EXHIBIT 3
[EXECUTION COPY]
$450,000,000
CREDIT AGREEMENT
dated as of
October 11, 1996
among
AEP Industries Inc.,
The Eligible Subsidiaries Referred to Herein,
The Banks Listed Herein,
The Letter of Credit Issuing Banks Named Herein
and
Xxxxxx Guaranty Trust Company of New York,
as Agent
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
SECTION 1.1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. ACCOUNTING TERMS AND DETERMINATIONS . . . . . . . . . . . .14
SECTION 1.3. CLASSES AND TYPES OF LOANS. . . . . . . . . . . . . . . . .15
ARTICLE 2
THE CREDITS
SECTION 2.1. COMMITMENTS TO LEND . . . . . . . . . . . . . . . . . . . .15
SECTION 2.2. METHOD OF BORROWING . . . . . . . . . . . . . . . . . . . .16
SECTION 2.3. NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 2.4. METHOD OF ELECTING INTEREST RATES . . . . . . . . . . . . .18
SECTION 2.5. INTEREST RATES. . . . . . . . . . . . . . . . . . . . . . .19
SECTION 2.6. FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.7. TERMINATION OR REDUCTION OF COMMITMENTS . . . . . . . . . .21
SECTION 2.8. MANDATORY REPAYMENTS, PREPAYMENTS AND COVER . . . . . . . .21
SECTION 2.9. OPTIONAL PREPAYMENTS. . . . . . . . . . . . . . . . . . . .23
SECTION 2.10. GENERAL PROVISIONS AS TO PAYMENTS . . . . . . . . . . . . .23
SECTION 2.11. FUNDING LOSSES. . . . . . . . . . . . . . . . . . . . . . .24
SECTION 2.12. COMPUTATION OF INTEREST AND FEES. . . . . . . . . . . . . .24
SECTION 2.13. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . .24
SECTION 2.14. REGULATION D COMPENSATION . . . . . . . . . . . . . . . . .28
ARTICLE 3
CONDITIONS
SECTION 3.1. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 3.2. BORROWINGS AND ISSUANCES OF LETTERS OF CREDIT . . . . . . .30
SECTION 3.3. FIRST BORROWING BY OR ISSUANCE OF LETTER OF CREDIT FOR EACH
ELIGIBLE SUBSIDIARY . . . . . . . . . . . . . . . . . . . .31
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. CORPORATE EXISTENCE AND POWER . . . . . . . . . . . . . . .32
SECTION 4.2. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 4.3. BINDING EFFECT. . . . . . . . . . . . . . . . . . . . . . .32
--------------------------
*The Table of Contents is not part of this Agreement.
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SECTION 4.4. FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . .33
SECTION 4.5. LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 4.6. COMPLIANCE WITH ERISA . . . . . . . . . . . . . . . . . . .33
SECTION 4.7. ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . .34
SECTION 4.8. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 4.9. SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 4.10. REGULATORY RESTRICTIONS ON BORROWING. . . . . . . . . . . .34
SECTION 4.11. FULL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . .35
ARTICLE 5
COVENANTS
SECTION 5.1. INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .35
SECTION 5.2. PAYMENT OF OBLIGATIONS. . . . . . . . . . . . . . . . . . .38
SECTION 5.3. MAINTENANCE OF PROPERTY; INSURANCE. . . . . . . . . . . . .38
SECTION 5.4. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. . . . . .38
SECTION 5.5. COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . . . . . .38
SECTION 5.6. INSPECTION OF PROPERTY, BOOKS AND RECORDS . . . . . . . . .39
SECTION 5.7. MERGERS AND SALES OF ASSETS . . . . . . . . . . . . . . . .39
SECTION 5.8. USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . .40
SECTION 5.9. NEGATIVE PLEDGE . . . . . . . . . . . . . . . . . . . . . .40
SECTION 5.10. DEBT OF SUBSIDIARIES. . . . . . . . . . . . . . . . . . . .41
SECTION 5.11. CASH FLOW RATIO . . . . . . . . . . . . . . . . . . . . . .41
SECTION 5.12. FIXED CHARGE COVERAGE RATIO . . . . . . . . . . . . . . . .41
SECTION 5.13. RESTRICTED PAYMENTS . . . . . . . . . . . . . . . . . . . .42
SECTION 5.14. INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 5.15. TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . . . . .42
ARTICLE 6
DEFAULTS
SECTION 6.1. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . .43
SECTION 6.2. NOTICE OF DEFAULT . . . . . . . . . . . . . . . . . . . . .45
SECTION 6.3. CASH COVER. . . . . . . . . . . . . . . . . . . . . . . . .45
ARTICLE 7
THE AGENT
SECTION 7.1. APPOINTMENT AND AUTHORIZATION . . . . . . . . . . . . . . .46
SECTION 7.2. AGENT AND AFFILIATES. . . . . . . . . . . . . . . . . . . .46
SECTION 7.3. ACTION BY AGENT . . . . . . . . . . . . . . . . . . . . . .46
SECTION 7.4. CONSULTATION WITH EXPERTS . . . . . . . . . . . . . . . . .46
SECTION 7.5. LIABILITY OF AGENT. . . . . . . . . . . . . . . . . . . . .46
SECTION 7.6. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . .47
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SECTION 7.7. CREDIT DECISION . . . . . . . . . . . . . . . . . . . . . .47
SECTION 7.8. SUCCESSOR AGENT . . . . . . . . . . . . . . . . . . . . . .47
SECTION 7.9. AGENT'S FEE . . . . . . . . . . . . . . . . . . . . . . . .48
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR. .48
SECTION 8.2. ILLEGALITY. . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 8.3. INCREASED COST AND REDUCED RETURN . . . . . . . . . . . . .49
SECTION 8.4. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 8.5. BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR
LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . .53
SECTION 8.6. SUBSTITUTION OF BANK. . . . . . . . . . . . . . . . . . . .54
SECTION 8.7. FOREIGN SUBSIDIARY COSTS. . . . . . . . . . . . . . . . . .54
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF ELIGIBLE SUBSIDIARIES
SECTION 9.1. CORPORATE EXISTENCE AND POWER . . . . . . . . . . . . . . .55
SECTION 9.2. CORPORATE AND GOVERNMENTAL AUTHORIZATION. . . . . . . . . .55
SECTION 9.3. BINDING EFFECT. . . . . . . . . . . . . . . . . . . . . . .55
SECTION 9.4. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . .55
ARTICLE 10
GUARANTY
SECTION 10.1. THE GUARANTY . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 10.2. GUARANTY UNCONDITIONAL . . . . . . . . . . . . . . . . . .56
SECTION 10.3. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN
CERTAIN CIRCUMSTANCES. . . . . . . . . . . . . . . . . . .57
SECTION 10.4. WAIVER BY THE COMPANY. . . . . . . . . . . . . . . . . . .57
SECTION 10.5. SUBROGATION. . . . . . . . . . . . . . . . . . . . . . . .57
SECTION 10.6. STAY OF ACCELERATION . . . . . . . . . . . . . . . . . . .57
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 11.2. NO WAIVERS . . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 11.3. EXPENSES; INDEMNIFICATION. . . . . . . . . . . . . . . . .58
SECTION 11.4. SHARING OF SET-OFFS. . . . . . . . . . . . . . . . . . . .59
SECTION 11.5. AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . .59
SECTION 11.6. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . .60
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SECTION 11.7. COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . .62
SECTION 11.8. GOVERNING LAW; SUBMISSION TO JURISDICTION. . . . . . . . .62
SECTION 11.9. COUNTERPARTS; INTEGRATION; EFFECTIVENESS . . . . . . . . .62
SECTION 11.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . .62
SECTION 11.11. CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . .63
SECTION 11.12. JUDGMENT CURRENCY. . . . . . . . . . . . . . . . . . . . .63
PRICING SCHEDULE
SCHEDULE I - Term Loan Installments
SCHEDULE II - Debt to be Refinanced
EXHIBIT A - Note
EXHIBIT B - Opinion of Counsel for the Company
EXHIBIT C - Opinion of Special Counsel for the Agent
EXHIBIT D - Assignment and Assumption Agreement
EXHIBIT E - Election to Participate
EXHIBIT F - Election to Terminate
EXHIBIT G - Opinion of Counsel for Eligible Subsidiary
iv
AGREEMENT dated as of October 11, 1996 among AEP INDUSTRIES INC., the
ELIGIBLE SUBSIDIARIES referred to herein, the BANKS listed on the signature
pages hereof, the LETTER OF CREDIT ISSUING BANKS named herein and XXXXXX
GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1. DEFINITIONS. The following terms, as used herein, have the
following meanings:
"Acceptable Insurer" means an insurance company (i) having an A.M. Best
rating of "A" or better and being in a financial size category of XII or
larger (as such category is defined on the date hereof) or (ii) otherwise
reasonably acceptable to the Required Banks.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted
to the Agent (with a copy to the Company) duly completed by such Bank.
"Affiliate" means (i) any Person that directly, or indirectly through one
or more intermediaries, controls the Borrower (a "Controlling Person") or
(ii) any Person (other than the Borrower or a Subsidiary) which is controlled
by or is under common control with a Controlling Person. As used herein, the
term "control" means possession, directly or indirectly, of the power to vote
10% or more of any class of voting securities of a Person or to direct or
cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" means Xxxxxx Guaranty Trust Company of New York in its capacity as
agent for the Banks hereunder, and its successors in such capacity.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office, and (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Asset Sale" means any sale, lease or other disposition (including any
such transaction effected by way of merger or consolidation) by the Borrower
or any of its Subsidiaries of any asset, including without limitation any
sale-leaseback transaction, whether or not involving a capital lease, but
excluding (i) dispositions of inventory, cash, cash equivalents and other
cash management investments and of obsolete, unused or unnecessary equipment,
undeveloped real estate and other immaterial assets, in each case in the
ordinary course of business, and (ii) dispositions to the Borrower or a
Subsidiary of the Borrower.
"Assignee" has the meaning set forth in Section 11.6(c).
"Bank" means each bank or other institution listed on the signature pages
hereof, each which becomes a Bank pursuant to Section 11.6(c), and their
respective successors, and shall include, as the context may require, any
Issuing Bank in such capacity.
"Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means (i) a Loan which bears interest at the Base Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or the provisions of Article 8 or (ii) an overdue amount which was a
Base Rate Loan immediately before it became overdue.
"Benefit Arrangement" means at any time an employee benefit pension plan
within the meaning of Section 3(2) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means the Company or any Eligible Subsidiary, as the context
may require, and their respective successors, and "Borrowers" means all of
the foregoing.
"Borrowing" means a borrowing hereunder consisting of Loans made to the
Borrower on the same day pursuant to Article 2, all of which Loans are of the
same Type (subject to Article 8) and, except in the case of Base Rate Loans,
have the same initial Interest Period. A Borrowing is a "Base Rate
Borrowing" if such Loans are Base Rate Loans or a "Euro-Dollar Borrowing" if
such Loans are Euro-Dollar Loans.
"Cash Flow Ratio" means, as of the last day of any fiscal quarter of the
Company, the ratio of (i) Consolidated Debt at such date to (ii) Consolidated
2
EBITDA for the four consecutive fiscal quarters of the Company and its
Consolidated Subsidiaries ending on such date. For purposes of this
definition, Consolidated EBITDA for the fiscal quarter ended April 30, 1996
shall be $18,900,000, Consolidated EBITDA for the fiscal quarter ended July
31, 1996 shall be $23,300,000, and Consolidated EBITDA for the fiscal quarter
ended October 31, 1996 shall be $26,500,000.
"Closing Date" means the date on or after the Effective Date on which the
Agent shall have received the documents specified in or pursuant to Section
3.1.
"Commitment" means, with respect to each Bank, a Term Commitment or a
Working Capital Commitment, and "Commitments" means both of the foregoing.
"Company" means AEP Industries Inc., a Delaware corporation, and its
successors.
"Company's 1995 Form 10-K" means the Company's annual report on Form 10-K
for 1995, as filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934.
"Company's Latest Form 10-Q" means the Company's quarterly report on Form
10-Q for the quarter ended July 31, 1996, as filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934.
"Consolidated Capital Expenditures" means, for any period, the additions
to property, plant and equipment and other capital expenditures of the
Company and its Consolidated Subsidiaries for such period, as the same are or
would be set forth in a consolidated statement of cash flows of the Company
and its Consolidated Subsidiaries for such period, but excluding any such
additions which are attributable to the acquisition of a business (as in the
Purchase).
"Consolidated Debt" means at any date the Debt of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"Consolidated EBITDA" means, for any fiscal period, Consolidated Net
Income for such period plus, to the extent deducted in determining
Consolidated Net Income for such period, the aggregate amount of (i)
Consolidated Interest Expense, (ii) depreciation, amortization and other
non-cash charges, (iii) income tax expense, and (iv) expenses incurred prior
to December 31, 1996 related to the transactions referred to in the first
sentence of Section 5.8.
3
"Consolidated Interest Expense" means, for any period, the interest
expense of the Company and its Consolidated Subsidiaries determined on a
consolidated basis for such period (excluding, to the extent reflected
therein, fees paid on or before the Closing Date in connection with this
Agreement), MINUS the portion thereof which is not paid or due and payable in
cash during such period.
"Consolidated Net Income" means, for any fiscal period, the net income of
the Company and its Consolidated Subsidiaries, determined on a consolidated
basis for such period, exclusive of the effect of any extraordinary or other
non-recurring gain or loss.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Company in its
consolidated financial statements if such statements were prepared as of such
date.
"Continuing Director" means at any date a member of the Company's board of
directors who was (i) a member of such board twelve months prior to such date
or (ii) nominated for election to such board by the Continuing Directors then
in office (whether as a result of designation as a replacement director
pursuant to Section 4.1 of the Governance Agreement between Xxxxxx, Inc. and
the Company dated as of June 20, 1996 or otherwise).
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable and accrued expenses
arising in the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally accepted
accounting principles, (v) all non-contingent obligations (and, for purposes
of Section 5.9 and the definitions of Material Debt and Material Financial
Obligations, all contingent obligations) of such Person to reimburse any bank
or other Person in respect of amounts paid under a letter of credit or
similar instrument, (vi) all Debt secured by a Lien on any asset of such
Person, whether or not such Debt is otherwise an obligation of such Person,
and (vii) all Debt of others Guaranteed by such Person.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
4
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of the foregoing transactions) or any combination of the foregoing
transactions.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to
close.
"Domestic Lending Office" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such
other office as such Bank may hereafter designate as its Domestic Lending
Office by notice to the Company and the Agent.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 11.9.
"Election to Participate" means an Election to Participate substantially
in the form of Exhibit E hereto.
"Election to Terminate" means an Election to Terminate substantially in
the form of Exhibit F hereto.
"Eligible Subsidiary" means any wholly-owned Consolidated Subsidiary as to
which an Election to Participate shall have been delivered to the Agent and
as to which an Election to Terminate shall not have been delivered to the
Agent. Each such Election to Participate and Election to Terminate shall be
duly executed on behalf of such wholly-owned Consolidated Subsidiary and the
Company in such number of copies as the Agent may request. The delivery of
an Election to Terminate shall not affect any obligation of an Eligible
Subsidiary theretofore incurred. The Agent shall promptly give notice to the
Banks of the receipt of any Election to Participate or Election to Terminate.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or
5
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, Hazardous Substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Company, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Company or any
Subsidiary, are treated as a single employer under Section 414(b) or (c) of
the Internal Revenue Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Internal Revenue Code, are treated as a single employer
under Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by
notice to the Company and the Agent.
"Euro-Dollar Loan" means (i) a Loan which bears interest at a Euro-Dollar
Rate pursuant to the applicable Notice of Borrowing or Notice of Interest
Rate Election or (ii) an overdue amount which was a Euro-Dollar Loan
immediately before it became overdue.
"Euro-Dollar Margin" means a rate per annum determined in accordance with
the Pricing Schedule.
"Euro-Dollar Rate" means a rate of interest determined pursuant to Section
2.5(b) on the basis of a London Interbank Offered Rate.
"Event of Default" has the meaning set forth in Section 6.1.
"Excluded Sales" means (A) the disposition of Xxxxxx Chimie S.A. on the
Closing Date and (B) to the extent the aggregate Net Cash Proceeds of (x) and
(y) do not exceed $75,000,000, (x) all other Permitted Dispositions and (y)
dispositions of other assets, the aggregate fair market value of which
dispositions under (y) does not exceed $50,000,000, if the Net Cash Proceeds
thereof are
6
reinvested in the business of the Company and its Subsidiaries within one
year of receipt.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business
Day next succeeding such day, PROVIDED that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to Xxxxxx Guaranty Trust
Company of New York on such day on such transactions as determined by the
Agent.
"Fixed Charge Coverage Ratio" means, as of the last day of any fiscal
quarter of the Company, the ratio of (i) Consolidated EBITDA for the four
consecutive fiscal quarters of the Company and its Consolidated Subsidiaries
ending on such date MINUS Consolidated Capital Expenditures for such period
to (ii) Consolidated Interest Expense for such period.
"Group of Loans" means at any time a group of Loans of the same Class and
Borrower consisting of (i) all Loans which are Base Rate Loans at such time
or (ii) all Euro-Dollar Loans having the same Interest Period at such time,
provided that, if a Loan of any particular Bank is converted to or made as a
Base Rate Loan pursuant to Article 8, such Loan shall be included in the same
Group or Groups of Loans from time to time as it would have been in if it had
not been so converted or made.
