EXHIBIT 10.12
CONFORMED COPY
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
January 30, 1997
between
RHEOX, INC.
THE SUBSIDIARY GUARANTORS PARTY HERETO,
and
THE LENDERS PARTY HERETO,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
BANKERS TRUST COMPANY,
as Documentation Agent
TABLE OF CONTENTS
Page
ARTICLE I
Definitions..................................................... 1
SECTION 1.01. Defined Terms......................... 1
SECTION 1.02. Classification of Loans and Borrowings 26
SECTION 1.03. Terms Generally....................... 27
SECTION 1.04. Accounting Terms; GAAP................ 27
ARTICLE II
The Credits..................................................... 27
SECTION 2.01. Commitments........................... 27
SECTION 2.02. Loans and Borrowings.................. 28
SECTION 2.03. Requests for Borrowings............... 29
SECTION 2.04. Letters of Credit..................... 29
SECTION 2.05. Funding of Borrowings................. 34
SECTION 2.06. Interest Elections.................... 35
SECTION 2.07. Termination and Reduction of
Commitments.......................... 36
SECTION 2.08. Repayment of Loans; Evidence of Debt.. 37
SECTION 2.09. Prepayment of Loans................... 38
SECTION 2.10. Fees.................................. 41
SECTION 2.11. Interest.............................. 43
SECTION 2.12. Alternate Rate of Interest............ 44
SECTION 2.13. Increased Costs....................... 44
SECTION 2.14. Break Funding Payments................ 45
SECTION 2.15. Taxes................................. 46
SECTION 2.16. Payments Generally; Pro Rata Treatment;
Sharing of Set-Offs.................. 47
SECTION 2.17. Mitigation Obligations................ 49
ARTICLE III
Guarantee by Subsidiary Guarantors.............................. 50
SECTION 3.01. The Guarantee......................... 50
SECTION 3.02. Obligations Unconditional............. 50
SECTION 3.03. Reinstatement......................... 51
SECTION 3.04. Subrogation........................... 52
SECTION 3.05. Remedies.............................. 52
SECTION 3.06. Instrument for the Payment of Money... 52
(i)
Page
SECTION 3.07. Continuing Guarantee.................. 52
SECTION 3.08. Rights of Contribution................ 52
SECTION 3.09. General Limitation on Guarantee
Obligations.......................... 53
ARTICLE IV
Representations and Warranties.................................. 54
SECTION 4.01. Organization; Powers.................. 54
SECTION 4.02. Authorization; Enforceability......... 54
SECTION 4.03. Governmental Approvals; No Conflicts.. 54
SECTION 4.04. Financial Condition; No Material
Adverse Change....................... 54
SECTION 4.05. Properties............................ 55
SECTION 4.06. Litigation and Environmental Matters.. 56
SECTION 4.07. Compliance with Laws and Agreements... 58
SECTION 4.08. Investment and Holding Company Status. 58
SECTION 4.09. Taxes................................. 58
SECTION 4.10. ERISA................................. 58
SECTION 4.11. Disclosure............................ 58
SECTION 4.12. Capitalization........................ 59
SECTION 4.13. Material Agreements and Liens......... 59
SECTION 4.14. Subsidiaries.......................... 59
SECTION 4.15. Certain Documents..................... 60
ARTICLE V
Conditions...................................................... 60
SECTION 5.01. Effective Date........................ 60
SECTION 5.02. Each Extension of Credit.............. 65
ARTICLE VI
Affirmative Covenants........................................... 66
SECTION 6.01. Financial Statements and Other
Information.......................... 66
SECTION 6.02. Notices of Material Events............ 68
SECTION 6.03. Existence; Conduct of Business........ 68
SECTION 6.04. Payment of Obligations................ 69
SECTION 6.05. Maintenance of Properties............. 69
SECTION 6.06. Maintenance of Insurance.............. 69
SECTION 6.07. Books and Records; Inspection Rights.. 72
SECTION 6.08. Fiscal Year........................... 72
(ii)
Page
SECTION 6.09. Compliance with Laws.................. 72
SECTION 6.10. Use of Proceeds....................... 72
SECTION 6.11. Hedging Agreements.................... 72
SECTION 6.12. Certain Obligations Respecting
Subsidiaries and Collateral Security. 73
SECTION 6.13. Environmental Laws and Permits........ 74
SECTION 6.14. Environmental Notices................. 74
SECTION 6.15. Environmental Audit and Remedial
Action............................... 75
ARTICLE VII
Negative Covenants.............................................. 75
SECTION 7.01. Indebtedness.......................... 75
SECTION 7.02. Liens................................. 76
SECTION 7.03. Fundamental Changes................... 77
SECTION 7.04. Investments, Loans, Advances, Guarantees
and Acquisitions; Hedging Agreements. 78
SECTION 7.05. Restricted Payments................... 79
SECTION 7.06. Transactions with Affiliates.......... 79
SECTION 7.07. Restrictive Agreements................ 80
SECTION 7.08. Certain Financial Covenants........... 80
SECTION 7.09. Lines of Business..................... 82
SECTION 7.10. Modifications of Certain Documents.... 82
SECTION 7.11. Rheox International................... 82
SECTION 7.12. Subordinated Notes.................... 82
ARTICLE VIII
Events of Default............................................... 83
ARTICLE IX
The Administrative Agent........................................ 86
ARTICLE X
Miscellaneous................................................... 89
SECTION 10.01. Notices.............................. 89
SECTION 10.02. Waivers; Amendments.................. 89
SECTION 10.03. Expenses; Indemnity; Damage Waiver... 91
(iii)
SECTION 10.04. Successors and Assigns............... 93
SECTION 10.05. Survival............................. 96
SECTION 10.06. Counterparts; Integration;
Effectiveness....................... 97
SECTION 10.07. Severability......................... 97
SECTION 10.08. Right of Setoff...................... 97
SECTION 10.09. Governing Law; Jurisdiction; Consent
to Service of Process............... 97
SECTION 10.10. WAIVER OF JURY TRIAL................. 98
SECTION 10.11. Headings............................. 98
SECTION 10.12. Confidentiality...................... 99
SCHEDULES:
Schedule 1.01 -- Ancillary Agreements
Schedule 2.01 -- Commitments
Schedule 2.04 -- Existing Letters of Credit
Schedule 4.05 -- Intellectual Property Matters
Schedule 4.06 -- Disclosed Matters
Schedule 4.13 -- Material Agreements and Liens
Schedule 4.14 -- Subsidiaries
Schedule 6.10 -- Indebtedness To Be Paid From Term Loan Proceeds
Schedule 7.01 -- Existing Indebtedness
Schedule 7.02 -- Existing Liens
Schedule 7.04 -- Investments
Schedule 7.07 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of Counsel to the Credit Parties and NL
Exhibit C -- Form of Opinion of Special Counsel
Exhibit D -- Form of Security Agreement
Exhibit E -- Form of NL Pledge Agreement
Exhibit F -- Form of Mortgage
Exhibit G -- Form of Conditional Assignment of and Security Interest in
Patent Rights
Exhibit H -- Form of Conditional Assignment of and Security Interest in
Trademark Rights
Exhibit I -- Form of Copyright Security Agreement
(iv)
AMENDED AND RESTATED CREDIT AGREEMENT dated as of January 30, 1997
between RHEOX, INC., the SUBSIDIARY GUARANTORS party hereto, the LENDERS party
hereto and THE CHASE MANHATTAN BANK, as Administrative Agent.
WHEREAS, the Borrower, the Subsidiary Guarantors, certain of the
Lenders (the "Existing Lenders") and the Administrative Agent are party to a
Credit Agreement dated as of March 20, 1991 (as heretofore modified and
supplemented and in effect on the date hereof immediately before giving effect
to the amendment and restatement contemplated hereby, the "Existing Credit
Agreement"). Pursuant to the Existing Credit Agreement (a) certain of the
Existing Lenders committed to make Revolving Credit Loans (as defined in the
Existing Credit Agreement and referred to herein as "Existing Revolving Credit
Loans") in an original aggregate principal amount not exceeding $15,000,000 at
any one time outstanding (the "Existing Revolving Credit Commitments"), with a
portion of such commitments made available for the issuance of letters of credit
in an aggregate amount not exceeding $5,000,000 at any one time outstanding and
(b) certain of the Existing Lenders committed to make Term Loans (as defined in
the Existing Credit Agreement and referred to herein as "Existing Term Loans")
to the Borrower in an original aggregate principal amount not exceeding
$115,000,000 (the "Existing Term Loan Commitments");
WHEREAS, the Borrower has requested that the Existing Lenders (which
include all of the Persons that on the date hereof are Banks under, and as
defined in, the Existing Credit Agreement) and the Administrative Agent agree to
amend and restate the Existing Credit Agreement, and the Existing Lenders and
the Administrative Agent are willing to amend and restate the Existing Credit
Agreement, in order to, among other things, (a) increase the aggregate amount of
the Existing Revolving Credit Commitments to $25,000,000, redesignate the
Existing Revolving Credit Commitments as "Revolving Credit Commitments"
hereunder and decrease the amount thereof available for Letters of Credit to
$2,500,000 and (b) reinstate the Existing Term Loan Commitments, increase the
aggregate amount thereof to $125,000,000 and redesignate the Existing Term Loan
Commitments as "Term Loan Commitments" hereunder;
NOW, THEREFORE, the parties hereto hereby agree that the Existing
Credit Agreement shall be amended and restated as of the date hereof (but
subject to Section 5.01) to read in its entirety as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
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"Acquisition" means any transaction, or any series of related
transactions, consummated after the date hereof, by which (a) the Borrower
and/or any of its Subsidiaries acquires the business of or all or substantially
all of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (b) any Person that was not
theretofore a Subsidiary of the Borrower becomes a Subsidiary of the Borrower;
provided however, the foregoing clauses (a) and (b) shall not include (i) any
transaction between the Borrower and any direct or indirect Wholly Owned
Subsidiary or between one or more direct or indirect Wholly Owned Subsidiaries,
or (ii) the organization of a newly formed Wholly Owned Subsidiary of the
Borrower.
"Adjusted Base Rate" means, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. Any change in the Adjusted Base Rate due to a change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime
Rate, Base CD Rate or the Federal Funds Effective Rate, respectively.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank in its capacity
as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. For purposes
of this definition, a Person shall be deemed to be an Affiliate of the Person
specified 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 the Person specified. Notwithstanding anything in this definition
to the contrary, (a) the Borrower and its Subsidiaries shall not be Affiliates
of each other and (b) none of the Administrative Agent, the Lenders or the LC
Issuing Lender shall be an Affiliate of the Borrower or any of its Subsidiaries.
"Ancillary Agreements" means the Tax Sharing Agreement and each of
the other documents listed on Schedule 1.01.
"Applicable Percentage" means (a) with respect to any Revolving
Credit Lender for purposes of Section 2.04 and any related definitions, the
percentage of the total Revolving
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Credit Commitments represented by such Lender's Revolving Credit Commitment and
(b) with respect to any Lender in respect of any indemnity claim under Section
10.03(b) or 10.03(c) arising out of an action or omission of the Administrative
Agent under any Loan Document, the percentage of the total Commitments of all
Classes hereunder represented by the aggregate amount of such Lender's
Commitment of all Classes hereunder.
"Applicable Rate" means, for Loans of any Type and commitment fees
for each Rate Period (as defined below), the respective rate per annum indicated
below for Loans of such Type or commitment fees, as applicable, opposite the
applicable Leverage Ratio indicated below for such Rate Period:
=========================================================================
Applicable Rate
---------------
Range
of Base Rate Eurodollar Commitment
Leverage Ratio Loans Loans Fee
-------------------------------------------------------------------------
Greater than to 3.00 to 1 0.750% 1.750% 0.500%
-------------------------------------------------------------------------
Greater than 2.00 to 1
but less than or equal to
3.00 to 1 0.500% 1.500% 0.500%
-------------------------------------------------------------------------
Greater than 1.50 to 1
but less than or equal to
2.00 to 1 0.250% 1.250% 0.375%
-------------------------------------------------------------------------
Greater than 1.00 to 1
but less than or equal to
1.50 to 1 0.000% 1.000% 0.375%
-------------------------------------------------------------------------
Less than or equal to 1.00 to 1 0.000% 0.750% 0.375%
=========================================================================
For purposes hereof, (i) a "Rate Period" means (x) initially, the
period commencing on the date hereof to but not including the first Rate Reset
Date (as defined below) thereafter and (y) thereafter, the period commencing on
a Rate Reset Date to but not including the immediately following Rate Reset Date
and (ii) a "Rate Reset Date" means, with respect to any fiscal quarters or
fiscal year, the earlier of (x) the third Business Day after the date on which
the Borrower delivers the Financial Certificate in respect of such fiscal
quarter or fiscal year, as the case may be, and (y) the date on which the
Borrower is required to have delivered the financial statements under Section
6.01(a) or (b) in respect of such fiscal quarter or fiscal year, as the case may
be.
The Leverage Ratio for any Rate Period shall be the Leverage Ratio
set forth in the applicable Financial Certificate as at the last day of the
fiscal quarter or fiscal year, as the
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case may be, in respect of which such Financial Certificate is delivered (i.e.,
the Leverage Ratio for the Rate Period commencing on the date on which the
Borrower delivers its financial statements pursuant to Section 6.01(b) for the
fiscal quarter ended on September 30, 1997 shall be the Leverage Ratio as at
September 30, 1997, the Leverage Ratio for the Rate Period commencing on the
date on which the Borrower delivers its financial statements pursuant to Section
6.01(a) for the fiscal year ended on December 31, 1997 shall be the Leverage
Ratio as at December 31, 1997, and so forth).
Anything in this Agreement to the contrary notwithstanding, the
Applicable Rate shall be the highest rates provided for above (i) during any
period when an Event of Default shall have occurred and be continuing, or (ii)
if the applicable Financial Certificate shall not be delivered within the time
that the applicable financial statements are required to be delivered by Section
6.01(a) or (b), as the case may be, (but only, in the case of this clause (ii),
with respect to the portion of such Rate Period prior to the delivery of such
Financial Certificate).
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Base Rate", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted Base Rate.
"Basic Documents" means the Loan Documents and the Ancillary
Agreements.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
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"Borrower" means Rheox, Inc., a Delaware corporation.
"Borrowing" means Loans of a particular Class of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Borrowing
in accordance with Section 2.03.
"Business" means the development, licensing, manufacture and
distribution of rheological additives and related and/or similar specialty
chemical products and services from time to time, now or hereafter, conducted by
the Borrower and its Subsidiaries.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided 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 U.S. dollar deposits in the London interbank market.
"Capital Assets" means, as to any Person, all fixed assets, plant,
equipment, land (to the extent the same constitutes a capital asset of such
Person) and other assets (including intangible assets) of such Person that
constitute capital assets of such Person under GAAP.
"Capital Expenditures" means expenditures made by the Borrower or any
Subsidiary to acquire or construct Capital Assets, computed in accordance with
GAAP.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Casualty Event" means, with respect to any property of any Person,
any loss of or damage to, or any condemnation or other taking of, such property
for which such Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation.
"Change in Law" means (a) the adoption of any law, rule or regulation
by any Governmental Authority after the date of this Agreement, (b) any change
in any law, rule or regulation or in the interpretation or application thereof
by any Governmental Authority after the date of this Agreement or (c) compliance
by any Lender or the LC Issuing Lender (or, for
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purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender's or the LC Issuing Lender's holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Chase" means The Chase Manhattan Bank, a New York banking
corporation.
"Class", when used in reference to any Loan, Borrowing or Commitment,
refers to whether such Loan, the Loans comprising such Borrowing or the Loans
that a Lender holding such Commitment is obligated to make, are Revolving Credit
Loans or Term Loans.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commitments" means the Revolving Credit Commitments and Term Loan
Commitments, as applicable.
"Conditional Assignment of and Security Interest in Patent Rights"
means an amended and restated Conditional Assignment of and Security Interest in
Patent Rights substantially in the form of Exhibit G between the Borrower and
the Administrative Agent.
"Conditional Assignment of and Security Interest in Trademark Rights"
means an amended and restated Conditional Assignment of and Security Interest in
Trademark Rights substantially in the form of Exhibit H between the Borrower and
the Administrative Agent.
"Consolidated Subsidiary" means, for any Person, each Subsidiary of
such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should be) consolidated with the
financial statements of such Person in accordance with GAAP.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Copyright Security Agreement" means an amended and restated
Copyright Security Agreement substantially in the form of Exhibit I between the
Borrower and the Administrative Agent.
"Credit Parties" means the Borrower and the Subsidiary Guarantors.
"Debt Service" means, for any period, the sum, for the Borrower and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with
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GAAP), of the following: (a) all payments of principal of Indebtedness scheduled
(excluding any mandatory prepayment made pursuant to Section 2.09 hereof) to be
made during such period, plus (b) all Interest Expense for such period.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.06.
"Disposition" means any sale, assignment, transfer or other
disposition of any property (whether now owned or hereafter acquired) by the
Borrower or any Subsidiary to any other Person (other than the Borrower or a
Wholly Owned Subsidiary) excluding any sale, assignment, transfer or other
disposition of (a) any property sold or disposed of in the ordinary course of
business, (b) any obsolete or worn-out tools and equipment no longer used or
useful in the business of the Borrower and its Subsidiaries and (c) any
Collateral under and as defined in the Security Agreement pursuant to an
exercise of remedies by the Administrative Agent under Section 5.05 thereof.
"Disposition Investment" means, with respect to any Disposition, any
promissory notes or other evidences of indebtedness or investments received by
the Borrower or any Subsidiary in connection with such Disposition.
"Distributor Affiliate Credit Extensions" shall mean extensions of
credit by the Borrower and its Subsidiaries to Affiliates of the Borrower under
Ancillary Agreements to finance the sale and distribution by such Affiliates of
products of the Borrower and its Subsidiaries.
"Domestic Subsidiary" means any Subsidiary that is organized or
created under the laws of the United States of America, any State or Territory
thereof or the District of Columbia.
"EBITDA" means, for any period, operating income for the Borrower and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) for such period (calculated before income taxes, Interest
Expense, depreciation, amortization and any other non-cash charges accrued for
such period and (except to the extent received or paid in cash by the Borrower
or any Subsidiary) income or loss attributable to equity in Affiliates for such
period) excluding any extraordinary and unusual gains or losses during such
period and excluding the proceeds of any Casualty Events and Dispositions.
Notwithstanding the foregoing, if during any period for which EBITDA
is being determined the Borrower shall have consummated any Acquisition or
Disposition then,
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for all purposes of this Agreement (other than for purposes of the definition of
Excess Cash Flow), EBITDA shall be determined on a pro forma basis as if such
Acquisition or Disposition had been made or consummated on the first day of such
period.
"Effective Date" means the date on which the conditions specified in
Section 5.01 are satisfied (or waived in accordance with Section 10.02).
"Enenco" means Enenco, Inc., a New York corporation that, on the date
hereof, is a joint venture between the Borrower and Witco Corporation.
"Environmental Claim" means, with respect to any Person, any written
notice, claim, demand or other communication by any other Person alleging or
asserting such Person's liability for investigatory costs, cleanup costs,
governmental response costs, damages to natural resources or other property,
personal injuries, fines or penalties arising out of, based on or resulting from
(a) the presence or Release into the environment, of any Hazardous Material at
any location, whether or not owned by such Person, or (b) circumstances forming
the basis of any violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any known or unknown liability,
contingent or otherwise (including any claim or liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of the Borrower or
any Subsidiary directly or indirectly resulting from or based upon (a) violation
of or non-compliance with any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the Release or
threatened Release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"Equity Issuance" shall mean the sale or issuance by the Borrower to
any Person other than NL or a Subsidiary of NL or by any Subsidiary to any
Person other than the Borrower or any of the Borrower's Wholly Owned
Subsidiaries of (a) any capital stock of the Borrower or any Subsidiary, (b) any
options or warrants exercisable in respect of such capital stock or (c) any
other security or instrument representing an equity interest (or the right to
obtain an equity interest) in the Borrower or any Subsidiary; provided however
the foregoing clauses (a), (b) and (c) shall not include the issuance of shares
by a Foreign Subsidiary to a nominee for the Borrower or any of the Borrower's
Wholly Owned
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Subsidiaries if such issuance is required under the applicable corporate laws of
the country in which such Foreign Subsidiary is organized.
"Equity Rights" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance or
sale of, or securities convertible into, any additional shares of capital stock
of any class, or partnership or other ownership interests of any type in, such
Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived), (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived, (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan, (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan,
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan, (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VIII.
