EXHIBIT 10.15
EXECUTION COPY
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Published CUSIP Number: 00000XXX0
CREDIT AGREEMENT
Dated as of February 27, 2004
among
SOLO CUP COMPANY,
as the Borrower,
SOLO CUP INVESTMENT CORPORATION,
BANK OF AMERICA, N.A.,
as Administrative Agent and Swing Line Lender
and
as an L/C Issuer,
and
The Other Lenders Party Hereto,
BANC OF AMERICA SECURITIES LLC and CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arrangers and Joint Bookrunning Managers,
CITICORP NORTH AMERICA, INC.,
as Syndication Agent,
and
XXXXXX TRUST AND SAVINGS BANK,
as Documentation Agent and as an L/C Issuer
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms ..........................................................2
1.02 Other Interpretive Provisions .........................................36
1.03 Accounting Terms ......................................................37
1.04 Rounding ..............................................................37
1.05 References to Agreements and Laws .....................................37
1.06 Times of Day ..........................................................37
1.07 Letter of Credit Amounts ..............................................38
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 The Loans .............................................................38
2.02 Borrowings, Conversions and Continuations of Loans ....................38
2.03 Letters of Credit .....................................................40
2.04 Swing Line Loans ......................................................49
2.05 Prepayments ...........................................................51
2.06 Termination or Reduction of Commitments ...............................54
2.07 Repayment of Loans ....................................................55
2.08 Interest ..............................................................56
2.09 Fees ..................................................................57
2.10 Computation of Interest and Fees ......................................57
2.11 Evidence of Indebtedness ..............................................57
2.12 Payments Generally ....................................................58
2.13 Sharing of Payments ...................................................60
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes .................................................................61
3.02 Illegality ............................................................62
3.03 Inability to Determine Rates ..........................................63
3.04 Increased Cost and Reduced Return; Capital Adequacy;
Reserves on Eurodollar Rate Loans .....................................63
3.05 Compensation for Losses ...............................................65
3.06 Matters Applicable to All Requests for Compensation ...................65
3.07 Survival ..............................................................65
3.08 Replacement of Lenders ................................................65
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ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension ................................66
4.02 Conditions to All Credit Extensions ...................................71
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Existence, Qualification and Power; Compliance with Laws ..............71
5.02 Authorization; No Contravention .......................................72
5.03 Governmental Authorization; Other Consents ............................72
5.04 Binding Effect ........................................................72
5.05 Financial Statements; No Material Adverse Effect ......................73
5.06 Litigation ............................................................74
5.07 No Default ............................................................74
5.08 Ownership of Property; Liens ..........................................74
5.09 Environmental Compliance ..............................................75
5.10 Insurance .............................................................76
5.11 Taxes .................................................................76
5.12 ERISA Compliance ......................................................76
5.13 Subsidiaries; Equity Interests ........................................77
5.14 Margin Regulations; Investment Company Act; Public
Utility Holding Company Act ...........................................78
5.15 Disclosure ............................................................78
5.16 Compliance with Laws ..................................................78
5.17 Intellectual Property; Licenses, Etc...................................78
5.18 Solvency ..............................................................79
5.19 Casualty, Etc..........................................................79
5.20 Perfection, Etc........................................................79
5.21 Equity Obligations ....................................................79
ARTICLE VI
AFFIRMATIVE COVENANTS
6.01 Financial Statements ..................................................80
6.02 Certificates; Other Information .......................................81
6.03 Notices ...............................................................84
6.04 Payment of Obligations ................................................84
6.05 Preservation of Existence, Etc.........................................84
6.06 Maintenance of Properties .............................................85
6.07 Maintenance of Insurance ..............................................85
6.08 Compliance with Laws ..................................................85
6.09 Books and Records .....................................................85
6.10 Inspection Rights .....................................................85
6.11 Use of Proceeds .......................................................86
6.12 Covenant to Guarantee Obligations and Give Security ...................86
6.13 Compliance with Environmental Laws ....................................88
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6.14 Preparation of Environmental Reports ..................................89
6.15 Further Assurances ....................................................89
6.16 Compliance with Terms of Leaseholds ...................................89
6.17 Interest Rate Hedging .................................................90
6.18 Conditions Subsequent to the Closing Date .............................90
ARTICLE VII
NEGATIVE COVENANTS
7.01 Liens .................................................................93
7.02 Indebtedness ..........................................................95
7.03 Investments ...........................................................97
7.04 Fundamental Changes ...................................................99
7.05 Dispositions .........................................................100
7.06 Restricted Payments ..................................................101
7.07 Change in Nature of Business .........................................103
7.08 Transactions with Affiliates .........................................103
7.09 Burdensome Agreements ................................................104
7.10 Financial Covenants ..................................................105
7.11 Amendments of Organization Documents .................................106
7.12 Accounting Changes ...................................................106
7.13 Prepayments, Etc., of Indebtedness ...................................106
7.14 Amendment, Etc., of Preferred Equity Documents, Senior Subordinated
Notes Documents and Documents Related to Qualified Preferred Stock
and Permitted Refinancing Subordinated Indebtedness ..................106
7.15 Partnerships, Etc.....................................................107
7.16 Equity Interests of the Borrower .....................................107
7.17 Holding Company ......................................................107
7.18 Designated Senior Debt ...............................................108
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default ....................................................108
8.02 Remedies upon Event of Default .......................................110
8.03 Application of Funds .................................................111
ARTICLE IX
ADMINISTRATIVE AGENT
9.01 Appointment and Authorization of the Administrative Agent ............112
9.02 Delegation of Duties .................................................113
9.03 Liability of Agent-Related Person ....................................113
9.04 Reliance by Agents ...................................................114
9.05 Notice of Default ....................................................114
9.06 Credit Decision; Disclosure of Information by Agents .................114
9.07 Indemnification of Agents ............................................115
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9.08 Administrative Agent in their Individual Capacities ..................116
9.09 Successor Administrative Agent .......................................116
9.10 Administrative Agent May File Proofs of Claim ........................117
9.11 Collateral and Guaranty Matters ......................................118
9.12 Other Agents; Arrangers and Managers .................................118
9.13 Supplemental Collateral Agent ........................................118
ARTICLE X
PARENT GUARANTY
10.01 Guaranty .............................................................119
10.02 Guaranty Absolute ....................................................120
10.03 Waivers and Acknowledgments ..........................................121
10.04 Subrogation ..........................................................122
10.05 Continuing Guaranty; Assignments .....................................123
ARTICLE XI
MISCELLANEOUS
11.01 Amendments, Etc.......................................................123
11.02 Notices and Other Communications; Facsimile Copies ...................125
11.03 No Waiver; Cumulative Remedies .......................................126
11.04 Attorney Costs, Expenses and Taxes ...................................126
11.05 Indemnification by the Borrower ......................................127
11.06 Payments Set Aside ...................................................127
11.07 Successors and Assigns ...............................................128
11.08 Confidentiality ......................................................132
11.09 Setoff ...............................................................133
11.10 Interest Rate Limitation .............................................133
11.11 Counterparts .........................................................133
11.12 Integration ..........................................................133
11.13 Survival of Representations and Warranties ...........................134
11.14 Severability .........................................................134
11.15 Tax Forms ............................................................134
11.16 Governing Law ........................................................136
11.17 Waiver of Right to Trial by Jury .....................................137
11.18 Binding Effect .......................................................137
11.19 USA PATRIOT Act Notice ...............................................137
SIGNATURES...................................................................S-1
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SCHEDULES
I Guarantors
1.01 Consolidated Pro Forma EBITDA
2.01 Commitments and Pro Rata Shares
4.01(a)(xix) Existing Secured Indebtedness
4.01(a)(xx) Existing Notes
5.03 Certain Authorizations
5.05 Supplement to Interim Financial Statements
5.08(b) Existing Liens
5.08(c) Owned Real Property and Owned Real Property Collateral
5.08(d) Real Property Leases, Real Property Subleases, Leased Real
Property Collateral, Material Real Property Subleases and
Collateral Access Leases
5.08(f) Existing Investments
5.09 Environmental Assessments
5.13 Subsidiaries and Other Equity Investments
5.17 Intellectual Property Matters
5.21 Outstanding Equity Obligations
7.02 Existing Indebtedness
11.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
FORM OF
A Committed Loan Notice
B Swing Line Loan Notice
C-1 Term Note
C-2 Revolving Credit Note
D Compliance Certificate
E Assignment and Assumption
F Subsidiary Guaranty
G Security Agreement
H Mortgage
I-1 Opinion Matters - Counsel to Loan Parties
I-2 Opinion Matters - Local Counsel to Loan Parties (Mortgages)
I-3 Opinion Matters - Local Counsel to Loan Parties
(Mortgages/Corporate Matters)
I-4 Opinion Matters - Perfection under Foreign Law
CREDIT AGREEMENT
This
CREDIT AGREEMENT ("AGREEMENT") is entered into as of February 27,
2004, among SOLO CUP COMPANY, a Delaware corporation (the "BORROWER"), SOLO CUP
INVESTMENT CORPORATION, a Delaware corporation ("HOLDINGS"), each lender from
time to time party hereto (collectively, the "LENDERS" and individually, a
"LENDER"), CITICORP NORTH AMERICA, INC., as Syndication Agent, XXXXXX TRUST AND
SAVINGS BANK, as Documentation Agent and as an L/C Issuer and BANK OF AMERICA,
N.A., as Administrative Agent, Swing Line Lender and as an L/C Issuer.
PRELIMINARY STATEMENTS:
The Borrower was organized by Solo Cup Company, an Illinois
corporation ("OLD SOLO CUP") to acquire control of SF Holdings Group, Inc., a
Delaware corporation (the "COMPANY"), its Subsidiaries (as hereinafter defined)
and three additional entities related to the Company. Pursuant to the Agreement
and Plan of Merger, dated December 22, 2003 (as amended, supplemented or
otherwise modified in accordance with its terms, to the extent permitted in
accordance with the Loan Documents (as hereinafter defined), the "MERGER
AGREEMENT") by and among Old Solo Cup, Solo Acquisition Corp., a Delaware
corporation and a wholly owned Subsidiary of Old Solo Cup ("MERGER SUB") and the
Company, Merger Sub has agreed to consummate a merger (the "MERGER") with the
Company in which the Company will be the surviving corporation. The Merger
Agreement also provides for the direct or indirect acquisition by Old Solo Cup
of additional entities related to the Company (the "RELATED PURCHASE"). Prior to
or at the time of the Merger, Old Solo Cup will be reorganized (the
"REORGANIZATION") whereupon Old Solo Cup shall become a direct wholly owned
Subsidiary of the Borrower.
The Borrower has requested that (a) immediately upon the consummation
of the Merger, the Related Purchase and the Reorganization and certain related
transactions, the Lenders lend to the Borrower to pay to the holders of the
Company Stock (as hereinafter defined) the cash consideration for their shares
in the Merger, to pay transaction fees and expenses, and to refinance certain
Indebtedness of the Company and its Subsidiaries and Old Solo Cup and its
Subsidiaries and (b) from time to time, the Lenders lend to the Borrower and the
L/C Issuers (as hereinafter defined) issue Letters of Credit (as hereinafter
defined) for the account of the Borrower to provide a revolving credit facility
for the Borrower and its Subsidiaries.