"Guarantee" by any Person (a "Guarantor") means any obligation, contingent
or otherwise, of such Guarantor directly or indirectly guaranteeing any Debt
(or, solely for purposes of the definition of "Investment", other obligation)
of any other Person and, without limiting the generality of the foregoing,
any obligation, direct or indirect, contingent or otherwise, of such
Guarantor (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of
the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part), PROVIDED that the term Guarantee shall
7
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and
other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 11.3(b).
"Information Memorandum" means the confidential descriptive memorandum
dated July 1996 furnished to the Banks in connection with the transactions
contemplated hereby.
"Interest Period" means, with respect to each Euro-Dollar Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in the applicable Notice of Interest Rate
Election and ending one, two, three or six months (or, if corresponding
funding is available to each Bank, nine or twelve months) thereafter, as the
Borrower may elect in the applicable notice; PROVIDED that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means any investment in any Person, whether by means of share
purchase, capital contribution, loan (excluding (i) commission, travel and
similar advances to officers and employees made in the ordinary course of
business and (ii) trade credit extended on customary terms in the ordinary
course
8
of business), Guarantee, time deposit or otherwise (but not including any
demand deposit). The amount of any Investment shall be the original
principal or capital amount thereof less all returns of principal or equity
thereon (without adjustment by reason of the financial condition of such
other Person) and shall, if made by the transfer or exchange of property
other than cash, be deemed to have been made in an original principal or
capital amount equal to the fair market value of such property at the time of
such transfer or exchange.
"Issuing Bank" means Xxxxxx Guaranty Trust Company of New York and any
other Bank that may agree to issue letters of credit hereunder, in each case
as issuer of a letter of credit hereunder.
"Letter of Credit" means a letter of credit to be issued hereunder by an
Issuing Bank.
"Letter of Credit Commitment" means the lesser of (x) $30,000,000 and (y)
the aggregate Working Capital Commitments.
"Letter of Credit Liabilities" means, for any Bank and at any time, the
sum of (x) such Bank's ratable participation in the aggregate amounts then
owing to all Issuing Banks to reimburse them in respect of amounts drawn
under Letters of Credit and (y) such Bank's ratable participation in the
aggregate amount then available for drawing under all Letters of Credit.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or similar encumbrance, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Company or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Base Rate Loan or a Euro-Dollar Loan and "Loans" means Base
Rate Loans, Euro-Dollar Loans or both.
"London Interbank Offered Rate" has the meaning set forth in Section
2.5(b).
"Material Adverse Effect" means any material adverse effect upon the
condition (financial or otherwise), results of operations, properties, assets
or business of the Company and its Subsidiaries, taken as a whole.
9
"Material Debt" means Debt (other than the Notes) of the Company and/or
one or more of its Subsidiaries, arising in one or more related or unrelated
transactions, in an aggregate principal or face amount exceeding $15,000,000.
"Material Financial Obligations" means a principal or face amount of Debt
(other than the Notes) and/or payment or collateralization obligations in
respect of Derivatives Obligations of the Company and/or one or more of its
Subsidiaries, arising in one or more related or unrelated transactions,
exceeding in the aggregate $15,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $15,000,000.
"Material Subsidiary" means at any time any Subsidiary, except
Subsidiaries which at such time have been designated by the Company (by
notice to the Agent, which may be amended from time to time) as nonmaterial
and which, if aggregated and considered as a single Subsidiary, would not
meet the definition of a "significant subsidiary" contained as of the date
hereof in Regulation S-X of the Securities and Exchange Commission.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the immediately preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the
ERISA Group during such five-year period.
"Net Cash Proceeds" means, with respect to any Reduction Event, an amount
equal to the cash proceeds received by the Company or any of its Subsidiaries
from or in respect of such Reduction Event (including any cash proceeds,
received as income or other proceeds, of any noncash proceeds of any Asset
Sale), less (x) any fees, commissions, expenses and similar costs reasonably
incurred by such Person in respect of such Reduction Event and (y) if such
Reduction Event is an Asset Sale, (I) the amount of any Debt secured by a
Lien on any asset disposed of in such Asset Sale and discharged from the
proceeds thereof, (II) any taxes actually paid or to be payable by such
Person (as estimated by a senior financial or accounting officer of the
Company, giving effect to the overall tax position of the Company) in respect
of such Asset Sale and (III) the amount of any reasonable reserve established
in accordance with generally accepted accounting principles against any
liabilities retained by such Person (other than taxes deducted pursuant to
clause (II) above) associated with the assets disposed of in such Asset Sale;
PROVIDED that the amount of any subsequent reduction of such reserve (other
than in connection with a payment in respect of a
10
retained liability) shall constitute Net Cash Proceeds of a Reduction Event
deemed to have occurred on the date of such reduction.
"Notes" means promissory notes of a Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of such Borrower to repay the
Loans made to it, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" has the meaning set forth in Section 2.2.
"Notice of Issuance" has the meaning set forth in Section 2.13(b).
"Notice of Interest Rate Election" has the meaning set forth in Section
2.4.
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 11.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Disposition" means the disposition of Xxxxxx Chimie S.A.; the
rigid plastic packaging materials business; and the Asia-Pacific businesses,
which are comprised of Xxxxxx (NZ) Limited, Hitachi-Xxxxxx Chemical Products
Inc. and assets transferred to the Company by Xxxxxx Australia (Pty.) Limited.
"Permitted Liens" means, with respect to any Person:
(a) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with generally accepted accounting
principles shall have been set aside on its books;
(b) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its books;
(c) Liens (other than Liens arising under ERISA or Section 412(n)
of the Code) incurred in the ordinary course of business in connection
11
with workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts entered into in the ordinary
course of business or to secure obligations on surety or appeal bonds;
(d) judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed; PROVIDED that no
such judgment with respect to which execution has been stayed is for the
payment of money in excess of $50,000,000;
(e) Liens consisting of ground leases of real property on which
facilities owned or leased by such Person are located;
(f) Liens consisting of easements, rights-of-way, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances; and
(g) Liens of a lessor or lessee arising from any interest or title
of such lessor or lessee under any operating lease or sublease to which such
Person is a party.
"Person" means an individual, a corporation, a limited liability company,
a partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the immediately preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees
of any Person which was at such time a member of the ERISA Group.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Prime Rate" means the rate of interest publicly announced by Xxxxxx
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"Purchase" means the "Stock and Asset Purchase" (as defined in the
Purchase Agreement).
12
"Purchase Agreement" means the Purchase Agreement, dated as of June 20,
1996, between Xxxxxx, Inc. and the Company, as amended by Amendment No. 1
dated as of October 11, 1996, between Xxxxxx, Inc. and the Company.
"Purchase Price" has the meaning set forth in the Purchase Agreement.
"Quarterly Dates" means each March 31, June 30, September 30 and December
31.
"Reduction Event" means (i) any Asset Sale other than Excluded Sales or
(ii) the incurrence of any Funded Debt by the Company or any of its
Subsidiaries. For purposes of this definition of "Reduction Event", "Funded
Debt" means obligations for borrowed money (other than the Loans) with a
final maturity date at least one year from the date of incurrence thereof, or
with a final maturity date which is extendable, renewable or refundable,
solely at the option of the Company or any of its Subsidiaries, to a date at
least one year from the date of incurrence thereof, to the extent that the
aggregate principal amount thereof exceeds $5,000,000 at any one time
outstanding. The description of any transaction as falling within or without
the definition of "Reduction Event" does not affect any limitation on such
transaction imposed by Article 5 of this Agreement.
"Reference Banks" means the respective LIBOR offices of The Bank of Nova
Scotia, The Chase Manhattan Bank and Xxxxxx Guaranty Trust Company of New
York, and "Reference Bank" means any one of such Reference Banks.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks (i) having at least 51% of the
aggregate amount of the Commitments or (ii) if the Term Commitments shall
have been terminated, having at least 51% of the sum of the aggregate unpaid
principal amount of the Term Loans and the aggregate amount of the Working
Capital Commitments, or (iii) if all of the Commitments shall have been
terminated, having at least 51% of the sum of the aggregate unpaid principal
amount of the Loans and Letter of Credit Liabilities.
"Restricted Payment" means (i) any dividend or other distribution on any
shares of the Company's capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Company's
capital stock or (b) any option, warrant or other right to acquire shares of
the Company's capital
13
stock (but not including payments of principal, premium (if any) or interest
made pursuant to the terms of convertible debt securities prior to
conversion).
"Subsidiary" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing
similar functions are directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means a Subsidiary of the Company.
"Term Commitment" means, as to any Bank, the amount set forth opposite
the name of such Bank on the signature pages hereof as its Term Commitment,
as such amount may be reduced from time to time pursuant to Section 2.7.
"Term Loan" means a Loan made pursuant to Section 2.1(a).
"Termination Date" means October 11, 2002, or, if such day is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case
the Termination Date shall be the next preceding Euro-Dollar Business Day.
"Trigger Date" means the first date on which the Agent receives a
certificate required to have been delivered pursuant to Section 5.1(c)(i)
which shows a Cash Flow Ratio which is equal to or less than 2.5:1.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the present value of all accrued benefit
liabilities under such Plan, determined on a plan termination basis using the
assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA,
exceeds (ii) the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess represents a potential
liability of a member of the ERISA Group to the PBGC or any other Person
under Title IV of ERISA.
"United States" means the United States of America, including the States
and the District of Columbia, but excluding its territories and possessions.
"Working Capital Commitment" means, as to any Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof as its Working
Capital Commitment, as such amount may be reduced from time to time pursuant
to Section 2.7.
14
"Working Capital Loan" means a Loan made pursuant to Section 2.1(b).
SECTION 1.2 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Company's independent public accountants) with the most recent audited
consolidated financial statements of the Company and its Consolidated
Subsidiaries delivered to the Banks; PROVIDED that, if the Company notifies
the Agent that the Company wishes to amend any covenant in Article 5 to
eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Agent notifies the
Company that the Required Banks wish to amend Article 5 for such purpose),
then the Company's compliance with such covenant shall be determined on the
basis of generally accepted accounting principles in effect immediately
before the relevant change in generally accepted accounting principles became
effective, until either such notice is withdrawn or such covenant is amended
in a manner satisfactory to the Company and the Required Banks.
SECTION 1.3 CLASSES AND TYPES OF LOANS. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan (or of a
Commitment to make such a Loan or of a Borrowing comprised of such Loans)
refers to the determination whether such Loan is a Term Loan or a Working
Capital Loan, each of which constitutes a Class. The "Type" of a Loan refers
to the determination whether such Loan is a Base Rate Loan or a Euro-Dollar
Loan. A Loan may be identified by both Class and Type (E.G., a "Working
Capital Euro-Dollar Loan" indicates that such Loan is both a Working Capital
Loan and a Euro-Dollar Loan).
ARTICLE 2
THE CREDITS
SECTION 2.1 COMMITMENTS TO LEND. (a) Subject to the terms and conditions
set forth in this Agreement, each Bank severally agrees to make a single loan
to the Company on the date designated by the Company pursuant to Section 2.2
in the principal amount of such Bank's Term Commitment. The Term Commitments
are not revolving in nature, and amounts repaid or prepaid may not be
reborrowed.
(b) Subject to the terms and conditions set forth in this Agreement,
each Bank severally agrees to make loans to the Borrowers from time to time
during
15
the period from and including the Effective Date to but not including the
Termination Date in amounts such that the aggregate principal amount of
Working Capital Loans by such Bank at any one time outstanding plus its
Letter of Credit Liabilities shall not exceed the amount of its Working
Capital Commitment. Within the limits specified in this Agreement, the
Borrowers may borrow under this Section 2.1(b), repay Working Capital Loans
and reborrow under this Section 2.1(b).
(c) Each Borrowing under this Section shall be in an aggregate principal
amount of $5,000,000 or any larger multiple of $1,000,000 (except that any
such Borrowing may be in the aggregate amount of the unused Commitments of
the relevant Class) and shall be made from the several Banks ratably in
proportion to their respective Commitments of the relevant Class.
SECTION 2.2 METHOD OF BORROWING. (a) The relevant Borrower shall give
the Agent notice (a "Notice of Borrowing") not later than 11:00 A.M. (New
York City time) on (x) the date of each Base Rate Borrowing and (y) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in
the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the Class and Type of the Loans comprising such Borrowing; and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
In no event shall the total number of Groups of Loans at any one time
outstanding exceed fifteen.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's share (if any) of
such Borrowing and such Notice of Borrowing shall not thereafter be revocable
by the Borrower.
(c) Not later than 12:00 Noon (New York City time) on the date of each
Borrowing, each Bank participating therein shall make available its share of
such Borrowing, in Federal or other funds immediately available in New York
City, to
16
the Agent at its address referred to in Section 11.1. Unless the Agent
determines that any applicable condition specified in Article 3 has not been
satisfied, the Agent will make the funds so received from the Banks available
to the Borrower at the Agent's aforesaid address.
(d) Unless the Agent shall have received notice from a Bank prior to the
date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsection (c) of this Section and the Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Agent, such Bank and the Borrower severally
agree to repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, a rate per annum equal to the
higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.5, and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Bank's Loan included in such Borrowing
for purposes of this Agreement. In no event shall any payment by the Agent,
or repayment by the Borrower, of any amount pursuant to this subsection (d)
relieve the Bank that failed to make available its share of the related
Borrowing of its obligations hereunder.
(e) The provisions of subsection (a) above notwithstanding, if the
relevant Borrower shall not have given a Notice of Borrowing by 11:00 A.M.
(New York City time) on any Disbursement Date (as defined in Section
2.13(c)), then, unless the Borrower notifies the Agent before such time that
it elects not to borrow on such date, the Agent shall be deemed to have
received a Notice of Borrowing specifying that (i) the date of the proposed
Borrowing shall be such Disbursement Date, (ii) the aggregate amount of the
proposed Borrowing shall be the aggregate amount of the reimbursement
obligations due and payable on such Disbursement Date, and (iii) the Loans
comprising the proposed Borrowing are to be Base Rate Loans.
SECTION 2.3 NOTES (a) The Loans of each Bank to each Borrower shall be
evidenced by a single Note of such Borrower payable to the order of such Bank
for the account of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans to such Borrower.
(b) Each Bank may, by notice to a Borrower and the Agent, request that
its Loans of a particular Class or Type be evidenced by a separate Note of
such
17
Borrower in an amount equal to the aggregate unpaid principal amount of such
Loans. Each such Note shall be in substantially the form of Exhibit A hereto
with appropriate modifications to reflect the fact that it evidences solely
Loans of the relevant Class or Type. Each reference in this Agreement to the
"Note" of such Bank shall be deemed to refer to and include any or all of
such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.1(a), the
Agent shall forward such Note to such Bank. Each Bank shall record the date,
amount, Class and Type of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect thereto, and may,
if such Bank so elects in connection with any transfer or enforcement of its
Note of any Borrower, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to
each such Loan to such Borrower then outstanding; PROVIDED that the failure
of any Bank to make any such recordation or endorsement shall not affect the
obligations of any Borrower hereunder or under the Notes. Each Bank is
hereby irrevocably authorized by each Borrower so to endorse its Notes and to
attach to and make a part of any Note a continuation of any such schedule as
and when required.
SECTION 2.4 METHOD OF ELECTING INTEREST RATES. (a) The Loans included in
each Borrowing shall bear interest initially at the type of rate specified by
the relevant Borrower in the applicable Notice of Borrowing. Thereafter, the
relevant Borrower may from time to time elect to change or continue the type
of interest rate borne by each Group of Loans (subject in each case to the
provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business Day;
and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or elect to continue such Loans as
Euro-Dollar Loans for an additional Interest Period, subject to Section 2.11
in the case of any such conversion or continuation effective on any day
other than the last day of the then current Interest Period applicable to
such Loans.
Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Agent not later than 10:00 A.M. (New York
City time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective. A Notice of
Interest Rate Election may, if it so specifies, apply to only a portion of
the aggregate principal
18
amount of the relevant Group of Loans; PROVIDED that (i) such portion is
allocated ratably among the Loans comprising such Group and (ii) the portion
to which such Notice applies, and the remaining portion to which it does not
apply, are each $5,000,000 or any larger multiple of $1,000,000. If no such
notice is timely received prior to the end of an Interest Period, the
Borrower shall be deemed to have elected that all Loans having such Interest
Period be converted to Base Rate Loans as of the end of such Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the applicable
clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the new
type of Loans and, if the Loans being converted are to be Euro-Dollar Loans,
the duration of the next succeeding Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for an
additional Interest Period, the duration of such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from a Borrower
pursuant to subsection (a) above, the Agent shall promptly notify each Bank
of the contents thereof and such notice shall not thereafter be revocable.
(d) An election by a Borrower to change or continue the rate of interest
applicable to any Group of Loans pursuant to this Section shall not
constitute a "Borrowing" subject to the provisions of Section 3.2.
SECTION 2.5 INTEREST RATES. (a) Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due, at a rate per annum equal to the Base Rate
for such day. Such interest shall be payable quarterly in arrears on each
Quarterly Date and, with respect to the principal amount of any Base Rate
Loan converted to a Euro-Dollar Loan, on each date a Base Rate Loan is so
converted. Any overdue principal of or interest on any Base Rate Loan shall
bear interest,
19
payable on demand, for each day until paid at a rate per annum equal to the
sum of 2% plus the Base Rate for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for
such day plus the London Interbank Offered Rate applicable to such Interest
Period. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof.