"Excess Cash Flow" means, for any period, the excess of (a) EBITDA
for such period over (b) the sum for the Borrower and its Subsidiaries
(determined on a consolidated
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basis without duplication in accordance with GAAP) of (i) Debt Service for such
period plus (ii) the aggregate amount of all Capital Expenditures made during
such period plus (iii) the aggregate amount paid in cash during such period in
respect of income taxes, including payments under the Tax Sharing Agreement,
plus (iv) any decrease in Working Investment for such Period minus (v) any
increase in Working Investment for such Period.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the LC Issuing Lender or any other recipient of any payment to be made
by or on account of any obligation of the Borrower hereunder, (a) income, net
worth or franchise taxes imposed on (or measured by) its net income or net worth
by the United States of America, or by the jurisdiction under the laws of which
such recipient is organized or in which its principal office is located or, in
the case of any Lender, in which its applicable lending office is located, (b)
any branch profits taxes imposed by the United States of America and (c) in the
case of a Foreign Lender, any withholding tax that is imposed on amounts payable
to such Foreign Lender on the date such Foreign Lender becomes a party to this
Agreement (or, in the case of any Foreign Lender that is a party to the Existing
Credit Agreement, on the date hereof) or that is attributable to such Foreign
Lender's failure or inability to comply with Section 2.15(e), except to the
extent that such Foreign Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 2.15(a).
"Existing Credit Agreement" has the meaning assigned to such term in
the first paragraph of this Agreement.
"Existing Mortgages" means (a) the Deed of Trust, Assignment of
Permits, Rents and Benefits, Security Agreement and Fixture Filing dated as of
June 5, 1992 by the Borrower, as trustor, in favor of Lawyers Title Insurance
Corporation, as trustee, for the benefit of the Administrative Agent recorded
with the County Recorder in the Official Records of Alameda County, California
as Instrument Number 92-184190; (b) the Deed of Trust, Mortgage, Security
Agreement (Personal Property Including Minerals, Mineral Interests and Products
thereof), Assignment of Benefits and Fixture Filing dated as of June 18, 1992 by
the Borrower, as trustor, in favor of Lawyers Title Insurance Corporation, as
trustee, for the benefit of the Administrative Agent recorded with the County
Recorder in the Official Records of San Bernardino County, California as
Instrument No. 91-228659; (c) the Deed of Trust, Assignment of Permits, Rents
and Benefits, Security Agreement and Fixture Filing dated as of June 5, 1992 by
the Borrower, as trustor, in favor of Xxxxxxx X. Xxxx, as trustee, for the
benefit of the Administrative Agent recorded in the St. Louis City Records in
Book M919 Page 0651 as amended by Amendment to Deed of Trust dated as of June 5,
1992 recorded in the St. Louis City Records in Book M926 Page 2018; and (d) the
Deed of Trust, Assignment of Permits, Rents and Benefits, Security Agreement and
Fixture Filing dated as of June 5, 1992 by the Borrower, as trustor, in favor of
Xxxxxxx X. Xxxxxxx, as trustee, for the benefit of the Administrative Agent
recorded in the Recorder's Office of Kanawha County, West Virginia in Book 2046,
Page 164.
Credit Agreement
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"Fair Market Value" means, with respect to any property, the amount
that may be realized within a reasonable period of time from the sale of such
property at market value, such market value being the amount that could be
obtained for such property within such period by a capable and diligent seller
from an interested buyer willing to purchase under prevailing selling
conditions.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of l%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Final Maturity Date" means January 30, 2004 or, if such day is not a
Business Day, the next preceding Business Day.
"Financial Certificate" has the meaning assigned to such term in
Section 6.01(c).
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower, as the case may be.
"Fixed Charges Ratio" means, as at any date, the ratio of (a) EBITDA
for the period of four consecutive fiscal quarters ending on or most recently
ended prior to such date to (b) the sum for the Borrower and its Subsidiaries
(determined on a consolidated basis without duplication in accordance with
GAAP), of the following: (i) all Debt Service for such period (excluding the
principal amount of the Subordinated Intercompany Note payable at maturity to
the extent the same is extended, renewed or refinanced on substantially the same
terms) plus (ii) the aggregate amount paid in cash during such period in respect
of income taxes, including payments under the Tax Sharing Agreement, plus (iii)
Restricted Payments (other than payments of the Special Dividend) made during
such period. Notwithstanding the foregoing, payments or prepayments of principal
of the Subordinated Note shall not be deemed to increase or decrease the Fixed
Charges Ratio.
"Foreign Intellectual Property" means, collectively, all non-United
States copyrights, copyright registrations and applications for copyright
registrations, including all renewals and extensions thereof, the right to
recover for all past, present and future infringements thereof, and all other
rights of any kind whatsoever accruing thereunder or pertaining thereto, all
non-United States patents and patent applications, including the inventions and
improvements described and claimed therein together with the reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof, all income,
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royalties, damages and payments now or hereafter due and/or payable under and
with respect thereto, including damages and payments for past or future
infringements thereof, the right to xxx for past, present and future
infringements thereof and all rights corresponding thereto throughout the world,
and all non-United States trade names, trademarks and service marks, logos,
trademark and service xxxx registrations, and applications for trademark and
service xxxx registrations, including all renewals of trademark and service xxxx
registrations, the right to recover for all past, present and future
infringements thereof, all other rights of any kind whatsoever accruing
thereunder or pertaining thereto, together, in each case, with the product lines
and goodwill of the business connected with the use of, and symbolized by, each
such trade name, trademark and service xxxx, in each case, now owned or
hereafter acquired by any of the Borrower or any Subsidiary, together with (a)
all inventions, processes, production methods, proprietary information, know-how
and trade secrets used or useful in the Business; (b) all licenses or other
agreements granted to the Borrower or any Subsidiary with respect to any of the
foregoing to the extent legally assignable, in each case whether now or
hereafter owned or used including the licenses and other agreements with respect
to the Foreign Intellectual Property; (c) all existing, from time to time,
information, customer lists, identification of suppliers, data, plans,
blueprints, specifications, designs, drawings, recorded knowledge, surveys,
engineering reports, test reports, manuals, materials standards, processing
standards, performance standards, catalogs, computer and automatic machinery
software and programs (to the extent a security interest may be granted), and
the like pertaining to the operation by the Borrower or any of its Subsidiaries
of the Business; (d) all existing, from time to time, field repair data, sales
data and other information relating to sales or service of products now or
hereafter manufactured and which pertain to the Business; (e) all existing, from
time to time, accounting information which pertains to the Business and all
media in which or on which any of the information or knowledge or data or
records which pertain to the Business may be recorded or stored and all computer
programs used for the compilation or printout of such information, knowledge,
records or data; (f) all licenses, consents, permits, variances, certifications
and approvals of governmental agencies now or hereafter held by the Borrower or
any of its Subsidiaries pertaining to the operation, by the Borrower and its
Subsidiaries, of the Business; and (g) all causes of action, claims and
warranties now or hereafter owned or required by the Borrower or any Subsidiary
in respect of any of the items listed above.
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than the United States of America, a State thereof or the
District of Columbia.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" means generally accepted accounting principles in the United
States of America.
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"General Assignment" has the meaning assigned to that term in Section
1(e) of the Restructuring Agreement.
"Generator" means any Person whose act or process produces Hazardous
Materials or whose act first causes a Hazardous Material to become subject to
regulation.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" means a guarantee, an endorsement, a contingent agreement
to purchase or to furnish funds for the payment or maintenance of, or otherwise
to be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and including
causing a bank or other financial institution to issue a letter of credit or
other similar instrument for the benefit of another Person, but excluding
endorsements for collection or deposit in the ordinary course of business. The
terms "Guarantee" and "Guaranteed" used as a verb shall have a correlative
meaning.
"Guaranteed Obligations" has the meaning assigned to such term in
Section 3.01.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Inactive Subsidiary" means, as at any date, any Subsidiary which, as
at the end of and for the quarterly accounting period ending on or most recently
ended prior to such date, shall have less than $50,000 in assets and less than
$25,000 in gross revenues.
Credit Agreement
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"Indebtedness" of any Person means, without duplication: (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind; (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments; (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person; (d) all obligations of such Person in respect of the
deferred purchase price of property or services; (e) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed; (f) all Guarantees by such Person of Indebtedness of others; (g)
all Capital Lease Obligations of such Person; (h) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty; (i) all obligations, contingent or otherwise, of such
Person in respect of bankers' acceptances[; and (j) in the case of the Borrower
or any Subsidiary, Indebtedness of Enenco, Inc. (but only to the extent that the
Borrower or such Subsidiary is obligated in respect of such Indebtedness under
any arrangement entered into primarily for the benefit of one or more
creditors)]. The Indebtedness of any Person shall include the Indebtedness of
any other Person (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such other Person,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor. Notwithstanding the foregoing, Indebtedness shall not
include (x) obligations under Hedging Agreements and (y) trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts are payable within
180 days of the date the respective goods are delivered or the respective
services are rendered.
"Indemnified Taxes" means all Taxes other than (a) Excluded Taxes and
Other Taxes and (b) amounts constituting penalties or interest imposed with
respect to Excluded Taxes or Other Taxes.
"Intangible Assets" means the book value of all properties of any of
the Borrower and its Subsidiaries that would be treated as intangibles under
GAAP, including goodwill, patents, trademarks, service marks, trade names,
copyrights and organization, reorganization and developmental expense and any
write-up in the book value of the properties of the Borrower and its
Subsidiaries resulting from a revaluation thereof subsequent to December 31,
1996.
"Intercompany Note Subordination Agreement" means the Subordination
Agreement, satisfactory in form and substance to each of the Lenders, dated as
of January 30, 1997 between NL, Rheox Inc. and the Administrative Agent
providing for the subordination of the Subordinated Intercompany Note to the
Indebtedness of the Borrower hereunder.
Credit Agreement
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"Interest Coverage Ratio" means, as at any date, the ratio of (a)
EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date to (b) Interest Expense for such period.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.06.
"Interest Expense" means, for any period, the sum, for the Borrower
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of all interest in respect of Indebtedness (including
imputed interest expense in respect of Capital Lease Obligations, if any) paid,
accrued or capitalized during such period.
Notwithstanding the foregoing, if during any period for which
Interest Expense is being determined the Borrower shall have consummated any
Acquisition or Disposition then, for all purposes of this Agreement (other than
for purposes of the definition of Excess Cash Flow), Interest Expense shall be
determined on a pro forma basis as if such Acquisition or Disposition (and any
Indebtedness incurred by the Borrower or any of its Subsidiaries in connection
with such Acquisition or repaid as a result of such Disposition) had been made
or consummated (and such Indebtedness incurred or repaid) on the first day of
such period.
"Interest Payment Date" means (a) with respect to any Base Rate Loan,
each Quarterly Date and (b) with respect to any Eurodollar Loan, the last
Business Day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months' duration, each Business Day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided, that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing. Notwithstanding the foregoing,
Credit Agreement
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(i) if any Interest Period for any Revolving Credit Borrowing
would otherwise end after the Final Maturity Date, such Interest Period
shall not be available hereunder,
(ii) no Interest Period for any Term Loan Borrowing may commence
before and end after any Principal Payment Date unless, after giving
effect thereto, the aggregate principal amount of the Term Loans having
Interest Periods that end after such Principal Payment Date shall be equal
to or less than the aggregate principal amount of the Term Loans scheduled
to be outstanding after giving effect to the payments of principal
required to be made on such Principal Payment Date, and
(iii) notwithstanding the foregoing clauses (i) and (ii), no Interest
Period shall have a duration of less than one month and, if the Interest
Period for any Eurodollar Loan would otherwise be a shorter period, such
Loan shall not be available hereunder as a Eurodollar Loan for such
period.
"Investment" means, for any Person, the acquisition of capital stock,
evidences of Indebtedness or other securities or ownership interests (including
any option, warrant or other right to acquire any of the foregoing) of any other
Person, or the making of any loans or advances to, Guarantee of any obligations
of, or extensions of credit to any other Person (other than in the ordinary
course of business with respect to purchase or sale of inventory, supplies,
product or services).
"LC Collateral Account" has the meaning assigned to such term in
Section 2.04(i).
"LC Disbursement" means a payment made by the LC Issuing Lender
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Credit
Lender at any time shall be its Applicable Percentage of the total LC Exposure
at such time.
"LC Issuing Lender" means The Chase Manhattan Bank, in its capacity
as the issuer of Letters of Credit hereunder.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
Credit Agreement
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"Leverage Ratio" means, as at any date, the ratio of (a) all
Indebtedness of the Borrower and its Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP) on such date to (b) EBITDA
for the period of four consecutive fiscal quarters ending on or most recently
ended prior to such date.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to U.S. dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for U.S. dollar deposits with
a maturity comparable to such Interest Period. In the event that such rate is
not available at such time for any reason, then the "LIBO Rate" with respect to
such Eurodollar Borrowing for such Interest Period shall be the rate at which
U.S. dollar deposits of $5,000,000, and for a maturity comparable to such
Interest Period, are offered by the principal London office of Chase in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, any promissory notes
evidencing Loans hereunder and the Security Documents.
"Loans" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of any Credit
Party to perform any of its obligations under this Agreement, the other Loan
Documents or the Tax Sharing Agreement or (c) the rights of or benefits
available to the Lenders under this Agreement or the other Loan Documents.
"Material Obligations" means Indebtedness (other than the Loans or
Letters of Credit and other than Indebtedness owed by the Borrower to a
Subsidiary or by a Subsidiary to the Borrower or a Subsidiary), or obligations
in respect of one or more Hedging Agreements, of any one or more of the Borrower
or any Subsidiary in an aggregate principal
Credit Agreement
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amount exceeding $2,000,000. For purposes of determining Material Obligations,
the "principal amount" of the obligations of any Person in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that such Person would be required to pay if
such Hedging Agreement were terminated at such time.
"Mortgage" means the Mortgage, Assignment of Rents, Security
Agreement and Fixture Filing executed by the Borrower, for the benefit of the
Administrative Agent substantially in the form of Exhibit F and covering the
leasehold interest of the Borrower located in Xxxxxx county, New Jersey pursuant
to that certain lease dated as of August 17, 1994 between the Borrower, as
tenant, and ABCJ East Windsor Associates L.P., as landlord.
"Mortgage Amendments" means amendments to the Existing Mortgages
satisfactory to the Agent in form and substance.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Available Proceeds" means:
(a) in the case of any Disposition, the aggregate amount of all cash
payments received by the Borrower and its Subsidiaries directly or
indirectly in connection with such Disposition, whether at the time of
such Disposition or after such Disposition under deferred payment
arrangements or investments entered into or received in connection with
such Disposition (including Disposition Investments) net of (i) the amount
of any legal, title, transfer and recording tax expenses, commissions and
other fees and expenses payable by the Borrower and its Subsidiaries in
connection with such Disposition, (ii) any Federal, state and local income
or other taxes estimated to be payable by the Borrower and its
Subsidiaries as a result of such Disposition, but only to the extent that
such estimated taxes are in fact paid to the relevant Federal, state or
local governmental authority or to NL under the Tax Sharing Agreement
within twelve months of the date of such Disposition and (iii) any
repayments by the Borrower or any of its Subsidiaries of Indebtedness to
the extent that (x) such Indebtedness is secured by a Lien on the property
that is the subject of such Disposition and (y) the transferee of (or
holder of a Lien on) such property requires that such Indebtedness be
repaid as a condition to the purchase of such property;
(b) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation received
by the Borrower and its Subsidiaries in respect of such Casualty Event net
of (i) reasonable expenses incurred by the Borrower and its Subsidiaries
in connection therewith and (ii) contractually required repayments of
Indebtedness to the extent secured by a Lien
Credit Agreement
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on such property and any income and transfer taxes payable by the Borrower
or any of its Subsidiaries in respect of such Casualty Event; and
(c) in the case of any Equity Issuance, the aggregate amount of all
cash received by the Borrower and its Subsidiaries in respect of such
Equity Issuance net of reasonable expenses incurred by the Borrower and
its Subsidiaries in connection therewith.
"NL" means NL Industries, Inc., a corporation organized under the
laws of New Jersey.
"NL Pledge Agreement" means an amended and restated Pledge Agreement
substantially in the form of Exhibit E between NL and the Administrative Agent.
"Note Subordination Agreement" means the Subordination Agreement
dated as of September 17, 1996 between NL, the Borrower and the Administrative
Agent providing for the subordination of the Subordinated Note to the
Indebtedness of the Borrower hereunder.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement and the other
Loan Documents (and any Uniform Commercial Code financing statements required by
any Security Document to be filed with respect to the security interests in
personal property and fixtures created pursuant to any Security Document) or any
amendments thereof or supplements thereto, provided that there shall be excluded
from "Other Taxes" all Excluded Taxes.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) Investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, a
credit rating obtainable from Standard & Poor's Ratings Service of A-1 or
better or from Xxxxx'x Investors Service of P-1 or better;
Credit Agreement
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(c) Investments in certificates of deposit, banker's acceptances and
time deposits (including Euro-deposits) maturing within 180 days from the
date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any office of any
commercial bank organized under the laws of the United States of America
or any State thereof, or under the laws of any other member state of the
Organization for Economic Cooperation and Development, which has a
combined capital and surplus and undivided profits of not less than
$500,000,000; and
(d) fully collateralized repurchase agreements with a term of not
more than 180 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above or with an investment bank organized under
the laws of the United States or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000.
"Permitted Liens" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 6.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of
business and securing obligations that are not overdue by more than 30
days or are being contested in compliance with Section 6.04 and Liens
securing judgments but only to the extent for an amount and for a period
not resulting in an Event of Default under Article VIII(k);
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary
course of business;
(e) easements, reservations, covenant restrictions, zoning
restrictions, rights-of-way and similar encumbrances or restrictions on
real property imposed by law or arising in the ordinary course of business
that do not materially detract from the value of the affected property or
materially interfere with the ordinary conduct of business of the Borrower
or any Subsidiary;
(f) Liens arising under workers' compensation laws, unemployment
insurance laws or similar legislation or progress payments under
government contracts, deposits
Credit Agreement
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as security for import duties; deposits to secure public or statutory
obligations of the Borrower or any of its Subsidiaries; and
(g) Liens incident to the conduct of, or the operation of property or
assets in the ordinary course of the Business and not securing obligations
in the aggregate amount exceeding $500,000 at any one time outstanding.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank, as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Principal Payment Dates" means the (a) 25 consecutive Quarterly
Dates falling on or nearest to March 31, June 30, September 30 and December 31
of each year, commencing with the Quarterly Date in September of 1997 and (b)
the Final Maturity Date.
"Quarterly Dates" means the last Business Day of March, June,
September and December in each year, the first of which shall be the first such
day after the date of this Agreement.
"Register" has the meaning assigned to such term in Section 10.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" means any "release" as such term is defined in 42 U.S.C.
Section 9601 (22), as amended, or any successor statute.
"Required Lenders" means, at any time, Lenders having Loans, LC
Exposure and unused Commitments representing more than 50% of the sum of the
total Loans, LC Exposure and unused Commitments at such time.
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"Required Revolving Credit Lenders" means, at any time, Lenders
having Revolving Credit Loans, LC Exposure and unused Revolving Credit
Commitments representing more than 50% of the sum of the total Revolving Credit
Loans, LC Exposure and unused Revolving Credit Commitments at such time.
"Required Term Loan Lenders" means, at any time, Lenders having Term
Loans and unused Term Loan Commitments representing more than 50% of the sum of
the total Term Loans and unused Term Loan Commitments at such time.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such shares of capital stock of the Borrower.
"Restructuring" means the separation of NL's titanium dioxide
operations from the rheological additives operations, as effected through the
Restructuring Agreement.
"Restructuring Agreement" means that certain agreement dated June 30,
1990, between NL, Rheox International, Inc., Kronos, Inc. and the Borrower,
effecting the Restructuring.
"Restructuring Documents" means the Restructuring Agreement, the
Rheox Int'l IP Assignment, the Rheox IP Assignment, the General Assignment and
the Supplemental Agreements.
"Revolving Credit Availability Period" means the period from and
including the Effective Date to but excluding the earlier of (a) the Final
Maturity Date and (b) the date of termination of the Revolving Credit
Commitments.
"Revolving Credit Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Credit Loans and to acquire
participations in Letters of Credit hereunder, as such commitment may be (a)
reduced from time to time pursuant to Sections 2.07 and 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender's Revolving Credit
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Revolving Credit
Commitment, as applicable. The aggregate original amount of the Revolving Credit
Commitments is $25,000,000.
"Revolving Credit Exposure" means, with respect to any Revolving
Credit Lender at any time, the sum of the outstanding principal amount of such
Lender's Revolving Credit Loans and its LC Exposure at such time.