The Borrower has requested that the Lenders provide a revolving credit
facility, and a term loan facility, and the Lenders have indicated their
willingness to lend and the L/C Issuers have indicated their willingness to so
issue Letters of Credit, in each case, on the terms and subject to the
conditions set forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"ACCOUNTING CHANGE" means any change in GAAP or any other change in
accounting principles required by the promulgation of any rule, regulation,
pronouncement, interpretation or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission of the United States or any
other regulatory body having jurisdiction.
"ADMINISTRATIVE AGENT" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"ADMINISTRATIVE AGENT'S OFFICE" means the Administrative Agent's
address and, as appropriate, account as set forth on SCHEDULE 11.02, or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "CONTROL"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "CONTROLLING" and
"CONTROLLED" have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.
"AGENT-RELATED PERSONS" means the Agents, BAS, Citicorp North America,
Inc. and Citigroup Global Markets Inc., together with their respective
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"AGENTS" means, collectively, the Administrative Agent, the
Syndication Agent, the Documentation Agent, the Supplemental Collateral Agent
and any agent appointed pursuant to SECTION 9.01(c).
"AGGREGATE COMMITMENTS" means the Commitments of all the Lenders.
"AGGREGATE CREDIT EXPOSURES" means, at any time, the sum of (i) the
unused portion of the Revolving Credit Commitment then in effect, (ii) the
unused portion of each Term Commitment then in effect and (iii) the Total
Outstandings at such time.
"AGGREGATE REVOLVING CREDIT COMMITMENTS" means the Revolving Credit
Commitments of all of the Revolving Credit Lenders.
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"AGREEMENT" means this
Credit Agreement.
"APPLICABLE RATE" means a percentage per annum equal to:
(a) with respect to Term Loans, (i) until the first Business Day
immediately following the six month anniversary of the Closing Date, (A) for
Eurodollar Rate Loans, 2.50% and (B) for Base Rate Loans, 1.50% and (ii)
thereafter, the following percentages per annum, based upon the Consolidated
Leverage Ratio as set forth in the most recent Compliance Certificate received
by the Administrative Agent pursuant to SECTION 6.02(b):
Pricing Consolidated Leverage Eurodollar
Level Ratio Rate Base Rate
1 LESS THAN OR EQUAL TO 3.75:1.00 2.25% 1.25%
2 GREATER THAN 3.75:1.00 2.50% 1.50%
(b) with respect to Revolving Credit Loans, (i) until the first
Business Day immediately following the six month anniversary of the Closing
Date, (A) for Eurodollar Rate Loans, 2.75% and (B) for Base Rate Loans, 1.75%
and (ii) thereafter, the following percentages per annum, based upon the
Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to SECTION 6.02(b):
Eurodollar
Rate and
Pricing Consolidated Letters of
Level Leverage Ratio Credit Base Rate
1 LESS THAN OR EQUAL TO 3.50:1.00 2.00% 1.00%
2 GREATER THAN 3.50:1.00 but 2.25% 1.25%
LESS THAN OR EQUAL TO 4.00:1.00
3 GREATER THAN 4.00:1.00 but 2.50% 1.50%
LESS THAN OR EQUAL TO 4.50:1.00
4 GREATER THAN 4.50:1.00 2.75% 1.75%
Any increase or decrease in the Applicable Rate resulting from a
change in the Consolidated Leverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to SECTION 6.02(b); PROVIDED, HOWEVER, that if a Compliance
Certificate is not delivered when due in accordance with such Section, then
Pricing Level 2 with respect to Term Loans and Pricing Level 4 with respect to
Revolving Credit Loans shall apply as of the first Business Day after the date
on which such Compliance Certificate was required to have been delivered until
such time as a Compliance Certificate is delivered, whereupon the Applicable
Rate shall be based upon the Consolidated Leverage Ratio set forth in such
Compliance Certificate.
"APPROPRIATE LENDER" means, at any time, (a) with respect to the Term
Facility or the Revolving Credit Facility, a Lender that has a Commitment with
respect to such Facility at such time, (b) with respect to the Letter of Credit
Sublimit, (i) the L/C Issuers and (ii) if any Letters of Credit have been issued
pursuant to SECTION 2.03(a) and are outstanding, the Revolving
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Credit Lenders and (c) with respect to the Swing Line Facility, (i) the Swing
Line Lender and (ii) if any Swing Line Loans are outstanding pursuant to SECTION
2.04(a), the Revolving Credit Lenders.
"ARRANGERS" means each of Banc of America Securities LLC and Citigroup
Global Markets Inc., in their capacity as joint lead arrangers and joint
bookrunning managers.
"ASSIGNMENT AND ASSUMPTION" means an Assignment and Assumption
substantially in the form of EXHIBIT E.
"ATTORNEY COSTS" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel.
"ATTRIBUTABLE INDEBTEDNESS" means, on any date, (a) in respect of any
Capitalized Lease Obligation of any Person, the capitalized amount thereof that
would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease payments under the relevant lease that
would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a Capitalized Lease
Obligation.
"AUDITED FINANCIAL STATEMENTS" means, collectively, (a) the audited
consolidated balance sheet of the Company and its Subsidiaries for the fiscal
year ended September 28, 2003, and (b) the audited consolidated balance sheet of
Old Solo Cup and its Subsidiaries for the fiscal year ended December 31, 2002,
and, in each case, the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal years of the Company and Old
Solo Cup and their respective Subsidiaries, including the notes thereto.
"AUTO-RENEWAL LETTER OF CREDIT" has the meaning specified in SECTION
2.03(b)(iii).
"AVAILABILITY PERIOD" means, in the case of the Revolving Credit
Facility, the period from and including the Closing Date to the earliest of (i)
the Maturity Date for such Facility, (ii) the date of termination of the
Revolving Credit Commitments, pursuant to SECTION 2.06, and (iii) the date of
termination of the commitment of each Revolving Credit Lender to make Revolving
Credit Loans and of the obligation of the L/C Issuers to make L/C Credit
Extensions pursuant to SECTION 8.02.
"AVERAGE CASH" means, (a) as of June 30, 2004, the sum of the
aggregate amount of cash and Cash Equivalents of the Borrower and its
Subsidiaries (i) as of such date of determination, (ii) as of the last day of
each of the 3 preceding fiscal months then ended and (iii) as of the Closing
Date, divided by 5, (b) as of September 30, 2004, the sum of the aggregate
amount of cash and Cash Equivalents of the Borrower and its Subsidiaries (i) as
of such date of determination, (ii) as of the last day of each of the 6
preceding fiscal months then ended and (iii) as of the Closing Date, divided by
8, (c) as of December 31, 2004, the sum of the aggregate amount of cash and Cash
Equivalents of the Borrower and its Subsidiaries (i) as of such date of
determination, (ii) as of the last day of each of the 9 preceding fiscal months
then ended and (iii) as of the Closing Date, divided by 11, and (d) as of each
date of determination thereafter, the sum of the aggregate amount of cash and
Cash Equivalents of the Borrower and its Subsidiaries
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(i) as of such date of determination and (ii) as of the last day of each of the
11 preceding fiscal months then ended, divided by 12.
"AVERAGE TOTAL DEBT" means, as of any date of determination, the sum
of (a) the aggregate outstanding principal amount of all Consolidated Funded
Indebtedness (other than the Outstanding Amount of any Revolving Credit Loans,
Swing Line Loans and L/C Borrowings) on such date and (b) the average daily
Outstanding Amount of all Revolving Credit Loans, Swing Line Loans and L/C
Borrowings outstanding during the 365 days immediately prior to such date, MINUS
Average Cash; PROVIDED that to the extent the Closing Date shall have occurred
within such 365 day-period set forth in CLAUSE (b) above, the average referred
to in CLAUSE (b) shall be the average of the amounts specified in CLAUSE (b)
from the Closing Date to the date of determination.
"BANK OF AMERICA" means Bank of America, N.A. and its successors.
"BAS" means Banc of America Securities LLC and its successors.
"BASE RATE" means for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its "prime rate." The "prime rate" is a rate set by Bank of
America based upon various factors including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"BASE RATE LOAN" means a Loan that bears interest based on the Base
Rate.
"BENEFICIAL OWNER" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Securities Exchange Act of 1934, except that in
calculating the beneficial ownership of any particular "person" (as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934), such "person"
shall be deemed to have beneficial ownership of all securities that such
"person" has the right to acquire by conversion or exercise of other securities,
whether such right is currently exercisable or is exercisable only upon the
occurrence of a subsequent condition. The terms "BENEFICIALLY OWNS" or
"BENEFICIALLY OWNED" shall have a corresponding meaning.
"BORROWER" has the meaning specified in the introductory paragraph
hereto.
"BORROWING" means a Revolving Credit Borrowing, a Swing Line Borrowing
or the Term Borrowing, as the context may require.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which commercial banks are authorized to close under the Laws of, or are
in fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
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"CAPITAL EXPENDITURE CARRYOVER AMOUNT" has the meaning specified in
SECTION 7.10(c).
"CAPITAL EXPENDITURES" means, with respect to any Person, all
expenditures by such Person which would be required to be capitalized in
accordance with GAAP, including all such expenditures with respect to fixed or
capital assets (including, without limitation, expenditures for maintenance and
repairs which are capitalized in accordance with GAAP) and, without duplication,
the amount of Capitalized Lease Obligations incurred by such Person.
"CAPITALIZED LEASE OBLIGATIONS" means, with respect to any Person, all
obligations of such Person under leases which, under GAAP, are or will be
required to be capitalized on the books of such Person, in each case taken at
the Attributable Indebtedness amount thereof.
"CASH COLLATERALIZE" means to pledge and deposit with or deliver to
the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance reasonably satisfactory to the
Administrative Agent and the L/C Issuers (which documents are hereby consented
to by the Lenders), which shall in all cases be subject to SECTION 2.03(g),
including, without limitation, the grant of a security interest in such cash or
deposit account balances. Derivatives of such term have corresponding meanings.
"CASH EQUIVALENTS" means any of the following types of Investments, to
the extent owned by the Borrower or any of its Subsidiaries free and clear of
all Liens (other than (i) Liens created under the Collateral Documents and (ii)
normal and customary rights of setoff and contractual rights and indemnities in
favor of any bank or other institution at which Cash Equivalents are held (in
each case to the extent relating to amounts payable in connection with such
Investments but excluding in any case any Liens securing Indebtedness),
(a) marketable securities (i) issued or directly and
unconditionally guaranteed as to interest and principal by the United
States government or (ii) issued by any agency of the United States the
obligations of which are backed by the full faith and credit of the United
States, in each case maturing within one year;
(b) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year and having a
rating of at least A- from S&P or the equivalent thereof from another
Recognized Rating Agency;
(c) commercial paper in an aggregate amount of not more than
$7,500,000 per issuer outstanding and maturing no more than 270 days from
the date of creation thereof and having a rating of at least A-1 from S&P
or at least P-1 from Moody's;
(d) time deposits, certificates of deposit or bankers'
acceptances maturing within one year and issued or accepted by any Lender
or by any commercial bank organized under the laws of the United States,
any state thereof or an OECD country having a rating of at least A- from
S&P or the equivalent thereof from another Recognized Rating Agency;
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(e) repurchase agreements with financial institutions organized
under the laws of the United States, any state thereof or an OECD country
having a rating of at least A- from S&P or the equivalent thereof from
another Recognized Rating Agency;
(f) Dollar denominated floating rate notes, foreign currency
denominated floating rate notes and foreign indexed notes, in each case
maturing within one year and having a rating of at least A or A-1 from S&P
or the equivalent thereof from another Recognized Rating Agency;
(g) auction rate notes maturing within one year and having a
rating of at least A or A-1 from S&P or the equivalent thereof from another
Recognized Rating Agency;
(h) money market preferred funds maturing within one year and
having a rating of at least AA from S&P or the equivalent thereof from
another Recognized Rating Agency; and
(i) money market funds maturing within one year after such date
and having a rating of at least A- from S&P or the equivalent thereof from
another Recognized Rating Agency; provided such investments are limited to
$25,000,000 for each such fund and $100,000,000 in the aggregate for all
such funds, such funds are open-end funds with total assets of more than
$1,000,000,000 and an expressed goal of maintaining a net asset value of
$1.00 per share and such funds limit their investments to the credit
instruments allowed in this definition with average weighted maturity of
less than 90 days.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980.
