan Document to the contrary notwithstanding,
and other amounts payable by Borrower hereunder shall also become immediately
due and payable all without notice of any kind.
Anything in this SECTION 10.1 to the contrary notwithstanding,
Administrative Agent shall, at the request of the Required Lenders, rescind and
annul any acceleration of the Loans by written instrument filed with Borrower;
provided that at the time such acceleration is so rescinded and annulled: (A)
all past due interest and principal (other than principal due solely as a result
of such acceleration), if any, on the Loans and all other sums payable under
this Agreement and the other Loan Documents shall have been duly paid, and (B)
no other Event of Default shall have occurred and be continuing which shall not
have been waived in accordance with the provisions of SECTION 12.1 hereof.
10.2 RIGHTS NOT EXCLUSIVE.
The rights provided for in this Agreement and the other Loan Documents
are cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by
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law or in equity, or under any other instrument, document or agreement now
existing or hereafter arising.
ARTICLE XI
ADMINISTRATIVE AGENT
In this ARTICLE XI, the Lenders agree among themselves as follows:
11.1 APPOINTMENT.
Each Lender hereby irrevocably appoints, designates and authorizes
Administrative Agent (for purposes of this Agreement, the term Administrative
Agent shall include Administrative Agent in its capacity as Collateral Agent
pursuant to the Security Documents) to act as herein specified. Each Lender
hereby irrevocably authorizes, and each holder of any Note by the acceptance of
such Note shall be deemed irrevocably to authorize, Administrative Agent to take
such action on its behalf under the provisions of the Loan Documents (including,
without limitation, to give notices and take such actions on behalf of the
Required Lenders as are consented to in writing by the Required Lenders or all
Lenders, as the case may be) and any other instruments, documents and agreements
referred to therein and to exercise such powers hereunder and thereunder as are
specifically delegated to Administrative Agent by the terms hereof and thereof
and such other powers as are reasonably incidental thereto. Administrative Agent
may perform any of its duties hereunder, or under the Loan Documents, by or
through its officers, directors, agents, employees or affiliates.
11.2 NATURE OF DUTIES.
Administrative Agent shall not have any duties or responsibilities
except those expressly set forth in this Agreement. The duties of Administrative
Agent shall be mechanical and administrative in nature. EACH LENDER HEREBY
ACKNOWLEDGES AND AGREES THAT AGENT SHALL NOT HAVE, BY REASON OF THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, A FIDUCIARY RELATIONSHIP TO OR IN RESPECT OF ANY
LENDER. Nothing in any of the Loan Documents, expressed or implied, is intended
to or shall be so construed as to impose upon Administrative Agent any
obligations in respect of any of the Loan Documents except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of Borrower in connection
with the making and the continuance of the Loans hereunder and shall make its
own appraisal of the credit worthiness of Borrower, and Administrative Agent
shall not have any duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before making of the Loans or at any
time or times thereafter. Administrative Agent will promptly notify each Lender
at any time that the Required Lenders have instructed it to act or refrain from
acting pursuant to ARTICLE X.
11.3 RIGHTS, EXCULPATION, ETC.
Neither Administrative Agent nor any of its officers, directors,
agents, employees or affiliates shall be liable to any Lender for any action
taken or omitted by it hereunder or under
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any of the Loan Documents, or in connection herewith or therewith, unless caused
by its or their gross negligence or willful misconduct. Administrative Agent
shall not be responsible to any Lender for any recitals, statements,
representations or warranties herein or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, or sufficiency of any of
the Loan Documents or any other document or the financial condition of Borrower.
Administrative Agent shall not be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any of the Loan Documents or any other document or the
financial condition of Borrower, or the existence or possible existence of any
Unmatured Event of Default or Event of Default unless requested to do so by the
Required Lenders. Administrative Agent may at any time request instructions from
the Lenders with respect to any actions or approvals (including the failure to
act or approve) which by the terms of any of the Loan Documents Administrative
Agent is permitted or required to take or to grant, and if such instructions are
requested, Administrative Agent shall be absolutely entitled to refrain from
taking any action or to withhold any approval and shall not be under any
liability whatsoever to any Person for refraining from any action or withholding
any approval under any of the Loan Documents until it shall have received such
instructions from the Required Lenders, Supermajority Lenders or all Lenders, as
applicable. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against Administrative Agent as a result of either
Administrative Agent acting or refraining from acting or approving under any of
the Loan Documents in accordance with the instructions of the Required Lenders
or, to the extent required by SECTION 12.1, all of the Lenders.
11.4 RELIANCE.
Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any written notice, statement, certificate, order or
other document or any telephone, telex, teletype, telecopier or electronic
message reasonably believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person, and, with respect to all matters
pertaining herein or to any of the other Loan Documents and its duties hereunder
or thereunder, upon advice of counsel selected by it.
11.5 INDEMNIFICATION.
To the extent that Administrative Agent is not reimbursed and
indemnified by Borrower, the Lenders will reimburse and indemnify Administrative
Agent for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against Administrative Agent, acting pursuant hereto in such capacity, in any
way relating to or arising out of any of the Loan Documents or any action taken
or omitted by Administrative Agent under any of the Loan Documents, in
proportion to each Lender's Aggregate Pro Rata Share; PROVIDED, HOWEVER, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, claims, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Administrative Agent's gross negligence or willful
misconduct. The obligations of the Lenders under this SECTION 11.5 shall survive
the payment in full of the Notes and the termination of this Agreement. For
purposes hereof, "Aggregate Pro Rata Share" means, when used with reference to
any Lender and any described aggregate or total amount, an amount equal to the
result obtained by multiplying such desired aggregate or total
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amount by a fraction the numerator of which shall be the aggregate principal
amount of such Lender's Term Loans and the denominator of which shall be the
aggregate of all of the Loans outstanding hereunder.
11.6 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its Loans made by it, the Administrative Agent shall
have and may exercise the same rights and powers hereunder and is subject to the
same obligations and liabilities as and to the extent set forth herein for any
other Lender or holder of Obligations. The terms "Lenders", "holder of
Obligations" or "Required Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include the Administrative Agent in its
individual capacity as a Lender, one of the Required Lenders or a holder of
Obligations. The Administrative Agent may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with
Borrower or any Subsidiary of Borrower as if it were not acting as the
Administrative Agent hereunder or under any other Loan Document, including the
acceptance of fees or other consideration for services without having to account
for the same to any of the Lenders.