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"Revolving Credit Lender" means (a) initially, any Lender that has a
Revolving Credit Commitment set forth opposite its name on Schedule 2.01 and (b)
thereafter, the Lenders from time to time holding Revolving Credit Loans and
Revolving Credit Commitments, after giving effect to any assignments thereof
permitted by Section 10.04.
"Revolving Credit Loan" means a Loan made pursuant to Section 2.01(a)
that utilizes the Revolving Credit Commitments.
"Rheox Int'l IP Assignment" has the meaning assigned to that term in
Section l(c) of the Restructuring Agreement.
"Rheox International" means Rheox International, Inc., a Delaware
corporation.
"Rheox IP Assignment" has the meaning assigned to that term in
Section 1(d) of the Restructuring Agreement.
"Security Agreement" means an amended and restated Security Agreement
substantially in the form of Exhibit D between the Borrower, the Subsidiary
Guarantors and the Administrative Agent.
"Security Documents" means the Copyright Security Agreement, the
Conditional Assignment of and Security Interest in Patent Rights and the
Conditional Assignment of and Security Interest in Trademark Rights, the
Security Agreement, the NL Pledge Agreement, the Mortgage, each Existing
Mortgage and each Mortgage Amendment.
"Special Counsel" means Milbank, Tweed, Xxxxxx & XxXxxx, in its
capacity as special counsel to The Chase Manhattan Bank, as Administrative Agent
of the credit facilities contemplated hereby.
"Special Dividend" means a dividend in an aggregate amount not to
exceed $30,000,000 to be paid by the Borrower to NL with the proceeds of Term
Loans and Revolving Credit Loans as provided herein.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to
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such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"Subordinated Note" means the $100,000,000 subordinated note dated
September 30, 1996 issued by the Borrower to NL.
"Subordinated Intercompany Note" means the (Pound Sterling) 3,423,292
note dated February 2, 1996 issued by Rheox Limited to NL.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent. References herein to "Subsidiaries" shall,
unless the context requires otherwise, be deemed to be references to
Subsidiaries of the Borrower.
"Subsidiary Guarantors" means the Persons listed under the caption
"SUBSIDIARY GUARANTORS" on the signature pages hereto and any other Person that
shall have become a party hereto pursuant to Section 6.12(a).
"Supplemental Agreements" has the meaning assigned to that term in
Section 6(a) of the Restructuring Agreement.
"Tangible Net Worth" means, at any time, the sum, for the Borrower
and its Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) the amount of share
capital (less cost of treasury shares) but excluding share capital in respect of
any preferred or similar stock which, by its terms or at the option of the
holder or the issuer, is under any circumstances redeemable, or is convertible
into Indebtedness, or which requires payments to a sinking fund, on or prior to
the Final Maturity Date; plus (b) the amount of surplus and retained earnings
(or, in the case of a surplus or retained earnings deficit, minus the amount of
such deficit); minus (c) Intangible Assets of the Borrower and its Subsidiaries.
Notwithstanding anything in this definition to the contrary, cumulative foreign
currency translation gains (or losses) shall not be deemed to increase (or
decrease) Tangible Net Worth.
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"Tax Sharing Agreement" means the Tax Agreement between NL and Rheox
dated as of July 1, 1990.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings of any nature imposed by any
Governmental Authority, and any interest, penalties or fines thereon or other
additions thereto.
"Term Loan" means a Loan made pursuant to Section 2.01(b) that
utilizes the Term Loan Commitments.
"Term Loan Availability Period" means the period from and including
the Effective Date to but excluding the earlier of (a) the Term Loan Commitment
Termination Date and (b) the date of termination of the Term Loan Commitments.
"Term Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make Term Loans, as such commitment may be (a)
reduced from time to time pursuant to Sections 2.07 and 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender's Term Loan
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Term Loan Commitment, as
applicable. The aggregate original amount of the Term Loan Commitments is
$125,000,000.
"Term Loan Commitment Termination Date" means the Effective Date.
"Term Loan Lender" means (a) initially, any Lender that has a Term
Loan Commitment set forth opposite its name on Schedule 2.01 and (b) thereafter,
the Lenders from time to time holding Term Loans and Term Loan Commitments,
after giving effect to any assignments thereof permitted by Section 10.04.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate is not so reported on such day or
such next preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m., New York City time, on such day (or,
if such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
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"Transactions" means (a) with respect to the Borrower, the execution,
delivery and performance by the Borrower of the Loan Documents to which it is a
party, the borrowing of Loans and the use of the proceeds thereof, and the
issuance of Letters of Credit hereunder and (b) with respect to any Credit Party
(other than the Borrower), the execution, delivery and performance by such
Credit Party of the Loan Documents to which it is a party.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Adjusted
Base Rate.
"UCP" means the Uniform Customs and Practices for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500, or any
successor publication.
"U.S. dollars" or "$" refers to lawful money of the United States of
America.
"Wholly Owned Subsidiary" means, with respect to any Person at any
date, any corporation, limited liability company, partnership, association or
other entity of which securities or other ownership interests representing 100%
of the equity or ordinary voting power (other than directors' qualifying shares)
or, in the case of a partnership, 100% of the general partnership interests are,
as of such date, directly or indirectly owned, controlled or held by such Person
or one or more Wholly Owned Subsidiaries of such Person or by such Person and
one or more Wholly Owned Subsidiaries of such Person.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Working Investment" means, at any time, the sum of the following
(without duplication) for the Borrower and its Consolidated Subsidiaries
(determined on a consolidated basis in accordance with GAAP), in each case
generated in the ordinary course of business: (a) net inventory at such time;
plus (b) net accounts and current notes receivable at such time; minus (c) net
accounts and current notes payable (excluding current notes payable to financial
institutions in respect of Indebtedness) at such time; minus (d) accrued
expenses at such time; minus (e) current accrued taxes at such time.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Credit Loan" or "Term Loan") or by Type (e.g., a "Base Rate Loan" or
a "Eurodollar Loan") or by Class and Type (e.g., a "Eurodollar Revolving Credit
Loan" or a "Base Rate Revolving Credit Loan"). In similar fashion, (i)
Borrowings may be classified and referred to by Class, by Type and by Class and
Type, and (ii) Commitments may be classified and referred to by Class.
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SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights and (f) references to
"the date hereof" and "the date of this Agreement" and similar references shall
be construed to mean January 30, 1997.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments.
(a) Revolving Credit Loans. Subject to the terms and conditions set
forth herein, each Revolving Credit Lender agrees to make Revolving Credit Loans
to the Borrower from time to time during the Revolving Credit Availability
Period in an aggregate principal
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amount that will not result in such Lender's Revolving Credit Exposure exceeding
such Lender's Revolving Credit Commitment. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Revolving Credit Loans; provided that the Borrower may not
borrow Revolving Credit Loans hereunder unless it shall have theretofore
borrowed or is concurrently borrowing hereunder Term Loans in an aggregate
principal amount of $125,000,000.
(b) Term Loans. Subject to the terms and conditions set forth herein,
each Term Loan Lender agrees to make Term Loans to the Borrower in a single
drawing on a date falling during the Term Loan Availability Period in an
aggregate principal amount equal to such Lender's Term Loan Commitment.
SECTION 2.02. Loans and Borrowings.
(a) Subject to Section 2.01(b), each Loan of a particular Class shall
be made as part of a Borrowing consisting of Loans of such Class made by the
Lenders ratably in accordance with their respective Commitments of such Class.
The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) Subject to Section 2.12, each Borrowing shall be comprised
entirely of Base Rate Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that (i) any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement and (ii) the Borrower shall not be required to pay any additional
amounts under Section 2.15(a) as a result of the exercise of such option unless
amounts payable by the Borrower to the relevant Lender under said Section
immediately after such exercise do not exceed amounts payable by the Borrower to
the relevant Lender under said Section immediately prior to such exercise.
(c) At the commencement of each Interest Period for a Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount at least equal to
$5,000,000 or any greater integral multiple of $1,000,000 with respect to a Term
Loan, and at least equal to $1,000,000 with respect to a Revolving Credit Loan.
At the time that each Base Rate Borrowing is made, such Borrowing shall be in an
aggregate amount at least equal to $1,000,000 or any greater integral multiple
of $1,000,000; provided that a Base Rate Borrowing of Loans of any Class may be
in an aggregate amount that is equal to the entire unused balance of the total
Commitments of such Class. Borrowings of more than one Type and Class may be
outstanding at the same time; provided that there shall not at any time be more
than a total of six Eurodollar Borrowings outstanding.
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SECTION 2.03. Requests for Borrowings. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of a Base Rate Borrowing, not later than 11:00 a.m., New York City
time, on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving Credit
Borrowing or Term Loan Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be a Base Rate Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a Base Rate Borrowing. If no Interest Period is specified
with respect to any requested Eurodollar Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section 2.03,
the Administrative Agent shall advise each Lender of the details thereof and of
the amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, in
addition to the Revolving Credit Loans provided for in Section 2.01(a), the
Borrower may request the issuance of Letters of Credit for its own account or
for the account of a Subsidiary by the LC Issuing Lender, in a form acceptable
to the LC Issuing Lender in its reasonable determination, at any time and from
time to time during the Revolving Credit Availability Period. Letters of
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Credit issued hereunder shall constitute utilization of the Revolving Credit
Commitments. In the event of any inconsistency between the terms and conditions
of this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, the LC Issuing Lender relating to any Letter of Credit, the
terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the LC Issuing Lender) to the LC
Issuing Lender and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, the date of issuance, amendment, renewal or
extension, the date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) of this Section 2.04), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the LC Issuing Lender, the Borrower also shall submit
a letter of credit application on the LC Issuing Lender's standard form in
connection with any request for a Letter of Credit. A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the aggregate LC Exposure of the LC Issuing Lender
(determined for these purposes without giving effect to the participations
therein of the Revolving Credit Lenders pursuant to paragraph (d) of this
Section 2.04) shall not exceed $2,500,000 and (ii) the total Revolving Credit
Exposures shall not exceed the total Revolving Credit Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Final Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) by the LC Issuing
Lender, and without any further action on the part of the LC Issuing Lender, the
LC Issuing Lender hereby grants to each Revolving Credit Lender, and each
Revolving Lender hereby acquires from the LC Issuing Lender, a participation in
such Letter of Credit equal to such Revolving Credit Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Revolving
Credit Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the LC Issuing Lender, such Revolving
Credit Lender's Applicable Percentage of each LC Disbursement made by the LC
Issuing Lender and not reimbursed by the
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Borrower on the date due as provided in paragraph (e) of this Section 2.04, or
of any reimbursement payment required to be refunded to the Borrower for any
reason. Each Revolving Credit Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the LC Issuing Lender shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse the
LC Issuing Lender in respect of such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, New York City time, on the Business Day immediately following the
day that the Borrower receives such notice, provided that, the Borrower may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 that such payment be financed with a Revolving Credit Base
Rate Borrowing in an equivalent amount and, to the extent so financed, the
Borrower's obligation to make such payment shall be discharged and replaced by
the resulting Revolving Credit Base Rate Borrowing.
If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Revolving Credit Lender of the applicable
LC Disbursement, the payment then due from the Borrower in respect thereof and
such Revolving Credit Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Revolving Credit Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.05 with respect to
Revolving Credit Loans made by such Lender (and Section 2.05 shall apply,
mutatis mutandis, to the payment obligations of the Revolving Credit Lenders),
and the Administrative Agent shall promptly pay to the LC Issuing Lender the
amounts so received by it from the Revolving Credit Lenders. Promptly following
receipt by the Administrative Agent of any payment from the Borrower pursuant to
this paragraph, the Administrative Agent shall distribute such payment to the LC
Issuing Lender or, to the extent that the Revolving Credit Lenders have made
payments pursuant to this paragraph to reimburse the LC Issuing Lender, then to
such Lenders and the LC Issuing Lender as their interests may appear. Any
payment made by a Revolving Credit Lender pursuant to this paragraph to
reimburse the LC Issuing Lender for any LC Disbursement shall not constitute a
Loan and shall not relieve the Borrower of its reimbursement obligation in
respect of such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section 2.04 shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of
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validity or enforceability of any Letter of Credit, or any term or provision
therein, (ii) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect, (iii) in the absence of gross
negligence or wilful misconduct on the part of the LC Issuing Lender (as
determined by a court of competent jurisdiction), payment by the LC Issuing
Lender under a Letter of Credit against presentation of a draft or other
document that does not comply strictly or substantially with the terms of such
Letter of Credit and (iv) any other event or circumstance whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions of this
Section 2.04, constitute a legal or equitable discharge of the Borrower's
obligations hereunder.
Neither the Administrative Agent, the Lenders nor the LC Issuing
Lender, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit by the LC Issuing Lender or any payment or failure to make
any payment thereunder (irrespective of any of the circumstances referred to in
the preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the LC Issuing Lender;
provided that the foregoing shall not be construed to excuse the LC Issuing
Lender from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by the Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by the LC Issuing Lender's failure to exercise the
standard of care agreed hereunder to be applicable when determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that such standard of care
shall be as follows, and that the LC Issuing Lender shall be deemed to have
exercised such standard of care in the absence of gross negligence or wilful
misconduct on its part (as determined by a court of competent jurisdiction):
(i) the LC Issuing Lender may accept documents that appear on
their face to be in substantial compliance with the terms of a Letter of
Credit without responsibility for further investigation, regardless of any
notice or information to the contrary, and may make payment upon
presentation of documents that appear on their face to be in substantial
compliance with the terms of such Letter of Credit; and
(ii) the LC Issuing Lender shall have the right, in its sole
discretion, to decline to accept such documents and to make such payment
if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The LC Issuing Lender shall, to the
extent required by the UCP, examine all documents purporting to represent a
demand for payment under any Letter of Credit. The LC Issuing Lender shall, when
required by the UCP, notify
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the Administrative Agent and the Borrower by telephone (confirmed by telecopy)
of such demand for payment and whether the LC Issuing Lender has made or will
make an LC Disbursement thereunder; provided that any failure to give or delay
in giving such notice shall not relieve the Borrower of its obligation to
reimburse the LC Issuing Lender and the Revolving Credit Lenders with respect to
any such LC Disbursement.
(h) Interim Interest. If the LC Issuing Lender shall make any LC
Disbursement in respect of any Letter of Credit, then, unless the Borrower shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then applicable
to Revolving Credit Base Rate Loans; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section 2.04, then Section 2.11(c) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the LC Issuing Lender, except that
interest accrued on and after the date of payment by any Revolving Credit Lender
pursuant to paragraph (e) of this Section 2.04 to reimburse the LC Issuing
Lender shall be for the account of such Lender to the extent of such payment.
(i) Cash Collateralization. If either (i) an Event of Default shall
occur and be continuing and the Borrower receives notice from the Administrative
Agent or the Required Revolving Credit Lenders demanding the deposit of cash
collateral pursuant to this paragraph, or (ii) the Borrower shall be required to
provide cover for LC Exposure pursuant to Section 2.09(b), the Borrower shall
immediately deposit into an account (the "LC Collateral Account") with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to, in the case of an Event of
Default, the LC Exposure as of such date plus any accrued and unpaid interest
thereon and, in the case of cover pursuant to Section 2.09(b), the amount
required under 2.09(b); provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default described in clause (h) or (i) of Article
VIII. Such deposit shall be held by the Administrative Agent as collateral in
the first instance for the LC Exposure under this Agreement and thereafter for
the payment of any other obligations of the Credit Parties hereunder and under
the other Loan Documents. The Administrative Agent shall have exclusive dominion
and control, including the exclusive right of withdrawal, over the LC Collateral
Account. Such deposits shall not accrue interest other than any interest earned
on the investment of such deposits, which investments shall be Permitted
Investments made at the option and sole discretion of the Borrower prior to an
Event of Default and made at the sole discretion of the Administrative Agent
after the occurrence and during the continuance of an Event of Default, and in
any event shall be at the Borrower's risk and expense. Prior to an Event of
Default, income and profits, if any, on such investments shall be distributed to
the Borrower upon request. After the occurrence and during the continuance of an
Event of Default, interest and profits, if any, on such investments shall
accumulate in
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such account. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower upon request within three Business Days after all Events of Default
have been cured or waived.
(j) Existing Letters of Credit. There is outstanding on the date
hereof pursuant to the Existing Credit Agreements one or more letters of credit
issued by Chase (as the "Issuing Bank" thereunder) for the account of the
Borrower as set forth on Schedule 2.04. Upon the Effective Date each of such
letters of credit is hereby designated a "Letter of Credit" under and for all
purposes of this Agreement. In that connection, the Borrower hereby represents
and warrants to the LC Issuing Lender, each Revolving Credit Lender and the
Administrative Agent that each such letter of credit satisfies the requirements
of this Section 2.04 (including paragraph (c) above).
SECTION 2.05. Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds by
1:00 p.m., New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request; provided that Revolving Credit
Base Rate Loans made to finance the reimbursement of an LC Disbursement under
any Letter of Credit as provided in Section 2.04(e) shall be remitted by the
Administrative Agent to the LC Issuing Lender.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
2.05 and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the Federal Funds Effective Rate or (ii) in the
case of the Borrower, the interest rate applicable to Base Rate Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
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SECTION 2.06. Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section 2.06. The
Borrower may elect different options for continuations and conversions with
respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.
(b) To make an election pursuant to this Section 2.06, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options for continuations or conversions are being
elected with respect to different portions thereof, the portions thereof
to be allocated to each resulting Borrowing (in which case the information
to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be a Base Rate Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
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(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each affected Lender of the details thereof
and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
a Base Rate Borrowing. Notwithstanding any contrary provision hereof, if an
Event of Default has occurred and is continuing and the Administrative Agent, at
the request of the Required Lenders, so notifies the Borrower, then, so long as
an Event of Default is continuing (i) no outstanding Borrowing may be converted
to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to a Base Rate Borrowing at the end of
the Interest Period applicable thereto.
SECTION 2.07. Termination and Reduction of Commitments.
(a) Unless previously terminated, (i) the Revolving Credit
Commitments shall terminate at the close of business on the Final Maturity Date
and (ii) the Term Loan Commitments shall terminate at the close of business on
the Term Loan Commitment Termination Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments of any Class; provided that (i) each reduction of the
Commitments of such Class shall be in an amount that at least equal to
$1,000,000 or any greater integral multiple of $500,000, (ii) the Borrower shall
not terminate or reduce the Term Loan Commitments if, after giving effect to any
concurrent prepayment of Term Loans in accordance with Section 2.09, the
outstanding Term Loans would exceed the total Term Loan Commitments and (iii)
the Borrower shall not terminate or reduce the Revolving Credit Commitments if,
after giving effect to any concurrent prepayment of the Revolving Credit Loans
in accordance with Section 2.09, the total Revolving Credit Exposures would
exceed the total Revolving Credit Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce Commitments under paragraph (b) of this Section
2.07 at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any such notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section 2.07 shall be irrevocable; provided that a
notice of termination of Commitments delivered by the Borrower may state that
such notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of Commitments shall be
permanent. Each reduction of Commitments of any Class shall be
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made ratably among the Lenders in accordance with their respective Commitments
of such Class.
SECTION 2.08. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Revolving Credit Lender the then
unpaid principal amount of such Lender's Revolving Credit Loans on the Final
Maturity Date.
(b) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of the Term Loan Lenders the principal of
the Term Loans in twenty-six installments payable on the Principal Payment Dates
as follows:
Principal Payment Date
Falling on or Nearest to: Amount of Installment ($):
------------------------ -------------------------
September 30, 1997 .................................... $3,750,000
December 31, 1997 ..................................... $3,750,000
March 31, 1998 ........................................ $3,750,000
June 30, 1998 ......................................... $3,750,000
September 30, 1998 .................................... $3,750,000
December 31, 1998 ..................................... $3,750,000
March 31, 1999 ........................................ $3,750,000
June 30, 1999 ......................................... $3,750,000
September 30, 1999 .................................... $3,750,000
December 31, 1999 ..................................... $3,750,000
March 31, 2000 ........................................ $3,750,000
June 30, 2000 ......................................... $3,750,000
September 30, 2000 .................................... $3,750,000
December 31, 2000 ..................................... $3,750,000
March 31, 2001 ........................................ $5,625,000
June 30, 2001 ......................................... $5,625,000
September 30, 2001 .................................... $5,625,000
December 31, 2001 ..................................... $5,625,000
March 31, 2002 ........................................ $6,250,000
June 30, 2002 ......................................... $6,250,000
September 30, 2002 .................................... $6,250,000
December 31, 2002 ..................................... $6,250,000
March 31, 2003 ........................................ $6,250,000
June 30, 2003 ......................................... $6,250,000
September 30, 2003 .................................... $6,250,000
January 30, 2004 ...................................... $6,250,000
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(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(d) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(e) The entries made in the accounts maintained pursuant to paragraph
(c) or (d) of this Section 2.08 shall be prima facie evidence of the existence
and amounts of the obligations recorded therein; provided that the failure of
any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form reasonably acceptable to the Administrative Agent.