"CFC FOREIGN SUBSIDIARY" means, with respect to any Loan Party, any
direct or indirect Subsidiary of such Loan Party which is a Foreign Subsidiary
and which is a "controlled foreign corporation" under Section 957 of the Code.
"CHANGE OF CONTROL" means, an event or series of events by which:
(a) the Principal Shareholders and the Co-Investors shall together
cease to own and control legally and beneficially, either directly or
indirectly, equity securities in Holdings representing 51% or more of the
combined voting power of all of the equity securities of Holdings entitled
to vote for members of the board of directors or equivalent governing body
of Holdings on a fully-diluted basis (and taking into account (i) all such
equity securities that any Principal Shareholder or any Co-Investor has the
right to acquire (whether or not such right is exercisable immediately or
only after the passage of time) and (ii) any and all securities that are
convertible into such equity securities); or
(b) during any period of 12 consecutive months commencing on the
Closing Date, a majority of the members of the board of directors or other
equivalent governing body of Holdings or the Borrower cease to be composed
of individuals (i) who were members of that board or equivalent governing
body on the first day of such period, (ii) whose election or nomination to
that board or equivalent governing body was approved by individuals
referred to in clause (i) above constituting at the time of such
8
election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing body
(excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a
member of that board or equivalent governing body occurs as a result of an
actual or threatened solicitation of proxies or consents for the election
or removal of one or more directors by any person or group other than a
solicitation for the election of one or more directors by or on behalf of
the board of directors); or
(c) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation thereof, will result in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of Holdings or the Borrower, or
control over the equity securities of such Person entitled to vote for
members of the board of directors or equivalent governing body of such
Person on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant to
any option right) representing 40% or more of the combined voting power of
such securities; or
(d) Holdings shall cease, directly or indirectly, to own and
control legally and beneficially all of the Equity Interests in the
Borrower; or
(e) any "CHANGE OF CONTROL" (or any similar term) as set forth in
the Senior Subordinated Notes Indenture or in any other agreement
evidencing Indebtedness for borrowed money in an amount in excess of the
Threshold Amount shall have occurred.
"CLOSING DATE" means the first date all the conditions precedent in
SECTION 4.01 are satisfied or waived in accordance with SECTION 11.01.
"CLOSING DATE PRO FORMA ADJUSTED EBITDA" means the consolidated EBITDA
of the Borrower and its Subsidiaries for the twelve months ended September 30,
2003 after giving effect to the Transaction and calculated in a manner
consistent with GAAP and the financial information set forth in the calculation
of "Pro Forma Adjusted EBITDA" set forth in offering memorandum with respect to
the Senior Subordinated Notes.
"CODE" means the Internal Revenue Code of 1986.
"CO-INVESTORS" means, collectively, (a) Vestar Capital Partners IV,
L.P., a Delaware limited partnership, (b) Vestar Cup Investment, LLC, a Delaware
limited liability company, (c) Vestar Cup Investment II, LLC, a Delaware limited
liability company, (d) any investment fund under common control or management
with any of the Persons referred to in the immediately preceding clauses (a),
(b) and (c), (e) any controlling stockholder, general partner or controlling
member of any of the Persons referred to in the immediately preceding clauses
(a), (b) and (c) and (f) any trust, corporation, limited liability company or
other entity, the beneficiaries, stockholders, members, general partners or
Persons who are Beneficial Owners of
9
an 80% or more interest of which consist of any of the Persons referred to in
the immediately preceding clauses (a), (b), (c), (d) and (e).
"COLLATERAL" means all of the "COLLATERAL" referred to in the
Collateral Documents and all of the other property and assets that are or are
intended under the terms of the Collateral Documents to be subject to Liens in
favor of the Administrative Agent for the benefit of the Secured Parties, other
than the Excluded Property; PROVIDED that such Excluded Property shall become
part of the Collateral if such Excluded Property shall not have been Disposed of
by the Borrower or any of its Subsidiaries within 180 days after the Closing
Date.
"COLLATERAL ACCESS LEASE" means the Real Property Leases listed on
PART V of SCHEDULE 5.08(D) hereto and any New Collateral Access Lease that
becomes Collateral after the Closing Date pursuant to SECTION 6.12.
"COLLATERAL DOCUMENTS" means, collectively, the Security Agreement,
the Intellectual Property Security Agreement, the Mortgages, each of the
mortgages, collateral assignments, Security Agreement Supplements, IP Security
Agreement Supplements, security agreements, pledge agreements or other similar
agreements delivered to the Administrative Agent and the Lenders pursuant to
SECTION 6.12, and each of the other agreements, instruments or documents that
creates or purports to create a Lien in favor of the Administrative Agent for
the benefit of the Secured Parties.
"COMMITTED CAPITAL EXPENDITURES" means, with respect to any fiscal
year of the Borrower and its Subsidiaries, the capital expenditures listed as
committed or planned for such fiscal year in the first Compliance Certificate
delivered during such fiscal year in accordance with SECTION 6.02(b).
"COMMITMENT" means a Term Commitment or a Revolving Credit Commitment,
as the context may require.
"COMMITMENT LETTER" means the Commitment Letter, dated December 22,
2003, by and among the Arrangers, BAS, Citigroup Global Markets Inc. and Old
Solo Cup.
"COMMITTED LOAN NOTICE" means a notice related to (a) the Term
Borrowing, (b) a Revolving Credit Borrowing, (c) a conversion of Loans from one
Type to the other, or (d) a continuation of Eurodollar Rate Loans, pursuant to
SECTION 2.02(a), which, if in writing, shall be substantially in the form of
EXHIBIT A.
"COMPANY STOCK" means the "COMMON STOCK" and the "PREFERRED STOCK", as
such terms are defined in the Merger Agreement.
"COMPENSATION PERIOD" has the meaning specified in SECTION
2.12(c)(ii).
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of EXHIBIT D.
"CONSOLIDATED CASH INTEREST EXPENSE" means for the Borrower and its
Subsidiaries, for any period, THE EXCESS OF (A) the sum of (i) interest expense
(net of cash interest
10
income) determined on a consolidated basis for such period in accordance with
GAAP, plus (ii) to the extent incurred by the Borrower and its Subsidiaries in
such period but not included in interest expense, without duplication, the sum
of (x) the portion of rent expense of the Borrower and its Subsidiaries with
respect to such period under Capitalized Lease Obligations that is treated as
interest expense in accordance with GAAP and (y) any cash payments made during
such period in respect of obligations referred to in CLAUSES (b) (iii), (iv) and
(v) below that were amortized or accrued in a previous period OVER (B) to the
extent included in interest expense, the sum of (i) the amortization of any debt
discounts and debt issuance costs, (ii) the amortization of fees in respect of
Swap Contracts, (iii) pay-in-kind interest expense, (iv) net costs associated
with swap or hedging obligations, (v) Preferred Equity dividends, (vi) the cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than the Borrower) in connection with debt incurred by such
plan or trust, and (vii) the non-cash interest expense related to (x) litigation
reserves, (y) reserves for exit activities, including closure of facilities and
termination payments and (z) self-insurance reserves.
"CONSOLIDATED EBITDA" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period PLUS (a) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Interest Charges for such period,
(ii) the provision for federal, state, local and foreign income taxes payable by
the Borrower and its Subsidiaries for such period, (iii) the amount of
depreciation and amortization expense, (iv) all non-cash impairment charges (to
the extent not captured in amortization), (v) all underfunded pension expenses
to the extent constituting non-cash charges, (vi) other non-recurring expenses
of the Borrower and its Subsidiaries which do not represent a cash item in such
period or any future period, (vii) non-cash expenses resulting from the grant of
stock and stock options and other compensation to management personnel of the
Borrower and its Subsidiaries pursuant to a written plan or agreement or the
treatment of such options under variable plan accounting, (viii) step up in
inventory valuation as a result of purchase accounting for the Transaction, (ix)
fees, expenses or charges related to the Transaction, (x) all non-cash expenses
attributable to minority interests in Subsidiaries, (xi) Inventory Reduction
Charges, (xii) for a period of thirty-six months after the Closing Date
non-recurring cash expenses incurred with respect to the post-Merger integration
of the Company and Old Solo Cup, in an aggregate amount not to exceed
$30,000,000 for such thirty-six month period and (xiii) all other non-cash
charges, and MINUS (b) all non-cash items increasing Consolidated Net Income for
such period; it being expressly understood and agreed that, notwithstanding
anything to the contrary set forth in this definition or in the definition of
Consolidated Net Income, if any restructuring charges are taken or incurred by
the Borrower or any of its Subsidiaries after the Closing Date (other than any
such charges related to the post-Merger integration of the Company and Old Solo
Cup), same shall reduce Consolidated EBITDA, PROVIDED that such reductions to
Consolidated EBITDA shall be made at the times, and to the extent, that cash
amounts are paid in respect thereof.
"CONSOLIDATED FUNDED INDEBTEDNESS" means, as of any date of
determination, for the Borrower and its Subsidiaries on a consolidated basis,
the sum of (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money (including Obligations hereunder) and
all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments (including, without limitation, with respect to the
11
Permitted Receivables Financings), (b) all purchase money Indebtedness, (c) all
obligations in respect of the deferred purchase price of property acquired or
services rendered (other than trade accounts payable in the ordinary course of
business), (d) Attributable Indebtedness in respect of Capitalized Lease
Obligations, (e) without duplication, all Guarantees with respect to outstanding
Indebtedness of the types specified in clauses (a) through (d) above of Persons
other than the Borrower or any Subsidiary, and (f) all Indebtedness of the types
referred to in clauses (a) through (e) above of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which the Borrower or a Subsidiary is a general partner or joint
venturer, unless such Indebtedness is expressly made non-recourse to the
Borrower or such Subsidiary.
"CONSOLIDATED INTEREST CHARGES" means, for any period, for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all
interest expense, premium payments, debt discount, fees, charges and related
expenses of the Borrower and its Subsidiaries in connection with borrowed money
or in connection with the deferred purchase price of property acquired or
services rendered, in each case to the extent treated as interest expense in
accordance with GAAP and (b) the portion of rent expense of the Borrower and its
Subsidiaries with respect to such period under Capitalized Lease Obligations
that is treated as interest expense in accordance with GAAP.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, as of any date of
determination, the ratio of (a) Consolidated EBITDA TO (b) Consolidated Cash
Interest Expense, in each case, for the most recently completed Measurement
Period.