The "London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before
the first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Reference Bank to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day from the due date until paid
at a rate per annum equal to the higher of (i) the sum of 2% plus the
Euro-Dollar Margin for such day plus the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective rates per annum
at which one day (or, if such amount due remains unpaid more than three
Euro-Dollar Business Days, then for such other period of time not longer than
three months as the Agent may select) deposits in dollars in an amount
approximately equal to such overdue payment due to each of the Reference
Banks are offered to such Reference Bank in the London interbank market for
the applicable period determined as provided above (or, if the circumstances
described in clause (a) or (b) of Section 8.1 shall exist, at a rate per
annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for
such day) and (ii) the sum of 2% plus the Euro-Dollar Margin for such day
plus the London Interbank Offered Rate applicable to such Loan at the date
such payment was due.
(d) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(e) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference
Bank
20
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available
on a timely basis, the provisions of Section 8.1 shall apply.
SECTION 2.6 FEES (a) The Company shall pay to the Agent for the account
of the Banks ratably a facility fee at the Facility Fee Rate (determined daily
in accordance with the Pricing Schedule). Such facility fee shall accrue (i)
from and including the Effective Date to but excluding the date of
termination of the Term Commitments in their entirety, on the daily aggregate
amount of the Commitments (whether used or unused), (ii) from and including
such date of termination of the Term Commitments to but excluding the date of
termination of the Working Capital Commitments in their entirety, on the sum
of the daily aggregate outstanding principal amount of the Term Loans and the
daily aggregate amount of the Working Capital Commitments (whether used or
unused), and (iii) from and including such date of termination of the Working
Capital Commitments to but excluding the date the Loans and the Letter of
Credit Liabilities shall be repaid in their entirety, on the sum of the daily
aggregate outstanding principal amount of the Loans and the daily aggregate
amount of Letter of Credit Liabilities.
(b) The Company shall pay to the Agent (i) ratably for the account of
the Banks having Working Capital Commitments a letter of credit fee accruing
daily on the aggregate amount then available for drawing under all Letters
of Credit at a rate per annum determined in accordance with the Pricing
Schedule and (ii) for the account of each Issuing Bank a letter of credit
fronting fee accruing daily on the aggregate amount then available for
drawing under all Letters of Credit issued by such Issuing Bank at a rate
per annum equal to .25%.
(c) Accrued fees under this Section shall be payable quarterly in arrears
on each Quarterly Date and on the date of termination of the Working Capital
Commitments in their entirety (and, if later, the date the Loans and the
aggregate amount of Letter of Credit Liabilities shall be repaid in their
entirety).
SECTION 2.7 TERMINATION OR REDUCTION OF COMMITMENTS (a) MANDATORY. The
Term Commitments shall terminate on the Closing Date. The Working Capital
Commitments shall terminate on the Termination Date. In addition, the
Working Capital Commitments shall be reduced automatically in the amount and
on the date of each prepayment applied to the Working Capital Loans (or to
provide cover for Letter of Credit Liabilities) pursuant to Section 2.8.
(b) OPTIONAL. The Company may, upon at least three Domestic Business
Days' notice to the Agent, (i) terminate the Working Capital Commitments at any
21
time, if no Loans or Letter of Credit Liabilities are outstanding at such
time, or (ii) ratably reduce from time to time by an aggregate amount of
$5,000,000 or a larger multiple of $1,000,000, the aggregate amount of the
Working Capital Commitments in excess of the sum of the aggregate outstanding
principal amount of the Working Capital Loans and the aggregate amount of
Letter of Credit Liabilities.
2.8 MANDATORY REPAYMENTS, PREPAYMENTS AND COVER (a) REPAYMENTS.
The Term Loans shall be due and payable (together with
accrued interest thereon) in installments in the respective aggregate
principal amounts and on the dates set forth in Schedule I hereto. Any
Working Capital Loans then outstanding (together with accrued interest
thereon) shall be due and payable on the Termination Date.
(b) PREPAYMENTS AND COVER. (i) In addition, if the Company or any of
its Subsidiaries shall at any time, or from time to time, after the date
hereof and prior to the Trigger Date, receive any Net Cash Proceeds of any
Reduction Event, the Loans shall be prepaid in an amount equal to such Net
Cash Proceeds.
(ii) The prepayments required by clause (i) of this subsection shall
be due and payable within two Euro-Dollar Business Days of receipt thereof by
the Company or any of its Subsidiaries, as the case may be, of such Net Cash
Proceeds; PROVIDED that if the Net Cash Proceeds in respect of any Reduction
Event are less than $5,000,000, such prepayment shall be due and payable
within two Euro-Dollar Business Days of receipt of proceeds such that,
together with all other such amounts not previously applied, the amount of
such Net Cash Proceeds is equal to at least $5,000,000; and PROVIDED FURTHER
that if any such prepayment pursuant to clause (i) of this subsection would
otherwise require prepayment of Euro-Dollar Loans or portions thereof prior
to the last day of the then current Interest Period, such prepayment shall,
unless the Agent otherwise notifies the Company upon the instructions of the
Required Banks, be deferred to such last day of the related Interest Period.
The Company shall give the Agent at least two Euro-Dollar Business Days'
notice of each prepayment pursuant to this subsection.
(iii) The prepayments required by clause (i) of this subsection shall be
applied, FIRST, to the Term Loans, ratably to future installments thereof, and
SECOND to the Working Capital Loans or Letter of Credit Liabilities in
accordance with this paragraph. If a prepayment is to be applied to the
Working Capital Loans or Letter of Credit Liabilities, it shall, until the
relevant Working Capital Loans have been paid in full, first be applied to
prepay the principal of such Working Capital Loans and then, following such
payment in full, to provide cover for the relevant Letter of Credit Liabilities.
Cover for Letter of Credit Liabilities
22
shall be effected by paying to the Agent immediately available funds to be held
as collateral pursuant to arrangements satisfactory to the Agent after
consultation with the Company, in an amount equal to the required prepayment,
which amount shall be retained by the Agent until such time as the Letters of
Credit shall have been terminated and all of the Letter of Credit Liabilities
paid in full; PROVIDED that if the Working Capital Commitments shall have been
terminated, all other amounts payable hereunder shall have been paid in full
and no Default shall have occurred and be continuing, but one or more Letters
of Credit remain outstanding, the Agent shall from time to time upon the request
of the Company return to the Company such portion of such amount as the Agent
in its sole discretion determines is no longer needed to provide cover for
Letter of Credit Liabilities and related fees and expenses payable under this
Agreement.
2.9 OPTIONAL PREPAYMENTS (a) Subject in the case of any Euro-Dollar
Borrowing to Section 2.11, a Borrower may, upon at least one Domestic Business
Day's notice to the Agent, prepay any Group of Base Rate Loans, or upon at
least three Euro-Dollar Business Days' notice to the Agent, prepay any Group
of Euro-Dollar Loans, in each case in whole at any time, or from time to time
in part in amounts aggregating $5,000,000 or any larger multiple of $1,000,000,
by paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks included in such
Group, and if applied to prepay Term Loans shall be allocated to reduce future
installments thereof as the Borrower shall direct.
(b) Upon receipt of a notice of prepayment pursuant to this Section, the
Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such prepayment and such notice shall not thereafter
be revocable.
2.10 GENERAL PROVISIONS AS TO PAYMENTS (a) The Borrowers shall
make each payment of principal of, and interest on, the Loans and of Letter
of Credit Liabilities and interest thereon and of fees hereunder (other than
fees payable directly to the Issuing Banks), not later than 12:00 Noon (New
York City time) on the date when due, in Federal or other funds immediately
available in New York City, to the Agent at its address referred to in
Section 11.1. The Agent will promptly distribute to each Bank its ratable
share of each such payment received by the Agent for the account of the
Banks. Whenever any payment of principal of, or interest on, the Base Rate
Loans or of Letter of Credit Liabilities or interest thereon or of fees shall
be due on a day which is not a Domestic Business Day, the date for payment
thereof shall be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, the Euro-Dollar Loans
shall be due on a day which is not a
23
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from a Borrower prior
to the date on which any payment is due from such Borrower to the Banks
hereunder that such Borrower will not make such payment in full, the Agent
may assume that the Borrower has made such payment in full to the Agent on
such date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then
due such Bank. If and to the extent that the Borrower shall not have so made
such payment, each Bank shall repay to the Agent forthwith on demand such
amount distributed to such Bank together with interest thereon, for each day
from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Agent, at the Federal Funds Rate.
2.11 FUNDING LOSSES. If a Borrower makes any payment of principal with
respect to any Euro-Dollar Loan or any Euro-Dollar Loan is converted (pursuant
to Article 2, 6 or 8 or otherwise) on any day other than the last day of an
Interest Period applicable thereto, or the last day of an applicable period
fixed pursuant to Section 2.5(c), or if the Borrower fails to borrow, prepay,
convert or continue any Euro-Dollar Loans after notice has been given to any
Bank in accordance with Section 2.2(b), 2.4(c) or 2.9(b), the Borrower shall
reimburse each Bank within 15 days after demand for any resulting loss or
expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or conversion or failure to
borrow, prepay, convert or continue, PROVIDED that such Bank shall have
delivered to the Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest
error. Any such certificate shall contain a statement as to the basis for
such amount, PROVIDED that such Bank shall not be required to disclose any
information it considers, in its sole discretion, to be confidential.
2.12 COMPUTATION OF INTEREST AND FEES. Interest based on the Prime Rate
hereunder shall be computed on the basis of a year of 365 days (or 366 days
in a leap year) and paid for the actual number of days elapsed (including the
first day but excluding the last day). All other interest and fees shall be
24
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
2.13 LETTERS OF CREDIT. (a) Subject to the terms and conditions hereof,
each Issuing Bank agrees to issue letters of credit hereunder from time to time
before the tenth day before the Termination Date upon the request of a
Borrower (the "Letters of Credit"); PROVIDED that, immediately after each
Letter of Credit is issued, (i) the aggregate amount of the Letter of Credit
Liabilities shall not exceed the Letter of Credit Commitment and (ii) the
aggregate amount of the Letter of Credit Liabilities plus the aggregate
outstanding amount of all Working Capital Loans shall not exceed the
aggregate amount of the Working Capital Commitments. Upon the date of
issuance by an Issuing Bank of a Letter of Credit, the Issuing Bank shall be
deemed, without further action by any party hereto, to have sold to each Bank
with a Working Capital Commitment, and each such Bank shall be deemed,
without further action by any party hereto, to have purchased from the
Issuing Bank, a participation in such Letter of Credit and the related Letter
of Credit Liabilities in the proportion its Working Capital Commitment bears
to the aggregate Working Capital Commitments.
(b) The Borrower shall give the Issuing Bank notice at least five
Domestic Business Days prior to the requested date of issuance of a Letter
of Credit specifying the date such Letter of Credit is to be issued, and
describing the terms of such Letter of Credit and the nature of the transactions
to be supported thereby (such notice, including any such notice given in
connection with the extension of a Letter of Credit, a "Notice of Issuance").
Upon receipt of a Notice of Issuance, the Issuing Bank shall promptly notify
the Agent, and the Agent shall promptly notify each Bank of the contents
thereof and of the amount of such Bank's participation (if any) in such Letter
of Credit. The issuance by the Issuing Bank of any Letter of Credit shall, in
addition to the conditions precedent set forth in Article III, be subject to
the conditions precedent that such Letter of Credit shall be in such form and
contain such terms as shall be satisfactory to the Issuing Bank and that the
Borrower shall have executed and delivered such other instruments and agreements
relating to such Letter of Credit as the Issuing Bank shall have reasonably
requested. The Borrower shall also pay to the Issuing Bank for its own account
issuance, drawing, amendment and extension charges in the amounts and at the
times as agreed between the Borrower and the Issuing Bank. The extension or
renewal of any Letter of Credit shall be deemed to be an issuance of such Letter
of Credit, and if any Letter of Credit contains a provision pursuant to which it
is deemed to be extended unless notice of termination is given by the Issuing
Bank, the Issuing Bank shall timely give such notice of termination unless it
has theretofore timely received a Notice of Issuance and the other conditions
to issuance of a Letter of Credit have also theretofore been met with respect
to such extension. No Letter of Credit shall have a term of more than
25
one year; PROVIDED that (i) a Letter of Credit may contain a provision pursuant
to which it is deemed to be extended on an annual basis unless notice of
termination is given by the Issuing Bank and (ii) no Letter of Credit shall
have a term extending or be so extendible beyond the Termination Date.
(c) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a demand or drawing under such Letter of Credit, the Issuing Bank
shall notify the Agent and the Agent shall promptly notify the Borrower and each
participating Bank as to the amount to be paid as a result of such demand or
drawing (a "Disbursement") and the payment date (the "Disbursement Date").
The Borrower shall be irrevocably and unconditionally obligated forthwith to
reimburse the Issuing Bank for any Disbursement, without presentment, demand,
protest or other formalities of any kind. All such amounts paid by the
Issuing Bank and remaining unpaid by the Borrower after the Disbursement Date
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for
such day. In addition, each participating Bank will pay to the Agent, for
the account of the Issuing Bank, immediately upon the Issuing Bank's demand
(a copy of which shall be delivered to the Agent) at any time during the
period commencing on the applicable Disbursement Date until reimbursement
therefor in full by the Borrower, an amount equal to such Bank's ratable
share of such Disbursement (in proportion to its participation therein),
together with interest on such amount for each day from the date of the
Issuing Bank's demand for such payment (or, if such demand is made after
12:00 Noon (New York City time) on such date, from the next succeeding
Domestic Business Day) to the date of payment by such Bank of such amount at
a rate of interest per annum equal to the rate applicable to Base Rate Loans
for such period. The Issuing Bank will pay to the Agent for the account of
each participating Bank ratably all amounts received from the Borrower for
application in payment of its reimbursement obligations in respect of any
Letter of Credit, but only to the extent such Bank has made payment to the
Agent for the account of the Issuing Bank in respect of such Letter of Credit
pursuant hereto.
(d) The obligations of the Borrower and each participating
Bank under subsection (c) above shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement, under all circumstances whatsoever, including without
limitation the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
Letter of Credit or any document related hereto or thereto;
26
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of this Agreement or any Letter of Credit or any
document related hereto or thereto;
(iii) the use which may be made of any Letter of Credit by, or any
acts or omission of, a beneficiary of a Letter of Credit (or any Person
for whom the beneficiary may be acting);
(iv) the existence of any claim, set-off, defense or other rights
that the Borrower may have at any time against a beneficiary of a Letter of
Credit (or any Person for whom the beneficiary may be acting), the Banks
(including the Issuing Bank) or any other Person, whether in connection
with this Agreement or the Letter of Credit or any document related hereto
or thereto or any unrelated transaction;
(v) any statement or any 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 whatsoever;
(vi) payment under a Letter of Credit against presentation to the
Issuing Bank of a draft or certificate that does not comply with the terms
of the Letter of Credit, PROVIDED that the Issuing Bank's determination
that documents presented under the Letter of Credit comply with the terms
thereof shall not have constituted gross negligence or willful misconduct
of the Issuing Bank; or
(vii) any other act or omission to act or delay of any kind by any
Bank (including the Issuing Bank), the Agent or any other Person or any
other event or circumstance whatsoever that might, but for the provisions
of this subsection (vii), constitute a legal or equitable discharge of the
Borrower's or the Bank's obligations hereunder.
(i) Each Borrower hereby indemnifies and holds harmless each Bank
(including each Issuing Bank) and the Agent from and against any and all
claims, damages, losses, liabilities, costs or expenses which such Bank or the
Agent may incur (including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the Issuing Bank may incur by reason of
or in connection with the failure of any other Bank to fulfill or comply with
its obligations to such Issuing Bank hereunder (but nothing herein contained
shall affect any rights such Borrower may have against such defaulting
Bank)), and none of the Banks (including an Issuing Bank) nor the Agent nor
any of their officers or directors or employees or agents shall be liable or
responsible, by reason of or in connection
27
with the execution and delivery or transfer of or payment or failure to pay
under any Letter of Credit, including without limitation any of the
circumstances enumerated in subsection (d) above, as well as (i) any error,
omission, interruption or delay in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, (ii) any error in interpretation
of technical terms, (iii) any loss or delay in the transmission of any document
required in order to make a drawing under a Letter of Credit, (iv) any
consequences arising from causes beyond the control of the Issuing Bank,
including without limitation any government acts, or any other circumstances
whatsoever in making or failing to make payment under such Letter of Credit;
PROVIDED that such Borrower shall not be required to indemnify the Issuing Bank
for any claims, damages, losses, liabilities, costs or expenses, and such
Borrower shall have a claim for direct (but not consequential) damage suffered
by it, to the extent found by a court of competent jurisdiction to have been
caused by (x) the willful misconduct or gross negligence of the Issuing Bank in
determining whether a request presented under any Letter of Credit complied
with the terms of such Letter of Credit or (y) the Issuing Bank's failure to
pay under any Letter of Credit after the presentation to it of a request
strictly complying with the terms and conditions of the Letter of Credit.
Nothing in this subsection (e) is intended to limit the obligations of the
Borrower under any other provision of this Agreement. To the extent the
Borrower does not indemnify an Issuing Bank as required by this subsection,
the Banks agree to do so ratably in accordance with their Working Capital
Commitments.