Thereafter, the Loans of such Class evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 10.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
SECTION 2.09. Prepayment of Loans.
(a) Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject
to prior notice in accordance with paragraph (c) of this Section 2.09. Each
prepayment of Term Loans shall be applied to the installments thereof pro rata
in accordance with the respective aggregate principal amounts of the Term Loans
outstanding on the date of such prepayment.
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(b) Mandatory Prepayments. The Borrower shall make prepayments of the
Loans hereunder (and reduce the Commitments hereunder) as follows:
(i) Casualty Events. On the date of receipt by the Borrower or any
Subsidiary of Net Available Proceeds in excess of $100,000 of any
insurance, condemnation award or other compensation in respect of any
Casualty Event (excluding Net Available Proceeds from (x) business
interruption coverage or (y) other insurance coverage unrelated to the
repair and/or replacement of the damaged assets) the Borrower or such
Subsidiary, as the case may be, shall deposit such Net Available Proceeds
into the Collateral Account (under and as defined in the Security
Agreement). Upon request by the Borrower, the Administrative Agent shall
(unless a Default shall have occurred and be continuing) release the Net
Available Proceeds to the Borrower in an amount not exceeding the amount
required for repair or replacement of the property for which such Net
Available Proceeds were received; provided that if such Net Available
Proceeds have not been released or committed to be expended in respect of
such repair or replacement in an amount and manner reasonably acceptable
to the Administrative Agent within 180 days of receipt by the Borrower or
such Subsidiary, as the case may be, such Net Available Proceeds, to the
extent that such Net Available Proceeds, together with all other Net
Available Proceeds received by the Borrower or any Subsidiary in respect
of Casualty Events, not released or committed to be expended in respect of
repair or replacement within 180 days of receipt by the Borrower or any
Subsidiary exceeds $500,000, shall be used to prepay the Loans (and/or
provide cover for LC Exposure as specified in Section 2.04(i)) and
automatically reduce the Revolving Credit Commitments in an aggregate
amount, if any, equal to 100% of the Net Available Proceeds of such
Casualty Event not theretofore applied to the repair or replacement of
such property (such prepayment and reduction to be effected in each case
in the manner and to the extent specified in clause (vi) of this Section
2.09).
(ii) Sale of Assets. Without limiting the obligation of the
Borrower to obtain the consent of the Required Lenders to any Disposition
not otherwise permitted hereunder, the Borrower agrees, on or prior to the
occurrence of any Disposition which, together with the aggregate Net
Available Proceeds of all other Dispositions to date in the then current
fiscal year, would generate Net Available Proceeds in excess of $100,000
to deliver to the Administrative Agent a statement certified by a
Financial Officer, in form and detail reasonably satisfactory to the
Administrative Agent, of the estimated amount of the Net Available
Proceeds of such Disposition that will (on the date of such Disposition)
be received by the Borrower or any Subsidiary in cash and the Borrower
will prepay the Loans hereunder (and provide cover for LC Exposure as
specified in Section 2.04(i)), and the Commitments hereunder shall be
subject to automatic reduction, as follows:
(x) upon the date of such Disposition, in an aggregate amount
equal to 100% of the amount of the Net Available Proceeds of such
Disposition which,
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together with the aggregate Net Available Proceeds of all other
Dispositions to date in the then current fiscal year, would generate
Net Available Proceeds in excess of $100,000, to the extent received
by the Borrower or any of its Subsidiaries in cash on the date of
such Disposition; and
(y) thereafter, quarterly, on the date of the delivery by the
Borrower to the Administrative Agent pursuant to Section 6.01 of the
financial statements for any quarterly fiscal period or fiscal year,
to the extent the Borrower or any Subsidiary shall receive Net
Available Proceeds during the quarterly fiscal period ending on the
date of such financial statements in cash under deferred payment
arrangements or Disposition Investments entered into or received in
connection with any Disposition, an amount equal to (A) 100% of the
aggregate amount of such Net Available Proceeds received during such
quarterly fiscal period minus (B) any transaction expenses associated
with Dispositions and not previously deducted in the determination of
Net Available Proceeds plus (or minus, as the case may be) (C) any
other adjustment received or paid by the Borrower or any Subsidiary
pursuant to the respective agreements giving rise to Dispositions and
not previously taken into account in the determination of the Net
Available Proceeds of Dispositions, provided that if prior to the
date upon which the Borrower would otherwise be required to make a
prepayment under this clause (y) with respect to any quarterly fiscal
period the aggregate amount of such Net Available Proceeds (after
giving effect to the adjustments provided for in this clause (y))
shall exceed $1,000,000, then the Borrower shall within three
Business Days after receipt of such aggregate amount make a
prepayment under this clause (y) in an amount equal to such required
prepayment.
Prepayments of Loans (and cover for LC Exposure) and reductions of
Commitments shall be effected in each case in the manner and to the extent
specified in clause (vi) of this Section 2.09(b).
(iii) Excess Cash Flow. Not later than the date 120 days after the
end of each fiscal year of the Borrower beginning with Excess Cash Flow
for the fiscal year ending December 31, 1997, the Borrower shall prepay
the Loans (and/or provide cover for LC Exposure as specified in Section
2.04(i)), and the Commitments shall be subject to automatic reduction, in
an aggregate amount equal to the excess of (x) 60% of Excess Cash Flow for
such fiscal year over (y) the aggregate amount of prepayments of Term
Loans made during such fiscal year pursuant to Section 2.09(a) (other than
that portion, if any, of such prepayments applied to installments of the
Term Loans falling due in such fiscal year) and, after the payment in full
of the Term Loans, the aggregate amount of voluntary reductions of
Revolving Credit Commitments made during such fiscal year pursuant to
Section 2.07(b), such prepayment and reduction to be effected in each case
in the manner and to the extent specified in clause (vi) of this Section
2.09(b).
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(iv) Equity Issuance. Upon any Equity Issuance, the Borrower shall
prepay the Loans (and/or provide cover for LC Exposure as specified in
Section 2.04(i)), and the Commitments shall be subject to automatic
reduction, in an aggregate amount equal to 100% of the Net Available
Proceeds thereof, such prepayment and reduction to be effected in each
case in the manner and to the extent specified in clause (vi) of this
Section 2.09(b).
(v) Application. Upon each required reduction of Commitments and
prepayment of Loans (and cover for LC exposure) pursuant to clauses (i)
through (iv) of this Section 2.09(b), the amount of the required
prepayment shall be applied (x) first, to reduce the Term Loan Commitments
and if, after giving effect to such reduction, the aggregate principal
amount of Term Loans exceeds the amount of the Term Loan Commitments, the
Borrower shall prepay the Term Loans in an amount equal to such excess,
such prepayment to be applied to the installments of the Term Loans pro
rata in accordance with the respective aggregate principal amounts thereof
outstanding on the date of such prepayment and (y) second, to the reduce
the Revolving Credit Commitments and if, after giving effect to such
reduction, the aggregate principal amount of Revolving Credit Loans
exceeds the amount of the Revolving Credit Commitments, the Borrower shall
prepay the Revolving Credit Loans (and, to the extent necessary, provide
cover for LC Exposure pursuant to Section 2.04(i)) in an amount equal to
such excess.
(c) Notice of Prepayment. The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
under this Section 2.09 (i) in the case of prepayment of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before the
date of prepayment and (ii) in the case of a Base Rate Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date and
the principal amount of each Borrowing or portion thereof to be prepaid;
provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.07, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.07. Promptly following
receipt of any such notice related to a prepayment, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of a
Borrowing shall be in an amount that would be permitted in the case of a
Borrowing of the same Class and Type as provided in Section 2.02. Each
prepayment of a Revolving Credit Borrowing shall be applied ratably to the
Revolving Credit Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.11.
SECTION 2.10. Fees.
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(a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee, which shall accrue at a rate per annum
equal to the Applicable Rate on the daily average unused amount of the
respective Commitments of such Lender during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates.
Accrued commitment fees shall be payable in arrears on each Quarterly Date and,
in respect of any Commitments, on the date such Commitments terminate,
commencing on the first such date to occur after the date hereof. All commitment
fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).
(b) The Borrower agrees to pay with respect to Letters of Credit
outstanding hereunder the following fees:
(i) to the Administrative Agent for the account of each Revolving
Credit Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at a rate per annum equal to the
Applicable Rate used in determining interest on Revolving Credit
Eurodollar Loans on the average daily amount of such Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to
but excluding the later of the date on which such Lender's Revolving
Credit Commitment terminates and the date on which there shall no longer
be any Letters of Credit outstanding hereunder, and
(ii) to the LC Issuing Lender (x) a fronting fee, which shall accrue
at the rate or rates per annum separately agreed upon between the Borrower
and the LC Issuing Lender on the average daily amount of the LC Exposure
of the LC Issuing Lender (determined for these purposes without giving
effect to the participations therein of the Revolving Credit Lenders
pursuant to paragraph (d) of Section 2.04, and excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the
date of termination of the Revolving Credit Commitments and the date on
which there shall no longer be any Letters of Credit of the LC Issuing
Lender outstanding hereunder, and (y) the LC Issuing Lender's standard
fees with respect to the issuance, amendment, renewal or extension of any
Letter of Credit or processing of drawings thereunder.
Accrued participation fees and fronting fees shall be payable in arrears on each
Quarterly Date and on the date the Revolving Credit Commitments terminate,
commencing on the first such date to occur after the date hereof, provided that
any such fees accruing after the date on which the Revolving Credit Commitments
terminate shall be payable on demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
Credit Agreement
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(c) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed in
writing between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution to the
Lenders entitled thereto. Fees paid shall not be refundable under any
circumstances, absent manifest error in the determination thereof.
SECTION 2.11. Interest.
(a) The Loans comprising each Base Rate Borrowing shall bear interest
at a rate per annum equal to the Adjusted Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at a rate per annum equal to the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided above or (ii) in the case of
any other amount, 2% plus the rate applicable to Base Rate Loans as provided
above.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to paragraph (c) of this Section 2.11 shall be payable on demand, (ii) in the
event of any repayment or prepayment of any Loan (other than a prepayment of a
Base Rate Revolving Credit Loan prior to the end of the Revolving Credit
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment, (iii) in the event
of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion and (iv) all accrued interest on Revolving
Credit Loans shall be payable upon termination of the Revolving Credit
Commitments.
(e) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Adjusted Base
Rate at times when the Adjusted Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Adjusted Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
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SECTION 2.12. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period; or
(b) if such Borrowing is of a particular Class of Loans, the
Administrative Agent is advised by the Required Revolving Credit Lenders
or the Required Term Loan Lenders, as the case may be, that the Adjusted
LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will
not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans of such Class included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
affected Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and such Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any such Borrowing to, or
continuation of any such Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing,
such Borrowing shall be made as a Base Rate Borrowing.
SECTION 2.13. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or the LC Issuing Lender; or
(ii) impose on any Lender or the LC Issuing Lender or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
LC Issuing Lender of participating in, issuing or maintaining any Letter of
Credit or to reduce the amount of any sum received or receivable by such Lender
or the LC Issuing Lender hereunder (whether of principal, interest or
otherwise), then, upon delivery of the certificate provided for in Section
2.13(c), the Borrower will pay to such Lender or the LC Issuing Lender, as the
case may be, such additional amount
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or amounts as will compensate such Lender or the LC Issuing Lender, as the case
may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the LC Issuing Lender reasonably determines that
any Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the LC Issuing Lender's capital
or on the capital of such Lender's or the LC Issuing Lender's holding company,
if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the LC Issuing Lender, to a level below that which such Lender
or the LC Issuing Lender or such Lender's or the LC Issuing Lender's holding
company could have achieved but for such Change in Law (taking into
consideration such Lender's or the LC Issuing Lender's policies and the policies
of such Lender's or the LC Issuing Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
or the LC Issuing Lender, as the case may be, such additional amount or amounts
as will compensate such Lender or the LC Issuing Lender, or such Lender's or the
LC Issuing Lender's holding company, for any such reduction suffered.
(c) A certificate of a Lender or the LC Issuing Lender setting forth
the amount or amounts necessary to compensate such Lender or the LC Issuing
Lender or its holding company, as the case may be, as specified in paragraph (a)
or (b) of this Section 2.13 shall be delivered to the Borrower and shall be
conclusive so long as it reflects a reasonable basis for the calculation of the
amounts set forth therein and does not contain any manifest error. The Borrower
shall pay such Lender or the LC Issuing Lender the amount shown as due on any
such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the LC Issuing
Lender to demand compensation pursuant to this Section 2.13 shall not constitute
a waiver of such Lender's or the LC Issuing Lender's right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or the LC Issuing Lender pursuant to this Section 2.13 for any increased
costs or reductions incurred more than six months prior to the date that such
Lender or the LC Issuing Lender, as the case may be, notifies the Borrower of
the Change in Law giving rise to such increased costs or reductions and of such
Lender's or the LC Issuing Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the six-month period referred to above shall
be extended to include the period of retroactive effect thereof.
SECTION 2.14. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto or (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice is permitted to be revocable
and
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is revoked in accordance herewith), then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event.
In the case of a Eurodollar Loan, the loss to any Lender attributable
to any such event shall be deemed to include an amount determined by such Lender
to be equal to the excess, if any, of
(i) the amount of interest that such Lender would pay for a
deposit equal to the principal amount of such Loan for the period (the
"Breakage Period") from the date of such payment, conversion, failure or
assignment to the last day of the then current Interest Period for such
Loan (or, in the case of a failure to borrow, convert or continue, the
duration of the Interest Period that would have resulted from such
borrowing, conversion or continuation) if the interest rate payable on
such deposit were equal to the Adjusted LIBO Rate for such Interest
Period,
over
(ii) the amount of interest that such Lender would earn on such
principal amount for the Breakage Period if such Lender were to invest
such principal amount for the Breakage Period at the interest rate that
would be bid by such Lender (or an affiliate of such Lender) for U.S.
dollar deposits from other banks in the eurodollar market at the
commencement of the Breakage Period.
A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 2.14 shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
SECTION 2.15. Taxes.
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.15) the Administrative Agent, Lender or the LC Issuing
Lender (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
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(c) The Borrower shall indemnify the Administrative Agent, each
Lender and the LC Issuing Lender, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section 2.15) paid by the Administrative Agent, such
Lender or the LC Issuing Lender, as the case may be, and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the LC
Issuing Lender, or by the Administrative Agent on its own behalf or on behalf of
a Lender or the LC Issuing Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled at any time under then
current law to an exemption from or reduction of withholding tax under the law
of the jurisdiction in which the Borrower is located, or any treaty to which
such jurisdiction is a party, with respect to payments under this Agreement
shall deliver to the Borrower (with a copy to the Administrative Agent), on or
before Effective Date or such later date on which such Person becomes a Foreign
Lender and at the time or times prescribed by applicable law or reasonably
requested by the Borrower, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of
Set-Offs.
(a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or under Section 2.13, 2.14 or 2.15, or otherwise) prior to 12:00
noon, New York City time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
such of its offices in New York City as shall be notified to the relevant
parties from time to time, except payments to be made directly to the LC Issuing
Lender as expressly provided herein and except that payments pursuant to
Sections 2.13, 2.14, 2.15, 3.03 and 10.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a
day that is
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not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in U.S. dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, unreimbursed
LC Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, to pay interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, to pay principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.
(c) Except to the extent otherwise provided herein: (i) each
borrowing of Loans of a particular Class from the Lenders under Section 2.01
shall be made from the relevant Lenders, each payment of commitment fee under
Section 2.10 in respect of Commitments of a particular Class shall be made for
account of the relevant Lenders, and each termination or reduction of the amount
of the Commitments of a particular Class under Section 2.03 shall be applied to
the respective Commitments of such Class of the relevant Lenders, pro rata
according to the amounts of their respective Commitments of such Class; (ii)
Eurodollar Loans of any Class having the same Interest Period shall be allocated
pro rata among the relevant Lenders according to the amounts of their
Commitments of such Class (in the case of the making of Loans) or their
respective Loans of such Class (in the case of conversions and continuations of
Loans); (iii) each payment or prepayment by the Borrower of principal of Loans
of a particular Class shall be made for account of the relevant Lenders pro rata
in accordance with the respective unpaid principal amounts of the Loans of such
Class held by them; (iv) each payment by the Borrower of interest on Loans of a
particular Class shall be made for account of the relevant Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to
the respective Lenders; and (v) each payment by the Borrower of participation
fees in respect of Letters of Credit shall be made for the account of the
Revolving Credit Lenders pro rata in accordance with the amount of participation
fees then due and payable to the Revolving Credit Lenders.
(d) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans (or participations in LC Disbursements) of any
Class resulting in such Lender receiving payment of a greater proportion of the
aggregate principal amount of its Loans (and participations in LC Disbursements)
of such Class and accrued interest thereon than the proportion of such amounts
received by any other Lender of any other Class, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans (and LC Disbursements) of the other Lenders to the extent necessary so
that the benefit of such payments shall be shared by all the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans (and participations in LC Disbursements); provided that
(i) if any such participations are purchased and all or any
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portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans (or
participations in LC Disbursements) to any assignee or participant, other than
to any Credit Party or any subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(e) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the LC Issuing Lender entitled thereto
(the "Applicable Recipient") hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Applicable Recipient the amount due. In such
event, if the Borrower has not in fact made such payment, then each Applicable
Recipient severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Applicable Recipient with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
Federal Funds Effective Rate.
(f) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(d), 2.04(e), 2.05(b) or 2.16(e), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Section until all such unsatisfied obligations are fully paid.
(g) Anything in this Agreement to the contrary notwithstanding, each
Lender hereby agrees with each other Lender that no Lender shall take any action
to protect or enforce its rights arising out of this Agreement or any promissory
notes prepared pursuant to Section 2.09(f) (including, without limitation,
exercising any rights of setoff) without first obtaining the prior written
consent of the Administrative Agent or the Required Lenders, it being the intent
of the Lenders that any such action to protect or enforce rights under this
Agreement and any promissory notes prepared pursuant to Section 2.09(f) shall be
taken in concert and at the direction or with the consent of the Administrative
Agent or the Required Lenders and not individually by a single Lender.
SECTION 2.17. Mitigation Obligations. Upon the earliest to occur of
(i) notice or knowledge by Lender of any event that could result in or provide a
basis for a request for compensation under Section 2.13 and a determination by
such Lender that it will request such compensation, (ii) a request by Lender for
compensation under Section 2.13, or
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(iii) the Borrower being required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section
2.15, then such Lender shall use reasonable efforts to designate a different
lending office for funding or booking its Loans hereunder or to assign its
rights and obligations, hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.13 or 2.15,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender; provided that such Lender shall not be required to make any such
designation or assignment unless the Borrower agrees to pay all reasonable
out-of-pocket costs and expenses incurred by any Lender in connection therewith.
ARTICLE III
Guarantee by Subsidiary Guarantors
SECTION 3.01. The Guarantee. The Subsidiary Guarantors hereby jointly
and severally guarantee to each Lender, the LC Issuing Lender and the
Administrative Agent and their respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest on the Loans made by the Lenders to
the Borrower, all LC Disbursements and all other amounts from time to time owing
to the Lenders, the LC Issuing Lender or the Administrative Agent by the
Borrower hereunder or under any other Loan Document, and all obligations of the
Borrower to any Lender under any Hedging Agreement, in each case strictly in
accordance with the terms thereof and including any interest accruing after the
commencement of any proceeding referred to in Article VIII (h) or (i), whether
or not allowed as a claim in such proceeding (such obligations being herein
collectively called the "Guaranteed Obligations"). The Subsidiary Guarantors
hereby further jointly and severally agree that if the Borrower shall fail to
pay in full when due (whether at stated maturity, by acceleration or otherwise)
any of the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay
the same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.
SECTION 3.02. Obligations Unconditional. The obligations of the
Subsidiary Guarantors under Section 3.01 are absolute and unconditional, joint
and several, irrespective of the value, genuineness, validity, regularity or
enforceability of this Agreement, the other Loan Documents or any other
agreement or instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable
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discharge or defense of a surety or guarantor, it being the intent of this
Section 3.02 that the obligations of the Subsidiary Guarantors hereunder shall
be absolute and unconditional, joint and several, under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of the Subsidiary Guarantors hereunder which shall remain
absolute and unconditional as described above:
(a) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance with
any of the Guaranteed Obligations shall be extended, or such performance
or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions hereof or of
the other Loan Documents or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right hereunder or under
the other Loan Documents or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(d) any lien or security interest granted to, or in favor of, the
Administrative Agent, the LC Issuing Lender or any Lender or Lenders as
security for any of the Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent, the LC Issuing Lender or any Lender exhaust any right,
power or remedy or proceed against the Borrower hereunder or under the other
Loan Documents or any other agreement or instrument referred to herein or
therein, or against any other Person under any other guarantee of, or security
for, any of the Guaranteed Obligations.