"CONSOLIDATED LEVERAGE RATIO" means, as of any date of determination,
the ratio of (a) Average Total Debt as of such date TO (b) Consolidated EBITDA
for the most recently completed Measurement Period.
"CONSOLIDATED NET INCOME" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, the net income of the Borrower and its
Subsidiaries (excluding extraordinary gains but including extraordinary losses)
for that period.
"CONSOLIDATED WORKING CAPITAL" at any time means Current Assets (but
excluding therefrom all cash and Cash Equivalents) less Current Liabilities.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CONTROL" has the meaning specified in the definition of "Affiliate."
"CREDIT EXTENSION" means each of the following: (a) a Borrowing and
(b) an L/C Credit Extension.
"CURRENT ASSETS" means, with respect to any Person, all assets of such
Person that, in accordance with GAAP, would be classified as current assets on
the balance sheet of a company conducting a business the same as or similar to
that of such Person, after deducting
12
appropriate and adequate reserves therefrom in each case in which a reserve is
proper in accordance with GAAP.
"CURRENT LIABILITIES" means, with respect to any Person, all
liabilities of such Person that, in accordance with GAAP, would be classified as
current liabilities on the balance sheet of a company conducting a business the
same as or similar to that of such Person, but excluding the current portion of
any Indebtedness under this Agreement and the current portion of any other
long-term Indebtedness which would otherwise be included therein.
"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"DEFAULT" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"DEFAULT RATE" means (a) when used with respect to Obligations other
than Letter of Credit Fees, an interest rate equal to (i) the Base Rate PLUS
(ii) the Applicable Rate, if any, applicable to Base Rate Loans PLUS (iii) 2.0%
per annum; PROVIDED, HOWEVER, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2.0% per annum, and (b)
when used with respect to Letter of Credit Fees, a rate equal to the Applicable
Rate plus 2.0% per annum, and in each case to the fullest extent permitted by
applicable Laws.
"DEFAULTING LENDER" means any Lender that (a) has failed to fund any
portion of the Term Loans, Revolving Credit Loans, participations in L/C
Obligations or participations in Swing Line Loans required to be funded by it
hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.
"DISPOSITION" or "DISPOSE" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person (or the granting of any option or other right to do any of the
foregoing), including, without limitation, any sale, assignment, transfer or
other disposal, with or without recourse, of any notes or accounts receivable or
any rights and claims associated therewith. Derivatives of such terms have
corresponding meanings.
"DOCUMENTATION AGENT" means Xxxxxx Trust and Savings Bank, as
documentation agent with respect to the Facilities
"DOLLAR" and "$" mean lawful money of the United States.
"DOMESTIC SUBSIDIARY" means any Subsidiary that is organized under the
laws of the United States, any state thereof or the District of Columbia.
13
"ELIGIBLE ASSIGNEE" has the meaning specified in SECTION 11.07(g).
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, agency determinations, policies or guidances,
grants, franchises, licenses, agreements or governmental restrictions, in each
case, having the force and effect of law and now or hereafter in effect and as
amended, including common law, relating to human health or safety, pollution,
the protection of the environment or natural resources, or the release of any
materials into the environment, including those related to hazardous substances
or wastes, air emissions and discharges to waste or public systems.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
the actual or alleged violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) the actual or alleged exposure to any Hazardous Materials, (d)
the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"EQUITY INTERESTS" means, with respect to any Person, all of the
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the warrants, options or other rights for the purchase or
acquisition from such Person of shares of capital stock of (or other ownership
or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination.
"EQUITY OBLIGATIONS" of any Person means all obligations of such
Person to purchase, redeem, retire, defease or otherwise make any payment in
respect of any Equity Interest in such Person or any other Person or any
warrants, rights or options to acquire such Equity Interests, valued, in the
case of redeemable preferred interests, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with any Loan Party within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
14
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by any Loan Party or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by any Loan Party or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party
or any ERISA Affiliate.
"EURODOLLAR RATE" means for any Interest Period with respect to a
Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a) does not
appear on such page or service or such page or service shall not be
available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and (b)
are not available, the rate per annum determined by the Administrative
Agent as the rate of interest at which deposits in Dollars for delivery on
the first day of such Interest Period in same day funds in the approximate
amount of the Eurodollar Rate Loan being made, continued or converted by
Bank of America and with a term equivalent to such Interest Period would be
offered by Bank of America's London Branch to major banks in the London
interbank eurodollar market at their request at approximately 4:00 p.m.
(London time) two Business Days prior to the first day of such Interest
Period.
"EURODOLLAR RATE LOAN" means a Loan that bears interest at a rate
based on the Eurodollar Rate.
"EVENT OF DEFAULT" has the meaning specified in SECTION 8.01.
15
"EXCESS CASH FLOW" means, for any period, the amount, if any, by which
(A) the sum of (i) Consolidated Net Income for such period, (ii) the decrease,
if any, in Consolidated Working Capital from the first day to the last day of
such period, (iii) any refund of taxes received during such period by Holdings
or any of its Subsidiaries except to the extent that such refund constitutes an
Extraordinary Receipt, (iv) the aggregate amount of Unfunded Committed Capital
Expenditures for such period, and (v) without duplication, the sum of the amount
of all net non-cash charges (including, without limitation, depreciation,
amortization, deferred tax expense, non-cash expenses attributable to minority
interests in Subsidiaries, non-cash interest expense and net non-cash losses
which were included in arriving at net income of the Borrower and its
Subsidiaries for such period), exceeds (B) the sum, without duplication, of (i)
an amount equal to the sum of Capital Expenditures spent during such period PLUS
any Committed Capital Expenditures for the fiscal year following such period,
(ii) the amounts expended by Holdings and its Subsidiaries (other than any such
amounts financed through the issuance of Indebtedness or Equity Interests) in
respect of acquisitions permitted hereunder, (iii) the aggregate amount of
permanent principal payments of Indebtedness of Holdings and its Subsidiaries,
PROVIDED that repayments of Loans shall be deducted in determining Excess Cash
Flow if such repayments were (x) required as a result of a scheduled repayment
made pursuant to SECTION 2.07(a) or (y) made as a voluntary prepayment with
internally generated funds (but in the case of a voluntary prepayment of
Revolving Credit Loans, only to the extent accompanied by a voluntary reduction
to the Revolving Credit Commitment) during such period, (iv) the increase, if
any, in Consolidated Working Capital from the first day to the last day of such
period, (v) an amount of cash spent during such period with respect to expenses
accrued on the Borrower's balance sheet in connection with the Transaction or an
acquisition permitted hereunder including purchase accounting reserves, (vi)
taxes paid by Holdings and its Subsidiaries during such period to the extent not
deducted in determining Consolidated Net Income for such period, and including
as a deduction under this clause (vi) any taxes payable by Holdings and its
Subsidiaries in respect of such period even if such taxes are paid in a
subsequent period, provided that if a deduction is made during any period for
taxes payable in respect of, but not paid in, such period, then no deduction
shall be made for such taxes (under this clause (vi) or under clause (v) above)
in the period in which such taxes are paid, (vii) reductions in purchase
accounting reserves or reductions in other long term liabilities on the balance
sheet of Holdings or the Borrower on the Closing Date, (viii) the net amount of
any cash generated by any Foreign Subsidiary during such period which cash
remains in the possession, ownership or control of such Foreign Subsidiary to
the extent such cash cannot be repatriated without adverse tax consequences or
is otherwise necessary for the operations of such Foreign Subsidiary, (ix) the
amount of all net non-cash gains (exclusive of items reflected in Consolidated
Working Capital) included in arriving at net income of the Borrower and its
Subsidiaries for such period and (x) gains or losses for such period from sales
of assets other than sales in the ordinary course of business of the Borrower
and its Subsidiaries; PROVIDED that for purposes of calculating changes in
Consolidated Working Capital under this definition of "Excess Cash Flow" for the
fiscal year ended December 31, 2004, the Consolidated Working Capital as of the
first date of such period shall be deemed to be the Consolidated Working Capital
reflected in the combined consolidated balance sheets of the Company and Old
Solo Cup as of December 31, 2003.
"EXCLUDED PROPERTY" means the British Aerospace 1982 HS-125-700A
Aircraft N700NY, S/N NA 0299.
16
"EXCLUDED SUBSIDIARY" means (1) Global Cup S.A. de C.V. and Servicios
Tanairi S.A. de C.V., so long as any such entity is not a wholly-owned
Subsidiary; (2) each Non-CFC Foreign Subsidiary as of the Closing Date, PROVIDED
that no such Non-CFC Foreign Subsidiary shall be deemed to be an Excluded
Subsidiary under this clause (2) at any time following the date that is 90 days
after the Closing Date; (3) any CFC Foreign Subsidiary; (4) any Non-CFC Foreign
Subsidiary of the Borrower that is designated as such by the Borrower in a
written notice to the Administrative Agent, PROVIDED that the total assets of
all Non-CFC Foreign Subsidiaries that are Excluded Subsidiaries solely as a
result of this clause (4), as reflected on their respective most recent balance
sheets prepared in accordance with GAAP or other applicable generally accepted
accounting standards, shall not in the aggregate at any time exceed $1,000,000;
and (5) S Credit Corporation, an Illinois Corporation.
"EXISTING XXXXX NOTES" means the Series A and Series B 9 1/2% Senior
Subordinated Notes due 2007 issued pursuant to the Existing Xxxxx Notes
Indenture.
"EXISTING XXXXX NOTES INDENTURE" means the Indenture dated as of
February 27, 1997 between The Xxxxx Group, Inc. and The Bank of
New York, as
trustee, as amended, supplemented or otherwise modified to the Closing Date.
"EXISTING LETTERS OF CREDIT" means each of (i) that certain
irrevocable standby letter of credit number HACH19889OS issued by Xxxxxx Trust
and Savings Bank with face amount of $850,000 and expiry date of January 1, 2005
and (ii) that certain irrevocable standby letter of credit number HACH198820S
issued by Xxxxxx Trust and Savings Bank with face amount of $1,500,000 and
expiry date of June 30, 2004.
"EXISTING NOTES" means each of the series of notes set forth on
SCHEDULE 4.01(a)(xx) hereto.
"EXISTING SECURED INDEBTEDNESS" means any Indebtedness of the Company,
Old Solo Cup and their respective Subsidiaries, evidenced by the agreements,
documents and instruments set forth on SCHEDULE 4.01(A)(XIX) hereto, the
repayment of which has been secured by the grant of a Lien on certain real or
personal property of the Company, Old Solo Cup or their respective Subsidiaries.
"EXISTING SWEETHEART NOTES" means the 9 1/2% Senior Secured Notes due
2007 issued pursuant to the Existing Sweetheart Notes Indenture.
"EXISTING SWEETHEART NOTES INDENTURE" means the Indenture dated as of
December 16, 2003 between Sweetheart Cup Company Inc. and Xxxxx Fargo Bank
Minnesota, National Association, as trustee, as amended, supplemented or
otherwise modified to the Closing Date.