11.7 NOTICE OF DEFAULTS. Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Event of Default or
Unmatured Event of Default hereunder unless Administrative Agent has received
written notice from a Lender or Borrower referring to this Agreement describing
such Event of Default or Unmatured Event of Default and stating that such notice
is a "notice of default". In the event Administrative Agent receives such a
notice, Administrative Agent shall give prompt notice thereof to the Lenders.
11.8 HOLDERS OF OBLIGATIONS. Administrative Agent may deem and
treat the payee of any Obligation as reflected on the books and records of
Administrative Agent as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with Administrative Agent pursuant to SECTION 12.8(c). Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Obligation shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Obligation or of any Obligation or Obligations granted in exchange therefor.
11.9 RESIGNATION BY ADMINISTRATIVE AGENT.
(a) Administrative Agent may resign from the performance of all
its functions and duties hereunder at any time by giving fifteen (15) Business
Days' prior written notice to Borrower and the Lenders. Such resignation shall
take effect upon the acceptance by a successor Administrative Agent of
appointment pursuant to clause (b), (c) or (d) below.
(b) Upon any such notice of resignation by Administrative Agent,
Required Lenders shall appoint a successor Administrative Agent who shall be
satisfactory to Borrower and shall be an incorporated bank or trust company.
(c) If a successor Administrative Agent shall not have been so
appointed within said 15 Business Day period, Administrative Agent, with the
consent of Borrower, shall then appoint its successor who shall serve as
Administrative Agent, as the case may be, until
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such time, if any, as the Required Lenders, with the consent of Borrower,
appoint a successor as provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c), by the 20th Business Day after the date such
notice of resignation was given by Administrative Agent, as the case may be,
such resignation shall become effective and the Required Lenders shall
thereafter perform all the duties of Administrative Agent hereunder until such
time, if any, as the Required Lenders, with the consent of Borrower, appoint a
successor Administrative Agent as provided above.
ARTICLE XII
MISCELLANEOUS
12.1 NO WAIVER; MODIFICATIONS IN WRITING.
(a) No failure or delay on the part of Administrative Agent or any
Lender in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to
Administrative Agent or any Lender at law or in equity or otherwise. Neither
this Agreement nor any terms hereof may be amended, modified, supplemented,
waived, discharged, terminated or otherwise changed unless such amendment,
modification, supplement, waiver, discharge, termination or other change is in
writing signed by the respective Credit Parties party thereto and the Required
Lenders, PROVIDED, that no such amendment, modification, supplement, waiver,
discharge, termination or other change shall:
(i) without the consent of Lenders holding at least 80% of
the principal amount of the affected Term Loans reduce the amount of or
postpone the date of any Scheduled Term Loan Principal Payments;
(ii) without the consent of Lenders holding at least 66-2/3%
of all Loans:
(A) amend, modify or waive any provision of SECTION
4.2(b), SECTION 4.2(c) (including for purposes hereof the definition
of Excess Cash Flow set forth in SECTION 1.1), SECTION 4.2(e) or
SECTION 4.2(g), or
(B) prior to the Minimum Term B Prepayment, amend,
modify or waive any provision of SECTION 8.1 or SECTION 8.2;
(iii) without the consent of each Lender (with Obligations
directly affected thereby in the case of the following clause (A)):
(A) extend the final scheduled maturity of any Loan or
Note or reduce the rate or extend the time of payment of interest or
fees thereon, or reduce the principal amount thereof),
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(B) other than as expressly permitted under SECTION
12.17(b)(i)(A)-(C), effect any release of assets with a book value
aggregating 5% or more of the total consolidated tangible assets of
Borrower (measured as of the end of the most recently completed Fiscal
Quarter for which financial statements have been delivered to
Administrative Agent) during the term of this Agreement,
(C) amend, modify or waive any provision of this
SECTION 12.1(a),
(D) reduce the percentage specified in the definition
of Required Lenders or Supermajority Lenders (it being understood
that, with the consent of the Required Lenders, the definition of
"Required Lenders" or "Supermajority Lenders" shall include lenders
with respect to additional loans pursuant to this Agreement),
(E) consent to the assignment or transfer by Borrower
of any of its rights and obligations under this Agreement,
(F) amend the definition of Pro Rata Share, or
(G) amend, modify or waive any provision of SECTION
4.2(j);
(iv) without the consent of Administrative Agent, amend,
modify or waive any provision of ARTICLE XI as same applies to
Administrative Agent or any other provisions as same relates to the rights
or obligations of Administrative Agent;
(v) without the consent of Administrative Agent, amend,
modify or waive any provisions relating to the rights or obligations of
Administrative Agent under the other Loan Documents;
(vi) without the consent of the Majority Lenders of each
Facility which is being allocated a lesser prepayment or repayment, alter
the required application of any prepayments or repayments, as between the
various Facilities pursuant to the first sentence of SECTION 4.3(a) and the
second sentence of SECTION 4.5(a) (although the Required Lenders may waive
in whole or in part, any such prepayment, repayment or commitment reduction
so long as the application, as amongst the various Facilities, of any such
prepayment, repayment or commitment reduction which is still required to be
made is not altered);
(vii) without the consent of the Majority Lenders of each
Facility amend the definition of Majority Lenders;
(viii) without the consent of Supermajority Lenders:
(A) amend, modify or waive SECTION 8.3 so as to permit
any Acquisition involving a total Investment in an amount in excess of
$20 million,
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(B) amend, modify or waive any provision of SECTION
8.4, 8.8, 8.16(b) or 8.16(c),
(C) amend, modify or waive any provision of SECTION
8.1, 12.17(b), the Security Documents or the Intercreditor Agreement
so as to expressly agree that any Liens shall be senior to the Liens
securing the Obligations, other than Liens securing the Priority
Loans, or
(D) amend, modify or waive SECTION 8.2 to permit any
Receivables Facility Attributed Indebtedness; or
(ix) without the consent of Lenders holding at least 80% of
all Loans, amend, modify or waive SECTION 8.16(a).