2.14 REGULATION D COMPENSATION. For so long as any Bank maintains
reserves against "Eurocurrency liabilities" (or any other category of
liabilities which includes deposits by reference to which the interest rate
on Euro-Dollar Loans is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of such Bank
to United States residents), then such Bank may require each Borrower to pay,
contemporaneously with each payment of interest on such Borrower's
Euro-Dollar Loans, additional interest on the related Euro-Dollar Loan of
such Bank at a rate per annum (the "Regulation D Rate") determined pursuant
to the following formula:
28
RDR = [ LIBOR ]
[ --------] - LIBOR
[ 1 - ERR ]
RDR = Regulation D Rate
LIBOR = The applicable London Interbank
Offered Rate
ERR = Eurocurrency Reserve Ratio
"Eurocurrency Reserve Ratio" means the applicable reserve ratio prescribed
by Regulation D of the Board of Governors of the Federal Reserve System (as such
Regulation shall have been amended to the first day of the related Interest
Period) for such reserve requirements (expressed as a decimal).
Notwithstanding anything contained herein to the contrary, the Regulation D
Rate shall be adjusted automatically on and as of the effective date of any
change in such reserve ratio.
Any Bank wishing to require payment of such additional interest:
(i) shall so notify the Company, in which case such additional
interest on the Euro-Dollar Loans of such Bank shall be payable on any
date interest is payable with respect to each Euro-Dollar Loan commencing
after the giving of such notice, and
(ii) shall notify each Borrower from time to time of the amount due
it under this Section;
PROVIDED that no Borrower shall be required to make any payment of an amount
due hereunder earlier than the third Euro-Dollar Business Day after receipt
of the notice referred to in clause (ii) of this Section.
ARTICLE 3
CONDITIONS
SECTION 3.1 CLOSING. The closing hereunder shall occur upon satisfaction
of the following conditions, with each document referred to in this Section
dated the Closing Date unless otherwise indicated:
(a) receipt by the Agent of a duly executed Note of each Borrower for the
account of each Bank dated on or before the Closing Date complying with the
provisions of Section 2.3;
29
(b) receipt by the Agent of an opinion of Bachner, Tally, Xxxxxxx & Xxxxxx
LLP, counsel for the Company (which is hereby requested by the Company to
deliver such opinion), substantially in the form of Exhibit B hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(c) receipt by the Agent of an opinion of Xxxxx Xxxx & Xxxxxxxx, special
counsel for the Agent, substantially in the form of Exhibit C hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(d) receipt by the Agent of evidence satisfactory to it that (1) all
conditions precedent to the Purchase have been satisfied or waived with the
consent of the Required Banks (which shall not be unreasonably withheld or
delayed), (2) immediately after giving effect to the first Borrowing hereunder,
the Purchase shall have been consummated in accordance with the material terms
of the Purchase Agreement previously furnished to the Banks, and (3)
arrangements have been made to pay in full (x) the entire principal amount of
all Debt identified on Schedule II, together with accrued interest thereon and
all other amounts due with respect thereto (and to discharge any Liens securing
such Debt and terminate any Commitments under the documents evidencing such
Debt), and (y) the Purchase Price, the cash portion of which does not exceed
$292,000,000;
(e) receipt by the Agent of each opinion or certificate (if any) required
to be delivered by a party thereto pursuant to the Purchase Agreement with a
letter from each Person delivering such opinion or certificate authorizing
reliance thereon by the Agent and the Banks, such reliance letter to be in form
and substance reasonably satisfactory to the Agent;
(f) payment in full of all fees and other amounts payable for the account
of the Banks or the Agent in the amounts previously agreed upon to be payable
on or before the Closing Date;
(g) the Required Banks shall not have notified the Agent that, in their
judgment, there is, pending or threatened, any action, suit or other
proceeding (1) with respect to which there is a reasonable likelihood of a
decision which could reasonably be expected to have a Material Adverse Effect
or (2) which in any manner draws into question the validity or enforceability
of this Agreement or the Notes; and
(h) receipt by the Agent of all documents the Agent may reasonably
request relating to the existence of the Company and the other Borrowers, the
30
corporate authority for and the validity of this Agreement and the Notes, and
any other matters relevant hereto, all inform and substance satisfactory to
the Agent.
The Agent shall promptly notify the Company and the Banks of the Closing
Date, and such notice shall be conclusive and binding on all parties hereto.
SECTION 3.2. BORROWINGS AND ISSUANCES OF LETTERS OF CREDIT. The obligation
of any Bank to make a Loan on the occasion of any Borrowing, and the obligation
of an Issuing Bank to issue (or renew or extend the term of) any Letter of
Credit are subject to the satisfaction of the following conditions:
(a) the Closing Date shall have occurred on or prior to October 31, 1996;
(b) the Agent shall have received a Notice of Borrowing as required by
Section 2.2, or the Issuing Bank shall have received a Notice of Issuance as
required by Section 2.13(b);
(c) (i) if such Borrowing or issuance of a Letter of Credit occurs on
the Closing Date, immediately after such Borrowing or issuance (or renewal or
extension) of a Letter of Credit, the sum of the aggregate outstanding
principal amount of the Loans and the aggregate amount of Letter of Credit
Liabilities shall not exceed the aggregate amount of the Commitments and (ii)
if such Borrowing or issuance of a Letter of Credit occurs after the Closing
Date, immediately after the Borrowing of a Working Capital Loan or the
issuance (or renewal or extension) of a Letter of Credit, the aggregate
principal amount of all Working Capital Loans plus the aggregate amount of
Letter of Credit Liabilities shall not exceed the aggregate amount of the
Working Capital Commitments;
(d) immediately before and after such Borrowing or issuance (or renewal
or extension) of a Letter of Credit, no Default shall have occurred and be
continuing; and
(e) the representations and warranties of the Borrowers contained in
this Agreement shall be true on and as of the date of such Borrowing or
issuance of a Letter of Credit.
Each Borrowing and issuance of a Letter of Credit hereunder shall be
deemed to be a representation and warranty by the Borrower on the date of
such Borrowing or issuance of a Letter of Credit as to the facts specified in
clauses (c), (d) and (e) of this Section.
31
SECTION 3.3. FIRST BORROWING BY OR ISSUANCE OF LETTER OF CREDIT FOR EACH
ELIGIBLE SUBSIDIARY. The obligation of each Bank to make a Loan on the
occasion of the first Borrowing by each Eligible Subsidiary and the
obligation of an Issuing Bank to issue the first Letter of Credit for the
account of an Eligible Subsidiary are subject to the satisfaction of the
following further conditions:
(a) receipt by the Agent for the account of each Bank of a duly
executed Note of such Eligible Subsidiary, dated on or before the date
of such Borrowing or issuance of a Letter of Credit, complying with the
provisions of Section 2.3;
(b) receipt by the Agent of an opinion of counsel for such
Eligible Subsidiary acceptable to the Agent, substantially in the form
of Exhibit G hereto and covering such additional matters relating to
the transactions contemplated hereby as the Required Banks may
reasonably request; and
(c) receipt by the Agent of all documents which it may reasonably
request relating to the existence of such Eligible Subsidiary, the
corporate authority for and the validity of the Election to Participate
of such Eligible Subsidiary, this Agreement and the Notes of
such Eligible Subsidiary, and any other matters relevant thereto, all
in form and substance satisfactory to the Agent.
The opinion referred to in clause (b) above shall be dated no more than five
Euro-Dollar Business Days before the date of the first extension of credit to
such Eligible Subsidiary hereunder.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
SECTION 4.1. CORPORATE EXISTENCE AND POWER. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted the failure to have which could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.2. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION.
The execution, delivery and performance by the Company of this Agreement and
the Notes are within the corporate powers of the Company, have been duly
authorized by all necessary corporate action, require no action by or in
32
respect of, or filing with, any governmental body, agency or official which
has not been taken or made (other than filings with the Securities and
Exchange Commission relating to the Purchase) and do not (i) contravene any
provision of the certificate of incorporation or by-laws of the Company, (ii)
contravene, or constitute a default under, any provision of applicable law or
regulation or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or any of its Subsidiaries, the
consequences of which contravention or default, singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, or (iii),
except as contemplated by Sections 2.8(b)(iii) and 6.3, result in the
creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries.
SECTION 4.3. BINDING EFFECT. This Agreement constitutes a valid and
binding agreement of each Borrower and each Note, when executed and delivered
in accordance with this Agreement, will constitute a valid and binding
obligation of the relevant Borrower, in each case enforceable in accordance
with its terms subject, as to enforceability, to the effect of (a) any
applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally and (b) general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
SECTION 4.4. FINANCIAL INFORMATION. (a) The balance sheet of the
Company as of October 31, 1995 and the related statements of income, cash
flows and shareholders' equity for the fiscal year then ended, reported on by
Xxxxxx Xxxxxxxx LLP and set forth in the Company's 1995 Form 10-K, a copy of
which has been delivered to each of the Banks, fairly present in all material
respects, in conformity with generally accepted accounting principles, the
financial position of the Company as of such date and its results of
operations and cash flows for such fiscal year.
(b) The unaudited balance sheet of the Company as of July 31, 1996 and
the related unaudited statements of income, cash flows and shareholders'
equity for the nine months then ended, set forth in the Company's Latest Form
10-Q, a copy of which has been delivered to each of the Banks, fairly present
in all material respects, in conformity with generally accepted accounting
principles applied on a basis consistent with the financial statements
referred to in subsection (a) of this Section, the financial position of the
Company as of such date and its results of operations and cash flows for such
nine-month period (subject to normal year-end adjustments).
(c) Since October 31, 1995 there has been no material adverse change in
the business, financial position, results of operations or prospects of the
Company and its Consolidated Subsidiaries, considered as a whole.
33
SECTION 4.5. LITIGATION. There is no action, suit or proceeding pending
against, or to the knowledge of the Company threatened against or affecting,
the Company or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official (i) in which there is a reasonable
likelihood of an adverse decision which could reasonably be expected to have
a Material Adverse Effect or (ii) which in any manner draws into question the
validity or enforceability of this Agreement or the Notes.
SECTION 4.6. COMPLIANCE WITH ERISA. Except to the extent that the
failure to do any of the following could not reasonably be expected to result
in liability to the Company or any Subsidiary that would have a Material
Adverse Effect, (i) each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and is in compliance in all respects
with the presently applicable provisions of ERISA and the Internal Revenue
Code with respect to each Plan, and (ii) no member of the ERISA Group has (A)
sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (B) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of
any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition of a Lien
or require the posting of a bond or other security in favor of the PBGC or a
Plan under ERISA or the Internal Revenue Code or (C) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA.
SECTION 4.7. ENVIRONMENTAL MATTERS. In the ordinary course of its
business, the Company conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the Company
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital
or operating expenditures required for clean-up or closure of properties
presently or previously owned, any capital or operating expenditures required
to achieve or maintain compliance with environmental protection standards
imposed by law or as a condition of any license, permit or contract, any
related constraints on operating activities, including any periodic or
permanent shutdown of any facility or reduction in the level of or change in
the nature of operations conducted thereat, any costs or liabilities in
connection with off-site disposal of wastes or Hazardous Substances, and any
actual or potential liabilities to third parties, including employees, and
any related costs and expenses). On the basis of this review, the Company
has reasonably concluded that such associated liabilities and costs,
including the costs of compliance with Environmental Laws, are unlikely to
have a Material Adverse Effect.
34
SECTION 4.8. TAXES. The Company and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes thereby shown
to be owing or owing pursuant to any assessment received by the Company or
any Subsidiary, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with generally accepted accounting principles shall
have been set aside on the books of the Company. The charges, accruals and
reserves on the books of the Company and its Subsidiaries in respect of taxes
or other governmental charges are, in the opinion of the Company, adequate.
SECTION 4.9. SUBSIDIARIES. Each of the Company's Material Subsidiaries
is duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization, and has all powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted the failure to have which could reasonably be
expected to have a Material Adverse Effect.
SECTION 4.10. REGULATORY RESTRICTIONS ON BORROWING. No Borrower is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or otherwise subject to any
statute or regulation which restricts its ability to incur debt.
SECTION 4.11. FULL DISCLOSURE. All written factual information
heretofore furnished by the Company to the Agent or any Bank for purposes of
or in connection with this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by the Company to the Agent
or any Bank will be, taken as a whole, true and accurate in all material
respects on the date as of which such information is stated or certified in
light of the circumstances under which such information was provided The
projections set forth in the Information Memorandum were based on good faith
estimates and assumptions believed by the Company and its senior management
to be reasonable when made.
35
ARTICLE 5
COVENANTS
The Company agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note or any Letter of Credit
Liability remains unpaid:
SECTION 5.1. INFORMATION. The Company will deliver to each of
the Banks:
(a) as soon as available and in any event within 90 days after the end
of each fiscal year of the Company, a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of income, cash flows and
shareholders' equity for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on in
a manner acceptable to the Securities and Exchange Commission by Xxxxxx
Xxxxxxxx LLP or other independent public accountants of nationally recognized
standing (the obligation to deliver which may be fulfilled by the delivery of
the Company's report on Form 10-K with respect to such fiscal year pursuant
to clause (h) of this Section 5.1);
(b) as soon as available and in any event within 45 days after the end
of each of the first three quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries
as of the end of such quarter and the related consolidated statements of
income, cash flows and shareholders' equity for such quarter and for the
portion of the Company's fiscal year ended at the end of such quarter,
setting forth in the case of such statements of income, cash flows and
shareholders' equity, in comparative form the figures for the corresponding
quarter and the corresponding portion of the Company's previous fiscal year,
all certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by the
chief financial officer or the chief accounting officer of the Company (the
obligation to deliver which may be fulfilled by the delivery of the Company's
report on Form 10-Q with respect to such fiscal quarter pursuant to clause
(h) of this Section 5.1);
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the chief accounting officer of the Company (i) setting
forth in reasonable detail the calculations required to establish whether the
Company was in compliance with the requirements of Section 5.7 and Sections
5.9 to 5.14, inclusive, on the date of such financial statements and (ii)
stating whether, to such officer's knowledge, any Default exists on the date
of such certificate and, if any
36
Default then exists, setting forth the details thereof and the action which
the Company is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial statements
referred to in clause (a) above, a statement of the firm of independent
public accountants which reported on such statements (i) whether anything has
come to their attention to cause them to believe that any Default existed on
the date of such statements and (ii) confirming the calculations set forth in
the officer's certificate delivered simultaneously therewith pursuant to
clause (c) above;
(e) within five days after any officer of the Company obtains knowledge
of any Default, if such Default is then continuing, a certificate of the
chief financial officer or the chief accounting officer of the Company
setting forth the details thereof and the action which the Company is taking
or proposes to take with respect thereto;
(f) as soon as reasonably practicable after any officer of the Company
obtains knowledge of the commencement of, or of a threat of the commencement
of, an action, suit or proceeding against the Company or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency
or official in which there is a reasonable likelihood of an adverse decision
which could reasonably be expected to have a Material Adverse Effect or which
in any manner draws into question the validity or enforceability of this
Agreement or the Notes, a certificate of a senior financial officer of the
Company setting forth the nature of such pending or threatened action, suit
or proceeding and such additional information with respect thereto as may be
reasonably requested by any Bank;
(g) promptly upon the mailing thereof to the shareholders of the Company
generally, copies of all financial statements, reports and proxy statements
so mailed;
(h) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto, any registration statements on
Form S-8 or its equivalent and amendments to any registration statement (to
the extent that such registration statement in the form in which it becomes
effective is delivered to the Banks)) and reports on Forms 10-K, 10-Q and 8-K
(or their equivalents) which the Company shall have filed with the Securities
and Exchange Commission;
(i) as soon as practicable after any officer of the Company obtains
knowledge that any member of the ERISA Group (i) has given or is required to
give written notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which is reasonably likely to
constitute grounds for a termination of such Plan under Title IV of ERISA, or
knows that
37
the plan administrator of any Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event
given or required to be given to the PBGC; (ii) has received written notice
of complete or partial withdrawal liability under Title IV of ERISA or
written notice that any Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii) has received written
notice from the PBGC under Title IV of ERISA of an intent to terminate,
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer any Plan, a copy of such
notice; (iv) has applied for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) has
given written notice of intent to terminate any Plan under Section 4041(c) of
ERISA, a copy of such notice and other information filed with the PBGC; (vi)
has given written notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) has failed to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or has made any amendment to any Plan or Benefit Arrangement
which has resulted or is reasonably likely to result in the imposition of a
Lien or the posting of a bond or other security in favor of the PBGC or a
Plan, a certificate of an officer of the Company setting forth details as to
such occurrence and action, if any, which the Company or applicable member of
the ERISA Group is required or proposes to take; and
(j) from time to time such additional information regarding the
financial position or business of the Company and its Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.2. PAYMENT OF OBLIGATIONS. The Company will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities
(including, without limitation, tax liabilities and claims of materialmen,
warehousemen and the like which if unpaid might by law give rise to a Lien),
except where the same may be contested in good faith by appropriate
proceedings, and appropriate reserves for the accrual of any of the same have
been established in accordance with generally accepted accounting principles.