"EXTRAORDINARY RECEIPT" means any cash (net of fees, expenses and
taxes) in excess of $250,000 received by or paid to or for the account of any
Person not in the ordinary course of business with respect to tax refunds in
respect of periods prior to the Closing Date, pension plan reversions, proceeds
of insurance (other than proceeds of business interruption insurance to the
extent such proceeds constitute compensation for lost earnings), and
condemnation awards (and payments in lieu thereof); PROVIDED, HOWEVER, that an
Extraordinary
17
Receipt shall not include cash receipts received from proceeds of insurance or
condemnation awards (or payments in lieu thereof) to the extent that such
proceeds or awards in respect of loss or damage to equipment, fixed assets or
real property are applied (or in respect of which expenditures were previously
incurred) to replace or repair the equipment, fixed assets or real property in
respect of which such proceeds were received, so long as such application is
made within twelve months after the occurrence of such damage or loss or such
longer period as may be applicable if such repair or replacement requires more
than twelve months to complete, PROVIDED that the repair or replacement has been
promptly commenced and is being diligently pursued by or at the direction of
Borrower or its applicable Subsidiary.
"FACILITY" means the Term Facility, the Revolving Credit Facility, the
Swing Line Sublimit or the Letter of Credit Sublimit, as the context may
require.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of
New York on the Business Day
next succeeding such day; PROVIDED that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"FEE LETTER" means the letter agreement, dated December 22, 2003,
among Old Solo Cup, the Administrative Agent, the Arrangers and Citicorp North
America, Inc.
"FIRST-TIER FOREIGN CFC SUBSIDIARY" has the meaning specified in
SECTION 6.14(b).
"FOREIGN GOVERNMENT SCHEME OR ARRANGEMENT" has the meaning specified
in SECTION 5.12(d).
"FOREIGN LENDER" means (i) any Lender that is not organized under the
laws of the United States, any State thereof or the District of Columbia and
(ii) in the case of any Lender that is a wholly-owned domestic entity that is
disregarded for United States Federal tax purposes under Treasury Regulations
section 301.7701-2(c)(2) as an entity separate from its owner and whose single
owner is a foreign person within the meaning of Treasury Regulations section
1.1441-1(c)(2), such single owner.
"FOREIGN PLAN" has the meaning specified in SECTION 5.12(d).
"FOREIGN SUBSIDIARY" means any direct or indirect Subsidiary of the
Borrower which is not a Domestic Subsidiary.
"FRB" means the Board of Governors of the Federal Reserve System of
the United States.
18
"FUND" has the meaning specified in SECTION 11.07(g).
"FUNDED DEBT" of any Person means Indebtedness in respect of the
Credit Extensions, in the case of the Borrower, and all other Indebtedness of
such Person that by its terms matures more than one year after the date of
determination or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year after
such date or arises under a revolving credit or similar agreement that obligates
the lender or lenders to extend credit during a period of more than one year
after such date.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board that are
applicable to the circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"GRANTING LENDER" has the meaning specified in SECTION 11.07(h).
"GUARANTEE" means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness of any other
Person, whether or not such Indebtedness is assumed by such Person (or any
right, contingent or otherwise, of any holder of such Indebtedness to obtain any
such Lien). The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term "GUARANTEE" as a
verb has a corresponding meaning. For purposes of this paragraph, the term
"Indebtedness" shall include Equity Obligations, but notwithstanding the
foregoing or anything else to the contrary contained herein, a Guarantee of
Equity Obligations shall not constitute Indebtedness for any other purpose.
"GUARANTEED OBLIGATIONS" has the meaning specified in SECTION 10.01.
19
"GUARANTORS" means, collectively, Holdings and each of the
Subsidiaries of the Borrower listed as of the date hereof on SCHEDULE I and each
other Subsidiary of the Borrower that executes and delivers a guaranty or
guaranty supplement pursuant to SECTION 6.12.
"GUARANTY" means, collectively, the Parent Guaranty and the Subsidiary
Guaranty.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, mold, polychlorinated biphenyls, radon gas, infectious or medical
wastes and all other substances or wastes of any nature regulated pursuant to or
defined under any Environmental Law.
"HEDGE BANK" means any Person that is a Lender or an Affiliate of a
Lender, in its capacity as a party to a Secured Hedge Agreement.
"HOLDINGS" has the meaning specified in the introductory paragraph to
this Agreement.
"HOLDINGS LLC" means SCC Holding Company LLC, a Delaware limited
liability company.
"HONOR DATE" has the meaning specified in SECTION 2.03(c)(i).
"INDEBTEDNESS" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar written instruments;
(b) the face amount of all letters of credit (including standby
and commercial), bankers' acceptances, bank guaranties, surety bonds and
similar instruments issued on behalf of such Person;
(c) net settlement obligations (to the extent representing a
payment obligation) of such Person under any Swap Contract to the extent
not included in interest expense;
(d) all obligations of such Person to pay the deferred purchase
price of property or services (other than trade accounts payable in the
ordinary course of business that are not outstanding for more than 120 days
after the date of the applicable invoice with respect thereto);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under
20
conditional sales or other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited in
recourse;
(f) Capitalized Lease Obligations and Synthetic Lease Obligations;
and
(g) all Guarantees of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any Capitalized Lease Obligation or
Synthetic Lease Obligation as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date. The amount of
Indebtedness of any Person at any date shall be, without duplication, (i) the
outstanding balance at such date of all obligations of such Person as described
above (other than any Guarantees), (ii) with respect to any Guarantees, the
maximum liability in respect of such Guarantees at such date and (iii) in the
case of Indebtedness of others secured by a Lien to which the property or assets
owned or held by such Person is subject and to the extent such Indebtedness is
otherwise non-recourse to such Person, the lesser of the fair market value at
such date of the asset subject to such Lien and the amount of the Indebtedness
secured.
"INDEMNIFIED LIABILITIES" has the meaning specified in SECTION 11.05.
"INDEMNITEES" has the meaning specified in SECTION 11.05.
"INFORMATION" has the meaning specified in SECTION 11.08.
"INFORMATION MEMORANDUM" means the information memorandum dated
January 2004 used by the Arrangers in connection with the syndication of the
Commitments.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" has the meaning specified
in SECTION 4.01(a)(iv).
"INTEREST PAYMENT DATE" means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date of the Facility under which such Loan was made; PROVIDED, HOWEVER,
that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the
respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any Base
Rate Loan (including a Swing Line Loan), the last Business Day of each May,
August, November and February and the Maturity Date of the Facility under which
such Loan was made.
"INTEREST PERIOD" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Committed Loan Notice;
PROVIDED that:
21
(i) any Interest Period that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period; and
(iii) no Interest Period shall extend beyond the Maturity Date of
the Facility under which such Loan was made.
"INVENTORY REDUCTION CHARGES" means, for a period of thirty-six months
after the Closing Date, as of any date of determination, for the Borrower and
its Subsidiaries, charges with respect to the under-absorption of fixed costs
due to a reduction in average inventory contemplated to occur as part of the
post-Merger integration of the Company and Old Solo Cup (such average inventory
calculated based on the ending balance for each of the last 12 months (with the
last such month being the last day of the applicable fiscal quarter in such
thirty-six month period) and then compared with average inventory for the
comparable period ending one year earlier), PROVIDED, that such Inventory
Reduction Charges shall be equal to $0.20 for each Dollar of inventory
reduction, but not to exceed $15,000,000 in any twelve-month period and
$30,000,00 in the aggregate, and PROVIDED, FURTHER, that, in connection with any
fiscal quarter ended during such thirty-six month period, a Responsible Officer
of the Borrower shall provide a calculation to be set forth in the Compliance
Certificate to be delivered in accordance with SECTION 6.02(b) with respect to
such fiscal quarter, in reasonable detail, of the Inventory Reduction Charges
for the fiscal quarter then ended.
"INVESTMENT" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, (b)
a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor incurs
debt of the type referred to in clause (g) of the definition of "Indebtedness"
set forth in this SECTION 1.01 in respect of such Person, or (c) the purchase or
other acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit or all or a substantial part of
the business of, such Person. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"IP RIGHTS" has the meaning specified in SECTION 5.17.
"IP SECURITY AGREEMENT SUPPLEMENT" has the meaning specified in
SECTION 1(g)(vi) of the Security Agreement.
"IRS" means the United States Internal Revenue Service.
22
"ISP" means, with respect to any Letter of Credit, the "International
Standby Practices 1998" published by the Institute of International Banking Law
& Practices (or such later version thereof as may be in effect at the time of
issuance).
"ISSUER DOCUMENTS" means, with respect to any Letter of Credit, the
Letter of Credit Application, and any other document, agreement and instrument
entered into by any L/C Issuer and the Borrower or in favor of any L/C Issuer
and relating to any such Letter of Credit.
"JAPANESE RECEIVABLES PROGRAM" means the factoring of notes receivable
in the ordinary course of business by any Subsidiary that is organized under the
laws of Japan; PROVIDED, that the aggregate face amount with respect to such
receivables shall not exceed, at any one time, in the aggregate $10,000,000.
"LAWS" means, (i) collectively, all international, foreign, Federal,
state and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof and, (ii) solely
for purposes of SECTION 3.04, shall include all applicable administrative
orders, directed duties, requests, guidelines, licenses, authorizations, and
permits of, and agreements with any Governmental Authority, in each case, under
this CLAUSE (ii), whether or not having the force of the law.
"L/C ADVANCE" means, with respect to each Revolving Credit Lender,
such Lender's funding of its participation in any L/C Borrowing in accordance
with its Pro Rata Share.
"L/C BORROWING" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Revolving Credit Borrowing.
"L/C CREDIT EXTENSION" means, with respect to any Letter of Credit,
the issuance thereof or extension of the expiry date thereof, or the increase of
the amount thereof.
"L/C ISSUER" means each of Bank of America and Xxxxxx Trust and
Savings Bank, each in its capacity as issuer of Letters of Credit hereunder, or
any successor issuer of Letters of Credit hereunder.
"L/C OBLIGATIONS" means, as at any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit PLUS the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings. For all purposes of
this Agreement, if on any date of determination a Letter of Credit has expired
by its terms but any amount may still be drawn thereunder by reason of the
operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be
"outstanding" in the amount so remaining available to be drawn.
"LEASED REAL PROPERTY" means each parcel of real property leased or
subleased by any Loan Party or any of its Subsidiaries pursuant to any Real
Property Lease.
23
"LEASED REAL PROPERTY COLLATERAL" means the leasehold interests of any
Loan Party or any of its Subsidiaries under the Real Property Leases listed on
PART III of SCHEDULE 5.08(D) hereto and any New Material Lease that becomes
Collateral after the Closing Date pursuant to SECTION 6.12.
"LENDER" has the meaning specified in the introductory paragraph
hereto and, as the context requires, includes the L/C Issuers and the Swing Line
Lender.
"LENDING OFFICE" means, as to any Lender, the office or offices of
such Lender described as such in such Lender's Administrative Questionnaire, or
such other office or offices as a Lender may from time to time notify the
Borrower and the Administrative Agent.
"LETTER OF CREDIT" means any letter of credit issued hereunder and
shall include the Existing Letters of Credit. A Letter of Credit may be a
commercial letter of credit or a standby letter of credit.