SECTION 3.03. Reinstatement. The obligations of the Subsidiary
Guarantors under this Article III shall be automatically reinstated if and to
the extent that for any reason any payment by or on behalf of the Borrower in
respect of the Guaranteed Obligations is rescinded or must be otherwise restored
by any holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and the Subsidiary
Guarantors jointly and severally agree that they will indemnify the
Administrative Agent, the LC Issuing Lender and each Lender on demand for all
reasonable costs and expenses (including fees of counsel) incurred by the
Administrative Agent, any Lender or the LC Issuing Lender in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
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preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
SECTION 3.04. Subrogation. Each Subsidiary Guarantor hereby waives
all rights of subrogation or contribution, whether arising by contract or
operation of law (including any such right arising under the Federal Bankruptcy
Code of 1978, as amended) or otherwise by reason of any payment by it pursuant
to the provisions of this Article III and further agrees, to the extent valid
under applicable law, with the Borrower for the benefit of each of its creditors
(including the LC Issuing Lender, each Lender and the Administrative Agent) that
any such payment by it shall constitute a dividend by such Subsidiary Guarantor
to the Borrower.
SECTION 3.05. Remedies. The Subsidiary Guarantors jointly and
severally agree that, as between the Subsidiary Guarantors on the one hand and
the Administrative Agent, the Lenders and the LC Issuing Lender on the other
hand, the obligations of the Borrower hereunder may be declared to be forthwith
due and payable as provided in Article VIII or Section 2.04(i), as applicable
(and shall be deemed to have become automatically due and payable in the
circumstances provided in Article VIII or Section 2.04(i), as applicable) for
purposes of Section 3.01 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Borrower) shall forthwith become due and payable by the Subsidiary Guarantors
for purposes of Section 3.01.
SECTION 3.06. Instrument for the Payment of Money. Each Subsidiary
Guarantor hereby acknowledges that the guarantee in this Article III constitutes
an instrument for the payment of money, and consents and agrees that the LC
Issuing Lender, any Lender or the Administrative Agent, at its sole option, in
the event of a dispute by the Subsidiary Guarantors in the payment of any moneys
due hereunder, shall have the right to bring a motion-action under New York CPLR
Section 3213.
SECTION 3.07. Continuing Guarantee. The guarantee in this Article III
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
SECTION 3.08. Rights of Contribution. The Subsidiary Guarantors
hereby agree, as between themselves, that if any Subsidiary Guarantor shall
become an Excess Funding Guarantor (as defined below) by reason of the payment
by such Subsidiary Guarantor of any Guaranteed Obligations, each other
Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such Excess Funding Guarantor an amount
equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such
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Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to any
Excess Funding Guarantor under this Section 3.08 shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
such Subsidiary Guarantor under the other provisions of this Article III and
such Excess Funding Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all of such
obligations.
For purposes of this Section 3.08, (a) "Excess Funding Guarantor"
means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has
paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations,
(b) "Excess Payment" means, in respect of any Guaranteed Obligations, the amount
paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such
Guaranteed Obligations and (c) "Pro Rata Share" means, for any Subsidiary
Guarantor, the ratio (expressed as a percentage) of (i) the amount by which the
aggregate fair saleable value of all properties of such Subsidiary Guarantor
(excluding any shares of stock of, or ownership interest in, any other
Subsidiary Guarantor) exceeds the amount of all the debts and liabilities of
such Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (ii) the amount by which
the aggregate fair saleable value of all properties of all of the Credit Parties
exceeds the amount of all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of the Borrower and the Subsidiary Guarantors hereunder and under
the other Loan Documents) of all of the Credit Parties, determined (x) with
respect to any Subsidiary Guarantor that is a party hereto on the Effective
Date, as of the Effective Date, and (y) with respect to any other Subsidiary
Guarantor, as of the date such Subsidiary Guarantor becomes a Subsidiary
Guarantor hereunder.
SECTION 3.09. General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 3.01 would otherwise, taking into account the provisions of Section
3.08, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 3.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, any Lender, the Administrative Agent or any
other Person, be automatically limited and reduced to the highest amount that is
valid and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
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ARTICLE IV
Representations and Warranties
The Borrower and each Subsidiary Guarantor represents and warrants to
the Lenders, the LC Issuing Lender and the Administrative Agent, as to itself
and each of its Subsidiaries, that:
SECTION 4.01. Organization; Powers. The Borrower and each Subsidiary
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. The Borrower and each Subsidiary has all requisite
power and authority under its organizational documents to carry on its business
as now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 4.02. Authorization; Enforceability. The Transactions are
within the corporate power of each Credit Party and have been duly authorized by
all necessary corporate and, if required, stockholder action on the part of such
Credit Party. Each of this Agreement and the other Loan Documents has been duly
executed and delivered by each Credit Party party thereto and constitutes a
legal, valid and binding obligation of such Credit Party, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
SECTION 4.03. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, (b) will not violate any
applicable law, policy or regulation or the charter, by-laws or other
organizational documents of any Credit Party or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Credit Party, or any of its
assets, or give rise to a right thereunder to require any payment to be made by
any Credit Party, and (d) except for the Liens created by the Security
Documents, will not result in the creation or imposition of any Lien on any
asset of the Credit Parties.
SECTION 4.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore delivered to the Lenders the
following financial statements:
(i) the respective audited consolidated balance sheet and statements
of income, retained earnings and cash flow of the Borrower and its
Consolidated
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Subsidiaries as of and for the fiscal years ended December 31, 1994 and
December 31, 1995, reported on by Coopers & Xxxxxxx, independent public
accountants; and
(ii) the unaudited consolidated balance sheet and statements of
income, retained earnings and cash flow of the Borrower and its
Consolidated Subsidiaries as of and for the nine-month period ended
September 30, 1996, certified by a Financial Officer.
Such financial statements present fairly, in all material respects, the
consolidated financial position and results of operations and cash flows of the
Borrower and its Consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of such unaudited statements.
(b) Since December 31, 1995, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and its Consolidated Subsidiaries taken as a whole.
(c) None of the Borrowers nor any of its Subsidiaries has on the date
of this Agreement any contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments in each case that are material (as determined in
accordance with GAAP), except as referred to or reflected or provided for in the
balance sheets as at September 30, 1996 referred to above.
SECTION 4.05. Properties.
(a) Each of the Borrower and its Subsidiaries has good title to, or
valid leasehold interests in, all its real and personal property material to its
business, except for minor defects in title that do not materially interfere
with its ability to conduct its business as currently conducted or to utilize
such properties for their intended purposes.
(b) Except as set forth on Schedule 4.05 hereto, as of the date
hereof, (i) each of the Borrower and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and (ii) the conduct of the business of the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, in both cases except for any such failure to own or have a license to
use, and except for any such infringements, that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. In the opinion of the Borrower, the matters set forth on Schedule 4.05
hereto, both individually and in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect.
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SECTION 4.06. Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of any
of the Credit Parties, threatened against or affecting, the Borrower or any
Subsidiary (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters listed on Schedule 4.06) or (ii) that involve any of
the Loan Documents, the Tax Sharing Agreement or the Transactions.
(b) The Borrower and each of its Subsidiaries have obtained all
permits, licenses, registrations and other authorizations which are required
under all Environmental Laws, except to the extent failure to have any such
permit, license, registration or authorization could not reasonably be expected
to have a Material Adverse Effect. The Borrower and each of its Subsidiaries are
in compliance with the terms and conditions of all such permits, licenses,
registrations and authorizations, and are also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Law or in any judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder except to the extent failure to comply could
not reasonably be expected to have a Material Adverse Effect. No action to
revoke any permit, license or other authorization, the lack of which could
reasonably be expected to have a Material Adverse Effect, is pending or
threatened in writing. In addition, except for the Disclosed Matters listed on
Schedule 4.06, as of the date of this Agreement:
(i) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed,
no penalty has been assessed and no investigation or review is pending or,
to the best knowledge of the Borrower, threatened by any governmental or
other entity with respect to any alleged failure by the Borrower or any
Subsidiary to have any permit, license or authorization required in
connection with the conduct of the business of the Borrower or any
Subsidiary or with respect to any handling generation, treatment, storage,
recycling, transportation, discharge or disposal, or any threatened
Release or Release of any Hazardous Materials generated by the Borrower or
any Subsidiary that has not been fully satisfied or discharged as of the
date hereof.
(ii) Neither the Borrower nor any Subsidiary has Released Hazardous
Material on any property now or previously owned or leased by the Borrower
or any Subsidiary in a manner or to an extent that it has, or may
reasonably be expected to have, a Material Adverse Effect; and to the best
knowledge of the Borrower after due inquiry, (w) no polychlorinated
biphenyl is present, (x) no asbestos is present, and (y) there are no
underground storage tanks, active or abandoned, at, or under any property
now or previously owned or leased by the Borrower or any Subsidiary,
during any
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period that the Borrower or any Subsidiary owned or leased such property
or, to the knowledge of the Borrower or any Subsidiary, prior thereto.
(iii) To the best knowledge of the Borrower after due inquiry,
neither the Borrower nor any Subsidiary has transported or arranged for
the transportation of any Hazardous Material to any location which is
listed or proposed for listing on the National Priorities List under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or any similar state list.
(iv) No written notification of a Release of a Hazardous Material
has been filed by or on behalf of the Borrower or any Subsidiary and no
property now or previously owned or leased by the Borrower or any
Subsidiary is listed or, to the best knowledge of the Borrower, proposed
for listing on the National Priorities list promulgated pursuant to
CERCLA.
(v) To the best knowledge of the Borrower, no Liens have arisen
under or pursuant to any Environmental Laws on any of the real property or
properties owned or leased by the Borrower or any Subsidiary, and, to the
best knowledge of the Borrower, no government actions have been taken or
are in process which could subject any of such properties to such Liens
and neither the Borrower nor any Subsidiary would be required to place any
notice or restriction relating to the presence of Hazardous Materials at
any property owned by it in any deed to such property.
(vi) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by third party
consultants which are in the possession of the Borrower or any Subsidiary
in relation to any property or facility now or previously owned or leased
by the Borrower or any Subsidiary which have not been made available to
the Lenders except analyses conducted in the ordinary course of business
including without limitation, waste water monitoring and air emissions
measurements.
(vii) Neither the Borrower nor any Subsidiary has retained or
assumed any liabilities (contingent or otherwise) in respect of any
Environmental Claims (x) under the terms of any contract or agreement or
(y) by operation of law as a result of the sale of assets or stock, which
liabilities could reasonably be expected to have a Material Adverse
Effect.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
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SECTION 4.07. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations,
policies and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except where the failure to be in compliance, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 4.08. Investment and Holding Company Status. Neither the
Borrower nor any Subsidiary is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended, or
(b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended.
SECTION 4.09. Taxes. Each of the Credit Parties and their respective
subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which such Credit Party has set aside on its
books adequate reserves with respect thereto in accordance with GAAP or (b) to
the extent that the failure to do so could not reasonably be expected to result
in a Material Adverse Effect.
SECTION 4.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
hereof, exceed by more than $13,000,000 the fair market value of the assets of
such Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date hereof, exceed by
more than $13,000,000 the fair market value of the assets of all such
underfunded Plans.
SECTION 4.11. Disclosure. None of the financial statements,
certificates or other information (including, without limitation, the
Information Memorandum dated December, 1996 prepared by the Borrower in
contemplation hereof) furnished in writing by or on behalf of the Credit Parties
to the Administrative Agent or any Lender in connection with this Agreement or
delivered hereunder (as modified or supplemented by other information so
furnished) contain, as of the date hereof, any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not materially
misleading; provided that, with respect to projected financial information, the
Borrower and its Subsidiaries represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time.
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SECTION 4.12. Capitalization. The authorized capital stock of the
Borrower consists, on the date hereof, of an aggregate of 1,000 shares
consisting of (i) 1,000 shares of common stock, par value $10.00 per share, of
which, as at the date hereof, 1,000 shares are duly and validly issued and
outstanding, each of which shares is fully paid and nonassessable. As of the
date hereof, (x) there are no outstanding Equity Rights with respect to the
Borrower and (y) there are no outstanding obligations of the Borrower or any
Subsidiary to repurchase, redeem, or otherwise acquire any shares of capital
stock of the Borrower nor are there any outstanding obligations of the Borrower
or any Subsidiary to make payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market value or equity value of the Borrower or any Subsidiary.
SECTION 4.13. Material Agreements and Liens.
(a) Schedule 4.13 is a complete and correct list, as of the date of
this Agreement, of each credit agreement, loan agreement, indenture, guarantee
or other arrangement providing for or otherwise relating to any Indebtedness of,
the Borrower or any Subsidiary (other than such arrangements between the
Borrower and a Subsidiary or between one or more Subsidiaries), the aggregate
principal or face amount of which equals or exceeds (or may equal or exceed)
$100,000 (other than the Loan Documents) and, as of the date of this Agreement,
the aggregate principal or face amount outstanding or which may become
outstanding under each such arrangement is correctly described in Schedule 4.13.
(b) Schedule 4.13 hereto is a complete and correct list, as of the
date of this Agreement, of each Lien securing Indebtedness of any Person the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $100,000 and covering any property of the Borrower or any Subsidiary,
and the aggregate Indebtedness secured (or which may be secured) by each such
Lien and the Property covered by each such Lien is correctly described in
Schedule 4.13.
SECTION 4.14. Subsidiaries.
(a) Set forth in Schedule 4.14 is a complete and correct list of all
of the Subsidiaries of the Borrower as of the date hereof and of all Investments
held by the Borrower or any of its Subsidiaries in any joint venture or other
Persons of the date hereof together with, for each such Subsidiary, (i) the
jurisdiction of organization of such Subsidiary, (ii) each Person holding
ownership interests in such Subsidiary and (iii) the nature of the ownership
interests held by each such Person and the percentage of ownership of such
Subsidiary represented by such ownership interests. Except as disclosed in
Schedule 4.14, (x) the Borrower and its respective subsidiaries owns, free and
clear of Liens (other than Liens created pursuant to the Security Documents),
and has the unencumbered right to vote, all outstanding ownership interests in
each Person and all Investments shown to be held by it in Schedule 4.14, (y) all
of the issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and (z) there are no
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outstanding Equity Rights with respect to such Person. Except as set forth on
Schedule 4.14, all of the capital stock of each of the Foreign Subsidiaries that
is owned, directly or indirectly, by the Borrower is owned, directly or
indirectly, by Rheox International.
(b) Except as provided in the arrangements described on Schedule 4.13
or on Schedule 4.14, as of the date of this Agreement, none of the Subsidiaries
of the Borrower is subject to any indenture, agreement, instrument or other
arrangement containing any provision of the type described in Section 7.07.
SECTION 4.15. Certain Documents. The Borrower heretofore or on the
date hereof has furnished to the Administrative Agent true and complete copies
of (a) the Tax Sharing Agreement, as amended and in effect on the date hereof
or, if not in effect on the date hereof, in substantially the form in which such
Tax Sharing Agreement will be executed, (b) each other Ancillary Agreement in
effect on the date hereof or if not in effect on the date hereof, in
substantially the form in which such Ancillary Agreement will be executed and
(c) the Restructuring Documents, as amended and in effect on the date hereof.
ARTICLE V
Conditions
SECTION 5.01. Effective Date. The amendment and restatement of the
Existing Credit Agreement provided for herein shall not become effective until
the date on which each of the following conditions is satisfied (or waived in
accordance with Section 10.02):
(a) Counterparts of Agreement. The Administrative Agent (or Special
Counsel) shall have received from each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.
(b) Opinions of Counsel to Credit Parties and NL. The Administrative
Agent (or Special Counsel) shall have received a favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of (i) Bartlit, Xxxx, Xxxxxx, Xxxxxxxxx & Xxxxx, counsel
to the Credit Parties, substantially in the form of Exhibit B, and
covering such other matters relating to the Credit Parties, this
Agreement, the other Loan Documents or the Transactions as the Required
Lenders shall request and (ii) counsel to the Borrower in the states where
the properties covered by the Mortgage and each Existing Mortgage is
located, satisfactory to the Administrative Agent in form and substance
(and each Credit Party hereby requests such counsel to deliver such
opinion).
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(c) Opinion of Special Counsel. The Administrative Agent shall have
received a favorable written legal opinion (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of
Special Counsel, substantially in the form of Exhibit C (and the
Administrative Agent requests Special Counsel to deliver such opinion).
(d) Corporate Matters. The Administrative Agent (or Special Counsel)
shall have received such documents and certificates as the Administrative
Agent or Special Counsel may reasonably request relating to the
organization, existence and good standing of each Credit Party and NL, the
authorization of the Transactions and any other legal matters relating to
the Credit Parties, NL, this Agreement, the other Loan Documents or the
Transactions, all in form and substance reasonably satisfactory to the
Administrative Agent and its counsel.
(e) Financial Officer Certificate. The Administrative Agent (or
Special Counsel) shall have received a certificate, dated the Effective
Date and signed by the President, a Vice President or a Financial Officer
of the Borrower, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 5.02.
(f) Notes. The Administrative Agent (or Special Counsel) shall have
received for each Lender that shall have requested a promissory note, a
duly completed and executed promissory note for such Lender.
(g) NL Pledge Agreement. The Administrative Agent (or Special
Counsel) shall have received (i) from NL a counterpart of the NL Pledge
Agreement signed on behalf of NL and (ii) the stock certificates
identified under the name of NL in Annex 1 thereto, accompanied by undated
stock powers executed in blank. In addition, NL shall have taken such
other action (including delivering to the Administrative Agent, for
filing, appropriately completed and duly executed copies of Uniform
Commercial Code financing statements) as the Administrative Agent shall
have requested in order to perfect the security interests created pursuant
to the NL Pledge Agreement to give effect to the priority contemplated
therefor.
(h) Security Agreement. The Administrative Agent (or Special Counsel)
shall have received (i) from the Borrower and each Subsidiary Guarantor, a
counterpart of the Security Agreement signed on behalf of such Credit
Party and (ii) the stock certificates identified under the name of such
Credit Party in Annex 1 thereto, accompanied by undated stock powers
executed in blank. In addition, each of the Borrower and the Subsidiary
Guarantors shall have taken such other action (including delivering to the
Administrative Agent, for filing, appropriately completed and duly
executed copies of Uniform Commercial Code financing statements) as the
Administrative Agent shall have requested in order to perfect the security
interests
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created pursuant to the Security Agreement to give effect to the priority
contemplated therefor.
(i) Mortgage and Title Insurance. The Administrative Agent (or
Special Counsel) shall have received (i) from the Borrower, a counterpart
of the Mortgage signed on behalf of the Borrower, (ii) one or more
mortgagee policies of title insurance on forms of and issued by one or
more title companies satisfactory to the Administrative Agent (the "Title
Companies"), insuring the validity and priority of the Liens created under
the Mortgage for and in amounts satisfactory to the Administrative Agent,
subject only to such exceptions as are satisfactory to the Administrative
Agent and containing such affirmative coverage and endorsements as the
Lenders may require and, to the extent necessary under applicable law, for
filing in the appropriate county land office(s), Uniform Commercial Code
financing statements covering fixtures, in each case appropriately
completed and duly executed, (iii) an as-built survey of recent date of
the facilities to be covered by the Mortgage, showing such matters as may
be required by the Administrative Agent, which surveys shall be in form
and content acceptable to the Administrative Agent, and certified to the
Administrative Agent and the Title Companies, and shall have been prepared
by a registered surveyor acceptable to the Administrative Agent, and (iv)
certified copies of permanent and unconditional certificates of occupancy
(or, if it is not the practice to issue certificates of occupancy in the
jurisdiction in which the facilities to be covered by the Mortgage is
located, then such other evidence reasonably satisfactory to each Lender)
permitting the fully functioning operation and occupancy of each such
facility and of such other permits as the Administrative Agent may request
necessary for the use and operation of each such facility issued by the
respective Governmental Authorities having jurisdiction over each such
facility. In addition, the Borrower shall have paid to the Title Companies
all expenses and premiums of the Title Companies in connection with the
issuance of such policies and in addition shall have paid to the Title
Companies an amount equal to the recording and stamp taxes payable in
connection with recording the Mortgage in the appropriate county land
office(s).