SECTION 5.3. MAINTENANCE OF PROPERTY; INSURANCE. (a) The Company will
keep, and will cause each Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear
and tear excepted, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(b) The Company will, and will cause each of its Subsidiaries to,
maintain (either in the name of the Company or in such Subsidiary's own name)
38
with financially sound and reputable insurance companies, insurance on their
respective properties in at least such amounts, against at least such risks
and with such risk retention as are usually maintained, insured against or
retained, as the case may be, in accordance with general industry practice;
and the Company will furnish to the Banks, upon request from the Agent,
information presented in reasonable detail as to the insurance so carried.
SECTION 5.4. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
Company and its Subsidiaries, taken as a whole, will continue to engage in
business of the same general type as now conducted by the Company and its
Subsidiaries, taken as a whole, and other similar or related businesses and
the Company will preserve, renew and keep in full force and effect, and will
cause each Material Subsidiary to preserve, renew and keep in full force and
effect their respective corporate existence and, except to the extent the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, their respective rights, privileges and franchises; PROVIDED that
nothing in this Section 5.4 shall prohibit (i) the merger of a Subsidiary
permitted by Section 5.7(a), or (ii) the termination of the corporate
existence of any Subsidiary (other than any Subsidiary which is a Borrower)
if the Company in good faith determines that such termination is in the best
interest of the Company and is not materially disadvantageous to the Banks.
SECTION 5.5. COMPLIANCE WITH LAWS. The Company will comply, and cause
each Subsidiary to comply, in all respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules
and regulations thereunder) except (i) where the necessity of compliance
therewith is contested in good faith by appropriate proceedings or (ii) where
such noncompliance could not reasonably be expected to have a Material
Adverse Effect.
SECTION 5.6. INSPECTION OF PROPERTY, BOOKS AND RECORDS. The Company
will permit, and will cause each Subsidiary to permit, representatives of any
Bank at such Bank's expense to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books
and records and to discuss their respective affairs, finances and accounts
with their respective officers and independent public accountants, all upon
reasonable notice, at such reasonable times during normal business hours and
as often as may reasonably be desired.
SECTION 5.7. MERGERS AND SALES OF ASSETS. (a) The Company will not, and
will not permit any Subsidiary to, consolidate or merge with or into any
other Person; PROVIDED that (x) any Subsidiary may merge into the Company or
into a
39
wholly-owned Subsidiary or, on and after the Trigger Date, any other Person
if, immediately after giving effect to such merger,(i) no Default shall have
occurred and be continuing and the entity surviving such merger is the
Company or a Subsidiary and (ii) in the event that any Subsidiary which
merges into a wholly-owned Subsidiary or any other Person is a Borrower, the
entity surviving such merger shall automatically assume all obligations of
such Borrower under this Agreement and the Notes and (y) on and after the
Trigger Date, the Company may merge with another Person if (A) the Company is
the corporation surviving such merger and (B) immediately after giving effect
to such merger, no Default shall have occurred and be continuing.
(b) Prior to the Trigger Date, the Company will not, and will not permit
any of its Subsidiaries to, make any Asset Sale, unless (i) the consideration
therefor is not less than the fair market value of the related asset and (ii)
either such sale is a Permitted Disposition or, after giving effect thereto,
the aggregate fair market value of the assets disposed of in all Asset Sales
other than Permitted Dispositions during any fiscal year would not exceed
$50,000,000 and the portion of the consideration for any Asset Sale (other
than Permitted Dispositions) which does not consist of cash payable at
closing would not exceed 20% of the total consideration for such Asset Sale.
On and after the Trigger Date, neither the Company nor any Subsidiary will
sell, lease or otherwise transfer, directly or indirectly, all or any
substantial part of the assets of the Company and its Subsidiaries, taken as
a whole, to any other Person; PROVIDED that any Subsidiary may transfer
assets to the Company or another Subsidiary if, after giving effect thereto,
no Default shall have occurred and be continuing.
SECTION 5.8. USE OF PROCEEDS. The proceeds of the Term Loans and a
portion of the Working Capital Loans will be used by the Company to refinance
the Debt identified on Schedule II hereto and finance the cash portion of the
Purchase Price and pay fees and expenses associated with the Purchase. The
proceeds of the remaining Working Capital Loans and the Letters of Credit
will be used by the Borrowers for general corporate purposes. None of such
proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulation U.
SECTION 5.9. NEGATIVE PLEDGE. Neither the Company nor any Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal or face
amount not exceeding $15,000,000;
40
(b) any Lien existing on any asset of any Person at the time such
Person becomes a Subsidiary or is merged or consolidated into the Company
or a Subsidiary and not created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such asset,
PROVIDED that such Lien attaches to such asset concurrently with or within
90 days after the acquisition thereof;
(d) any Lien existing on any asset prior to the acquisition thereof
by the Company or a Subsidiary and not created in contemplation of such
acquisition;
(e) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, PROVIDED that the principal amount of such Debt is
not increased and such Debt is not secured by any additional assets;
(f) Permitted Liens which (i) do not secure Debt or Derivatives
Obligations and (ii) do not in the aggregate materially detract from
the value of its assets or materially impair the use thereof in the
operation of its business;
(g) Liens on cash and cash equivalents securing Derivatives
Obligations, PROVIDED that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $5,000,000; and
(h) Liens not otherwise permitted by the foregoing clauses of this
Section securing Debt in an aggregate principal or face amount at any date
not to exceed $15,000,000.
SECTION 5.10. DEBT OF SUBSIDIARIES. The aggregate principal and face
amount of Debt of all Subsidiaries (excluding Debt incurred under this
Agreement, Debt of a Subsidiary to the Company or to a wholly owned Subsidiary
and Guarantees by a Subsidiary of Debt of another Subsidiary) will at no time
exceed $75,000,000.
SECTION 5.11. CASH FLOW RATIO. As of the last day of each fiscal quarter
of the Company ending during each period set forth below, the Cash Flow Ratio
will not exceed the ratio set forth below opposite such period:
41
Period Ratio
------ -----
November 1, 1996 through January 31, 1997 4.75:1
February 1, 1997 through April 30, 1997 4.375:1
May 1, 1997 through July 31, 1997 4.0:1
August 1, 1997 through October 31, 1997 3.5:1
November 1, 1997 through January 31, 1998 3.125:1
February 1, 1998 through April 30, 1998 2.875:1
May 1, 1998 through July 31, 1998 2.625:1
Thereafter 2.5:1
SECTION 5.12. FIXED CHARGE COVERAGE RATIO. As of the last day of each
fiscal quarter of the Company ending during each period set forth below, the
Fixed Charge Coverage Ratio will not be less than the ratio set forth below
opposite such period:
Period Ratio
------ -----
November 1, 1996 through January 31, 1997 1.75:1
February 1, 1997 through April 30, 1997 1.875:1
May 1, 1997 through July 31, 1997 2.125:1
August 1, 1997 through October 31, 1997 2.5:1
November 1, 1997 through January 31, 1998 2.75:1
February 1, 1998 through April 30, 1998 3:1
May 1, 1998 through July 31, 1998 3.25:1
Thereafter 3.5:1
SECTION 5.13. RESTRICTED PAYMENTS. Neither the Company nor any Subsidiary
will declare or make any Restricted Payment except that if, after giving effect
thereto, no Default shall have occurred and be continuing, the Company may:
(a) repurchase its capital stock (or options or warrants in respect
thereof) held by any officer, director or employee of the Company or a
Subsidiary in connection with the termination of such Person's employment,
so long as the aggregate amount paid by the Company pursuant to this clause
(a) at any time during the term of this Agreement does not exceed the sum
of (x) $5,000,000 and (y) 25% of Consolidated Net Income for the period
from November 1, 1996 through the end of the Company's then most recent
fiscal quarter (treated for this purpose as a single accounting period);
and
42
(b) on and after the Trigger Date, pay dividends in cash on its commo
stock during each fiscal year in an amount not to exceed 50% of
Consolidated Net Income for the prior fiscal year.
SECTION 5.14. INVESTMENTS. Neither the Company nor any Subsidiary will
hold, make or acquire any Investment in any Person other than:
(a) Investments in Persons which are Subsidiaries on the date hereof
(including, without limitation, Guarantees contemplated by Section 4.5 of
the Purchase Agreement);
(b) temporary cash investments, including direct obligations of the
United States or any agency thereof, obligations guaranteed by the United
States or any agency thereof, commercial paper, time deposits, repurchase
agreements and other similar investments, maturing within one year of the
date of acquisition thereof;
(c) Investments contemplated by Section 5.7(b);
(d) Investments made with the proceeds of Excluded Sales; and
(e) any Investment not otherwise permitted by the foregoing clauses
of this Section if, immediately after such Investment is made or acquired,
the aggregate net book value of all Investments permitted by this clause
(e) does not exceed $65,000,000.
SECTION 5.15. TRANSACTIONS WITH AFFILIATES. The Company will not, and
will not permit any Subsidiary to, directly or indirectly, pay any funds to
or for the account of, make any Investment in, lease, sell, transfer or
otherwise dispose of any assets, tangible or intangible, to, or participate
in, or effect, any transaction with, any Affiliate except on an arms-length
basis on terms at least as favorable to the Company or such Subsidiary as
could have been obtained from a third party who was not an Affiliate;
PROVIDED that the foregoing provisions of this Section shall not prohibit (i)
any such Person from declaring or paying any lawful dividend or other payment
ratably in respect of all of its capital stock of the relevant class so long
as, after giving effect thereto, no Default shall have occurred and be
continuing or (ii) payment of customary fees to members of the Boards of
Directors of the Company and its Subsidiaries.
43
ARTICLE 6
DEFAULTS
SECTION 6.1. EVENTS OF DEFAULT. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) any Borrower shall fail to reimburse any drawing under any Letter
of Credit when required hereunder or to pay when due any principal of any
Loan, or shall fail to pay any interest, any fees or any other amount
payable hereunder within five days of the due date thereof;
(b) the Company or any other Borrower shall fail to observe or
perform any applicable covenant contained in Article 5, other than those
contained in Sections 5.1 through 5.6 and Section 5.15;
(c) any Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause
(a) or (b) above) for 30 days after notice thereof has been given to the
Company by the Agent or the Required Banks;
(d) any representation, warranty, certification or statement made by
any Borrower in this Agreement or in any certificate, financial statement
or other document delivered pursuant to this Agreement shall prove to have
been incorrect in any material respect when made (or deemed made);
(e) the Company or any Subsidiary shall fail to make any payment in
respect of any Material Financial Obligations when due or within any
applicable grace period;
(f) any event or condition (other than one covered by clause (e)
above) shall occur which results in the acceleration of the maturity of any
Material Debt or enables the holder of such Debt or any Person acting on
such holder's behalf to accelerate the maturity thereof;
(g) the Company, any other Borrower or any Material Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
44
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or
shall take any corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Company, any other Borrower or any Material Subsidiary
seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Company, any other Borrower or any
Material Subsidiary under the federal bankruptcy laws as now or hereafter
in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $15,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan; or a condition shall exist by
reason of which the PBGC would be reasonably likely to be entitled to
obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default,
within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or
more Multiemployer Plans which would be reasonably likely to cause one or
more members of the ERISA Group to incur a current payment obligation in
excess of $15,000,000;
(j) judgments or orders for the payment of money aggregating in
excess of $15,000,000 (excluding any amount of such judgment or order
as to which an Acceptable Insurer has acknowledged liability) shall be
rendered against the Company or any Subsidiary and such judgments or
orders shall continue unsatisfied and unstayed for a period of 30 days; or
(k) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) other than
Xxxxxx, Inc. or any Affiliate of Xxxxxx, Inc. on the date hereof or
Xxxxxxx Xxxxx shall have acquired beneficial ownership (within the
45
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) of 39% or more of the outstanding shares of common stock of
the Company; or Continuing Directors shall cease to constitute a majority
of the board of directors of the Company;
then, and in every such event, the Agent shall (i) if requested by Banks
having more than 50% in aggregate amount of the Commitments, by notice to the
Company terminate the Commitments and they shall thereupon terminate, and
(ii) if requested by Banks holding more than 50% of the sum of the aggregate
principal amount of the Loans and the Letter of Credit Liabilities, by notice
to the Company declare the Loans (together with accrued interest thereon) to
be, and the Loans shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company; PROVIDED that in the case of any of the Events
of Default specified in clause 6.1(g) or 6.1(h) above with respect to any
Borrower, automatically, without any notice to any Borrower or any other act
by the Agent or the Banks, the Commitments shall thereupon terminate and the
Loans (together with accrued interest thereon) shall become immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower.
SECTION 6.2. NOTICE OF DEFAULT. The Agent shall give notice to the
Company under Section 6.1(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
SECTION 6.3. CASH COVER. The Company agrees, in addition to the
provisions of Section 6.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the Agent upon
the instruction of the Banks having more than 50% in aggregate amount of the
Commitments (or, if the Commitments shall have been terminated, holding at
least 50% of the Letter of Credit Liabilities), pay to the Agent an amount in
immediately available funds (which funds shall be held as collateral pursuant
to arrangements satisfactory to the Agent after consultation with the
Company) equal to the aggregate amount available for drawing under all
Letters of Credit then outstanding at such time, PROVIDED that, upon the
occurrence of any Event of Default specified in Section 6.1(g) or 6.1(h) with
respect to any Borrower, the Company shall pay such amount forthwith without
any notice or demand or any other act by the Agent or the Banks.
46
ARTICLE 7
THE AGENT
SECTION 7.1. APPOINTMENT AND AUTHORIZATION. Each Bank irrevocably appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the Notes as are delegated to the
Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
SECTION 7.2. AGENT AND AFFILIATES. Xxxxxx Guaranty Trust Company of New
York, in its capacity as a Bank, shall have the same rights and powers under
this Agreement as any other Bank and may exercise or refrain from exercising
the same as though it were not the Agent, and Xxxxxx Guaranty Trust Company
of New York and its affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Company or any Subsidiary
or affiliate of the Company as if it were not the Agent.
SECTION 7.3. ACTION BY AGENT. The obligations of the Agent hereunder
are only those expressly set forth herein. Without limiting the generality
of the foregoing, the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in Article 6.
SECTION 7.4. CONSULTATION WITH EXPERTS. The Agent may consult with
legal counsel (who may be counsel for any Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
SECTION 7.5. LIABILITY OF AGENT. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article 3, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex, facsimile
47
transmission or similar writing) believed by it to be genuine or to be signed
by the proper party or parties.
SECTION 7.6. INDEMNIFICATION. Each Bank shall, ratably in accordance
with the sum of (x) the aggregate unpaid principal amount of its Term Loans
and (y) its Working Capital Commitment (or, if such Commitment shall have
been terminated, the sum of the aggregate principal amount of its Working
Capital Loans and its Letter of Credit Liabilities), indemnify the Agent, its
affiliates and their respective directors, officers, agents and employees (to
the extent not reimbursed by the Borrowers) against any cost, expense
(including counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from such indemnitees' gross negligence or
willful misconduct) that such indemnitees may suffer or incur in connection
with this Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.7. CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, 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 Bank
also acknowledges that it will, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.
SECTION 7.8. SUCCESSOR AGENT. The Agent may resign at any time by
giving notice thereof to the Banks and the Company. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent, which Agent shall, unless a Default has occurred and is continuing, be
acceptable to the Company. If no successor Agent shall have been so
appointed by the Required Banks, and shall have accepted such appointment,
within 30 days after the retiring Agent gives notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a commercial bank organized or licensed under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of at least $50,000,000 and shall, unless a Default has occurred and
is continuing, be acceptable to the Company. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent.
48
SECTION 7.9. AGENT'S FEE. The Company shall pay to the Agent for its own
account fees in the amounts and at the times previously agreed upon between
the Company and the Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR.
If on or prior to the first day of any Interest Period for any Euro-Dollar Loan:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference
Banks in the London interbank market for such Interest Period, or
(b) Banks having 50% or more of the aggregate principal amount of
the affected Loans advise the Agent that the London Interbank Offered Rate
as determined by the Agent will not adequately and fairly reflect the cost
to such Banks of funding their Euro-Dollar Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Company and the Banks,
whereupon until the Agent notifies the Company that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make Euro-Dollar Loans or to continue or convert outstanding Loans as or into
Euro-Dollar Loans shall be suspended and (ii) each outstanding Euro-Dollar
Loan shall be converted into a Base Rate Loan on the last day of the then
current Interest Period applicable thereto. Unless the Borrower notifies the
Agent at least two Domestic Business Days before the date of any Euro-Dollar
Borrowing for which a Notice of Borrowing has previously been given that it
elects not to borrow on such date, such Borrowing shall instead be made as a
Base Rate Borrowing.
If the Agent is subsequently advised by the Persons who had previously
advised it of their existence that the conditions described in clause (a) or
(b) no longer exist, the Agent shall promptly give notice thereof to the
Company and each of the Banks, and the obligations of all Banks to make or
continue Loans as, or convert Loans into, Euro-Dollar Loans shall be
reinstated, and the Agent shall, in such notice, declare that such
obligations have been so reinstated.
SECTION 8.2. ILLEGALITY. If, on or after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
49
comparable agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain
or fund its Euro-Dollar Loans to any Borrower and such Bank shall so notify
the Agent, the Agent shall forthwith give notice thereof to the other Banks
and the Company, whereupon until such Bank notifies the Company and the Agent
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans to such Borrower, or to
convert outstanding Loans to such Borrower into Euro-Dollar Loans, shall be
suspended. Before giving any notice to the Agent pursuant to this Section,
such Bank shall designate a different Euro-Dollar Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such
notice is given, each Euro-Dollar Loan of such Bank then outstanding shall be
converted to a Base Rate Loan either (a) on the last day of the then current
Interest Period applicable to such Euro-Dollar Loan if such Bank may lawfully
continue to maintain and fund such Loan to such day or (b) immediately if
such Bank shall determine that it may not lawfully continue to maintain and
fund such Loan to such day.