(b) If, in connection with any proposed change, waiver, discharge
or termination of any of the provisions of this Agreement as contemplated by
clauses (a)(i) through (ix), inclusive, of the proviso to the third sentence of
SECTION 12.1(a), the consent of the Required Lenders is obtained but the consent
of one or more of such other Lenders whose consent is required is not obtained,
then Borrower shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clauses (A) or
(B) below to either (A) replace each such non-consenting Lender or Lenders (or,
at the option of Borrower if the respective Lender's consent is required with
respect to less than all Loans, to replace only the respective Loans of the
respective non-consenting Lender which gave rise to the need to obtain such
Lender's individual consent) with one or more Replacement Lenders pursuant to
SECTION 3.6 so long as at the time of such replacement, each such Replacement
Lender consents to the proposed amendment, modification, supplement, waiver,
discharge, termination or other change or (B) repay outstanding Loans of such
Lender which gave rise to the need to obtain such Lender's consent, in
accordance with SECTION 12.1(a); PROVIDED that, unless Loans repaid pursuant to
the preceding clause (B) are immediately replaced in full at such time through
the addition of new Lenders or the increase of outstanding Loans of existing
Lenders (who in each case must specifically consent thereto), then in the case
of any action pursuant to preceding clause (B) the Required Lenders (determined
before giving effect to the proposed action) shall specifically consent thereto;
PROVIDED, FURTHER, that in any event the Borrower shall not have the right to
replace a Lender or repay its Loans solely as a result of the exercise of such
Lender's rights (and the withholding of any required consent by such Lender)
contemplated by the proviso to this SECTION 12.1(b).
12.2 FURTHER ASSURANCES.
Borrower agrees to do such further acts and things and to execute and
deliver to Administrative Agent such additional assignments, agreements, powers
and instruments, as Administrative Agent may reasonably require or deem
advisable to carry into effect the purposes of this Agreement or any of the Loan
Documents or to better assure and confirm unto Administrative Agent its rights,
powers and remedies hereunder.
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12.3 NOTICES, ETC.
Except where telephonic instructions or notices are authorized herein
to be given, all notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto or any other
Person shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, return receipt requested, or by a
reputable overnight or courier delivery service, or by telecopier, and shall be
deemed to be given for purposes of this Agreement on the third day after deposit
in registered or certified mail, postage prepaid, and otherwise on the day that
such writing is delivered or sent to the intended recipient thereof, or in the
case of notice delivered by telecopy, upon completion of transmission with a
copy of such notice also being delivered under any of the other methods provided
above, all in accordance with the provisions of this SECTION 12.3. Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this SECTION 12.3, notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective telex, TWX
or telecopier numbers) indicated on its signature page to this Agreement or, in
the case of any Assignee, on its signature page to its Assignment and Assumption
Agreement and, in the case of telephonic instructions or notices, by calling the
telephone number or numbers indicated for such party on its signature page to
this Agreement or such Assignment or Assumption Agreement, as the case may be.
12.4 COSTS, EXPENSES AND TAXES.
(a) GENERALLY. Borrower agrees without duplication to pay promptly
upon request by Administrative Agent all reasonable costs and expenses incurred
by or on behalf of the Administrative Agent in connection with the negotiation,
preparation, printing, typing, reproduction, execution and delivery of this
Agreement and the other Loan Documents and the documents and instruments
referred to herein and therein and any amendment, waiver, consent relating
hereto or thereto or other modifications of (or supplements to) any of the
foregoing and any and all other documents and instruments furnished pursuant
hereto or thereto or in connection herewith or therewith, including without
limitation, the reasonable fees and out-of-pocket expenses of Winston & Xxxxxx,
special counsel to Administrative Agent, and any local counsel retained by
Administrative Agent relative thereto, other Attorney Costs, independent public
accountants and other outside experts retained by Administrative Agent in
connection with the administration of this Agreement and the other Loan
Documents, and all search fees, appraisal fees and expenses, title insurance
policy fees, costs and expenses and filing and recording fees and all costs and
expenses (including, without limitation, Attorney Costs), if any, in connection
with the enforcement of this Agreement, any of the Loan Documents or any other
agreement furnished pursuant hereto or thereto or in connection herewith or
therewith. In addition, Borrower shall pay any and all present and future stamp,
transfer, excise and other similar taxes payable or determined to be payable in
connection with the execution and delivery of this Agreement, any Loan Document,
or the making of any Loan, and agrees to save and hold Administrative Agent and
each Lender harmless from and against any and all liabilities with respect to or
resulting from any delay by Borrower in paying, or omission by Borrower to pay,
such taxes. Any portion of the foregoing fees, costs and expenses which remains
unpaid more than thirty (30) days following Administrative Agent's or any
Lender's statement and request for
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payment thereof shall bear interest from the date of such statement and request
to the date of payment at the Default Rate.
(b) INDEMNIFICATION. Borrower will indemnify and hold harmless
Administrative Agent and each Lender and each director, officer, employee,
agent, attorney, trustee, advisor and Affiliate of Administrative Agent and each
Lender (each such Person an "INDEMNIFIED PERSON" and collectively, the
"INDEMNIFIED PERSONS") from and against all losses, claims, damages, obligations
(including removal or remedial actions), expenses or liabilities (not including
Taxes as to which Borrower is not required to make any payment of additional
amounts pursuant to SECTION 4.7(c) hereof) to which such Indemnified Person may
become subject, insofar as such losses, claims, damages, penalties, obligations
(including removal or remedial actions), expenses or liabilities (or actions,
suits or proceedings including any inquiry or investigation or claims in respect
thereof (whether or not Administrative Agent or any Lender is a party thereto))
arise out of, in any way relate to, or result from the transactions contemplated
by this Agreement or any of the other Loan Documents and to reimburse each
Indemnified Person upon their demand, for any Attorney Costs or other expenses
incurred in connection with investigating, preparing to defend or defending any
such loss, claim, damage, liability, action or claim; PROVIDED, HOWEVER,
(i) that no Indemnified Person shall have the right to be
so indemnified hereunder for any loss, claim, damage, penalties,
obligations, expense or liability to the extent it arises or results from
the gross negligence or willful misconduct or bad faith of such Indemnified
Person as finally determined by a court of competent jurisdiction and
(ii) that nothing contained herein shall affect the
obligations and liabilities of the Lenders to Borrower contained herein.