"LETTER OF CREDIT APPLICATION" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time in
use by any L/C Issuer.
"LETTER OF CREDIT EXPIRATION DATE" means the day that is seven days
prior to the Maturity Date then in effect for the Revolving Credit Facility (or,
if such day is not a Business Day, the next preceding Business Day).
"LETTER OF CREDIT FEE" has the meaning specified in SECTION 2.03(i).
"LETTER OF CREDIT SUBLIMIT" means an amount equal to $40,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Revolving
Credit Facility.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or otherwise), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"LOAN" means an extension of credit by a Lender to the Borrower under
ARTICLE II in the form of a Term Loan, a Revolving Credit Loan or a Swing Line
Loan.
"LOAN DOCUMENTS" means, collectively, (a) for purposes of this
Agreement and the Notes and any amendment, supplement or other modification
hereof or thereof and for all other purposes other than for purposes of the
Guaranty and the Collateral Documents, (i) this Agreement, (ii) the Notes, (iii)
the Guaranty, (iv) the Collateral Documents, (v) the Fee Letter and (vi) each
Issuer Document and (b) for purposes of the Guaranty and the Collateral
Documents, (i) this Agreement, (ii) the Notes, (iii) the Guaranty, (iv) the
Collateral Documents, (v) each Issuer Document, (vi) the Fee Letter and (vii)
each Secured Hedge Agreement.
"LOAN PARTIES" means, collectively, the Borrower and each Guarantor.
24
"LOCAL LAW PERFECTION DOCUMENTS" has the meaning specified in SECTION
6.14(b).
"MATERIAL ADVERSE EFFECT" means (a) a material adverse effect upon the
business, assets, liabilities (actual or contingent), operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole;
(b) a material adverse effect upon the rights and remedies of the Administrative
Agent or any Lender under any Loan Document; (c) an adverse effect upon the
ability of any Loan Party to perform its obligations under any Loan Document to
which it is a party; or (d) an adverse effect upon the legality, validity,
binding effect or enforceability against any Loan Party of any Loan Document to
which it is a party.
"MATERIAL REAL PROPERTY SUBLEASES" means the Real Property Subleases
listed on PART IV of SCHEDULE 5.08(d) hereto.
"MATURITY DATE" means (a) with respect to the Revolving Credit
Facility, the earlier of (i) February 27, 2010 and (ii) the date of termination
in whole of the Revolving Credit Commitments, the Letter of Credit Commitments,
and the Swing Line Commitments pursuant to SECTION 2.06 or 8.02, and (b) with
respect to the Term Facility, the earlier of (i) February 27, 2011 and (ii) the
date of termination in whole of the commitments or the declaration of the Term
Loans to be due and payable or acceleration of the Term Loans pursuant to
SECTION 8.02.
"MAXIMUM RATE" has the meaning specified in SECTION 11.10.
"MEASUREMENT PERIOD" means, at any date of determination, the most
recently completed four consecutive fiscal quarters of the Borrower ending on or
prior to such date or, if less than four consecutive fiscal quarters of the
Borrower have been completed since the Closing Date, the fiscal quarters of the
Borrower that have been completed since the Closing Date; PROVIDED that, (i) (a)
for purposes of determining an amount of any item included in the calculation of
Consolidated Cash Interest Expense for the fiscal quarter ended June 30, 2004,
such amount for the Measurement Period then ended shall equal such item for the
fiscal quarter then ended multiplied by four; (b) for purposes of determining an
amount of any item included in the calculation of Consolidated Cash Interest
Expense for the fiscal quarter ended September 30, 2004, such amount for the
Measurement Period then ended shall equal such item for the two fiscal quarters
then ended multiplied by two; and (c) for purposes of determining an amount of
any item included in the calculation of Consolidated Cash Interest Expense for
the fiscal quarter ended December 31, 2004, such amount for the Measurement
Period then ended shall equal such item for three fiscal quarters then ended
multiplied by 4/3; and (ii) (a) for purposes of determining Consolidated EBITDA
for the fiscal quarter ended June 30, 2004, such amount for the Measurement
Period then ended shall equal the sum of (i) the consolidated pro forma EBITDA
of the Borrower and its Subsidiaries for the fiscal quarters ended September 30,
2003 and December 31, 2003 (after giving effect to the Transaction and the
allocation of synergies as the computation thereof is set forth on SCHEDULE
1.01), (ii) the consolidated pro forma EBITDA of the Borrower and its
Subsidiaries for the months ended January 31, 2004 and February 29, 2004 (after
giving effect to the Transaction and the allocation of synergies as the
computation thereof is set forth on SCHEDULE 1.01), (iii) the Consolidated
EBITDA for the month ended March 31, 2004 and (iv) Consolidated EBITDA for the
fiscal quarter ended June 30, 2004; (b) for purposes of determining Consolidated
EBITDA for the fiscal quarter ended September 30, 2004, such amount for the
Measurement Period then ended shall equal the sum of (i) the
25
consolidated pro forma EBITDA of the Borrower and its Subsidiaries for the
fiscal quarter ended December 31, 2003 (after giving effect to the Transaction
and the allocation of synergies as the computation thereof is set forth on
SCHEDULE 1.01), (ii) the consolidated pro forma EBITDA of the Borrower and its
Subsidiaries for the months ended January 31, 2004 and February 29, 2004 (after
giving effect to the Transaction and the allocation of synergies as the
computation thereof is set forth on SCHEDULE 1.01), (iii) the Consolidated
EBITDA for the month ended March 31, 2004 and (iv) Consolidated EBITDA for the
fiscal quarters ended June 30, 2004 and September 30, 2004; and (c) for purposes
of determining Consolidated EBITDA for the fiscal quarter ended December 31,
2004, such amount for the Measurement Period then ended shall equal the sum of
(i) the consolidated pro forma EBITDA of the Borrower and its Subsidiaries for
the months ended January 31, 2004 and February 29, 2004 (after giving effect to
the Transaction and the allocation of synergies as the computation thereof is
set forth on SCHEDULE 1.01), (ii) the Consolidated EBITDA for the month ended
March 31, 2004 and (iii) Consolidated EBITDA for the fiscal quarters ended June
30, 2004, September 30, 2004 and December 31, 2004.
"MERGER" has the meaning specified in the Preliminary Statements to
this Agreement.
"MERGER AGREEMENT" has the meaning specified in the Preliminary
Statements to this Agreement.
"MERGER SUB" has the meaning specified in the Preliminary Statements
to this Agreement.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"MORTGAGE" has the meaning specified in SECTION 6.18.
"MORTGAGE POLICY" has the meaning specified in SECTION 6.18(a)(ii).
"MULTIEMPLOYER PLAN" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"NET CASH PROCEEDS" means:
(a) with respect to any Disposition by Holdings or any of its
Subsidiaries, or any Extraordinary Receipt received by or paid to the
account of any such Persons, the excess, if any, of (i) the sum of cash and
Cash Equivalents received in connection with such transaction (including
any cash or Cash Equivalents received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and
when so received) and not required to be returned or reimbursed pursuant to
then applicable contract terms thereof over (ii) the sum of (A) the
principal amount of any Indebtedness that is secured by such asset and that
is required to be repaid in connection with such transaction (other than
Indebtedness under the Loan Documents), (B) the out-of-pocket expenses
incurred by Holdings or such Subsidiary in connection with such transaction
and (C) income taxes reasonably estimated to be actually payable within two
26
years of the date of the relevant transaction as a result of any income or
gain recognized in connection therewith; and
(b) with respect to the sale of any capital stock or other Equity
Interest by Holdings or any of its Subsidiaries, or the incurrence or
issuance of any Indebtedness by Holdings or any of its Subsidiaries, the
excess of (i) the sum of the cash and Cash Equivalents received in
connection with such transaction over (ii) the underwriting and brokerage
discounts and commissions, taxes and other out-of-pocket fees and expenses,
incurred by Holdings or such Subsidiary in connection with such
transaction.
"NEW COLLATERAL ACCESS LEASE" has the meaning specified in SECTION
6.12.
"NEW MATERIAL LEASE" has the meaning specified in SECTION 6.12.
"NEW OWNED PROPERTY" has the meaning specified in SECTION 6.12.
"NON-CFC FOREIGN SUBSIDIARY" means, with respect to any Loan Party,
any direct or indirect Subsidiary of such Loan Party that is (i) not a Domestic
Subsidiary and (ii) not a "controlled foreign corporation" under Section 957 of
the Code.
"NONRENEWAL NOTICE DATE" has the meaning specified in SECTION
2.03(b)(iii).
"NOTE" means a Term Note or a Revolving Credit Note, as the context
may require.
"NPL" means the National Priorities List under CERCLA.
"OBLIGATIONS" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party of any proceeding under any Debtor Relief Laws naming such Person as
the debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding. Without limiting the generality of the
foregoing, the Obligations of the Loan Parties under the Loan Documents include
(a) the obligation to pay principal, interest, Letter of Credit commissions,
charges, expenses, fees, attorneys' fees and disbursements, indemnities and
other amounts payable by any Loan Party under any Loan Document and (b) the
obligation of any Loan Party to reimburse any amount in respect of any of the
foregoing that any Lender, in its sole discretion, may elect to pay or advance
on behalf of such Loan Party.
"OLD SOLO CUP" has the meaning specified in the Preliminary Statements
to this Agreement.
"ORGANIZATION DOCUMENTS" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and
27
(c) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement of
formation or organization and any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"OTHER TAXES" has the meaning specified in SECTION 3.01(b).
"OUTSTANDING AMOUNT" means (i) with respect to Term Loans, Revolving
Credit Loans and Swing Line Loans on any date, the aggregate outstanding
principal amount thereof after giving effect to any borrowings and prepayments
or repayments of Term Loans, Revolving Credit Loans and Swing Line Loans, as the
case may be, occurring on such date; and (ii) with respect to any L/C
Obligations on any date, the amount of such L/C Obligations on such date after
giving effect to any L/C Credit Extension occurring on such date and any other
changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements of outstanding unpaid drawings under
any Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date.
"OWNED REAL PROPERTY" means all real property owned by any Loan Party
or any of its Subsidiaries from time to time.
"OWNED REAL PROPERTY COLLATERAL" means all Owned Real Property listed
on PART II of SCHEDULE 5.08(c) and any New Owned Property that becomes
Collateral after the Closing Date pursuant to SECTION 6.12.
"PANAMANIAN RECEIVABLES PROGRAM" means the sale by any Loan Party to
any Subsidiary organized under the laws of Panama, of trade receivables in the
ordinary course of business and owing by foreign obligors; PROVIDED, that the
aggregate face amount with respect to such receivables shall not exceed, at any
one time, in the aggregate $2,500,000.
"PARENT GUARANTY" means the Guarantee made by Holdings in favor of the
Administrative Agent on behalf of the Lenders pursuant to Article X hereof.
"PARTICIPANT" has the meaning specified in SECTION 11.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PENSION PLAN" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by any Loan Party or
any ERISA Affiliate or to which any Loan Party or any ERISA Affiliate
contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five plan years.
"PERMITTED ENCUMBRANCES" has the meaning specified in the Mortgages.