If circumstances subsequently change so that such affected Bank shall
determine that it is no longer so affected, the obligation of such Bank to
make or continue Loans as, or to convert loans into, Euro-Dollar Loans shall,
upon such determination, forthwith be reinstated, such Bank shall give notice
thereof to the Agent and the Company, and the Agent shall, by notice to the
Company and each Bank, declare that such obligation has been so reinstated.
SECTION 8.3. INCREASED COST AND REDUCED RETURN. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency shall impose,
modify or deem applicable any reserve (including, without limitation, any
such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding any such requirement for which a Bank may be
compensated pursuant to Section 2.14), special deposit, insurance assessment
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Bank (or its Applicable Lending Office) or
shall impose on any Bank (or its Applicable Lending Office) or the London
interbank market any other condition affecting its Euro-Dollar Loans, its
50
Note or its obligation to make Euro-Dollar Loans or its obligations hereunder
in respect of Letters of Credit and the result of any of the foregoing is to
increase the cost to such Bank (or its Applicable Lending Office) of making
or maintaining any Euro-Dollar Loan or of issuing or participating in any
Letter of Credit, or to reduce the amount of any sum received or receivable
by such Bank (or its Applicable Lending Office) under this Agreement or under
its Note with respect thereto, by an amount deemed by such Bank to be
material, then, within 15 days after demand by such Bank (with a copy to the
Agent), the Company shall pay to such Bank such additional amount or amounts
as will compensate such Bank for such increased cost or reduction (without
duplication of any amounts payable by the Company pursuant to Section 8.3(b)
or 8.4).
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing
the rate of return on capital of such Bank (or its Parent) as a consequence
of such Bank's obligations hereunder to a level below that which such Bank
(or its Parent) could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Bank to be material, then from time to
time, within 15 days after demand by such Bank (with a copy to the Agent),
the Company shall pay to such Bank such additional amount or amounts as will
compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Company and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate
a different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous to such Bank. A certificate of
any Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive
in the absence of manifest error. In determining such amount, such Bank may
use any reasonable averaging and attribution methods. Any such certificate
shall contain a statement as to the basis for such amount, PROVIDED that such
Bank shall not be required to disclose any information it considers, in its
sole discretion, to be confidential.
51
SECTION 8.4. TAXES (a) For the purposes of this Section 8.4, the
following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
any Borrower pursuant to this Agreement or under any Note, and all
liabilities with respect thereto, EXCLUDING (i) in the case of each Bank and
the Agent, taxes imposed on its net income, and franchise or similar taxes
imposed on it, by a jurisdiction solely as a result of a present or former
connection between the jurisdiction and such Bank or Agent (except a
connection arising solely from such Bank's or Agent's having executed or
delivered, or performed its obligations or received a payment under, or
enforced, this Agreement or the Notes) and (ii) in the case of each Bank, any
United States withholding tax imposed on such payments but only to the extent
that such Bank is subject to United States withholding tax at the time such
Bank first becomes a party to this Agreement.
"Other Taxes" means any present or future stamp or documentary taxes and
any other excise or property taxes, or similar charges or levies, which arise
from any payment made pursuant to this Agreement or under any Note or from
the execution or delivery of, or otherwise with respect to, this Agreement or
any Note.
(b) Any and all payments by any Borrower to or for the account of any
Bank or the Agent hereunder or under any Note shall be made without deduction
for any Taxes or Other Taxes; PROVIDED that, if any Borrower or the Company
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, (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) such Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Borrower or the Company shall make such
deductions, (iii) such Borrower or the Company shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law and (iv) such Borrower or the Company shall furnish to
the Agent, at its address referred to in Section 11.1, the original or a
certified copy of a receipt evidencing payment thereof.
(c) The Company and each other Borrower jointly and severally agree to
indemnify each Bank and the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or asserted
by any jurisdiction on amounts payable under this Section) paid by such Bank
or the Agent (as the case may be) and any liability (including penalties,
interest and
52
expenses) arising therefrom or with respect thereto. This indemnification
shall be paid within 15 days after such Bank or the Agent (as the case may
be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and
on or prior to the date on which it becomes a Bank in the case of each other
Bank, and from time to time thereafter if requested in writing by the Company
(but only so long as such Bank remains lawfully able to do so), shall provide
the Company and the Agent with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, appropriately completed, certifying that such Bank is entitled to
benefits under an income tax treaty to which the United States is a party
which exempts the Bank from United States withholding tax or reduces the rate
of withholding tax on payments of interest for the account of such Bank or
certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.
(e) Each Bank that is not incorporated or organized under the laws of
the jurisdiction under which an Eligible Subsidiary is incorporated or
organized shall, upon request of such Eligible Subsidiary, deliver to such
Eligible Subsidiary or the applicable governmental or taxing authority, as
the case may be, any form or certificate required in order that any payment
by such Eligible Subsidiary under this Agreement or any Note to such Bank may
be free and clear of, and without deduction or withholding for or on account
of any Taxes or Other Taxes (or to allow any such deduction or withholding to
be at a reduced rate) imposed on such payment under the laws of the
jurisdiction under which such Eligible Subsidiary is incorporated or
organized, PROVIDED THAT no Bank shall be required to make such delivery of
any form or certificate if such Bank is not legally entitled to complete,
execute and deliver such form or certificate or, in the sole judgment of such
Bank, such completion, execution or submission would materially prejudice the
legal position of such Bank, require such Bank to disclose any confidential
or proprietary information or be otherwise disadvantageous to such Bank.
(f) For any period with respect to which a Bank which was required to
deliver a form pursuant to Section 8.4(d) or (e) has failed to do so (unless
such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section
8.4(b) or (c) with respect to Taxes imposed by the United States; PROVIDED
that if a Bank, which is otherwise exempt from or subject to a reduced rate
of withholding tax, becomes subject to
53
Taxes because of its failure to deliver a form required hereunder, the
Borrowers shall take such steps as such Bank shall reasonably request (at
such Bank's expense) to assist such Bank to recover such Taxes.
(g) If the Borrowers have indemnified a Bank under Section 8.4(b) or (c)
for any Taxes, such Bank shall take such steps as the Borrowers shall
reasonably request and at such Borrowers' expense to assist such Borrowers to
recover such Taxes which were not correctly or legally imposed, if assisting
such Borrowers to recover such Taxes would not, in the sole judgment of the
Bank, be disadvantageous to such Bank; PROVIDED that nothing in this Section
8.4(g) shall be construed to (i) require any Bank to institute any
administrative proceeding or judicial proceeding to obtain a refund of such
Taxes, (ii) entitle any Borrower or any other Persons to any information
determined by any Bank, in its sole discretion, to be confidential or
proprietary information of such Bank, to any tax or financial information of
any Bank or to inspect or review any books and records of any Bank, or (iii)
interfere with the rights of any Bank to conduct its fiscal or tax affairs in
such manner as it deems fit.
(h) If any Borrower is required to pay additional amounts to or for the
account of any Bank pursuant to this Section, then such Bank will change the
jurisdiction of its Applicable Lending Office if, in the judgment of such
Bank, such change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) is not otherwise disadvantageous to such
Bank.
SECTION 8.5. BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR LOANS.
If (i) the obligation of any Bank to make, or convert outstanding Loans to,
Euro-Dollar Loans has been suspended pursuant to Section 8.2 or (ii) any Bank
has demanded compensation under Section 8.3 or 8.4 with respect to its
Euro-Dollar Loans and the Company shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Agent, have elected that
the provisions of this Section shall apply to such Bank, then, unless and
until such Bank notifies the Company that the circumstances giving rise to
such suspension or demand for compensation no longer exist:
(a) all Loans which would
54
otherwise be made by such Bank as (or continued as or converted into)
Euro-Dollar Loans shall instead be Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar
Loans of the other Banks); and
(b) after each of its Euro-Dollar Loans has been repaid (or converted
to a Base Rate Loan), all payments of principal which would otherwise be
applied to repay such Euro-Dollar Loans shall be applied to repay its Base
Rate Loans instead.
If such Bank notifies the Company that the circumstances giving rise to such
notice no longer apply (which such Bank agrees to do promptly upon such
circumstances no longer applying, with a copy to the Agent), the principal
amount of each such Base Rate Loan shall be converted into a Euro-Dollar Loan
on the first day of the next succeeding Interest Period applicable to the
related Euro-Dollar Loans of the other Banks.
SECTION 8.6. SUBSTITUTION OF BANK. If (i) the obligation of any Bank to
make Euro-Dollar Loans has been suspended pursuant to Section 8.2 or (ii) any
Bank has demanded compensation under Section 8.3 or 8.4, the Company shall
have the right, with the assistance of the Agent, to seek a substitute bank
or banks (which may be one or more of the Banks) satisfactory to the Company
and the Agent to purchase the Note of such Bank at par plus all amounts owed
to such Bank hereunder and to assume the Commitment of such Bank.
SECTION 8.7. FOREIGN SUBSIDIARY COSTS. (a) If the cost to any Bank of
making or maintaining any Loan to an Eligible Subsidiary is increased, or the
amount of any sum received or receivable by any Bank (or its Applicable
Lending Office) is reduced by an amount deemed by such Bank to be material,
by reason of the fact that such Eligible Subsidiary is incorporated in, or
conducts business in, a jurisdiction outside the United States of America,
the Company shall indemnify such Bank for such increased cost or reduction
within 15 days after demand by such Bank (with a copy to the Agent). A
certificate of such Bank claiming compensation under this subsection (a) and
setting forth the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. Any such certificate
shall contain a statement as to the basis for such amount, PROVIDED that such
Bank shall not be required to disclose any information it considers, in its
sole discretion, to be confidential.
(b) Each Bank will promptly notify the Company and the Agent of any
event of which it has knowledge that will entitle such Bank to additional
interest or payments pursuant to subsection (a) above and will use reasonable
efforts to designate a different Applicable Lending Office, if, in the
judgment of such Bank, such designation will avoid the need for, or reduce
the amount of, such compensation and will not be otherwise disadvantageous to
such Bank.
55
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF ELIGIBLE SUBSIDIARIES
Each Eligible Subsidiary shall be deemed by the execution and delivery
of its Election to Participate to have represented and warranted that:
SECTION 9.1. CORPORATE EXISTENCE AND POWER. It is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is a wholly-owned Consolidated Subsidiary.
SECTION 9.2. CORPORATE AND GOVERNMENTAL AUTHORIZATION. The execution and
delivery by it of its Election to Participate and its Notes, and the
performance by it of this Agreement and its Notes, are within its corporate
powers, have been duly authorized by all necessary corporate action, require
no action by or in respect of, or filing with, any governmental body, agency
or official which has not been taken or made other than filings required
after the Closing Date as a result of the consummation of the Purchase or
approval of the purchase of F.I.A.P. Deutschland GmbH (Germany) or Cofin
Folien GmbH (Germany) by the German Federal Cartel Office and do not (i)
contravene any provision of its certificate of incorporation or by-laws, (ii)
contravene, or constitute a default under, any provision of applicable law or
regulation or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or such Eligible Subsidiary the
consequences of which contravention or default, singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, or (iii)
except as contemplated by Sections 2.8(b)(iii) and 6.3, result in the
creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries.
SECTION 9.3. BINDING EFFECT. This Agreement constitutes a valid and
binding agreement of such Eligible Subsidiary and each of its Notes, when
executed and delivered in accordance with this Agreement, will constitute a
valid and binding obligation of such Eligible Subsidiary, in each case
enforceable in accordance with its terms subject, as to enforceability, to
the effect of (a) any applicable bankruptcy, insolvency, moratorium or
similar laws affecting creditors' rights generally and (b) general principles
of equity (regardless of whether considered in a proceeding in equity or at
law).
SECTION 9.4. TAXES. Except as disclosed in such Election to Participate,
there is no income, stamp or other tax of any country, or any taxing
authority thereof or therein, imposed by or in the nature of withholding or
otherwise, which is imposed on any payment to be made by such Eligible
Subsidiary pursuant hereto or on its Notes, or is imposed on or by virtue of
the execution, delivery or enforcement of its Election to Participate or of
its Notes.
56
ARTICLE 10
GUARANTY
SECTION 10.1. THE GUARANTY. The Company hereby unconditionally
guarantees the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal of and interest on each Note
issued by any Eligible Subsidiary pursuant to this Agreement, and the full
and punctual payment of all other amounts payable by any Eligible Subsidiary
under this Agreement. Upon failure by any Eligible Subsidiary to pay
punctually any such amount, the Company shall forthwith on demand pay the
amount not so paid at the place and in the manner specified in this Agreement.
SECTION 10.2. GUARANTY UNCONDITIONAL. The obligations of the Company
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of any Eligible Subsidiary under this Agreement
or any Note, by operation of law or otherwise;
(b) any modification or amendment of or supplement to this Agreement or
any Note (except to the extent affected by an express modification or
amendment of or supplement to this Section);
(c) any release, impairment, non-perfection or invalidity of any direct
or indirect security for any obligation of any Eligible Subsidiary under this
Agreement or any Note;
(d) any change in the corporate existence, structure or ownership of
any Eligible Subsidiary, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Eligible Subsidiary or its assets or
any resulting release or discharge of any obligation of any Eligible
Subsidiary contained in this Agreement or any Note;
(e) the existence of any claim, set-off or other rights which the
Company may have at any time against any Eligible Subsidiary, the Agent, any
Bank or any other Person, whether in connection herewith or any unrelated
transactions, provided that nothing herein shall prevent the assertion of any
such claim by separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against any
Eligible Subsidiary for any reason of this Agreement or any Note, or any
provision of
57
applicable law or regulation purporting to prohibit the payment by any
Eligible Subsidiary of the principal of or interest on any Note or any other
amount payable by it under this Agreement; or
(g) any other act or omission to act or delay of any kind by any
Eligible Subsidiary, the Agent, any Bank or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the Company's
obligations hereunder.
SECTION 10.3. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN
CERTAIN CIRCUMSTANCES. The Company's obligations hereunder shall remain in
full force and effect until the Commitments shall have terminated and the
principal of and interest on the Notes and all other amounts payable by the
Company and each Eligible Subsidiary under this Agreement shall have been
paid in full. If at any time any payment of the principal of or interest on
any Note or any other amount payable by any Eligible Subsidiary under this
Agreement is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of any Eligible Subsidiary or
otherwise, the Company's obligations hereunder with respect to such payment
shall be reinstated at such time as though such payment had been due but not
made at such time.
SECTION 10.4. WAIVER BY THE COMPANY. The Company irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided
for herein, as well as any requirement that at any time any action be taken
by any Person against any Eligible Subsidiary or any other Person.
SECTION 10.5. SUBROGATION. Upon making any payment with respect to any
Eligible Subsidiary hereunder, the Company shall be subrogated to the rights
of the payee against such Eligible Subsidiary with respect to such payment;
PROVIDED that the Company shall not enforce any payment by way of subrogation
until all amounts of principal of and interest on the Loans and all other
amounts payable under this Agreement have been paid in full.
SECTION 10.6. STAY OF ACCELERATION. In the event that acceleration of
the time for payment of any amount payable by any Eligible Subsidiary under
this Agreement or its Notes is stayed upon insolvency, bankruptcy or
reorganization of such Eligible Subsidiary, all such amounts otherwise
subject to acceleration under the terms of this Agreement shall nonetheless
be payable by the Company hereunder forthwith on demand by the Agent made at
the request of the Required Banks.
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ARTICLE 11
MISCELLANEOUS
SECTION 11.1. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to such party:
(a) in the case of any Borrower or the Agent, at its address, facsimile
number or telex number set forth on the signature pages hereof (or, in the
case of an Eligible Subsidiary, of its Election to Participate), (b) in the
case of any Bank, at its address, facsimile number or telex number set forth
in its Administrative Questionnaire or (c) in the case of any party, such
other address, facsimile number or telex number as such party may hereafter
specify for the purpose by notice to the Agent and the Company. Each such
notice, request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received from the recipient,
(iii) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid or (iv) if
given by any other means, when delivered at the address specified in this
Section; PROVIDED that notices to the Agent or the Issuing Bank under Article
2 or Article 8 shall not be effective until received.
SECTION 11.2. NO WAIVERS. No failure or delay by the Agent or any Bank
in exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 11.3. EXPENSES; INDEMNIFICATION. (a) The Company shall pay (i)
all reasonable out-of-pocket expenses of the Agent, including reasonable fees
and disbursements of special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred
by the Agent and each Bank, including (without duplication) the fees and
disbursements of outside counsel and the allocated cost of inside counsel, in
connection with such Event of Default and collection, bankruptcy, insolvency
and other enforcement proceedings resulting therefrom.
(b) The Company agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents and
employees of
59
the foregoing (each an "Indemnitee") and hold each Indemnitee harmless from
and against any and all liabilities, losses, damages, costs and expenses of
any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought
or threatened relating to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans or of Letters of Credit hereunder; provided
that no Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee's own gross negligence or willful misconduct as determined by a
court of competent jurisdiction.