(iii) If any action, suit or proceeding arising from any of
the foregoing is brought against Administrative Agent, any Lender or any
other Person indemnified or intended to be indemnified pursuant to this
SECTION 12.4, Borrower will, if requested by Administrative Agent, any
Lender or any such Indemnified Person, resist and defend such action, suit
or proceeding or cause the same to be resisted and defended by counsel
reasonably satisfactory to the Person or Persons indemnified or intended to
be indemnified. Each Indemnified Person shall, unless Administrative Agent,
a Lender or other Indemnified Person has made the request described in the
preceding sentence and such request has been complied with, have the right
to employ its own counsel (or (but not as well as) staff counsel) to
investigate and control the defense of any matter covered by such indemnity
and the reasonable fees and expenses of such counsel shall be at the
expense of the indemnifying party. Excluding any liability to the extent
arising out of the gross negligence or willful misconduct of any
Indemnified Person as determined by a court of competent jurisdiction in a
final non-appealable judgment, Borrower further agrees to indemnify and
hold each Indemnified Person harmless from all loss, cost (including
Attorney Costs), liability and damage whatsoever incurred by any
Indemnified Person by reason of any violation of any Environmental Laws or
Environmental Permits or for the Release or Threatened Release of any
Contaminants into the environment for which Borrower or any of its
Subsidiaries has any liability or which occurs upon the
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Mortgaged Property or which is related to any property currently or
formerly owned, leased or operated by or on behalf of Borrower or any of
its Subsidiaries, or by reason of the imposition of any Environmental Lien
or which occurs by a breach of any of the representations, warranties or
covenants relating to environmental matters contained herein, including,
without limitation, by reason of any matters disclosed in SCHEDULE 6.17,
provided that, with respect to any liabilities arising from acts or failure
to act for which Borrower or any of its Subsidiaries is strictly liable
under any Environmental Law or Environmental Permit, Borrower's obligation
to each Indemnified Person under this indemnity shall likewise be without
regard to fault on the part of Borrower or any such Subsidiary. If Borrower
shall fail to do any act or thing which it has covenanted to do hereunder
or any representation or warranty on the part of Borrower or any Subsidiary
contained herein or in any other Loan Document shall be breached,
Administrative Agent may (but shall not be obligated to) do the same or
cause it to be done or remedy any such breach, and may expend its funds for
such purpose, and will use its best efforts to give prompt written notice
to Borrower that it proposes to take such action. Any and all amounts so
expended by Administrative Agent shall be repaid to it by Borrower promptly
upon Administrative Agent's demand therefor, with interest at the Default
Rate in effect from time to time during the period including the date so
expended by Administrative Agent to the date of repayment. To the extent
that the undertaking to indemnify, pay or hold harmless Administrative
Agent or any Lender as set forth in this SECTION 12.4 may be unenforceable
because it is violative of any law or public policy, Borrower shall make
the maximum contribution to the payment and satisfaction of each of the
indemnified liabilities which is permissible under applicable law. The
obligations of Borrower under this SECTION 12.4 shall survive the
termination of this Agreement and the discharge of Borrower's other
Obligations hereunder.
12.5 CONFIRMATIONS.
Each of Borrower and each holder of any portion of the Obligations
agrees from time to time, upon written request received by it from the other, to
confirm to the other in writing (with a copy of each such confirmation to
Administrative Agent) the aggregate unpaid principal amount of the Loan or Loans
and other Obligations then outstanding.
12.6 ADJUSTMENT.
(a) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to Borrower, any
such notice being expressly waived by Borrower, upon the occurrence and during
the continuance of an Event of Default, to setoff and apply against any
Obligations, whether matured or unmatured, of Borrower to such Lender, any
amount owing from such Lender to Borrower, at or at any time after, the
happening of any of the above-mentioned events, and the aforesaid right of
setoff may be exercised by such Lender against Borrower or against any trustee
in bankruptcy, debtor in possession, assignee for the benefit of creditors,
receivers, or execution, judgment or attachment creditor of Borrower, or against
anyone else claiming through or against, Borrower or such trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receivers, or
execution, judgment or attachment creditor, notwithstanding the fact that such
right of setoff shall not have been exercised by such Lender prior to the
making, filing or issuance, or service
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upon such Lender of, or of notice of, any such petition, assignment for the
benefit of creditors, appointment or application for the appointment of a
receiver, or issuance of execution, subpoena, order or warrant. Each Lender
agrees promptly to notify Borrower, Administrative Agent after any such setoff
and application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such setoff and application.
(b) Borrower expressly agrees that to the extent Borrower makes a
payment or payments and such payment or payments, or any part thereof, are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or are required to be repaid to a trustee, receiver, or any other party under
any bankruptcy act, state or federal law, common law or equitable cause, then to
the extent of such payment or repayment, the Indebtedness to the Lenders or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if said payment or payments had not been made.
12.7 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
Agreement.
12.8 BINDING EFFECT; ASSIGNMENT; ADDITION AND SUBSTITUTION OF
LENDERS.
(a) This Agreement shall be binding upon, and inure to the benefit
of, Borrower, Administrative Agent, the Lenders, all future holders of the Notes
and their respective successors and assigns; PROVIDED, HOWEVER, that Borrower
may not assign its rights or obligations hereunder or in connection herewith or
any interest herein (voluntarily, by operation of law or otherwise) without the
prior written consent of Administrative Agent and all of the Lenders.
(b) Each Lender may at any time sell to one or more banks or other
entities ("PARTICIPANTS") participating interests in all or any portion of its
Loans or any other interest of such Lender hereunder (in respect of any Lender,
its "CREDIT EXPOSURE"). In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, and Borrower and Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Each Lender shall from
time to time upon request of Borrower notify Borrower of the identity of any
Participants with respect to its Credit Exposure hereunder, PROVIDED, HOWEVER,
that failure to provide such notice will not affect the validity of such
participation. Borrower agrees that if amounts outstanding under this Agreement
or any of the Loan Documents are due or unpaid, or shall have been declared or
shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and the Loan
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement or any other Loan
Document, provided that such right of setoff shall be subject to the obligation
of such Participant to share with the Lenders, and the Lenders agree to share
with such Participant, as provided in SECTION 4.6. Borrower also agrees
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that each Participant shall be entitled to the benefits of SECTIONS 3.4, 3.5 and
4.5 with respect to its participation in the Loans outstanding from time to time
as if it were a Lender, PROVIDED that such Participant's benefits under SECTIONS
3.4, 3.5 and 4.5 shall be limited to the benefits that the primary Lender would
be entitled to thereunder. Each Lender agrees that any agreement between such
Lender and any such Participant in respect of such participating interest shall
not restrict such Lender's right to approve or agree to any amendment,
restatement, supplement or other modification to, waiver of, or consent under
this Agreement or any of the Loan Documents except to the extent that any of the
foregoing would (i) extend the final scheduled maturity of any Loan or Note in
which such Participant is participating (it being understood that amending the
definitions of Scheduled Term A Loans Principal Payments (other than the Term A
Loan Maturity Date) shall not constitute an extension of the final scheduled
maturity of any Loan or Note), or reduce the rate or extend the time of payment
of interest or fees on any such Loan or Note (except in connection with a waiver
of applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the Participant's
participation over the amount thereof then in effect (it being understood that
waivers or modifications of conditions precedent, covenants, Events of Default
or Unmatured Events of Default shall not constitute a change in the terms of
such participation, and that an increase in any Loan shall be permitted without
the consent of any Participant if the Participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
Borrower of any of its rights and obligations under this Agreement or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Loan Documents) supporting the
Loans hereunder in which such Participant is participating.