(j) Mortgage Amendments. The Administrative Agent (or Special
Counsel) shall have received (i) from any Credit Party party to any
Existing Mortgage, a counterpart of a Mortgage Amendment signed on behalf
of such Credit Party and amending such Mortgage and (ii) commitments for
title insurance policies or endorsements to existing title insurance
policies in a form acceptable to the Administrative Agent insuring the
validity and priority of the Liens created under each of the Existing
Mortgages (as amended by the Mortgage Amendments) for and in amounts
satisfactory to the Administrative Agent, subject only to such exceptions
as are satisfactory to the Agent and containing such affirmative coverage
and endorsements as the Lenders may require and, to the extent necessary
under applicable law, for filing in the appropriate county and offices,
Uniform Commercial Code financing statements covering fixtures, in each
case appropriately completed and duly
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executed. In addition, the applicable Credit Parties shall have (x) caused
to be delivered to the applicable title companies such affidavits and
other documents required by such title companies, including, if required
by the respective title companies in order to provide title insurance
coverage acceptable to the Administrative Agent, a re-certification by a
registered surveyor acceptable to the applicable title company of as-built
surveys of each of the facilities covered by the Existing Mortgages, which
surveys shall be in form and content acceptable to the applicable title
company and certified to the Administrative Agent and the applicable title
insurance company, necessary to omit from the title insurance policies or
endorsements thereto the standard survey exception and (y) caused to be
paid to the applicable title insurance company all expenses and premiums
in connection with the issuance of the title insurance and an amount equal
to the recording and stamp taxes payable in connection with recording each
Mortgage Amendment in the appropriate county land office.
(k) Intercompany Note Subordination Agreement. The Administrative
Agent (or Special Counsel) shall have received (i) from each of NL and
Rheox, Inc., a counterpart of the Intercompany Note Subordination
Agreement signed on behalf of NL and Rheox Inc.
(l) Insurance. The Administrative Agent (or Special Counsel) shall
have received certificates of insurance evidencing the existence of all
insurance required to be maintained by the Borrower and its Subsidiaries
pursuant to Section 6.06 and the designation of the Administrative Agent
as the loss payee thereunder to the extent required by Section 6.06 in
respect of all insurance covering tangible property, such certificates to
be in such form and contain such information as is specified in Section
6.06.
(m) Other Loan Documents. The Administrative Agent (or Special
Counsel) shall have received (i) from the Borrower and each Subsidiary
Guarantor, a counterpart of the Conditional Assignment of and Security
Interest in Patent Rights, the Conditional Assignment of and Security
Interest in Trademark Rights and the Copyright Security Agreement signed
on behalf of such Credit Party. In addition, each of the Borrower and the
Subsidiary Guarantors shall have taken such other action (including
delivering to the Administrative Agent, for filing, appropriately
completed and duly executed copies of Uniform Commercial Code financing
statements) as the Administrative Agent shall have requested in order to
perfect the security interests created pursuant to the Security Agreement
to give effect to the priority contemplated therefor.
(n) Solvency Analysis. The Administrative Agent (or Special Counsel)
shall have received (i) analyses from Valuation Research Corporation, or
any other firm of independent solvency analysts of nationally recognized
standing, to the effect that, as
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of the Effective Date and after giving effect to the making of the Loans
hereunder and to the other transactions contemplated hereby, (x) the
aggregate value of all properties of the Borrower and its Subsidiaries at
their present fair saleable value (i.e., the amount which may be realized
within a reasonable time, considered to be six months to one year, either
through collection or sale at the regular market value, conceiving the
latter as the amount which could be obtained for the property in question
within such period by a capable and diligent businessman from an
interested buyer who is willing to purchase under ordinary selling
conditions), exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated
liabilities) of the Borrower and its Subsidiaries, (y) the Borrower and
its Subsidiaries will not, on a consolidated basis, have an unreasonably
small capital with which to conduct their business operations as
heretofore conducted and (z) the Borrower and its Subsidiaries will have,
on a consolidated basis, sufficient cash flow to enable them to pay their
debts as they mature and (ii) a certificate from a Financial Officer of
the Borrower certifying that the financial projections were at the time
made, and on the Effective Date are, based on reasonable assumptions and
are accurately computed based on such assumptions, and containing such
other certifications relating to the valuation analyses as the
Administrative Agent may reasonably request.
(o) Financial Projections. The Administrative Agent shall have
received financial projections prepared in good faith and based on
reasonable assumptions by a Financial Officer, satisfactory in scope and
substance to the Lenders, as to the annual financial results of the
Borrower and its Subsidiaries for a period of seven years after the
Effective Date.
(p) Ancillary Agreements. The Administrative Agent (or Special
Counsel) shall have received (i) copies of each of the Ancillary
Agreements, including, but not limited to, the Tax Sharing Agreement as
executed and delivered by the parties thereto, and (ii) a certificate from
a senior officer of the Borrower to the effect that such copies are true
and complete copies the Ancillary Agreements as in effect on the Effective
Date.
(q) Other Documents. The Administrative Agent shall have received
such other documents as the Administrative Agent or any Lender or Special
Counsel shall have reasonably requested.
(r) Amounts Owing under the Existing Credit Agreement. The
Administrative Agent shall have received evidence that the Borrower shall
have paid or provided for the payment to the Agent under the Existing
Credit Agreement the principal amount of all loans outstanding thereunder
and all accrued and unpaid interest, fees and expenses owing by the
Borrower thereunder.
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(s) Fees and Expenses. The Administrative Agent shall have received
all fees and other amounts due and payable on or prior to the Effective
Date, including, to the extent invoiced, reimbursement or payment of all
legal fees and expenses and other out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder.
(t) Special Dividend. The Administrative Agent shall have received a
certificate of a Financial Officer of the Borrower, dated the Effective
Date, confirming that the Special Dividend, in the amount of $30,000,000,
will be paid on the Effective Date.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the amendment and restatement of the Existing Credit Agreement
contemplated hereby shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 10.02) at or prior to
3:00 p.m., New York City time, on February 28, 1997 (and, in the event such
conditions are not so satisfied or waived, the Commitments shall terminate at
such time).
SECTION 5.02. Each Extension of Credit. The obligation of each Lender
to make a Loan on the occasion of any Borrowing, and of the LC Issuing Lender to
issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties. The representations and
warranties of each Credit Party set forth in this Agreement and the other
Loan Documents, and the representations and warranties of NL set forth in
the NL Pledge Agreement, shall be true and correct on and as of the date
of such Borrowing, or (as applicable) the date of issuance, amendment,
renewal or extension of such Letter of Credit, both before and after
giving effect thereto and to the use of the proceeds thereof (or, if any
such representation or warranty is expressly stated to have been made as
of a specific date, such representation or warranty shall be true and
correct as of such specific date).
(b) No Defaults. At the time of such Borrowing, and based upon the
intended use thereof and immediately after giving effect to such Borrowing
and the intended use thereof, or (as applicable) the date of issuance,
amendment, renewal or extension of such Letter of Credit, no Default shall
have occurred and be continuing.
Each Borrowing Request, or request for issuance, amendment, renewal or extension
of a Letter of Credit, shall be deemed to constitute a representation and
warranty by the Borrower (both as of the date of such Borrowing Request, or
request for issuance, amendment, renewal or extension, and as of the date of the
related Borrowing or issuance, amendment, renewal or extension) as to the
matters specified in paragraphs (a) and (b) of this Section 5.02.
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ARTICLE VI
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each of the Borrower and the
Subsidiary Guarantors covenants and agrees with the Lenders that:
SECTION 6.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 105 days after the
end of each fiscal year of the Borrower:
(i) consolidated and consolidating statements of income and
retained earnings and consolidated statements of cash flow of the
Borrower and its Subsidiaries for such fiscal year and the related
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as at the end of such fiscal year, setting forth in each
case in comparative form with respect to consolidated statements
only, the corresponding consolidated figures for the preceding fiscal
year,
(ii) an opinion of independent certified public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception
as to the scope of such audit) stating that said consolidated
financial statements referred to in the preceding clause (i) present
fairly, in all material respects, the consolidated financial
condition and consolidated results of operations of the Borrower and
its Subsidiaries as at the end of, and for, such fiscal year in
conformity with generally accepted accounting principles, and
(iii) a certificate of a Financial Officer stating that said
consolidating financial statements referred to in the preceding
clause (i) present fairly, in all material respects, the financial
condition and results of operations on a consolidating basis of the
Borrower and of each of its Subsidiaries, in each case in accordance
with generally accepted accounting principles, consistently applied,
as at the end of, and for, such fiscal year;
(b) as soon as available and in any event within 60 days after the
end of each of the first three quarterly fiscal periods of each fiscal
year of the Borrower:
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(i) consolidated statements of income and retained earnings
and consolidated statements of cash flow of the Borrower and its
Subsidiaries for such period and for the period from the beginning of
the respective fiscal year to the end of such period, and the related
consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such period, setting forth in each case in comparative
form, the corresponding consolidated figures for the corresponding
period in the preceding fiscal year (except that, in the case of
balance sheets, such comparison shall be to the last day of the prior
fiscal year),
(ii) a certificate of a Financial Officer, which certificate
shall state that said financial statements referred to in the
preceding clause (i) present fairly, in all material respects, the
consolidated financial condition and results of operations of the
Borrower and its Subsidiaries;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer (the
"Financial Certificate") (i) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof
and any action taken or proposed to be taken with respect thereto, (ii)
setting forth reasonably detailed calculations demonstrating compliance
with Section 7.08, including a calculation of the Leverage Ratio as at the
last day of the fiscal quarter or fiscal year, as the case may be, in
respect of which such financial statements are delivered, and setting
forth a reasonably detailed calculation of EBITDA for (x) in the case of
financial statements delivered under clause (a) above, the fiscal year in
respect of which such financial statements are being delivered and (y) in
the case of financial statements delivered under clause (b) above, the
period of the four consecutive fiscal quarters ending on the last day of
the fiscal quarter in respect of which such financial statements are being
delivered and (iii) stating whether any material change in GAAP or in the
application thereof has been adopted by the Borrower since the date of the
audited financial statements referred to in Section 4.04 and, if any such
change has been adopted by the Borrower, specifying the effect of such
change on the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any
Default (which certificate may be limited to the extent required by
accounting rules or guidelines);
(e) within 105 days following the last day of each fiscal year of the
Borrower, commencing with fiscal year 1997, a report of a qualified
employee or agent (familiar with the identification of toxic and hazardous
substances) stating that, except as expressly described in such report, to
the best of such Person's knowledge, after due
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inquiry, each of the Borrower and its Subsidiaries is, as of the last day
of such fiscal year, in compliance with all applicable Environmental Laws
(except to the extent failure so to comply could not reasonably be
expected to have a Material Adverse Effect); and
(f) not later than April 15 of each year, commencing with April 15,
1998, financial projections prepared in good faith based on reasonable
assumptions by a Financial Officer, of the projected annual consolidated
financial statements of the Borrower and its Subsidiaries through the
period ending on December 31, 2003;
(g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of this
Agreement, as the Administrative Agent or any Lender may reasonably
request.
SECTION 6.02. Notices of Material Events. The Borrower will furnish
to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default describing the same in reasonable
detail and describing the steps being taken to remedy same;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
the Borrower, any Subsidiary that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate
amount exceeding $2,000,000; and
(d) any other event that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
Each notice delivered under this Section 6.02 shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 6.03. Existence; Conduct of Business. The Borrower will, and
will cause each of its Subsidiaries (other than Inactive Subsidiaries) to, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business, except to the extent the
failure to preserve, renew and keep in full force and effect any thereof
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could not reasonably be expected to have a Material Adverse Effect; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 7.03.
SECTION 6.04. Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Borrower or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 6.05. Maintenance of Properties. The Borrower will, and will
cause each of its Subsidiaries to, keep and maintain all property material to
the conduct of its business in good working order and condition, ordinary wear
and tear excepted, except where the failure to so maintain such properties could
not reasonably be expected to have a Material Adverse Effect.
SECTION 6.06. Maintenance of Insurance. The Borrower will, and will
cause each of its Subsidiaries to, keep insured by financially sound and
reputable insurers all property of a character usually insured by corporations
engaged in the same or similar business similarly situated against loss or
damage of the kinds and in the amounts customarily insured against by such
corporations and carry such other insurance as is usually carried by such
corporations, provided that in any event the Borrower will maintain (with
respect to itself and each of its Subsidiaries):
(a) Property Insurance -- insurance against loss or damage covering
all of the tangible real and personal property and improvements of the
Borrower and each of its Subsidiaries by reason of any Peril (as defined
below) in such amounts (subject to reasonable deductibles) as shall be
reasonable and customary and sufficient to avoid the insured named therein
from becoming a co-insurer of any loss under such policy but in any event
in an amount (i) in the case of fixed assets and equipment, at least equal
to 100% of the actual replacement cost of such assets, subject to
deductibles as aforesaid and (ii) in the case of inventory, not less than
the fair market value thereof, subject to deductibles as aforesaid.
Without limiting the foregoing, the Borrower shall in any event cover any
property constituting improved real estate located in a "special flood
hazard area" in a "participating community" as described in 12 CFR Part 22
with flood insurance in an amount at least equal to the lesser of the
outstanding principal amount of the Obligations or the replacement cost of
that property in the "special flood hazard area".
(b) Automobile Liability Insurance for Bodily Injury and Property
Damage --insurance in respect of all vehicles (whether owned, hired or
rented by the Borrower or
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any of its Subsidiaries) at any time located at, or used in connection
with, its properties or operations against liability for bodily injury and
property damage in such amounts as are then customary for vehicles used in
connection with similar properties and businesses, but in any event to the
extent required by applicable law.
(c) Comprehensive General Liability Insurance -- insurance against
claims for bodily injury, death or property damage occurring on, in or
about the properties (and adjoining streets, sidewalks and waterways) of
the Borrower and its Subsidiaries, in such amounts as are then customary
for property similar in use in the jurisdictions where such properties are
located.
(d) Workers' Compensation Insurance -- workers' compensation
insurance (including Employers' Liability Insurance) to the extent
required by applicable law.
(e) Product Liability Insurance -- insurance against claims for
bodily injury, death or property damage resulting from the use of products
sold by the Borrower or any of its Subsidiaries in such amounts as are
then customarily maintained by responsible persons engaged in businesses
similar to that of the Borrower and its Subsidiaries.
(f) Business Interruption Insurance -- insurance against loss of
operating income (subject to a deductible, or self-insured amount, not in
excess of $1,000,000) by reason of any Peril.
(g) Other Insurance -- such other insurance, in each case as
generally carried by owners of similar properties in the jurisdictions
where such properties are located, in such amounts and against such risks
as are then customary for property similar in use.
Such insurance shall be written by financially responsible companies selected by
the Borrower and having an A.M. Best rating of "A+" or better and being in a
financial size category of XIV or larger, or by other companies reasonably
acceptable to the Administrative Agent (including an insurer that is an
Affiliate of the Borrower provided that all insurance with such Affiliate is
reinsured on terms (including an insolvency provision) and with reinsurers
reasonably acceptable to the Administrative Agent), and (other than workers'
compensation) shall name the Administrative Agent as an additional insured to
the extent of the Borrower's liability under this Agreement, or loss payee, as
its interests may appear. Each policy referred to in this Section 6.06 shall
provide that it will not be canceled or reduced, or allowed to lapse without
renewal, except after not less than 30 days' written notice to the
Administrative Agent and shall also provide that the interests of the
Administrative Agent, the Lenders and the LC Issuing Lender shall not be
invalidated by any act or negligence of the Borrower or any Person having an
interest in any property covered by any mortgage nor by occupancy or use of any
such property for purposes more hazardous than permitted by such policy nor by
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any foreclosure or other proceedings relating to such property. The Borrower
will advise the Administrative Agent promptly of any policy cancellation,
material reduction or other material amendment.
On or before the Effective Date the Borrower will deliver to the
Administrative Agent certificates of insurance satisfactory to the
Administrative Agent evidencing the existence of all insurance required to be
maintained by the Borrower hereunder setting forth the respective coverages,
limits of liability, carrier, policy number and period of coverage and showing
that such insurance is in effect. Thereafter, on or before the date 30 days
after the expiration or renewal date of each insurance policy required hereunder
the Borrower will deliver to the Administrative Agent certificates of insurance
evidencing that all insurance required to be maintained by the Borrower
hereunder is in effect. In addition, the Borrower will not modify in any
material (in the reasonable judgment of the Borrower) respect any of the
provisions of any policy with respect to property insurance, without notifying
the Administrative Agent and providing such information in respect thereof as
the Administrative Agent may request. The Borrower will not obtain or carry
separate insurance concurrent in form or contributing in the event of loss with
that required by this Section 6.06 unless the Administrative Agent is an
additional insured thereunder, with loss payable as provided herein. The
Borrower will immediately notify the Administrative Agent whenever any such
separate insurance is obtained and shall deliver to the Administrative Agent the
certificates evidencing the same.
Without limiting the obligations of the Borrower under the foregoing
provisions of this Section 6.06, in the event the Borrower shall fail to
maintain in full force and effect insurance as required by the foregoing
provisions of this Section 6.06, then the Administrative Agent may, but shall
have no obligation so to do, procure insurance covering the interests of the
Administrative Agent, the Lenders and the LC Issuing Lender in such amounts and
against such risks as the Administrative Agent (or the Required Lenders) shall
deem appropriate and the Borrower shall reimburse the Administrative Agent in
respect of any reasonable premiums paid by the Administrative Agent in respect
thereof.
For purposes hereof, the term "Peril" means, collectively, fire,
lightning, flood, windstorm, hail, earthquake, explosion, riot and civil
commotion, vandalism and malicious mischief, damage from aircraft, vehicles and
smoke and all other perils covered by the "all-risk" endorsement then in use in
the jurisdictions where the properties of the Borrower and its Subsidiaries are
located.
The requirements of this Section 6.06 shall apply only to insurance
coverage with respect to the Borrower and its Subsidiaries and shall not affect
or limit any insurance, amendments, cancellations or any changes with regard to
insurance coverage for other entities insured under policies that also cover the
Borrower and its Subsidiaries.
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SECTION 6.07. Books and Records; Inspection Rights. The Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. Subject to Section
10.12, the Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 6.08. Fiscal Year. The Borrower and its Subsidiaries will not
change the last day of their fiscal year from December 31 of each year, or the
last days of the first three fiscal quarters in each of their fiscal years from
March 31, June 30, and September 30 of each year, respectively.
SECTION 6.09. Compliance with Laws. The Borrower will, and will cause
each of its Subsidiaries (other than Inactive Subsidiaries) to, comply with all
laws, rules, regulations and orders of any Governmental Authority applicable to
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 6.10. Use of Proceeds.
(a) Term Loans. The proceeds of the Term Loans shall be used solely
(i) to pay certain Indebtedness of the Borrower, including interest thereon,
outstanding on the date hereof listed on Schedule 6.10, (ii) to finance, on the
Effective Date, the payment of $15,000,000 of the Special Dividend and (iii) to
pay related fees and expenses of the Borrower. The Borrower shall repay in full
the indebtedness evidenced by the Subordinated Note on the Effective Date.
(b) Revolving Credit Loans. The proceeds of the Revolving Credit
Loans shall be used solely (i) for working capital and general corporate
purposes and (ii) to finance, on the Effective Date, the payment, in a single
installment, of $15,000,000 of the Special Dividend.
No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations G, U and X.
SECTION 6.11. Hedging Agreements. Within 120 days after the Effective
Date, the Borrower will enter into and, thereafter maintain in full force and
effect for a period at all times of at least four years, one or more Hedging
Agreements with one or more of the
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Lenders (and/or with a bank or other financial institution having capital,
surplus and undivided profits of at least $500,000,000), that satisfy the
following requirements:
(a) the notional principal amount of such Hedging Agreement(s), shall
be at least equal to $50,000,000; and
(b) each such Hedging Agreement shall enable the Borrower, as at any
date, to protect itself in a manner reasonably satisfactory to the
Required Lenders against interest rate fluctuations.
SECTION 6.12. Certain Obligations Respecting Subsidiaries and
Collateral Security.