28
"PERMITTED REFINANCING SUBORDINATED INDEBTEDNESS" means any unsecured
Indebtedness incurred by the Borrower or any of the Loan Parties which is
subordinated to all Obligations hereunder and any other obligations secured
pursuant to the Collateral Documents in a manner which, in the reasonable
judgment of the Administrative Agent, is for such Indebtedness no less favorable
from the standpoint of the Obligations as such other obligations, so long as (i)
such Indebtedness shall require no amortization, sinking fund payment or any
other scheduled maturity of the principal amount thereof on any date which is
earlier than the date occurring one year after the then latest Maturity Date,
(ii) the weighted average interest rate for such Indebtedness shall not exceed
10% per annum and (iii) the terms governing any such Indebtedness shall not
contain any provision (including, without limitation, covenants, mandatory
redemptions or offers to purchase or prepay, defaults, remedies and
subordination provisions) which, in the reasonable judgment of the
Administrative Agent or the Required Lenders, is more restrictive or less
favorable, as applicable, in any material respect, than the provisions in the
Senior Subordinated Note Documents. Nothing contained in this definition shall
require the Administrative Agent to make any determination with respect to the
foregoing matters, and if the Administrative Agent shall elect to not make any
such determination, the Required Lenders shall do so upon request by the
Borrower.
"PERMITTED RECEIVABLES FINANCINGS" means, collectively, the Japanese
Receivables Program and the Panamanian Receivables Program.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by any Loan Party or, with respect to any
such plan that is subject to Section 412 of the Code or Title IV of ERISA, any
ERISA Affiliate.
"PLEDGED DEBT" has the meaning specified in SECTION 1(d)(iv) of the
Security Agreement.
"PLEDGED EQUITY" has the meaning specified in SECTION 1(d)(iii) of the
Security Agreement.
"PREFERRED EQUITY" means (i) the convertible participating preferred
stock of Holdings and (ii) the redeemable preferred stock of Holdings, in each
case issued pursuant to the Preferred Equity Documents.
"PREFERRED EQUITY CERTIFICATE OF DESIGNATIONS" means the Certificate
of Designations with respect to certain Preferred Equity, as adopted by the
Board of Directors of Holdings on February 27, 2004.
"PREFERRED EQUITY DOCUMENTS" means the Preferred Equity Certificate of
Designations, the Redeemable Preferred Equity Certificate of Designations, the
Preferred Equity Stock Purchase Agreement, the Stockholders' Agreement and the
2004 Management Investment and Compensation Incentive Plan, and all other
agreements, instruments and other documents pursuant to which the Preferred
Equity has been or will be issued or otherwise setting forth the terms of the
Preferred Equity, in each case as such agreement, instrument or other document
may
29
be amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof, but to the extent permitted under the terms of the Loan
Documents.
"PREFERRED EQUITY STOCK PURCHASE AGREEMENT" means the Convertible
Participating Preferred Stock Purchase Agreement, dated as of February 27, 2004,
by and among Holdings, Vestar Capital Partners IV, L.P., a Delaware limited
partnership, Vestar Cup Investment, LLC, a Delaware limited liability company
and Vestar Cup Investment II, LLC, a Delaware limited liability company.
"PRINCIPAL SHAREHOLDERS" (a) means each of Xxxx X. Xxxxxxxx or Xxxxxx
X. Xxxxxxxx, and (b) with respect to each of the foregoing, (i) his spouse, (ii)
his descendants and any member of his immediate family, including in each case
stepchildren and family members by adoption, (iii) his heirs at law and his
estate and the beneficiaries thereof, (iv) any charitable foundation created by
Xxxx X. Xxxxxxxx or Xxxxxx X. Xxxxxxxx, as applicable, and (v) any trust,
corporation, limited liability company, partnership or other entity, the
beneficiaries, stockholders, members, general partners, owners or Persons
Beneficially Owning a majority of the interests of which consist of Xxxx X.
Xxxxxxxx or Xxxxxx X. Xxxxxxxx, as applicable, and/or one or more of the Persons
referred to in the immediately preceding clauses (i) through (iv); PROVIDED that
any Person in the immediately preceding clauses (i) through (v) shall only be
deemed to be a Principal Shareholder to the extent that such Person's equity
securities of Holdings entitled to vote were received from Xxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxxxxx or any Person referred to in the immediately preceding
clauses (i), (ii) or (iii).
"PRO RATA SHARE" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment(s) of such Lender under
the applicable Facility or Facilities at such time and the denominator of which
is the amount of the Aggregate Commitments under the applicable Facility or
Facilities at such time; PROVIDED that if the commitment of each Lender to make
Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have
been terminated pursuant to SECTION 2.06 or SECTION 8.02, as applicable, then
the Pro Rata Share of each Lender shall be determined based on the Pro Rata
Share of such Lender immediately prior to such termination and after giving
effect to any subsequent assignments made pursuant to the terms hereof. The
initial Pro Rata Share of each Lender is set forth opposite the name of such
Lender on SCHEDULE 2.01 or in the Assignment and Assumption pursuant to which
such Lender becomes a party hereto, as applicable.
"QUALIFIED PREFERRED STOCK" means capital stock of Holdings that (a)
is entitled to a preference or priority over any other capital stock issued by
Holdings upon any distribution of Holdings' assets, whether by dividend or upon
liquidation, (b) by its terms is not redeemable (as defined below) in whole or
in part on any date which is earlier than the date occurring one year after the
then latest Maturity Date, (c) does not provide for payment of any cash
dividends or any other cash payments, including sinking fund payments (except on
the same terms as those applicable to the Preferred Equity as of the date
hereof) and (d) does not contain any provision (including, without limitation,
covenants, mandatory redemptions or offers to purchase or prepay, defaults and
remedies) which, in the reasonable judgment of the Administrative Agent or the
Required Lenders, is more restrictive or less favorable, as applicable, in any
material respect, than the provisions in the Preferred Equity Documents as in
effect on the Closing Date. As used
30
herein, the term "redeemable" means, with respect to any capital stock, that the
issuer has undertaken to redeem or repurchase the same (other than by an
exchange for other Qualified Preferred Stock or common stock) at a fixed or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of any event or condition, or that such capital stock is
redeemable for any reason at the option of the holder. Nothing contained in this
definition shall require the Administrative Agent to make any determination with
respect to the foregoing matters, and if the Administrative Agent shall elect to
not make any such determination, the Required Lenders shall do so upon request
of the Borrower.
"REAL PROPERTY COLLATERAL" means the Owned Real Property Collateral
and the Leased Real Property Collateral.
"REAL PROPERTY LEASES" means all leases of real property under which
any Loan Party or any of its Subsidiaries is the lessee from time to time.
"REAL PROPERTY SUBLEASES" means all leases of real property under
which any Loan Party or any of its Subsidiaries is the lessor or sublessor from
time to time.
"RECOGNIZED RATING AGENCY" means S&P, Xxxxx'x or another U.S.
nationally recognized or internationally recognized rating agency.
"REDEEMABLE PREFERRED EQUITY CERTIFICATE OF DESIGNATIONS" means the
Certificate of Designations with respect to certain Preferred Equity, as adopted
by the Board of Directors of Holdings on February 27, 2004
"REDUCTION AMOUNT" has the meaning specified in SECTION 2.05(b)(viii).
"REGISTER" has the meaning specified in SECTION 11.07(c).
"RELATED DOCUMENTS" means the Merger Agreement, the documents
effecting the Reorganization and the Preferred Equity Documents.
"RELATED PURCHASE" has the meaning specified in the Preliminary
Statements to this Agreement.
"REORGANIZATION" has the meaning specified in the Preliminary
Statements to this Agreement.
"REPORTABLE EVENT" means any of the events set forth in Section
4043(c) of ERISA, other than events for which the 30 day notice period has been
waived.
"REQUEST FOR CREDIT EXTENSION" means (a) with respect to a Borrowing,
conversion or continuation of Term Loans or Revolving Credit Loans, a Committed
Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit
Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan
Notice.
"REQUIRED LENDERS" means, as of any date of determination, more than
50% of the sum of the (a) Total Outstandings (with the aggregate amount of each
Lender's risk
31
participation and funded participation in L/C Obligations and Swing Line Loans
being deemed "held" by such Lender for purposes of this definition), (b)
aggregate unused Term Commitments and (c) aggregate unused Revolving Credit
Commitments; PROVIDED that the unused Term Commitment and unused Revolving
Credit Commitment of, and the portion of the Total Outstandings held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.
"RESPONSIBLE OFFICER" means the chief executive officer, president,
chief operating officer, chief financial officer, treasurer or assistant
treasurer of a Loan Party. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.
"RESTRICTED PAYMENT" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any capital stock or
other Equity Interest of Holdings or any of its Subsidiaries, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to Holdings' or any of
its Subsidiaries' stockholders, partners or members (or the equivalent Persons
thereof), or any option, warrant or other right to acquire any such capital
stock or other Equity Interest of Holdings or any of its Subsidiaries.
"REVOLVING CREDIT BORROWING" means a borrowing consisting of
simultaneous Revolving Credit Loans of the same Type and, in the case of
Eurodollar Rate Loans, having the same Interest Period made by each of the
Revolving Credit Lenders pursuant to SECTION 2.01(b).
"REVOLVING CREDIT COMMITMENT" means, as to each Revolving Credit
Lender, its obligation to (a) make Revolving Credit Loans to the Borrower
pursuant to SECTION 2.01(b), (b) purchase participations in L/C Obligations, and
(c) purchase participations in Swing Line Loans, in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth opposite
such Lender's name on SCHEDULE 2.01 under the caption "Revolving Credit
Commitment" or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such amount may be adjusted from time
to time in accordance with this Agreement.
"REVOLVING CREDIT FACILITY" means, at any time, the aggregate amount
of the Revolving Credit Lenders' Revolving Credit Commitments at such time.
"REVOLVING CREDIT LENDER" means, at any time, any Lender that has a
Revolving Credit Commitment at such time.
"REVOLVING CREDIT LOAN" has the meaning specified in SECTION 2.01(b).
"REVOLVING CREDIT NOTE" means a promissory note of the Borrower
payable to the order of any Revolving Credit Lender, in substantially the form
of EXHIBIT C-2 hereto,
32
evidencing the aggregate indebtedness of the Borrower to such Revolving Credit
Lender resulting from the Revolving Credit Loans made by such Revolving Credit
Lender.
"SALE/LEASEBACK TRANSACTION" has the meaning specified in SECTION
4.01(a)(xxi).
"SCC HOLDING MANAGEMENT AGREEMENT" means the Management Agreement,
dated as of February 27, 2004 and entered into by and among the Borrower,
Holdings and Holdings LLC.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"SECURED HEDGE AGREEMENT" means any interest rate or foreign currency
Swap Contract required or permitted under ARTICLE VI or VII that is entered into
by and between the Borrower and any Hedge Bank.
"SECURED OBLIGATIONS" has the meaning specified in SECTION 2 of the
Security Agreement.
"SECURED PARTIES" means, collectively, the Administrative Agent, the
Lenders, the L/C Issuers, the Hedge Banks and each co-agent or sub-agent
appointed by the Administrative Agent from time to time pursuant to SECTION
9.01(c) and the other Persons the Obligations owing to which are or are
purported to be secured by the Collateral under the terms of the Collateral
Documents.
"SECURITY AGREEMENT" has the meaning specified in SECTION
4.01(a)(iii).