(c) Any Lender may at any time assign to one or more Eligible
Assignees, including an Affiliate thereof (treating any fund that invests in
bank loans, any other fund that invests in bank loans and is managed by the same
investment advisor of such Lender or by an affiliate of such investment manager
as a single Eligible Assignee) (each an "ASSIGNEE"), all or any part of its
Loans pursuant to an Assignment and Assumption Agreement attached hereto as
EXHIBIT 12.8(c); PROVIDED that (i) it assigns its Credit Exposure in an amount
not less than $1,000,000 (except in the case of an assignment to another Lender)
and (ii) any assignment of all or any portion of any Lender's Loans to an
Assignee other than an Affiliate of such Lender or another Lender, or in the
case of a Lender that is a fund that invests in senior loans, any Related Fund
of any Lender, shall require the prior written consent of Administrative Agent
(such consent not to be unreasonably withheld or delayed), PROVIDED FURTHER,
that notwithstanding the foregoing limitations, any Lender may at any time
assign all or any part of its Loans to any Affiliate of such Lender or to any
other Lender (or in the case of a Lender which is a Related Fund, to any Related
Fund of any Lender). Upon execution of an Assignment and Assumption Agreement
and the payment of a nonrefundable assignment fee of $3,500 (provided that no
such fee shall be payable upon assignments by any Lender which is a fund to one
or more Related Fund) in immediately available funds to Administrative Agent at
its Payment Office in connection with each such assignment ($2,500 with respect
to assignments to any Lender or an Affiliate of such Lender), written notice
thereof by such transferor Lender to Administrative Agent and the recording by
Administrative Agent in the Register of such assignment and the resulting effect
upon the applicable Loans of the assigning Lender and the Assignee, the Assignee
shall have, to the extent of such assignment, the same rights and benefits as it
would have if it were a Lender hereunder and the holder of the Obligations
(provided that Borrower and
106
Administrative Agent shall be entitled to continue to deal solely and directly
with the assignor Lender in connection with the interests so assigned to the
Assignee until written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
shall have been given to Borrower and Administrative Agent by the assignor
Lender and the Assignee) and, if the Assignee has expressly assumed, for the
benefit of Borrower, some or all of the transferor Lender's obligations
hereunder, such transferor Lender shall be relieved of its obligations hereunder
to the extent of such assignment and assumption, and except as described above,
no further consent or action by Borrower, the Lenders or Administrative Agent
shall be required. At the time of each assignment pursuant to this SECTION
12.8(c) to a Person which is not already a Lender hereunder and which is not a
USA person (as such term is defined in Section 7701(a)(30) of the Code) for
United States Federal income tax purposes, the respective Assignee shall provide
to Borrower and Administrative Agent the appropriate IRS Forms (and, if
applicable a Section 4.5(d)(ii) Certificate) described in SECTION 4.5(d). Each
Assignee shall take such Credit Exposure subject to the provisions of this
Agreement and to any request made, waiver or consent given or other action taken
hereunder, prior to the receipt by Administrative Agent and Borrower of written
notice of such transfer, by each previous holder of such Credit Exposure. Such
Assignment and Assumption Agreement shall be deemed to amend this Agreement, to
the extent, and only to the extent, necessary to reflect the addition of such
Assignee as a Lender and the resulting adjustment of all or a portion of the
rights and obligations of such transferor Lender under this Agreement, the
determination of its Pro Rata Share of the applicable Facility (in each case,
rounded to twelve decimal places), the Loans and any new Notes to be issued, at
Borrower's expense, to such Assignee, and no further consent or action by
Borrower or the Lenders shall be required to effect such amendments.
(d) Borrower authorizes each Lender to disclose to any Participant
or Assignee or its investment advisor (each, a "TRANSFEREE") and any prospective
Transferee any and all financial information in such Lender's possession
concerning Borrower and any Subsidiary of Borrower which has been delivered to
such Lender by Borrower pursuant to this Agreement or which has been delivered
to such Lender by Borrower in connection with such Lender's credit evaluation of
Borrower prior to entering into this Agreement. Any Transferee or any
prospective Transferee to whom such financial information is disclosed shall be
required to maintain the confidentiality of such information pursuant to SECTION
12.17 as if they were parties to this Agreement
(e) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement and the other Loan
Documents (including, without limitation, the Notes held by it) to secure
obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to any Federal Reserve Bank in accordance with
Regulation A of the Federal Reserve Board without notice to, or the consent of,
Borrower; provided that no such pledge or assignment of a security interest
under this SECTION 12.8(e) shall release a Lender from any obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
Any Lender which is a fund may pledge all or any portion of its Notes or Loans
to its trustee in support of its obligations to its trustee. No such pledge or
assignment shall release the transferor Lender from its obligations hereunder.
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12.9 CONSENT TO JURISDICTION; MUTUAL WAIVER OF JURY TRIAL.
(A) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH CREDIT PARTY HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. EACH CREDIT PARTY FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH CREDIT PARTY, AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS
AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF AGENT UNDER THIS
AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST EACH CREDIT PARTY IN ANY OTHER JURISDICTION.