(a) Subsidiary Guarantors. The Borrower shall take such action, and
shall cause each of its Subsidiaries to take such action, from time to time as
shall be necessary to ensure that all Domestic Subsidiaries (other than Inactive
Subsidiaries) are Subsidiary Guarantors, and, thereby, "Credit Parties"
hereunder and under the Security Agreement. Without limiting the generality of
the foregoing, in the event that the Borrower shall form or acquire any new
Domestic Subsidiary after the date hereof which the Borrower or such Subsidiary
anticipates will not be an Inactive Subsidiary (or in the event that any
theretofore Inactive Subsidiary that is a Domestic Subsidiary shall cease to be
an Inactive Subsidiary), the Borrower will, and will cause each of its
Subsidiaries to, cause such new Domestic Subsidiary (or such theretofore
Inactive Subsidiary) within ten Business Days of such formation or acquisition
notify the Administrative Agent of such formation or acquisition and promptly
take all such actions as the Administrative Agent may request to cause such
Subsidiary to become a "Subsidiary Guarantor" (and thereby, a "Credit Party")
hereunder and under the Security Agreement pursuant to a written instrument in
form and substance reasonably satisfactory to the Administrative Agent, to
become a party to the Security Agreement and to deliver such proof of corporate
action, incumbency of officers, opinions of counsel and other documents
(including Uniform Commercial Code Financing Statements) as are consistent with
those delivered by Credit Party pursuant to Section 5.01 or as the Required
Lenders or the Administrative Agent shall have requested.
(b) Ownership of Subsidiaries. The Borrower will, and will cause each
of its Subsidiaries to, take such action from time to time as shall be necessary
to ensure that the Borrower and each of its Subsidiaries at all times owns
(subject only to the Lien of the Security Agreement) at least the same
percentage of the issued and outstanding shares of each class of stock of or
other ownership interest in each of its Subsidiaries as is owned on the date
hereof (except as otherwise permitted by Section 7.03 and subject to Section
7.11). Without limiting the generality of the foregoing, none of the Borrower
nor any of its Subsidiaries shall sell, transfer or otherwise dispose of any
shares of stock of or other ownership interest in any Subsidiary owned by them,
nor permit any Subsidiary to issue any shares of stock of any class whatsoever
to any Person (except as otherwise permitted by
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Section 7.03 and, subject to Section 7.11, to the Borrower or a Subsidiary). In
the event that any such additional shares of stock or other ownership interest
shall be issued by any Domestic Subsidiary, the respective Credit Party agrees
forthwith to deliver to the Administrative Agent pursuant to the Security
Agreement the certificates evidencing such shares of stock, accompanied by
undated stock powers duly executed in blank and shall take such other action as
the Administrative Agent shall request to perfect the security interest created
therein pursuant to the Security Agreement.
SECTION 6.13. Environmental Laws and Permits. Without limiting the
Borrower's obligations under Section 6.09, the Borrower will, and will cause
each of its Subsidiaries to, (a) comply in all material respects with all
Environmental Laws now or hereafter applicable to the Borrower and its
Subsidiaries, (b) when and to the extent required by any Governmental Authority
after exhaustion of all available administrative and judicial remedies, carry
out environmental investigatory and response actions at any property of the
Borrower or any of its Subsidiaries under applicable Environmental Laws, and (c)
obtain, at or prior to the time required by applicable Environmental Laws, all
environmental, health and safety permits, licenses and other authorizations
necessary for its operations and maintain such authorizations in full force and
effect.
SECTION 6.14. Environmental Notices.
(a) The Borrower will, and will cause each of its Subsidiaries to,
promptly and in no event later than thirty days after it has received the same,
furnish to the Administrative Agent (i) all written notices of violation,
orders, claims, citations, complaints, penalty assessments, suits or other
proceedings, administrative, civil or criminal, at law or in equity, received by
the Borrower or any Subsidiary or of which it has notice, pending or threatened
against the Borrower or any Subsidiary by any Governmental Authority with
respect to any alleged violation of or non-compliance with any Environmental
Laws or any permits, licenses or authorizations, if such alleged violation or
non-compliance could reasonably be expected to have a Material Adverse Effect
and (ii) written notification of any condition or occurrence at, on, or arising
from the property of the Borrower or any Subsidiary that results in its
non-compliance with any applicable Environmental Law, which violation or
non-compliance could reasonably be expected to have a Material Adverse Effect.
(b) The Borrower will, and will cause each of its Subsidiaries to,
promptly and in no event later than thirty days after it has received the same,
furnish to the Administrative Agent all requests for information, notices of
claim, demand letters, and other notifications, received by the Borrower or any
Subsidiary, that in connection with its ownership or use of any real estate or
the conduct of its business, it may be potentially responsible with respect to
any investigation or clean-up of Hazardous Material at any location, which
investigation or clean-up could reasonably be expected to have a Material
Adverse Effect.
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(c) Upon receipt of any notice provided to the Administrative Agent
pursuant to clause (a) or (b) of this Section 6.14, the Required Lenders shall
have the right to retain the services of an independent environmental consulting
firm acceptable to the Borrower (the "Environmental Consultant") to conduct an
environmental assessment of the property, operation or environmental condition
described in such notice. As a result of such environmental assessment, the
Environmental Consultant may prepare a written recommendation of what, if any,
technical action should be taken by the Borrower or its Subsidiaries to remedy
the environmental condition in accordance with good commercial practices or in
compliance with applicable Environmental Laws. The environmental assessment
shall be conducted during normal business hours and with reasonable prior notice
to the Borrower but such environmental assessment shall not include the physical
collection of any samples. The Borrower shall have sole responsibility for all
costs and reasonable out-of-pocket expenses associated with such environmental
assessment.
SECTION 6.15. Environmental Audit and Remedial Action. Upon the
occurrence and during the continuation of an Event of Default, the Borrower
will, and will cause each of its Subsidiaries to, conduct and complete all
investigations, studies, sampling and testing and all remedial, removal and
other actions reasonably requested by the Administrative Agent on behalf of the
Required Lenders.
ARTICLE VII
Negative Covenants
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower and the Subsidiary
Guarantors covenant and agree with the Lenders that:
SECTION 7.01. Indebtedness. The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in
Schedule 7.01, and any extensions, renewals, refinancings and replacements
of any such Indebtedness that do not increase the principal amount thereof
from the amount set forth in Schedule 7.01 or, in the case of the lines of
credit, the aggregate amount of lines of credit set forth on Schedule 7.01
and that do not contain terms and conditions that are materially more
restrictive to the Borrower and its Subsidiaries than the terms and
conditions of the Indebtedness so extended, renewed, refinanced or
replaced;
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(c) Indebtedness of the Borrower and its Subsidiaries to each other,
provided that (i) no such Indebtedness shall be owed by the Borrower or
any of the Domestic Subsidiaries other than Rheox International to any of
the Foreign Subsidiaries and no such Indebtedness shall be owed by any of
the Foreign Subsidiaries to any of the Borrower and the Domestic
Subsidiaries other than Rheox International and (ii) if the aggregate
outstanding principal amount of Indebtedness owed by Rheox International
to the Borrower and the Domestic Subsidiaries exceeds $2,000,000 at any
time, an amount equal to the excess shall be evidenced solely by one or
more promissory notes of Rheox International pledged to the Administrative
Agent under the Security Agreement;
(d) until the initial borrowing hereunder, Indebtedness of the
Borrower to NL evidenced by the Subordinated Note;
(e) Indebtedness of Rheox Limited to NL evidenced by the Subordinated
Intercompany Note;
(f) Indebtedness of up to $500,000 in the form of Guarantees of
Indebtedness of Enenco, so long as the Borrower owns, directly or
indirectly, at least 50% of the equity interests in Enenco; and
(g) additional Indebtedness of the Borrower in an aggregate principal
amount up to but not exceeding $2,000,000 at any one time outstanding.
SECTION 7.02. Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Liens created under the Security Documents;
(b) Permitted Liens; and
(c) Liens (including Capital Leases) on real and/or personal property
acquired and/or constructed by the Borrower or any Subsidiary after the
date hereof securing Indebtedness of the Borrower or such Subsidiary
permitted by Section 7.01 in respect of the purchase price and/or
construction cost of such property (including Indebtedness incurred to
finance such acquisition and/or construction), provided that the aggregate
principal amount of Indebtedness secured by each such Lien does not at any
time exceed (i) the acquisition and/or construction cost of the related
property referred to above or (ii) in the case of property subject to a
Capital Lease, the Fair Market Value of the related property referred to
above; and
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(d) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 7.02 and
Liens securing any Indebtedness incurred in connection with the
refinancing of any Indebtedness secured by any Lien existing on the date
hereof and set forth in Schedule 7.02, provided however that no property
or asset may secure such Liens other than the property or asset covered by
the related Lien existing on the date hereof and provided further that
such Liens may not secure Indebtedness in a principal amount in excess of
the principal amount set forth on Schedule 7.02.
SECTION 7.03. Fundamental Changes. The Borrower will not, and will
not permit any Subsidiary to, merge into or consolidate with any other Person,
or permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) all or any substantial part of its assets, or all or substantially
all of the stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing:
(a) any Subsidiary other than Rheox International may merge into the
Borrower in a transaction in which the Borrower is the surviving
corporation;
(b) any Subsidiary other than Rheox International may merge into
another Subsidiary; provided that (i) if any such transaction shall be
between a Subsidiary and a Wholly Owned Subsidiary, the Wholly Owned
Subsidiary shall be the continuing or surviving corporation and (ii) if
any such transaction shall be between a Subsidiary Guarantor and a
Subsidiary not a Subsidiary Guarantor, and such Subsidiary Guarantor is
not the continuing or surviving corporation, then the continuing or
surviving corporation shall have assumed all of the obligations of such
Subsidiary Guarantor hereunder and under the other Loan Documents;
(c) any Subsidiary may sell, transfer, lease or otherwise dispose of
its assets or property to the Borrower or to another Subsidiary;
(d) the Borrower or any Subsidiary may make Dispositions to third
parties with the approval of the Required Lenders;
(e) the Borrower or any Subsidiary may sell, transfer, lease or
otherwise dispose of any inventory or other assets or property in the
ordinary course of business;
(f) the Borrower or any Subsidiary may sell, transfer, lease or
otherwise dispose of obsolete or worn-out property, tools or equipment no
longer used or useful in its business so long as the amount thereof sold
in any single fiscal year by the Borrower and its Subsidiaries shall not
have a Fair Market Value in excess of $500,000; and
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(g) the Borrower may sell, transfer, lease or otherwise dispose of
the surplus parcels of real property in Alameda County, California owned
by the Borrower and encumbered for the benefit of the Lenders as described
in section (b) of the definition of "Existing Mortgages".
SECTION 7.04. Investments, Loans, Advances, Guarantees and
Acquisitions; Hedging Agreements.
(a) The Borrower will not, and will not permit any its Subsidiary to,
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a Wholly Owned Subsidiary prior to such merger) any Investment, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:
(i) Investments outstanding on the date hereof and set forth in
Schedule 7.04, including such Investments in Enenco so set forth;
(ii) Permitted Investments;
(iii) Investments by the Borrower and any Subsidiary in the
capital stock of and other ownership interests in other Subsidiaries
(subject to Section 7.11);
(iv) Indebtedness and advances permitted by Section 7.01(c);
(v) Guarantees constituting Indebtedness permitted by Section
7.01;
(vi) operating deposit accounts with banks;
(vii) Distributor Affiliate Credit Extensions not exceeding
$5,000,000 in the aggregate at any one time outstanding, provided that
each Distributor Affiliate Credit Extension shall mature and be payable no
later than the date 45 days after the date made;
(viii) Capital Expenditures (including but not limited to
Acquisitions constituting Capital Expenditures) made by the Borrower or
any Subsidiary as permitted under Section 7.08(e); and
(ix) Investments in Enenco after the date of this Agreement of up
to $750,000 in the form of capital contributions or loans and of up to
$500,000 in the form of Guarantees of Indebtedness of Enenco, so long as
the Borrower owns, directly or indirectly, at least 50% of the equity
interests in Enenco; and
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(x) Investments of the LC Collateral Account as provided in
Section 2.04(i).
(b) The Borrower will not, and will not permit any Subsidiary to,
enter into any Hedging Agreement, other than (i) Hedging Agreements required by
Section 6.11 and (ii) any other Hedging Agreements entered into in the ordinary
course of business to hedge or mitigate risks to which the Borrower or any
Subsidiary is exposed in the conduct of its business or the management of its
liabilities.
SECTION 7.05. Restricted Payments. The Borrower will not, and will
not permit any Subsidiary to, declare or make, or agree to pay or make, directly
or indirectly, any Restricted Payment, except that so long as no Default exists
or would result therefrom:
(a) the Borrower may (i) declare and pay the portion of the Special
Dividend payable from the proceeds of the Term Loans in cash; and (ii)
declare and pay the portion of the Special Dividend payable from the
proceeds of the Revolving Credit Loans in cash, provided that after giving
effect thereto the aggregate unutilized amount of the Revolving Credit
Commitments shall not be less than $7,500,000; and
(b) the Borrower may declare and pay dividends in cash with respect
to its capital stock after the second anniversary of the Effective Date,
provided that (i) at the time of the declaration and at the time of
payment of such dividends (and after giving effect thereto), the Fixed
Charges Ratio shall not be less than 1.10 to 1 and (ii) the aggregate
amount of such dividends paid in such fiscal year shall not exceed 40% of
Excess Cash Flow for the immediately preceding fiscal year.
SECTION 7.06. Transactions with Affiliates. Except as expressly
permitted by this Agreement, the Borrower will not, and will not permit any
Subsidiary to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except that:
(a) the Borrower or any Subsidiary may enter into transactions with
Affiliates (other than extension of Indebtedness by the Borrower or any
Subsidiary to an Affiliate) in the ordinary course of business at prices
and on terms and conditions not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm's-length basis from unrelated
third parties;
(b) any Affiliate who is an individual may serve as a director,
officer, employee or consultant of the Borrower or any of Subsidiary and
receive reasonable compensation for his or her services in such capacity;
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(c) Rheox GmbH, a German corporation, may pay dividends to all
holders of interests in Rheox GmbH, provided that any such dividends are
paid together with dividends to each holder of interest in Rheox GmbH
ratably in accordance with their respective interests;
(d) the Borrower and its Subsidiaries may enter into and perform the
Tax Sharing Agreement, the other Ancillary Agreements and the
Restructuring Documents;
(e) the Borrower may engage in the transactions with Enenco permitted
under Sections 7.01, 7.03 and 7.04; and
(f) the Borrower and its Subsidiaries may enter into Distributor
Affiliate Credit Extensions permitted by Section 7.04.
SECTION 7.07. Restrictive Agreements. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon the ability of any Subsidiary to pay dividends or
other distributions with respect to any shares of its capital stock or to make
or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by law
or by this Agreement, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 7.07 or related to
the Indebtedness set forth in Schedule 7.01 (but shall apply to any extension or
renewal of, or any amendment or modification resulting in any such restriction
or condition becoming more restrictive), (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided that such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, and (iv) the foregoing shall not apply to (x) restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only to the
property or assets securing such Indebtedness and (y) to customary provisions in
leases and other contracts restricting the assignment thereof.
SECTION 7.08. Certain Financial Covenants.
(a) Leverage Ratio. The Borrower will not permit the Leverage Ratio
at any time during any of the periods set forth below to exceed the ratio set
opposite such period below:
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Period Ratio
------ -----
From and including the Effective Date
through June 30, 1997 ....................................... 3.75 to 1
From and including July 1, 1997
through September 30, 1997 .................................. 3.60 to 1
From and including October 1, 1997
through December 31, 1997 ................................... 3.50 to 1
From and including January 1, 1998
through December 31, 1998 ................................... 3.25 to 1
From and including January 1, 1999
through December 31, 2000 ................................... 3.00 to 1
From and including January 1, 2001 .......................... 2.50 to 1
and at all times thereafter
(b) Tangible Net Worth. The Borrower will not permit Tangible Net
Worth on any date to be less than an amount equal to negative (-) $52,000,000
plus the sum, for all of the fiscal quarters of the Borrower starting on or
after January 1, 1997 and ending on or before such date for which the
consolidated net income of the Borrower and its Subsidiaries was greater than
zero (and excluding each fiscal quarter for which the consolidated net income of
the Borrower and its Subsidiaries was less than zero), of 60% of the
consolidated net income of the Borrower and its Subsidiaries for such fiscal
quarters minus the Special Dividend.
(c) Fixed Charges Ratio. The Borrower will not permit the Fixed
Charges Ratio to be less than 1.000 to 1 at any time from and including the
Effective Date through June 30, 1997 or 1.025 at any time thereafter.
(d) Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio at any time during any of the periods set forth below to
be less than the ratio set opposite such period below:
Period Ratio
------ -----
From and including the Effective
Date through December 31, 1998 ............................. 3.00 to 1
From and including January 1, 1999
and at all times thereafter ................................ 3.50 to 1
(e) Capital Expenditures. The Borrower will not permit the aggregate
amount of Capital Expenditures to exceed $5,000,000 in any calendar year.
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SECTION 7.09. Lines of Business. Neither the Borrower nor any of its
Subsidiaries shall engage to any substantial extent in any line or lines of
business activity other than the Business.
SECTION 7.10. Modifications of Certain Documents. The Borrower will
not, and will not permit any Subsidiary to, agree or consent to any
modification, supplement or waiver of (a) any of the provisions of any of the
Restructuring Documents or the Ancillary Agreements (other than the Tax Sharing
Agreement) if such modification, supplement or waiver could reasonably be
expected to have a Material Adverse Effect or (b) the Subordinated Note, the
Subordinated Intercompany Note (excluding any modification, supplement or waiver
regarding waiver or deferral of the payment of interest or principal or
extending the final maturity thereof), the Note Subordination Agreement, the
Intercompany Note Subordination Agreement or the Tax Sharing Agreement, in each
case without the prior consent of the Administrative Agent (with the approval of
the Required Lenders).
SECTION 7.11. Rheox International. Notwithstanding anything to the
contrary contained in this Agreement, but without limiting the effect of Section
6.12(b):
(a) the Borrower will cause all shares of capital stock or other
ownership interests in any of the Foreign Subsidiaries at any time owned
by any of the Borrower and the Domestic Subsidiaries to be owned solely by
Rheox International, directly or indirectly through other Foreign
Subsidiaries; and
(b) the Borrower will not permit Rheox International to (i) merge or
consolidate with any Person, (ii) engage in any business other than (x)
owning and administering the business of the Foreign Subsidiaries
(including, but not limited to, owning, licensing and administering the
Foreign Intellectual Property) and (y) extending Indebtedness permitted by
Sections 7.04(iii) and 7.04(viii) and incurring Indebtedness permitted by
Section 7.01(c) hereof or (iii) incur any Indebtedness other than
Indebtedness of (A) Rheox International under the Loan Documents and (B)
Indebtedness of Rheox International to the Borrower and its other
Subsidiaries permitted by Section 7.01(c).
SECTION 7.12. Subordinated Notes. The Borrower will not (except, with
respect to the Subordinated Note, as required by Section 6.10(a)), and will not
permit any Subsidiary to, purchase, redeem, retire or otherwise acquire for
value, or set apart any money for a sinking, defeasance or other analogous fund
for the purchase, redemption, retirement or other acquisition of, or make any
voluntary payment or prepayment of the principal of or interest on, or any other
amount owing in respect of, the Subordinated Note or the Subordinated
Intercompany Note, except (a) in the case of the Subordinated Note, (i) as
required by Section 6.10(a) and (ii) subject to the Note Subordination
Agreement, for regularly scheduled payments of interest thereon required
pursuant thereto and (b) in the case of the Subordinated Intercompany Note,
subject to the Intercompany Note Subordination
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Agreement, for regularly scheduled payments of principal and interest thereon
required pursuant thereto.