SECTION 11.4. SHARING OF SET-OFFS. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount of principal and interest due with
respect to any Note held by it and any Letter of Credit Liabilities which is
greater than the proportion received by any other Bank in respect of the
aggregate amount of principal and interest due with respect to any Note and
Letter of Credit Liabilities held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the
Notes and Letter of Credit Liabilities held by the other Banks, and such
other adjustments shall be made, as may be required so that all such payments
of principal and interest with respect to the Notes and Letter of Credit
Liabilities held by the Banks shall be shared by the Banks pro rata; PROVIDED
that nothing in this Section shall impair the right of any Bank to exercise
any right of set-off or counterclaim it may have and to apply the amount
subject to such exercise to the payment of indebtedness of a Borrower other
than its indebtedness hereunder. Each Borrower agrees, to the fullest extent
it may effectively do so under applicable law, that any holder of a
participation in a Note or Letter of Credit Liabilities, whether or not
acquired pursuant to the foregoing arrangements, which has notified the
Company that it holds a participation, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of such Borrower in
the amount of such participation.
SECTION 11.5. AMENDMENTS AND WAIVERS. Any provision of this Agreement or
the Notes may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Company and the Required Banks (and, if
the rights or duties of the Agent or the Issuing Banks are affected thereby,
by the Agent or the Issuing Banks, as relevant); PROVIDED that no such
amendment or waiver shall, without the consent of each Bank directly affected
thereby, (i) increase or decrease the Commitments of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on
any Loan or the amount to be reimbursed in respect of any Letter of Credit or
any
60
interest thereon or any fees hereunder, (iii) postpone the date fixed for the
final scheduled payment of principal of or any payment of interest on any
Loan or for the amount to be reimbursed in respect of any Letter of Credit or
any interest thereon or for any fees hereunder or for the scheduled reduction
or termination of any Commitment, (iv) postpone beyond the Termination Date
the scheduled expiry date of any Letter of Credit, (v) change the percentage
of the Commitments or of the aggregate unpaid principal amount of the Notes
and Letter of Credit Liabilities, or the number of Banks, which shall be
required for the Banks or any of them to take any action under this Section
or any other provision of this Agreement or (vi) modify any provision of
Article 10 in any material respect; provided further that no such amendment,
waiver or modification shall, unless signed by an Eligible Subsidiary, (w)
subject such Eligible Subsidiary to any additional obligation, (x) increase
the principal of or rate of interest on any outstanding Loan of such Eligible
Subsidiary, (y) change the stated maturity of any outstanding Loan of such
Eligible Subsidiary or (z) change this proviso.
SECTION 11.6 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, except that no Borrower
may assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in any or all of
its Commitments, Loans and Letter of Credit Liabilities. In the event of any
such grant by a Bank of a participating interest to a Participant, whether or
not upon notice to the Borrowers and the Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the
Borrowers, the Issuing Banks and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement. Any agreement pursuant to which any Bank may grant
such a participating interest shall provide that such Bank shall retain the
sole right and responsibility to enforce the obligations of the Borrowers
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; PROVIDED that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (i),
(ii), (iii) or, if the Participant has been granted a participating interest
in any Letter of Credit Liabilities, (iv) of Section 11.5 without the consent
of the Participant. The Borrowers agree that each Participant shall, to the
extent provided in its participation agreement and subject to subsection (e)
below, be entitled to the benefits of Article 8 with respect to its
participating interest; PROVIDED that any forms and certificates which must
be provided by a Participant pursuant to Section 8.4 shall be delivered to
the Bank
61
granting it the participating interest instead of to the Persons named in
Section 8.4. An assignment or other transfer which is not permitted by
subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to
initial Commitments aggregating not less than $10,000,000) of all, of its
rights and obligations with respect to either Commitment or both Commitments
and the Loans or, if applicable, Letter of Credit Liabilities thereunder, and
such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit D
hereto executed by such Assignee and such transferor Bank, with (and subject
to) the subscribed consent, which shall not be unreasonably withheld, of the
Company, the Agent, and, if the assignment is of Working Capital Commitments,
the Issuing Banks; provided that if an Assignee is an affiliate of such
transferor Bank or was a Bank immediately prior to such assignment, no
minimum amount of such assignment and no such consent shall be required.
Upon execution and delivery of such instrument and payment by such Assignee
to such transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and obligations of a
Bank with a Commitment or Commitments or Loans and Letter of Credit
Liabilities as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be required.
Upon the consummation of any assignment pursuant to this subsection (c), the
transferor Bank, the Agent and the Borrowers shall make appropriate
arrangements so that, if required, new Notes are issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the
Agent an administrative fee for processing such assignment in the amount of
$3,500. If the Assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall deliver to the Company and the
Agent certification as to exemption from deduction or withholding of any
United States federal income taxes in accordance with Section 8.4.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Notes to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.3, 8.4 or
8.7 than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Company's prior
written consent or by
62
reason of the provisions of Section 8.2, 8.3, 8.4 or 8.7 requiring such Bank
to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
SECTION 11.7 COLLATERAL. Each of the Banks represents to the Agent and
each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 11.8 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement
and each Note shall be governed by and construed in accordance with the laws
of the State of New York. Each Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for
purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. Each Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which it may
now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in
such a court has been brought in an inconvenient forum.
SECTION 11.9 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement constitutes the entire agreement
and understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective upon receipt by the
Agent of counterparts hereof signed by each of the parties hereto (or, in the
case of any party as to which an executed counterpart shall not have been
received, receipt by the Agent in form satisfactory to it of telegraphic,
telex, facsimile or other written confirmation from such party of execution
of a counterpart hereof by such party).
SECTION 11.10 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, EACH OTHER
BORROWER, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 11.11 CONFIDENTIALITY. Each of the Agent and the Banks agrees
to exercise all reasonable efforts to keep any non-public information
delivered or made available by a Borrower to it pursuant to this Agreement
confidential from
63
anyone other than persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring or
administering the credit facilities contemplated hereby; provided that
nothing herein shall prevent any Bank from disclosing such information (a) to
any other Bank or to the Agent, (b) to any other Person if reasonably
incidental to the administration of the credit facility contemplated hereby
and such Person agrees to be bound by the provisions of this Section, (c)
upon the order of any court or administrative agency, (d) upon the request or
demand of any regulatory agency or authority having or purporting to have
jurisdiction over the Agent or such Bank, (e) which had been publicly
disclosed other than as a result of a disclosure by the Agent or such Bank
prohibited by this Agreement, (f) in connection with any litigation to which
the Agent, any Bank or its affiliates may be a party relating to this
Agreement or any transaction contemplated hereunder or as may be required or
appropriate in response to any summons or subpoena in connection with any
litigation, (g) to the extent reasonably required in connection with the
exercise of any remedy hereunder, (h) to such Bank's or Agent's legal counsel
and independent auditors and (i) to any actual or proposed Participant or
Assignee which has agreed to be bound by provisions substantially similar to
those contained in this Section.
SECTION 11.12 JUDGMENT CURRENCY. If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due from any Borrower
hereunder or under any of the Notes in United States dollars ("dollars") into
another currency, the parties hereto agree, to the fullest extent that they
may effectively do so, that the rate of exchange used shall be that at which
in accordance with normal banking procedures the Agent could purchase dollars
with such other currency at the Agent's New York office on the Domestic
Business Day preceding that on which final judgment is given. The
obligations of each Borrower in respect of any sum due to any Bank or the
Agent hereunder or under any Note shall, notwithstanding any judgment in a
currency other than dollars, be discharged only to the extent that on the
Domestic Business Day following receipt by such Bank or the Agent (as the
case may be) of any sum adjudged to be so due in such other currency such
Bank or the Agent (as the case may be) may in accordance with normal banking
procedures purchase dollars with such other currency; if the amount of
dollars so purchased is less than the sum originally due to such Bank or the
Agent, as the case may be, in dollars, each Borrower agrees, to the fullest
extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify such Bank or the Agent, as
the case may be, against such loss, and if the amount of dollars so purchased
exceeds (i) the sum originally due to any Bank or the Agent, as the case may
be, and (ii) any amounts shared with other Banks as a result of allocations
of such excess as a disproportionate payment to such Bank under
64
Section 11.4, such Bank or the Agent, as the case may be, agrees to remit
such excess to the appropriate Borrower.
65
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.
AEP INDUSTRIES INC.
By
--------------------------------------------
Name:
Title:
Address: 000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
with a copy of any notice delivered
pursuant to Section 6.1 or 6.3 to
Bachner, Tally, Xxxxxxx & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
COMMITMENTS XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK
TERM COMMITMENT
$25,277,777.79
WORKING CAPITAL COMMITMENT By
$7,222,222.21 --------------------------------------------
Name:
Title:
THE CHASE MANHATTAN
BANK
TERM COMMITMENT
$17,500,000.00
WORKING CAPITAL COMMITMENT By
$5,000,000.00 --------------------------------------------
Name:
Title:
00
XXX XXXX XX XXXX XXXXXX
TERM COMMITMENT
$15,555,555.55
WORKING CAPITAL COMMITMENT By
$4,444,444.45 --------------------------------------------
Name:
Title:
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
TERM COMMITMENT
$15,555,555.55
WORKING CAPITAL COMMITMENT By
$4,444,444.45 --------------------------------------------
Name:
Title:
BARCLAYS BANK PLC
TERM COMMITMENT
$15,555,555.55
WORKING CAPITAL COMMITMENT By
$4,444,444.45 --------------------------------------------
Name:
Title:
CIBC INC.
TERM COMMITMENT
$15,555,555.55
WORKING CAPITAL COMMITMENT By
$4,444,444.45 --------------------------------------------
Name:
Title:
67
CORESTATES BANK, N.A.
TERM COMMITMENT
$15,555,555.55
WORKING CAPITAL COMMITMENT By
$4,444,444.45 --------------------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK
BRANCH
TERM COMMITMENT
$15,555,555.55
WORKING CAPITAL COMMITMENT By
$4,444,444.45 --------------------------------------------
Name:
Title:
FLEET BANK, N.A.
TERM COMMITMENT
$15,555,555.55
Working Capital Commitment By
$4,444,444.45 --------------------------------------------
Name:
Title:
THE INDUSTRIAL BANK OF
JAPAN, LIMITED
TERM COMMITMENT
$15,555,555.55
WORKING CAPITAL COMMITMENT By
$4,444,444.45 --------------------------------------------
Name:
Title:
00
XXXXX XXXX XX XXXXXX
TERM COMMITMENT
$15,555,555.55
WORKING CAPITAL COMMITMENT By
$4,444,444.45 --------------------------------------------
Name:
Title:
SOCIETE GENERALE NEW YORK
BRANCH
TERM COMMITMENT
$15,555,555.55
WORKING CAPITAL COMMITMENT By
$4,444,444.45 --------------------------------------------
Name:
Title:
ABN AMRO BANK N.V.
NEW YORK BRANCH
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
By
--------------------------------------------
Name:
Title:
THE BANK OF NEW YORK
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
69
BANQUE PARIBAS
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
By
--------------------------------------------
Name:
Title:
BANCA COMMERCIALE ITALIANA
NEW YORK
BRANCH
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
By
--------------------------------------------
Name:
Title:
THE DAI-ICHI KANGYO BANK,
LTD., NEW YORK BRANCH
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
00
XXXXX XXXXX XXXXXXXX XXXX
XX XXXXX XXXXXXXX
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
THE NIPPON CREDIT BANK,LTD.
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
THE SAKURA BANK, LIMITED
NEW YORK BRANCH
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
00
XXXXXXXX XXXXXXXX XXX
XXXXX XX XXXXXX XXX
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
SUMITOMO BANK LIMITED
NEW YORK BRANCH
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
SUMMIT BANK
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE NEW YORK
BRANCH
TERM COMMITMENT
$11,666,666.67
WORKING CAPITAL COMMITMENT By
$3,333,333.33 --------------------------------------------
Name:
Title:
By
--------------------------------------------
Name:
Title:
72
Total Term Commitments
$350,000,000
TOTAL WORKING COMMITMENTS
$100,000,000
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK,
as Agent
By
--------------------------------------------
Name:
Title:
Address: 00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Facsimile: 000-000-0000
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK,
as Issuing Bank
By
--------------------------------------------
Name:
Title:
Address: 00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Facsimile: 000-000-0000
73
PRICING SCHEDULE
Each of "Euro-Dollar Margin", "Facility Fee Rate" and "LC Fee Rate"
means, for any date, the rates set forth below in the row opposite such term
and in the column corresponding to the "Pricing Level" that applies at such
date:
---------------------------------------------------------------------------
Level I Level II Level III Level IV Level V
---------------------------------------------------------------------------
Euro-Dollar .25% .275% .35% .45% .625%
Margin
---------------------------------------------------------------------------
LC Fee Rate .25% .275% .35% .45% .625%
---------------------------------------------------------------------------
Facility Fee .125% .15% .20% .30% .375%
Rate
---------------------------------------------------------------------------
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Pricing" applies at any date after the first anniversary of the
Closing Date if the Cash Flow Ratio in effect on such date is equal to or
less than 1.5:1.
"Level II Pricing" applies at any date after the first anniversary of
the Closing Date if (i) the Cash Flow Ratio in effect on such date is equal
to or less than 2:1 and (ii) Level I Pricing does not apply.
"Level III Pricing" applies at any date after the first anniversary of
the Closing Date if (i) the Cash Flow Ratio in effect on such date is equal
to or less than 2.75:1 and (ii) neither Level I Pricing nor Level II Pricing
applies.
"Level IV Pricing" applies at any date (x) on or prior to the first
anniversary of the Closing Date, and (y) on any date thereafter if (i) the
Cash Flow Ratio in effect on such date is equal to or less than 3.25:1 and
(ii) none of Level I Pricing, Level II Pricing and Level III Pricing applies.
"Level V Pricing" applies at any date after the first anniversary of the
Closing Date if, on such date, no other Pricing Level applies.
"Pricing Level" refers to the determination of which of Xxxxx X, Xxxxx
XX, Xxxxx XXX, Xxxxx XX or Level V Pricing applies at any date.
The Cash Flow Ratio used to determine Pricing Levels after the first
anniversary of the Closing Date shall be the Cash Flow Ratio shown in the
most
recent certificate required to have been delivered pursuant to Section
5.1(i). Each Cash Flow Ratio so determined shall be in effect after the
first anniversary of the Closing Date for all Loans made more than five days
after such certificate is received by the Agent and less than six days after
the next such certificate is delivered to the Agent; provided that if a
certificate has not been delivered when required pursuant to Section
5.1(c)(i) and such requirement has not been waived by the Required Banks,
Level V Pricing shall apply to all Loans made more than five days after the
date by which such certificate was required to have been delivered and less
than six days after the next date a required certificate is actually
delivered to the Agent.
2
SCHEDULE I
TERM LOAN INSTALLMENTS
DATE PRINCIPAL AMOUNT
January 31, 1997 $10,000,000
April 30, 1997 10,000,000
July 31, 1997 10,000,000
October 31, 1997 10,000,000
January 31, 1998 12,500,000
April 30, 1998 12,500,000
July 31, 1998 12,500,000
October 31, 1998 12,500,000
January 31, 1999 15,000,000
April 30, 1999 15,000,000
July 31, 1999 15,000,000
October 31, 1999 15,000,000
January 31, 2000 15,000,000
April 30, 2000 15,000,000
July 31, 2000 15,000,000
October 31, 2000 15,000,000
January 31, 2001 17,500,000
April 30, 2001 17,500,000
July 31, 2001 17,500,000
October 31, 2001 17,500,000
January 31, 2002 17,500,000
April 30, 2002 17,500,000
DATE PRINCIPAL AMOUNT
July 31, 2002 17,500,000
Termination Date 17,500,000
2
SCHEDULE II
DEBT TO BE REFINANCED
DESCRIPTION AMOUNT
Credit Agreement dated as of August 3, 1995 and
amended as of October 20, 1995 and March 22, 1996
by and among AEP Industries Inc., the lenders party
thereto, The Chase Manhattan Bank (National
Association), as Administrative Agent and Mellon
Bank, N.A., as Documentation Agent. $95,092,045.46
EXHIBIT A
NOTE
New York, New York
___________ __, 199_
For value received, [name of relevant Borrower], a [relevant
Borrower's jurisdiction of incorporation] corporation (the "Borrower"),
promises to pay to the order of ______________________ (the "Bank"), for the
account of its Applicable Lending Office, the unpaid principal amount of each
Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the maturity date provided for in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be made in
lawful money of the United States in Federal or other immediately available
funds at the office of Xxxxxx Guaranty Trust Company of New York, 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx.
All Loans made by the Bank, the respective Classes and Types thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement
dated as of October 11, 1996 among AEP Industries Inc., the Eligible
Subsidiaries referred to therein, the banks listed on the signature pages
thereof, the Letter of Credit Issuing Banks party thereto and Xxxxxx Guaranty
Trust Company of New York, as Agent (as the same may be amended from time to
time, the "Credit Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit Agreement for
provisions for the
prepayment hereof and the acceleration of the maturity hereof. [Pursuant to
the provisions of the Credit Agreement, the payment in full of all amounts
due in respect of this Note has been unconditionally guaranteed by
AEP Industries Inc.]