(B) EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE
(A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(C) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY COURT OR JURISDICTION,
INCLUDING WITHOUT LIMITATION THOSE REFERRED TO IN CLAUSE (A) ABOVE, IN RESPECT
TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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12.10 GOVERNING LAW. THIS AGREEMENT AND EACH NOTE SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF SAID
STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
12.11 SEVERABILITY OF PROVISIONS. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
12.12 TRANSFERS OF NOTES. In the event that the holder of any Note
(including any Lender) shall transfer such Note, it shall immediately advise
Administrative Agent and Borrower of such transfer, and Administrative Agent and
Borrower shall be entitled conclusively to assume that no transfer of any Note
has been made by any holder (including any Lender) unless and until
Administrative Agent and Borrower shall have received written notice to the
contrary. Except as otherwise provided in this Agreement or as otherwise
expressly agreed in writing by all of the other parties hereto, no Lender shall,
by reason of the transfer of a Note or otherwise, be relieved of any of its
obligations hereunder. Each transferee of any Note shall take such Note subject
to the provisions of this Agreement and to any request made, waiver or consent
given or other action taken hereunder, prior to the receipt by Administrative
Agent and Borrower of written notice of such transfer, by each previous holder
of such Note, and, except as expressly otherwise provided in such transfer,
Administrative Agent and Borrower shall be entitled conclusively to assume that
the transferee named in such notice shall hereafter be vested with all rights
and powers under this Agreement with respect to the Pro Rata Share of Term A
Loans or Term B Loans, as the case may be, of the Loans of the Lender named as
the payee of the Note which is the subject of such transfer.
12.13 REGISTRY. Borrower hereby designates Administrative Agent to
serve as Borrower's agent, solely for purposes of this SECTION 12.13 to maintain
a register (the "Register") on which it will record the Loans made by each of
the Lenders and each repayment in respect of the principal amount of the Loans
of each Lender. Failure to make any such recordation, or any error in such
recordation shall not affect Borrower's obligations in respect of such Loans.
With respect to any Lender, the transfer of the rights to the principal of, and
interest on, any Loan shall not be effective until such transfer is recorded on
the Register maintained by Administrative Agent with respect to ownership of
such Loans and prior to such recordation all amounts owing to the transferor
with respect to such Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Loans shall be
recorded by Administrative Agent on the Register only upon the acceptance by
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to SECTION 12.8(c). Coincident with the delivery
of such an Assignment and Assumption Agreement to Administrative Agent for
acceptance and registration of assignment or transfer of all or part of a Loan,
or as soon thereafter as practicable, the assigning or transferor Lender shall
surrender the Note (if any) evidencing such Loan, and thereupon one or more new
Notes in the same aggregate principal amount then owing to such assignor or
transferor Lender shall be issued to the assigning or transferor Lender and/or
the new Lender. Borrower agrees to indemnify Administrative Agent from and
against any and all losses, claims, damages and liabilities of whatsoever nature
which
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may be imposed on, asserted against or incurred by Administrative Agent (other
than those arising from the gross negligence or willful negligence of the
Administrative Agent) in performing its duties under this SECTION 12.13.
12.14 HEADINGS. The Table of Contents and Article and Section
headings used in this Agreement are for convenience of reference only and shall
not affect the construction of this Agreement.
12.15 TERMINATION OF AGREEMENT. This Agreement shall terminate when
all outstanding Obligations and Loans have been paid in full; provided, however,
that the rights and remedies of Administrative Agent and each Lender with
respect to any representation and warranty made by Borrower pursuant to this
Agreement or any other Loan Document, and the indemnification provisions
contained in this Agreement and any other Loan Document, shall be continuing and
shall survive any termination of this Agreement or any other Loan Document.
12.16 CONFIDENTIALITY. Each of the Lenders severally agrees to keep
confidential all non-public information pertaining to Borrower and its
Subsidiaries or Affiliates which is provided to it by any such parties in
accordance with such Lender's customary procedures for handling confidential
information of this nature and in a prudent fashion, and shall not disclose such
information to any Person except:
(i) to the extent such information is public when received
by such Lender or becomes public thereafter due to the act or omission of
any party other than a Lender,
(ii) to the extent such information is independently
obtained from a source other than Borrower or its Subsidiaries and such
information from such source is not, to such Lender's knowledge, subject to
an obligation of confidentiality or, if such information is subject to an
obligation of confidentiality, that disclosure of such information is
permitted,
(iii) to an Affiliate of such Lender, counsel, auditors,
examiners of any regulatory authority having or reasonably asserting
jurisdiction over such Lender, accountants and other consultants retained
by Administrative Agent or any Lender or to any Affiliate of a Lender which
is a direct or indirect contractual counterparty in swap agreements with
the Borrower or a Subsidiary of the Borrower or such contractual
counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty
agrees to be bound by the provisions of this SECTION 12.16) or to the
National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with rating
issued with respect to such Lender,
(iv) in connection with any litigation or the enforcement of
the rights of any Lender or Administrative Agent under this Agreement or
any other Loan Document,
(v) to the extent (x) required by any applicable statute,
rule or regulation or court order (including, without limitation, by way of
subpoena) or pursuant
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to the request of any Governmental Authority having or reasonably asserting
jurisdiction over any Lender or Administrative Agent; PROVIDED, HOWEVER,
that in such event, if the Lender(s) are able to do so, the Lender shall
provide Borrower with prompt notice of such requested disclosure so that
Borrower may seek a protective order or other appropriate remedy, and, in
any event, the Lenders will endeavor in good faith to provide only that
portion of such information which, in the reasonable judgment of the
Lender(s), is relevant and legally required to be provided, (y) requested
by any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with rating
issued with respect to such Lender or (z) requested by an Affiliate of a
Lender which is a direct or indirect contractual counterparty in swap
agreements with the Borrower or a Subsidiary of the Borrower or such
contractual counterparty's professional advisor (so long as such
contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this SECTION 12.16) or
to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires
access to information about a Lender's investment portfolio in connection
with rating issued with respect to such Lender,
(vi) to the extent disclosure to other entities is
appropriate in connection with any proposed or actual assignment or grant
of a participation by any of the Lenders of interests in this Agreement
and/or any of the other Loan Documents to such other entities (who will in
turn be required to maintain confidentiality as if they were Lenders
parties to this Agreement). In no event shall Administrative Agent or any
Lender be obligated or required to return any such information or other
materials furnished by Borrower.