ARTICLE VIII
Events of Default
If any of the following events ("Events of Default") shall occur and
be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) any Credit Party shall fail to pay any interest on any Loan or
any fee or other amount (other than an amount referred to in clause (a) of
this Article VIII) payable under this Agreement or under any other Loan
Document, when and as the same shall become due and payable and such
failure shall continue unremedied for a period of three or more Business
Days;
(c) any representation or warranty made or deemed made by or on
behalf any Credit Party or NL in or in connection with this Agreement, any
of the other Loan Documents or any amendment or modification hereof or
thereof, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with this Agreement, any
of the other Loan Documents or any amendment or modification hereof or
thereof, shall prove to have been incorrect when made or deemed made in
any material respect;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 6.02(a), 6.03 (with respect to
the Borrower's existence), 6.09 or 6.10 or in Article VII;
(e) any Credit Party or NL shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than
those specified in clause (a), (b) or (d) of this Article VIII), any other
Loan Document or the Tax Sharing Agreement, and such failure shall
continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent (given at the request of any Lender) to the Borrower;
(f) the Borrower or any Subsidiary shall fail after any applicable
period of grace to make any payment of principal of, interest on or fees
payable to lenders in
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respect of any Material Obligations, when and as the same shall become due
and payable;
(g) any event or condition occurs that results in any Material
Obligations becoming due prior to its scheduled maturity or, for so long
as such event or condition is continuing, that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or
holders of any Material Obligations or any trustee or agent on its or
their behalf or cause any Material Obligations to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (g) shall not
apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such
Indebtedness or the voluntary termination of a Hedging Agreement;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of NL, the Borrower any Subsidiary other than an
Inactive Subsidiary or its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for NL, the Borrower or any Subsidiary other than an Inactive
Subsidiary or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(i) NL, the Borrower or any Subsidiary other than an Inactive
Subsidiary shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article VIII, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for NL, the Borrower or any
Subsidiary other than an Inactive Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) NL, the Borrower or any Subsidiary other than an Inactive
Subsidiary shall become unable, admit in writing or fail generally to pay
its debts as they become due;
(k) one or more final judgments for the payment of money in excess of
$2,500,000 shall be rendered against the Borrower or any Subsidiary or any
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combination thereof and the same shall not be discharged for a period of
30 consecutive days during which the execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to
attach or levy upon any assets of the Borrower or any Subsidiary to
enforce any such judgment, or any action shall be legally taken by a
judgment creditor of NL to attach or levy upon the collateral pledged
under the NL Pledge Agreement;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in a Material
Adverse Effect;
(m) A reasonable basis shall exist for the assertion against NL, the
Borrower or any Subsidiary of (or there shall have been asserted against
NL, the Borrower or any Subsidiary) claims or liabilities, whether
accrued, absolute or contingent, based on or arising from the generation,
storage, transport, handling or disposal of Hazardous Materials by NL, the
Borrower or any of the Borrower's Subsidiaries or Affiliates, or any
predecessor in interest of NL, the Borrower or any of the Borrower's
Subsidiaries or Affiliates, or relating to any site or facility owned,
operated or leased by NL, the Borrower or any of the Borrower's
Subsidiaries or Affiliates, which claims or liabilities (insofar as they
are payable by NL, the Borrower or any Subsidiary but after deducting any
portion thereof which is reasonably expected to be paid by other
creditworthy Persons jointly and severally liable therefor), in the
judgment of the Required Lenders are reasonably likely to be determined
adversely to NL, the Borrower or any Subsidiary, and the amount thereof
is, singly or in the aggregate, reasonably likely to have a Material
Adverse Effect;
(n) NL shall at any time and for any reason cease to be the
beneficial owner of 100% of the outstanding shares of capital stock of the
Borrower; or any Person or Persons not having beneficial ownership in the
aggregate of 50% or more of the outstanding shares of capital stock of NL
on the date hereof shall acquire beneficial ownership in aggregate of 50%
or more of the outstanding shares of capital stock of NL; or during any
period of 25 consecutive calendar months, (i) individuals who were
directors of NL on the first day of such period and (ii) other individuals
whose election or nomination by the Board of Directors of NL was approved
by at least a majority of the Board of Directors of NL who either were
directors on the first day of such period or whose election or nomination
was previously so approved shall no longer constitute a majority of the
Board of Directors of NL; or
(o) Any of the following shall occur: (i) the Lien created by any
Security Document shall at any time (other than by reason of the
Administrative Agent relinquishing possession of certificates evidencing
shares of stock of Subsidiaries pledged thereunder) cease to constitute a
valid and perfected (to the extent such Lien is required to be perfected
under the Security Documents) Lien on the collateral intended
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to be covered thereby; (ii) except for expiration in accordance with its
terms, any Security Document shall for whatever reason be terminated, or
shall cease to be in full force and effect; or (iii) the enforceability of
any Security Document or the validity of any subordination provision in
the Note Subordination Agreement or in the Intercompany Note Subordination
Agreement shall be contested by any Credit Party or by NL;
then, and in every such event (other than an event described in clause (h) or
(i) of this Article), and at any time thereafter during the continuance of such
event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower, take either or both of the following actions,
at the same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in the case of any event
described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE IX
The Administrative Agent
Each of the Lenders and the LC Issuing Lender hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such actions and powers as are reasonably
incidental thereto.
Chase shall have the same rights and powers in its capacity as a
Lender hereunder as any other Lender and may exercise the same as though Chase
were not the Administrative Agent, and Chase and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
any Credit Party or any Subsidiary or other Affiliate of any thereof as if it
were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in this Agreement and the other Loan Documents.
Without limiting the
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generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by this Agreement and the
other Loan Documents that the Administrative Agent is required to exercise in
writing by the Required Lenders, and (c) except as expressly set forth herein
and in the other Loan Documents, the Administrative Agent shall not have any
duty to disclose, and shall not be liable for the failure to disclose, any
information relating to any Credit Party, NL or any of their respective
Subsidiaries that is communicated to or obtained by Chase or any of its
Affiliates in any capacity. The Administrative Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders or, if provided herein, with the consent or at the request of
the Required Revolving Credit or the Required Term Loan Lenders, or in the
absence of its own gross negligence or wilful misconduct. The Administrative
Agent shall not be deemed to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Borrower or a
Lender (whereupon the Administrative Agent shall promptly deliver a copy thereof
to the Lenders), and the Administrative Agent shall not be responsible for or
have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or the other Loan
Documents, (ii) the contents of any certificate, report or other document
delivered hereunder or under any of the other Loan Documents or in connection
herewith of therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or in any
other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, the other Loan Documents or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article V or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.
The Administrative Agent shall not, except to the extent expressly
instructed by the Required Lenders with respect to collateral security under the
Security Documents, be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan Document.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.
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The Administrative Agent may perform any and all of its duties, and
exercise its rights and powers, by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through its Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to its activities
in connection with the syndication of the credit facilities provided for herein
as well as activities as the Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent, as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the LC Issuing Lender and the
Borrower. Upon any such resignation, the Required Lenders shall have the right,
in consultation with the Borrower, to appoint a successor Administrative Agent.
If no successor shall have been so appointed and shall have accepted such
appointment within 30 days after such retiring Administrative Agent gives notice
of its resignation, then such retiring Administrative Agent may, on behalf of
the Lenders and the LC Issuing Lender, appoint a successor Administrative Agent,
which shall be a bank with an office in New York, New York, or an Affiliate of
any such bank. Upon the acceptance of its appointment as Administrative Agent,
by a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. The fees payable by
the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After an Administrative Agent's resignation hereunder, the provisions
of this Article IX and Sections 3.03 and 10.03 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent, the LC Issuing Lender or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent, the LC Issuing Lender or any other Lender and based on
such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement and the other Loan Documents, any related agreement or any
document furnished hereunder or thereunder.
The Documentation Agent identified on the cover page of this
Agreement shall have no duties or responsibilities hereunder other than as a
Lender hereunder.
Credit Agreement
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ARTICLE X
Miscellaneous
SECTION 10.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, (i) to Rheox, Inc. c/o NL Industries, Inc. at
00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx X.
Xxxxxxxx (Telecopy No. (000) 000-0000) and (ii) to Rheox, Inc., X.X. Xxx
000, Xxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention of Xxxxxx
Xxxxx;
(b) if to the Administrative Agent, to The Chase Manhattan Bank, Loan
and Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention of Xxxxx Xxxxxxxx (Telecopy No. (000) 000-0000),
with a copy to The Chase Manhattan Bank, 1 Chase Xxxxxxxxx Xxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx Xxxxxxxx (Telecopy No.
(000) 000-0000); and
(c) if to any Lender (including to Chase in its capacity as the LC
Issuing Lender), to it at its address (or telecopy number) set forth in
its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 10.02. Waivers; Amendments.
(a) No failure or delay by the Administrative Agent, the LC Issuing
Lender or any Lender in exercising any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
LC Issuing Lender and the Lenders hereunder are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by any Credit Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 10.02, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of
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a Loan or issuance of a Letter of Credit shall not be construed as a waiver of
any Default, regardless of whether the Administrative Agent, any Lender or the
LC Issuing Lender may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall:
(i) increase the Commitment of any Lender without the written
consent of such Lender;
(ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby;
(iii) postpone the scheduled date of payment of the principal
amount of any Loan or LC Disbursement, or any interest thereon, or any
fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby;
(iv) change Section 2.09 in a manner that would reduce or alter
the application of prepayments thereunder, or change Section 2.16(b), (c)
or (d) in a manner that would alter the pro rata sharing of payments
required thereby, without in each case the written consent of each Lender;
(v) alter the rights or obligations of the Borrower to prepay
Loans without the written consent of each Lender;
(vi) change any of the provisions of this Section 10.02 or the
definition of "Required Lenders", "Required Revolving Credit Lenders", or
"Required Term Loan Lenders", or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any
rights hereunder or under any other Loan Document or make any
determination or grant any consent hereunder or thereunder, without the
written consent of each Lender; or
(vii) release all or substantially all of the Subsidiary
Guarantors from their obligations in respect of their Guarantee under
Article III, without the written consent of each Lender;
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provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent or the LC Issuing Lender
hereunder without the prior written consent of the Administrative Agent or the
LC Issuing Lender, as the case may be.
Anything in this Agreement to the contrary notwithstanding, no waiver
or modification of any provision of this Agreement that has the effect (either
immediately or at some later time) of enabling the Borrower to satisfy a
condition precedent to the making of Revolving Credit Loans or Term Loans shall
be effective against the Revolving Credit Lenders or Term Loan Lenders,
respectively, unless the Required Revolving Credit Lenders or Required Term Loan
Lenders, respectively, shall have concurred with such waiver or modification.
(c) Neither any Security Document nor any provision thereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Credit Parties party thereto, and by the
Administrative Agent with the consent of the Required Lenders, provided that,
without the prior consent of each Lender, the Administrative Agent shall not
(except as provided herein or in the applicable Security Document) release all
or substantially all of the collateral thereunder or otherwise terminate any
Lien under any Security Document, agree to additional obligations being secured
by such collateral (unless the Lien for such additional obligations shall be
junior to the Lien in favor of the other obligations secured by such Security
Document, in which event the Administrative Agent may consent to such junior
Lien provided that it obtains the consent of the Required Lenders thereto),
alter the relative priorities of the obligations entitled to the benefits of the
Liens created under such Security Document, except that no such consent shall be
required, and the Administrative Agent is hereby authorized, to release any Lien
covering property that is the subject of either a Disposition of property
permitted hereunder or a Disposition to which the Required Lenders have
consented.
SECTION 10.03. Expenses; Indemnity; Damage Waiver.
(a) The Credit Parties jointly and severally agree to pay, or
reimburse the Administrative Agent or Lenders for paying, (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of Special Counsel, in
connection with the syndication of the credit facilities provided for herein,
the preparation of this Agreement and the other Loan Documents (and any Uniform
Commercial Code financing statements required by any Security Document to be
filed with respect to the security interests in personal property and fixtures
created pursuant thereto) or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all out-of-pocket expenses
incurred by the LC Issuing Lender in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder, (iii) all out-of-pocket expenses incurred by the Administrative
Agent, the LC Issuing Lender or any Lender, including the fees, charges and
disbursements of any
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counsel for such Administrative Agent, LC Issuing Lender or Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents, including its rights under this
Section 10.03, or in connection with the Loans made or Letters of Credit issued
hereunder, including in connection with any workout, restructuring or
negotiations in respect thereof, and (iv) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any of the other Loan
Documents or any other document referred to herein or therein and all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Security Document, by any Uniform Commercial Code financing
statements required by any Security Document to be filed with respect to the
security interests in personal property and fixtures created pursuant thereto,
or by any other document referred to therein. Notwithstanding anything to the
contrary in this Section 10.03(a), the Borrower shall not be obligated to pay
the fees and expenses of more than one law firm representing the Administrative
Agent and the Lenders (which law firm shall be selected by the Administrative
Agent, or if the Required Lenders so decide, by the Required Lenders) unless (x)
the Administrative Agent or the Required Lenders reasonably determine that the
retention of more than one law firm is advisable because questions arise under
laws of jurisdictions in which the principal law firm engaged is not authorized
to practice law or (y) in the case of the foregoing clause (iii), the
Administrative Agent or any Lender or Lenders have different or conflicting
interests.
(b) The Credit Parties jointly and severally agree to indemnify the
Administrative Agent, the LC Issuing Lender and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, the other Loan
Documents or any agreement or instrument contemplated hereby, the performance by
the parties hereto and thereto of their respective obligations hereunder or
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use of
the proceeds therefrom (including any refusal by the LC Issuing Lender to honor
a demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence, Release or threatened Release
of Hazardous Materials related to any property owned or operated by any Credit
Party or any of their Subsidiaries, or any Environmental Liability related in
any way to any Credit Party or any of their Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (are determined by a
court of competent jurisdiction by final and
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nonappealable judgment to have) resulted from the gross negligence or wilful
misconduct of such Indemnitee. Notwithstanding anything to the contrary in this
Section 10.03(b), the Borrower shall not be obligated to pay or otherwise
indemnify the Administrative Agent or any Lender for the fees and expenses of
more than one law firm representing the Administrative Agent and the Lenders
(which law firm shall be selected by the Administrative Agent, or if the
Required Lenders so decide, by the Required Lenders) unless (x) the
Administrative Agent or the Required Lenders reasonably determine that the
retention of more than one law firm is advisable because questions arise under
laws of jurisdictions in which the principal law firm engaged is not authorized
to practice law or (y) the Administrative Agent or any Lender or Lenders have
different or conflicting interests.
(c) To the extent that the Credit Parties fail to pay any amount
required to be paid by them to the Administrative Agent under paragraph (a) or
(b) of this Section 10.03, each Lender severally agrees to pay to the
Administrative Agent such Lender's Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such. To the
extent that the Credit Parties fail to pay any amount required to be paid by
them to the LC Issuing Lender under paragraph (a) or (b) of this Section 10.03,
each Revolving Credit Lender severally agrees to pay to the LC Issuing Lender
such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent in its capacity as such.
(d) To the extent permitted by applicable law, none of the Credit
Parties shall assert, and each Credit Party hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, the other Loan Documents or
any agreement or instrument contemplated hereby or thereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section 10.03 shall be payable
promptly after written demand therefor.
SECTION 10.04. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this
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Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Issuing Lender and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an
Affiliate of a Lender, the Borrower and the Administrative Agent (and, in
the case of an assignment of all or a portion of a Commitment or any
Lender's obligations in respect of its LC Exposure, the LC Issuing Lender)
must give its prior written consent to such assignment (which consent
shall not be unreasonably withheld or delayed),
(ii) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of
the assigning Lender's Commitment and Loans, the amount (without
duplication) of the Commitment and Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $10,000,000 unless each of
the Borrower and the Administrative Agent otherwise consent,
(iii) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500,
(iv) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire, and
(v) written notice of each assignment and the forms required under
Section 2.15(e) are given to the Borrower.
provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required if an Event of Default has occurred and is
continuing.
Upon acceptance and recording pursuant to paragraph (d) of this
Section 10.04, from and after the effective date specified in each Assignment
and Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and,
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in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.13, 2.14, 2.15, 3.03 and 10.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph (b) shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent,
the LC Issuing Lender and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, the LC Issuing
Lender and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section 10.04 and any written consent to such assignment required by
paragraph (b) of this Section 10.04, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
and until it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent or the LC Issuing Lender, sell participations to one or
more banks or other entities (a "Participant") in all or a portion of such
Lender's rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations; and (iii) the Borrower, the Administrative Agent, the LC
Issuing Lender and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in the first proviso to
Section 10.02(b), or the
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first provision to Section 10.02(c), that affects such Participant. Subject to
paragraph (f) of this Section 10.04, the Borrower agrees that each Participant
shall be entitled, subject to the obligations of Section 2.17, to the benefits
of Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section 10.04.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.13 or 2.15 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
and shall be subject to the obligations of Section 2.17, unless the sale of the
participation to such Participant is made with the Borrower's prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 2.15 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 2.15(e) and Section 2.17 as
though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any such pledge or assignment to a Federal Reserve
Bank, and this Section shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such assignee for such Lender as a party hereto.
(h) Anything in this Section 10.04 to the contrary notwithstanding,
no Lender may assign or participate any interest in any Loan held by it
hereunder to the Borrower or any of its Affiliates or Subsidiaries without the
prior consent of each Lender.
SECTION 10.05. Survival. All covenants, agreements, representations
and warranties made by the Credit Parties herein and in the other Loan
Documents, and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement and the other Loan Documents, shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the LC Issuing Lender or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect so long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement or the other Loan Documents is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.13, 2.14, 2.15, 2.17, 3.03 and 10.03
and Article IX shall survive and remain in full force and effect regardless of
the consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters
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of Credit and the Commitments or the termination of this Agreement or any other
Loan Document or any provision hereof or thereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 5.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section 10.08 are in addition to any other
rights and remedies (including other rights of setoff) which such Lender may
have.
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of
Process.
(a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) Each party hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New
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York sitting in New York County and of the United States District Court of the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
New York State court (or, to the extent permitted by law, in such Federal
court). Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the LC Issuing Lender or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against any Credit Party or its properties
in the courts of any jurisdiction.
(c) Each party hereto hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any court referred to in paragraph (b) of this Section 10.09. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10.
SECTION 10.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
Credit Agreement
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SECTION 10.12. Confidentiality. Each Lender and the Administrative
Agent agrees (on behalf of itself and each of its Related Parties) to use
reasonable precautions to keep confidential, in accordance with their customary
procedures for handling confidential information of the same nature and in
accordance with safe and sound banking practices, any non-public information
supplied to it by the Borrower pursuant to this Agreement that is identified by
the Borrower as being confidential at the time the same is delivered to the
Lenders or the Administrative Agent, provided that nothing herein shall limit
the disclosure of any such information (i) after such information shall have
become public (other than through a violation of this Section 10.12), (ii) to
the extent required by statute, rule, regulation or judicial process, (iii) to
counsel for any of the Lenders or the Administrative Agent, (iv) to bank
examiners (or any other regulatory authority having jurisdiction over any Lender
or the Administrative Agent), or to auditors or accountants, (v) to the
Administrative Agent or any other Lender, (vi) in connection with any litigation
to which any one or more of the Lenders or the Administrative Agent is a party,
or in connection with the enforcement of rights or remedies hereunder or under
any other Loan Document, (vii) to a Related Party of such Lender or (viii) to
any assignee or participant (or prospective assignee or participant) so long as
such assignee or participant (or prospective assignee or participant) first
executes and delivers to such Lender an acknowledgement to the effect that it is
bound by the provisions of this Section 10.12; provided, further, that in no
event shall any Lender or the Administrative Agent be obligated or required to
return any materials furnished by the Borrower.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
RHEOX, INC.
by / s / Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
SUBSIDIARY GUARANTORS
RHEOX INTERNATIONAL, INC.
by / s / Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
ADMINISTRATIVE AGENT
THE CHASE MANHATTAN BANK,
as Administrative Agent
by / s / Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
LENDERS
THE CHASE MANHATTAN BANK
by / s / Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
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BANKERS TRUST COMPANY
by / s / Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Vice President
LASALLE NATIONAL BANK
by / s / Xxxx X. XxXxxxxx
Name: Xxxx X. XxXxxxxx
Title: Senior Vice President
THE NIPPON CREDIT BANK, LTD.
by / s / Xxxxx X. Xxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President & Manager
XXX XXXXXX AMERICAN CAPITAL
by / s / Xxxxx Xxxx
Name: Xxxxx Xxxx
Title : Vice President
GIRO CREDIT BANK
by / s / X. Xxxxxxxxx
Name: X. Xxxxxxxxx
Title: Assistant Vice President
Credit Agreement
Schedule 1.01
[Ancillary Agreements]
Schedule 1.01
Schedule 2.01
Term Loan Revolving Credit
Lender Commitment Commitment
------ ---------- ----------------
The Chase Manhattan Bank ................ $ 61,250,000.00 $ 8,750,000.00
Bankers Trust Company ................... 18,750,000.00 6,250,000.00
LaSalle National Bank ................... 11,250,000.00 3,750,000.00
The Nippon Credit Bank, Ltd. ............ 11,250,000.00 3,750,000.00
Xxx Xxxxxx American Capital ............. 15,000,000.00 --
Giro Credit Bank ........................ 7,500,000.00 2,500,000.00
--------------- --------------
Schedule 2.01
Schedule 4.06
[Disclosed Matters]
Schedule 4.06
Schedule 4.13
[Material Agreements and Liens]
Schedule 4.13
Schedule 4.14
[Subsidiaries]
Schedule 4.14
Schedule 7.01
[Existing Indebtedness]
Schedule 7.01
Schedule 7.02
[Existing Liens]
Schedule 7.02
Schedule 7.07
[Existing Restrictions]