[NAME OF RELEVANT BORROWER]
By_____________________________________________
Name:
Title:
2
LOANS AND PAYMENTS OF PRINCIPAL
_______________________________________________________________________________
Amount of
Amount of Principal Notation Made
Date Loan Class of Loan Type of Loan Repaid By
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
3
EXHIBIT B
OPINION OF
COUNSEL FOR THE BORROWER
________________, 199_
To the Banks and the Agent
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York, as Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We have acted as counsel for AEP Industries Inc. (the "Company") in
connection with the Credit Agreement (the "Credit Agreement") dated as of
October 11, 1996 among the Borrower, the Eligible Subsidiaries referred to
therein, the banks listed on the signature pages thereof, the Letter of Credit
Issuing Banks party thereto and Xxxxxx Guaranty Trust Company of New York, as
Agent. Terms defined in the Credit Agreement are used herein as therein
defined. This opinion is being rendered to you at the request of our client
pursuant to Section 3.1(b) of the Credit Agreement.
In rendering the opinions expressed below, we have examined the
following agreements, instruments and other documents:
(a) the Credit Agreement and exhibits thereto;
(b) the Notes; and
(c) such records of the Company and such other documents as we have
deemed necessary as a basis for the opinions expressed below.
The agreements, instruments and other documents referred to in the foregoing
clauses (a) and (b) are collectively referred to as the "Credit Documents."
In addition, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals and the
conformity with authentic original documents of all documents submitted to us
as copies.
In rendering the opinions expressed below, we have assumed, with
respect to all of the documents referred to in this opinion letter, that
(except, to the extent set forth in the opinions expressed below, as to the
Company):
(i) such documents have been duly authorized by, have been duly
executed and delivered by, and constitute legal, valid,
binding and enforceable obligations of, all of the parties to
such documents;
(ii) all signatories to such documents have been duly authorized;
and
(iii) all of the parties to such documents are duly organized and
validly existing and have the power and authority (corporate
or other) to execute, deliver and perform such documents.
As to any facts material to this opinion, we have relied solely upon
certificates of public officials, certificates of officers and other
representatives of the Company, the documents provided to us by the Company and
the representations and warranties made by the parties in the Credit Documents.
We have not attempted to verify independently (and, except for reviews of the
files of the attorneys in this firm who have been actively involved in this
transaction, and for review of the documents provided to us by the Company,
have made no independent investigation of) such facts, although we know of no
facts which lead us to believe that any portion of our opinion as set forth
below is incorrect. There is no assurance that all possible material facts
relating to the Company were disclosed to us or that our familiarity with the
Company and the business in which it is engaged is such that we have
necessarily recognized the materiality of such facts as were disclosed to us.
In addition, we have reviewed such matters of law as we have deemed
necessary or appropriate to enable us to render this opinion.
Statements herein as to our knowledge, or to the effect that we have
no knowledge, with respect to the existence, non-existence or absence of facts
are
2
not intended to signify that we have undertaken an independent investigation
except as specifically set forth herein with reference to such facts, and no
inference relative thereto should be taken, our knowledge indicating only
that we have actual knowledge of such facts, and our lack of knowledge
indicating only that no information has come to our attention that would give
us actual knowledge of such facts.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware and has all corporate powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted the failure to have which
could reasonably be expected to have a Material Adverse Effect.
2. The execution, delivery and performance by the Company of the
Credit Agreement and its Notes are within the corporate powers of the Company,
have been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body, agency or official,
except for the filing with the Securities and Exchange Commission of a Current
Report on Form 8-K and the filing of appropriate termination statements on Form
UCC-3 in connection with the repayment of indebtedness of the Company described
on Schedule II to the Credit Agreement, and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Company or of any agreement
(other than the documents governing the indebtedness of the Company described
on Schedule II to the Credit Agreement, which is being repaid in full from the
proceeds of the Loans), judgment, injunction, order, decree or other instrument
of which we have knowledge binding upon the Company or any of its Subsidiaries
or result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries, except as contemplated by the Credit
Agreement with respect to cover for Letter of Credit Liabilities.
3. The Credit Agreement constitutes a valid and binding agreement of
the Company and each Note executed and delivered by the Company constitutes a
valid and binding obligation of the Company, in each case enforceable in
accordance with its terms except as the same may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether considered in a proceeding in
equity or an action at law), including, without limitation, (a) the possible
unavailability of
3
specific performance, injunctive relief or any other
equitable remedy and (b) concepts of materiality, reasonableness, good faith
and fair dealing.
4. To our knowledge there is no action, suit or proceeding pending
against, or threatened against or affecting, the Company before any court or
arbitrator or any governmental body, agency or official, in which there is a
reasonable probability of any adverse decision which could have a Material
Adverse Effect or which in any manner draws into question the validity or
enforceability of the Credit Agreement or the Notes.
The foregoing opinions are subject to the following comments and
qualifications:
(A) The enforceability of Section 11.3(b) of the Credit Agreement
(and any similar provisions in any of the other Credit Documents) may be
limited by (i) laws rendering unenforceable indemnification contrary to
federal or state securities laws and the public policy underlying such laws
and (ii) laws limiting the enforceability of provisions exculpating or
exempting a party, or requiring indemnification of a party for, liability
for its own action or inaction, to the extent the action or inaction involves
recklessness or unlawful conduct.
(B) The enforceability of provisions in the Credit Documents to the
effect that terms may not be waived or modified except in writing may be
limited under certain circumstances.
(C) We express no opinion as to (i) the effect of the laws of any
jurisdiction in which any Bank is located (other than the State of New York)
that limit the interest, fees or other charges such Bank may impose and (ii)
the second sentence of Section 11.8 of the Credit Agreement, insofar as such
sentence may imply that the United States District Court for the Southern
District of New York would have subject matter jurisdiction to adjudicate any
controversy related to any of the Credit Documents.
The foregoing opinions are limited to matters involving the federal
laws of the United States, the Delaware General Corporation Law and the law of
the State of New York, and we do not express any opinion as to the laws of any
other jurisdiction.
At the request of our client, this opinion letter is provided to you
by us in our capacity as counsel to the Company and may not be relied upon by
any Person (other than any Person that becomes a Bank after the date hereof
pursuant to Section 11.6(c) of the Credit Agreement) for any purpose other
than in connection with the transactions contemplated by the Credit Agreement
without,
4
in each instance, our prior written consent.
This opinion is effective as of the date hereof and we disclaim any
obligation to advise you of any changes subsequent to the date hereof.
Very truly yours,
5
EXHIBIT C
OPINION OF
XXXXX XXXX & XXXXXXXX, SPECIAL COUNSEL
FOR THE AGENT
________________, 199_
To the Banks and the Agent
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York, as Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"Credit Agreement") dated as of October 11, 1996 among AEP Industries Inc., a
Delaware corporation (the "Company"), the Eligible Subsidiaries referred to
therein, the banks listed on the signature pages thereof (the "Banks"), the
Letter of Credit Issuing Banks party thereto and Xxxxxx Guaranty Trust
Company of New York, as Agent (the "Agent"), and have acted as special
counsel for the Agent for the purpose of rendering this opinion pursuant to
Section 3.1(c) of the Credit Agreement. Terms defined in the Credit
Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Company of the Credit
Agreement and its Notes are within the Company's corporate powers and have
been duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding agreement of the
Company and its Notes constitute valid and binding obligations of the
Company, in each case enforceable in accordance with its terms except as the
same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the General
Corporation Law of the State of Delaware. In giving the foregoing opinion,
we express no opinion as to the effect (if any) of any law of any jurisdiction
(except the State of New York) in which any Bank is located which limits the
rate of interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied
upon by any other Person without our prior written consent.
Very truly yours,
2
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [NAME OF ASSIGNOR] (the
"Assignor"), [NAME OF ASSIGNEE] (the "Assignee"), AEP INDUSTRIES INC. (the
"Company"), the ISSUING BANK[S] party hereto and XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Credit Agreement dated as of October 11, 1996 among AEP
Industries Inc. (the "Company"), the Eligible Subsidiaries referred to
therein, the Assignor and the other Banks party thereto, as Banks, the Letter
of Credit Issuing Banks party thereto and the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has
[a Term Commitment to make Term Loans in an aggregate principal amount at any
time outstanding not to exceed $__________ and] a Working Capital Commitment to
make Working Capital Loans and participate in Letters of Credit in an aggregate
principal and face amount at any time outstanding not to exceed $__________;
WHEREAS, Term Loans made by the Assignor under the Credit Agreement in
the aggregate principal amount of $__________, and Working Capital Loans made
by the Assignor under the Credit Agreement in the aggregate principal amount
of $__________, are outstanding at the date hereof;
[WHEREAS, Letters of Credit with a total amount available for drawing
thereunder of $__________ are outstanding at the date hereof;] and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of
its Term [Commitment thereunder in an amount equal to $__________, [Loans in a
-----------------------------
*Modify as appropriate if assignment is not of both Tem and Working Capital
Loans and Commitments.
principal amount equal to $__________] and in respect of its Working Capital
Commitment in an amount equal to $__________ ([collectively,] the "Assigned
Amount"), together with a corresponding portion of its outstanding Working
Capital Loans and Letter of Credit Liabilities, and the Assignee proposes to
accept assignment of such rights and assume the corresponding obligations from
the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. ASSIGNMENT. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the
Assignor under the Credit Agreement to the extent of the Assigned Amount,
including the purchase from the Assignor of the referenced portion of the
principal amount of the Loans made by, and Letter of Credit Liabilities of,
the Assignor outstanding at the date hereof. Upon the execution and delivery
hereof by the Assignor, the Assignee, [the Company, the Issuing Banks, and the
Agent] and the payment of the amounts specified in Section 3 required to be
paid on the date hereof (i) the Assignee shall, as of the date hereof, succeed
to the rights and be obligated to perform the obligations of a Bank under the
Credit Agreement with [a Term Commitment] [Term Loans] and a Working Capital
Commitment in an aggregate amount equal to the Assigned Amount, and (ii) the
[Term Commitment] [Term Loans] and Working Capital Commitment of the Assignor
shall, as of the date hereof, be reduced by a like amount and the Assignor
released from its obligations under the Credit Agreement to the extent such
obligations have been assumed by the Assignee. The assignment provided for
herein shall be without recourse to the Assignor.
SECTION 3. PAYMENTS. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount heretofore agreed between them.*
It is understood that facility fees accrued to the date hereof are for the
account of the Assignor and such fees accruing with respect to the Assigned
Amount from and
-------------------------------
* Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any portion
of any upfront fee to be paid by the Assignor to the Assignee. It may be
preferable in an appropriate case to specify these amounts generically or by
formula rather than as a fixed sum.
2
including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under
the Credit Agreement which is for the account of the other party hereto, it
shall receive the same for the account of such other party to the extent of
such other party's interest therein and shall promptly pay the same to such
other party.
[SECTION 4. CONSENT OF THE COMPANY, THE AGENT AND THE ISSUING BANKS. This
Agreement is conditioned upon the consent of the Company, the Agent and the
Issuing Banks pursuant to Section 11.6(c) of the Credit Agreement. The
execution of this Agreement by the Company, the Agent and the Issuing Banks is
evidence of this consent.]
SECTION 5. NON-RELIANCE ON ASSIGNOR. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of any Borrower, or the validity and enforceability of the
obligations of any Borrower in respect of the Credit Agreement or any Note.
The Assignee acknowledges that it has, independently and without reliance on
the Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Company and
the other Borrowers.
SECTION 6. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
3
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[NAME OF ASSIGNOR]
By
-----------------------------------
Name:
Title:
[NAME OF ASSIGNEE]
By
-----------------------------------
Name:
Title:
[AEP INDUSTRIES INC.]
By
-----------------------------------
Name:
Title:
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK,
as Agent
By
-----------------------------------
Name:
Title:
4
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK,
as Issuing Bank
By
-----------------------------------
Name:
Title:
[OTHER ISSUING BANKS]
By
-----------------------------------
Name:
Title:]
5
EXHIBIT E
FORM OF ELECTION TO PARTICIPATE
___________, 19__
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent for the Banks
named in the Credit Agreement dated as of
October 11, 1996 among AEP Industries
Inc., the Eligible Subsidiaries referred to
therein, such Banks and such Agent (the
"Credit Agreement")
Dear Sirs:
Reference is made to the Credit Agreement described above. Terms not defined
herein which are defined in the Credit Agreement shall have for the purposes
hereof the meaning provided therein.
The undersigned, [name of Eligible Subsidiary], a [jurisdiction of
incorporation] corporation, hereby elects to be an Eligible Subsidiary for
purposes of the Credit Agreement, effective from the date hereof until an
Election to Terminate shall have been delivered on behalf of the undersigned in
accordance with the Credit Agreement. The undersigned confirms that the
representations and warranties set forth in Article 9 of the Credit Agreement
are true and correct as to the undersigned as of the date hereof, and the
undersigned hereby agrees to perform all the obligations of an Eligible
Subsidiary under, and to be bound in all respects by the terms of, the Credit
Agreement as if the undersigned were a signatory party thereto.
The address to which all notices to the undersigned under the Credit
Agreement should be directed is:
This instrument shall be construed in accordance with and governed by the
laws of the State of New York.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By ___________________________________
Title:
The undersigned hereby confirms that [name of Eligible Subsidiary] is an
Eligible Subsidiary for purposes of the Credit Agreement described above.
AEP INDUSTRIES INC.
By ___________________________________
Name:
Title:
Receipt of the above Election to Participate is hereby acknowledged on and as
of the date set forth above.
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK,
as Agent
By ___________________________________
Name:
Title:
2
EXHIBIT F
FORM OF ELECTION TO TERMINATE
___________, 19__
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent for the Banks
named in the Credit Agreement dated as of
October 11, 1996 among AEP Industries
Inc. the Eligible Subsidiaries referred to
therein, such Banks and such Agent
(the "Credit Agreement")
Dear Sirs:
Reference is made to the Credit Agreement described above. Terms not defined
herein which are defined in the Credit Agreement shall have for the purposes
hereof the meaning provided therein.
The undersigned, [name of Eligible Subsidiary], a [jurisdiction of
incorporation] corporation, hereby elects to terminate its status as an Eligible
Subsidiary for purposes of the Credit Agreement, effective as of the date
hereof. The undersigned hereby represents and warrants that all principal and
interest on all Notes of the undersigned and all other amounts payable by the
undersigned pursuant to the Credit Agreement have been paid in full on or prior
to the date hereof. Notwithstanding the foregoing, this Election to Terminate
shall not affect any obligation of the undersigned under the Credit Agreement or
under any Note heretofore incurred.
This instrument shall be construed in accordance with and governed by the
laws of the State of New York.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By ___________________________________
Title:
The undersigned hereby confirms that the status of [name of Eligible
Subsidiary] as an Eligible Subsidiary for purposes of the Credit Agreement
described above is terminated as of the date hereof.
AEP INDUSTRIES INC.
By ___________________________________
Name:
Title:
Receipt of the above Election to Terminate is hereby acknowledged on and as
of the date set forth above.
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK,
as Agent
By ___________________________________
Name:
Title:
2
EXHIBIT G
OPINION OF
COUNSEL FOR THE BORROWER
(BORROWINGS BY ELIGIBLE SUBSIDIARIES)
[Dated as provided
in Section 3.3 of
the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York, as Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
I am counsel to [name of Eligible Subsidiary], a [jurisdiction of
incorporation] corporation (the "Borrower"), and give this opinion pursuant to
Section 3.3(b) of the Credit Agreement (the "Credit Agreement") dated as of
October 11, 1996 among AEP Industries Inc. (the "Company"), the Eligible
Subsidiaries referred to therein, the banks listed on the signature pages
thereof and Xxxxxx Guaranty Trust Company of New York, as Agent. Terms defined
in the Credit Agreement are used herein as therein defined.
I have examined originals or copies, certified or otherwise identified to my
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing and in
good standing under the laws of [jurisdiction of incorporation], and is a
wholly-owned Consolidated Subsidiary.
2. The execution and delivery by the Borrower of its Election to Participate
and its Notes and the performance by the Borrower of the Credit Agreement and
its Notes are within the Borrower's corporate powers, have been duly authorized
by all necessary corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official and do not (i) contravene
any provision of its certificate of incorporation or by-laws, (ii) contravene,
or constitute a default under, any provision of applicable law or regulation or
of any agreement, judgment, injunction, order, decree or other instrument known
to me binding upon the Borrower or the Company or any of its Subsidiaries the
consequences of which contravention or default, singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, or (iii) result
in the creation or imposition of any Lien on any asset of the Company or any of
its Subsidiaries, except as contemplated by the Credit Agreement with respect to
cover for Letter of Credit Liabilities.
3. The Credit Agreement constitutes a valid and binding agreement of the
Borrower and each of its Notes constitute a valid and binding obligation of the
Borrower, in each case enforceable in accordance with its terms except as the
same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity (regardless of
whether considered in a proceeding in equity or an action at law), including,
without limitation, (a) the possible unavailability of specific performance,
injunctive relief or any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
4. Except as disclosed in the Borrower's Election to Participate, there is
no income, stamp or other tax of [jurisdiction of incorporation and, if
different, principal place of business], or any taxing authority thereof or
therein, imposed by or in the nature of withholding or otherwise, which is
imposed on any payment to be made by the Borrower pursuant to the Credit
Agreement or its Notes, or is imposed on or by virtue of the execution, delivery
or enforcement of its Election to Participate or of its Notes.
Very truly yours,
2