12.17 CONCERNING THE COLLATERAL AND THE LOAN DOCUMENTS.
(a) AUTHORITY. Each Lender authorizes and directs DB to act as
Collateral Agent and to enter into the Loan Documents relating to the Collateral
for the benefit of the Lenders and the other secured parties. Each Lender agrees
that any action taken by the Administrative Agent or the Required Lenders (or,
where required by the express terms, hereof, a different proportion of the
Lenders) in accordance with the provisions hereof or of the other Loan
Documents, and the exercise by the Administrative Agent, the Collateral Agent or
the Required Lenders (or, where so required, such different proportion) of the
powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all of the
Lenders. Without limiting the generality of the foregoing, the Administrative
Agent or the Collateral Agent as the case may be, shall have the sole and
exclusive right and authority to (i) act as the disbursing and collecting agent
for the Lenders with respect to all payments and collections arising in
connection herewith and with the Loan Documents relating to the Collateral; (ii)
execute and deliver each Loan Document relating to the Collateral and accept
delivery of each such agreement delivered by Borrower or any of its
Subsidiaries; (iii) act as the Collateral Agent for the Lenders for purposes
stated therein to the extent such action is provided for under the Loan
Documents, PROVIDED, HOWEVER, the Administrative Agent hereby appoints,
authorizes and directs each Lender to act as collateral sub-agent for the
Administrative Agent and the Lenders for purposes of the perfection of all
security interests and Liens with respect to Borrower's and its Subsidiaries'
respective deposit
111
accounts maintained with, and cash and Cash Equivalents held by, such Lender;
(iv) manage, supervise and otherwise deal with the Collateral; (v) take such
action as is necessary or desirable to maintain the perfection and priority of
the security interests and liens created or purported to be created by the Loan
Documents; and (vi) except as may be otherwise specifically restricted by the
terms hereof or of any other Loan Document, exercise all remedies given to the
Administrative Agent or the Lenders with respect to the Collateral under the
Loan Documents relating thereto, applicable law or otherwise.
(b) RELEASE OF COLLATERAL.
(i) The Administrative Agent and the Lenders hereby direct
the Administrative Agent and the Collateral Agent, as the case may be, to
release, in accordance with the terms hereof, any Lien held by the
Administrative Agent or the Collateral Agent, as the case may be, under
the Security Documents (and, in the case of clause (B) below, release the
affected Subsidiary from its guaranty):
(A) against all of the Collateral, upon final and
indefeasible payment in full of the Loans and Obligations and
termination hereof;
(B) against any part of the Collateral sold or
disposed of by Borrower or any of its Subsidiaries (other than sales
permitted under SECTION 8.6(e) but including, without limitation, in
the case of a sale or disposition of all of the Capital Stock of a
Subsidiary owned by Borrower and its Subsidiaries or the redesignation
of a Restricted Subsidiary as an Unrestricted Subsidiary pursuant to
an amendment hereto with the approval of the Required Lenders, all
assets of such Subsidiary and its Subsidiaries and all Pledged
Intercompany Notes issued by such Subsidiary and its Subsidiaries) to
the extent such sale or disposition is permitted hereby (or permitted
pursuant to a waiver or consent of a transaction otherwise prohibited
hereby);
(C) against any Collateral acquired by Borrower or any
of its Subsidiaries after the Closing Date and at least 80% of the
purchase price therefor is within 120 days of the acquisition thereof
financed with Indebtedness secured by a Lien permitted by SECTION
8.1(b)(i); and
(D) against a part of the Collateral which release
does not require the consent of all of the Lenders as set forth in
SECTION 12.1(a)(iii)(B), if such release is consented to by the
Required Lenders;
PROVIDED, HOWEVER, that (y) the Administrative Agent or the Collateral Agent, as
the case may be shall not be required to execute any such document on terms
which, in its opinion, would expose it to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (z) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens upon (or obligations of Borrower or any of
its Subsidiaries in respect of) all interests retained by Borrower and/or any of
its Subsidiaries, including (without limitation) the proceeds of any sale, all
of which shall continue to constitute part of the Collateral.
112
(ii) Each of the Lenders hereby directs the Administrative
Agent to execute and deliver or file such termination and partial release
statements and such other things as are necessary to release Liens to be
released pursuant to this SECTION 12.17 promptly upon the effectiveness of
any such release or enter into intercreditor agreements contemplated or
permitted herein.
(c) NO OBLIGATION. Neither the Administrative Agent nor the
Collateral Agent shall have any obligation whatsoever to any Lender or to any
other Person to assure that the Collateral exists or is owned by Borrower or any
of its Subsidiaries or is cared for, protected or insured or has been encumbered
or that the Liens granted to the Administrative Agent or the Collateral Agent
herein or pursuant to the Loan Documents have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Administrative Agent
or the Collateral Agent in any of the Loan Documents, it being understood and
agreed that in respect of the Collateral, or any act, omission or event related
thereto, the Administrative Agent and the Collateral Agent may act in any manner
it may deem appropriate, in its sole discretion, given the Administrative
Agent's own interests in the Collateral as one of the Lenders and that neither
the Administrative Agent nor the Collateral Agent shall have any duty or
liability whatsoever to any Lender, provided, that, notwithstanding the
foregoing, the Administrative Agent and the Collateral Agent shall be
responsible for their grossly negligent actions or actions constituting
intentional misconduct.
(d) PRIORITY CREDIT AGREEMENT LIEN SUBORDINATION. Each Lender
hereby instructs the Administrative Agent and the Collateral Agent to enter into
the Security Agreement and the Intercreditor Agreement and such amendments or
modifications thereto and to the other Security Documents consistent herewith
and as the Administrative Agent or the Collateral Agent reasonably determines to
be necessary to subordinate the Liens granted by Borrower and the Restricted
Subsidiaries in favor of the Administrative Agent and Lenders to secure the
Obligations to the Liens granted pursuant to the Priority Loan Documents. Each
Lender agrees that, notwithstanding the time, order or method of attachment or
perfection of Liens granted in favor of the Collateral Agent and/or the Priority
Collateral Agent, to secure the Obligations and/or the Obligations (as defined
in the Priority Credit Agreement) or the filing or recording of financing
statements or other Security Documents and/or Security Documents (as defined in
the Priority Credit Agreement); the validity or enforceability of the security
interests and Liens granted in favor of the Priority Collateral Agent or the
Collateral Agent; any provisions of the UCC or any applicable law or decision;
any provision set forth in any Security Document and/or any Security Document
(as defined in the Priority Credit Agreement) in the possession or control by
the Priority Collateral Agent or the Collateral Agent of all or any part of any
Collateral as of the date hereof or otherwise, the Liens granted under the
Security Documents (as defined in the Priority Credit Agreement) shall be a
first and prior security interest for all purposes and the Liens granted under
the Security Documents to secure the Obligations shall be second and
subordinated to the liens granted under the Security Documents (as defined in
the Priority Credit Agreement). Each Lender agrees that it shall not challenge
or question in any proceeding the validity or enforceability of this SECTION
12.17(d) or any corresponding provisions with respect to lien subordination in
the Security Agreement or the Intercreditor Agreement. Each Lender agrees that
it shall not challenge or question in any proceeding the priority or validity of
the liens
113
granted to the Administrative Agent, Lenders or the Collateral Agent to secure
the Obligations (as defined in the Priority Credit Agreement).
(e) TRANSFER RESTRICTION AGREEMENT. The Administrative Agent and
the Required Lenders (as defined in the Original Credit Agreement) and the
Required Lenders (as defined in the Original Term Loan Agreement) hereby permit
the contribution of the Capital Stock which is subject to the Transfer
Restriction Agreement dated as of December 20, 2001, by and among the Borrower,
Xxx X. Xxxxxxxx and DB, to the Borrower on or before the Closing Date, without
the payment of any cash consideration, pursuant to SECTION 5.1(c)(ii).
12.18 CERTAIN GUARANTEE OBLIGATIONS. The Borrower hereby guarantees
all obligations of each of its Subsidiaries (for so long as such Subsidiary
remains a Subsidiary) under all Hedging Agreements entered into by such
Subsidiary with any Lender or any Affiliate of a Lender (even if such Person
subsequently ceases to be a Lender hereunder for any reason), which obligations
are pursuant to the terms of such Hedging Agreements expressly secured by the
security interests granted under the Security Agreement. The provisions of
Sections 4 through 9 of the Amended and Restated Subsidiary Guarantee Agreement
are hereby incorporated herein by reference MUTATIS MUTANDIS as if all
references to "Guarantor" and "Guaranteed Obligations" were references to
Borrower and the obligations guaranteed by this SECTION 12.18, respectively.
12.19 STEERING COMMITTEE. No member of the Steering Committee (as
defined in the Second Amendment to the Amended and Restated Term Loan Agreement)
or any of such member's officers, directors, employees or agents shall be liable
to the Borrower, any Lender, the Administrative Agent or any other Person for
any action taken or omitted by it hereunder or under any of the Loan Documents,
or in connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The Borrower shall, and to the extent that any
member of the Steering Committee is not reimbursed and indemnified by Borrower,
the Lenders shall reimburse and indemnify such member of the Steering Committee
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against such member of the Steering Committee (or against such member's
officers, directors, employees or agents), acting in such capacity, in any way
relating to or arising out of any of the Loan Documents or any action taken or
omitted by the Steering Committee or such member of the Steering Committee under
any of the Loan Documents, or in connection herewith or therewith, in proportion
to each Lender's Aggregate Pro Rata Share; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such member of the Steering Committee's gross negligence or
willful misconduct.
12.20 EFFECTIVENESS. This Agreement shall become effective on the
date (the "Effective Date") on which (a) Borrower, Administrative Agent and each
of the Existing Lenders shall have signed a counterpart of this Agreement
(whether the same or different counterparts) and shall have delivered the same
to the Administrative Agent at the Notice Office (or to Administrative Agent's
counsel as directed by such counsel) or, in the case of the Existing Lenders,
shall have given to Administrative Agent telephonic (confirmed in writing),
written, telex or facsimile notice (actually received) at such office or the
office of Administrative Agent's
114
counsel that the same has been signed and mailed to it or (b) upon the
occurrence of the Effective Date as defined in the Plan of Reorganization and
approved by a court of competent jurisdiction. Administrative Agent will give
Borrower and each Existing Lender prompt written notice of the occurrence of the
Effective Date.
12.21 EFFECT OF AMENDMENT AND RESTATEMENT. Borrower, Administrative
Agent and the Lenders acknowledge and agree that (i) this Agreement and the
documents executed and delivered in connection herewith do not constitute a
novation, payment and reborrowing, or termination of the Obligations (as such
terms are defined in the Original Credit Agreement and the Original Term Loan
Agreement, each as in effect prior to the Closing Date (prior to giving effect
to the Transactions)) or a novation, payment and reborrowing of the Loans (as
such terms are defined in the Original Credit Agreement and the Original Term
Loan Agreement, each as in effect prior to the Closing Date (prior to giving
effect to the Transactions)) and (ii) the liens and security interests of the
Existing Lenders securing payment of the Obligations (as such term is defined in
the Original Credit Agreement and the Original Term Loan Agreement) are in all
respects continuing and in full force and effect with respect to the Obligations
hereunder. The security interest in, lien upon and/or conditional assignment of
rights and interest of the Borrower and the Subsidiary Guarantors granted to the
Collateral Agent pursuant to the Security Agreement are hereby ratified and
shall continue from and after the date hereof and as such, shall remain in full
force and effect pursuant to the Security Agreement from and after the date
hereof.
[SIGNATURE PAGES FOLLOW]
115
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized, as of
the date first above written.
HUNTSMAN COMPANY LLC
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Address:
Huntsman Company LLC
000 Xxxxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: General Counsel
Tel. No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Solely for purposes of SECTION 8.15 of this Agreement:
HUNTSMAN SPECIALTY CHEMICALS
CORPORATION
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Solely for purposes of SECTION 8.15 of this Agreement:
HUNTSMAN SPECIALTY CHEMICALS
HOLDINGS CORPORATION
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Amended and Restated Credit Agreement
DEUTSCHE BANK TRUST COMPANY
AMERICAS (f/k/a BANKERS TRUST
COMPANY in its individual
capacity as a Lender and
Administrative Agent)
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Address:
--------------------------
Deutsche Bank Trust Company Americas
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Anos
Tel. No.: (000) 000-0000
Telex No.: 62922
(Answerback: BTA9-UAW)
Telecopier No.: (000) 000-0000
Amended and Restated Credit Agreement
[Name of Financial Institution]
By:
------------------------------
Name:
-----------------------------
Title:
----------------------------
Amended and Restated Credit Agreement