"SECURITY AGREEMENT SUPPLEMENT" has the meaning specified in SECTION
25(b) of the Security Agreement.
"SENIOR SUBORDINATED NOTES" means the 8 1/2% unsecured subordinated
notes of the Borrower due February 15, 2014 in an aggregate principal amount of
$325,000,000 issued and sold on the Closing Date pursuant to the Senior
Subordinated Notes Indenture.
"SENIOR SUBORDINATED NOTES DOCUMENTS" means the Senior Subordinated
Notes Indenture, the Senior Subordinated Notes and all other agreements,
instruments and other documents pursuant to which the Senior Subordinated Notes
have been or will be issued or otherwise setting forth the terms of the Senior
Subordinated Notes, in each case as such agreement, instrument or other document
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof, but to the extent permitted under the terms
of the Loan Documents.
"SENIOR SUBORDINATED NOTES INDENTURE" means the Indenture dated as of
the Closing Date by and among U.S. Bank National Association, as trustee, the
Borrower and the Subsidiary Guarantors, as may be amended, supplemented or
otherwise modified from time to
33
time in accordance with the terms thereof, but only to the extent permitted
under the terms of the Loan Documents.
"SIGNIFICANT SUBSIDIARY" means at any time, a Subsidiary of the
Borrower having assets in an amount equal to at least 2% of the amount of total
consolidated assets of the Borrower and its Subsidiaries (determined as of the
last day of the most recent fiscal quarter of the Borrower) or revenues or net
income in an amount equal to at least 2% of the amount of total consolidated
revenues or net income of the Borrower and its Subsidiaries for the 12-month
period ending on the last day of the most recent fiscal quarter of the Borrower.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on any date
of determination, that on such date (a) the aggregate fair value of the property
of such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"SPC" has the meaning specified in SECTION 11.07(h).
"STOCKHOLDERS' AGREEMENT" means the Stockholders' Agreement, dated as
of February 27, 2004, by and among Holdings, Vestar Capital Partners IV, L.P., a
Delaware limited partnership, Vestar Cup Investment, LLC, a Delaware limited
liability company, Vestar Cup Investment II, LLC, a Delaware limited liability
company and certain members of management of Holdings.
"STOCKHOLDERS' REGISTRATION RIGHTS AGREEMENT" means the Registration
Rights Agreement, dated as of February 27, 2004, by and among Holdings LLC,
Vestar Capital Partners IV, L.P., a Delaware limited partnership, Holdings and
the other parties thereto.
"SUBSIDIARY" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"SUBSIDIARY" or to "SUBSIDIARIES" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"SUBSIDIARY GUARANTORS" means, collectively, the Subsidiaries of the
Borrower that are Guarantors.
34
"SUBSIDIARY GUARANTY" means, collectively, the Guarantee made by the
Subsidiary Guarantors in favor of the Administrative Agent on behalf of the
Lenders, substantially in the form of EXHIBIT F, together with each other
guaranty and guaranty supplement delivered pursuant to SECTION 6.12.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning specified in SECTION
9.13.
"SWAP CONTRACT" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "MASTER AGREEMENT"), including
any such obligations or liabilities under any Master Agreement.
"SWAP TERMINATION VALUE" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"SWING LINE" means the revolving credit facility made available by the
Swing Line Lender pursuant to SECTION 2.04.
"SWING LINE BORROWING" means a borrowing of a Swing Line Loan pursuant
to SECTION 2.04.
"SWING LINE LENDER" means Bank of America in its capacity as provider
of Swing Line Loans, or any successor swing line lender hereunder.
"SWING LINE LOAN" has the meaning specified in SECTION 2.04(a).
"SWING LINE LOAN NOTICE" means a notice of a Swing Line Borrowing
pursuant to SECTION 2.04(b), which, if in writing, shall be substantially in the
form of EXHIBIT B.
35
"SWING LINE SUBLIMIT" means an amount equal to the lesser of (a)
$10,000,000 and (b) the Revolving Credit Commitments. The Swing Line Sublimit is
part of, and not in addition to, the Revolving Credit Facility Commitments.
"SYNDICATION AGENT" means Citicorp North America, Inc., as syndication
agent with respect to the Facilities.
"SYNTHETIC LEASE OBLIGATION" means the monetary obligation of a Person
under (a) a synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as Indebtedness of such Person
(without regard to accounting treatment).
"TAXES" has the meaning specified in SECTION 3.01(a).
"TERM BORROWING" means the borrowing consisting of simultaneous Term
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the
same Interest Period made by each of the Term Lenders pursuant to SECTION
2.01(a).
"TERM COMMITMENT" means, as to each Term Lender, its obligation to
make Term Loans to the Borrower pursuant to SECTION 2.01(a) in an aggregate
principal amount at any one time outstanding not to exceed the amount set forth
opposite such Lender's name on SCHEDULE 2.01 under the caption "Term Commitment"
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.
"TERM FACILITY" means, at any time, the aggregate Term Loans of all
Lenders at such time.
"TERM LOAN" means an advance made by any Term Lender under the Term
Facility.
"TERM LENDER" means, at any time, any Lender that has a Term
Commitment at such time.
"TERM NOTE" means a promissory note of the Borrower payable to the
order of any Term Lender, in substantially the form of EXHIBIT C-1 hereto,
evidencing the aggregate indebtedness of the Borrower to such Term Lender
resulting from the Term Loans made by such Term Lender.
"THRESHOLD AMOUNT" means $12,500,000.
"TOTAL OUTSTANDINGS" means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.
"TRANSACTION" means, collectively, (a) the organization of the
Borrower and the issuance of all of the Equity Interests therein to Holdings,
(b) the consummation of the Merger, the Related Purchase and the Reorganization,
(c) the issuance and sale of the Senior
36
Subordinated Notes, (d) the entering into by the Loan Parties and their
applicable Subsidiaries of the Loan Documents, the Senior Subordinated Notes
Documents and the Related Documents to which they are or are intended to be a
party, (e) the refinancing of certain outstanding Indebtedness of Old Solo Cup
and its Subsidiaries and the termination of all commitments thereunder and the
refinancing of certain outstanding Indebtedness of the Company and its
Subsidiaries and the termination of all commitments thereunder, (f) the
organization of Holdings and the issuance by Holdings of common equity to
Holdings LLC and the Preferred Equity to Vestar Capital Partners IV, L.P., a
Delaware limited partnership, Vestar Cup Investment, LLC, a Delaware limited
liability company and Vestar Cup Investment II, LLC, a Delaware limited
liability company and (g) the payment of the fees and expenses incurred in
connection with the consummation of the foregoing, including without limitation,
the costs of all Mortgage Policies delivered under the Loan Documents.
"TREASURY REGULATIONS" means the final and temporary (but not
proposed) income tax regulations promulgated under the Code.
"TYPE" means, with respect to a Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.
"UCC COLLATERAL" has the meaning specified in SECTION 5.20.
"UNFUNDED COMMITTED CAPITAL EXPENDITURES" means, for any period, the
amount of any Committed Capital Expenditures for such period that was not paid
in cash during such period.
"UNITED STATES" and "U.S." mean the United States of America.
"UNREIMBURSED AMOUNT" has the meaning specified in SECTION 2.03(c)(i).
"VESTAR MANAGEMENT AGREEMENT" means the Management Agreement, dated as
of February 27, 2004, by and among Holdings, the Borrower and Vestar Capital
Partners, a
New York general partnership.
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this
Agreement and each other Loan Document, unless otherwise specified herein or in
such other Loan Document:
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "HEREIN," "HERETO," "HEREOF" and "HEREUNDER" and
words of similar import when used in any Loan Document shall refer to such
Loan Document as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to the
Loan Document in which such reference appears.
(iii) The term "INCLUDING" is by way of example and not limitation.
37
(iv) The term "DOCUMENTS" includes any and all instruments,
documents, agreements, certificates, notices, reports, financial statements
and other writings, however evidenced, whether in physical or electronic
form.
(c) In the computation of periods of time from a specified date
to a later specified date, the word "FROM" means "FROM AND INCLUDING;" the
words "TO" and "UNTIL" each mean "TO BUT EXCLUDING;" and the word "THROUGH"
means "TO AND INCLUDING."
(d) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS. (a) All accounting terms not specifically
defined herein shall be construed in conformity with, and all financial data
(including the financial covenants set forth in SECTION 7.10) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP,
applied in a manner consistent with that used in preparing the Audited Financial
Statements, EXCEPT as otherwise specifically prescribed herein.
(b) Notwithstanding SECTION 1.03(a) above, if at any time any
Accounting Change would affect the computation of the financial covenants set
forth in SECTION 7.10, and either the Borrower or the Required Lenders shall so
request, the Administrative Agent, the Lenders and the Borrower shall negotiate
in good faith to amend such financial covenant to preserve the original intent
thereof in light of such Accounting Change (subject to the approval of the
Required Lenders); PROVIDED that, until so amended, (i) such financial covenant
shall continue to be computed in the manner computed prior to such Accounting
Change and (ii) the Borrower shall provide to the Administrative Agent and the
Lenders financial statements and other documents required under this Agreement
or as reasonably requested hereunder setting forth a reconciliation between
calculations of such financial covenant made before and after giving effect to
such Accounting Change.
1.04 ROUNDING. Any financial ratios required to be maintained by
the Borrower pursuant to SECTION 7.10 shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06 TIMES OF DAY. Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).
38
1.07 LETTER OF CREDIT AMOUNTS. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Issuer Documents related thereto, whether or not such maximum face amount is in
effect at such time.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 THE LOANS.
(a) THE TERM BORROWING. Subject to the terms and conditions set
forth herein, each Term Lender severally agrees to make a single loan
(consisting of a Term Loan) in an amount equal to its Pro Rata Share of the Term
Facility to the Borrower on the Closing Date. The Term Borrowing shall consist
of Term Loans made simultaneously by the Term Lenders in accordance with their
respective Pro Rata Share of the Term Facility. Amounts borrowed under this
SECTION 2.01(a) and repaid or prepaid may not be reborrowed. Term Loans may be
Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
(b) THE REVOLVING CREDIT BORROWINGS. Subject to the terms and
conditions set forth herein, each Revolving Credit Lender severally agrees to
make loans (each such loan, a "REVOLVING CREDIT LOAN") to the Borrower from time
to time, on any Business Day during the Availability Period, in an aggregate
amount not to exceed at any time outstanding the amount of such Lender's
Revolving Credit Commitment; PROVIDED, HOWEVER, that after giving effect to any
Revolving Credit Borrowing, (i) the Total Outstandings shall not exceed the
Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the
Revolving Credit Loans of any Lender, PLUS such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations, PLUS such Lender's Pro Rata Share of
the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Revolving Credit Commitment. Within the limits of each Lender's Revolving Credit
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow under this SECTION 2.01(b), prepay under SECTION 2.05, and reborrow
under this SECTION 2.01(b). Revolving Credit Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) The Term Borrowing, each Revolving Credit Borrowing, each
conversion of Term Loans or Revolving Credit Loans from one Type to the other,
and each continuation of Eurodollar Rate Loans shall be made upon the Borrower's
irrevocable notice (except as provided in SECTION 3.03) to the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Administrative Agent not later than 1:00 p.m. (i) three Business Days prior to
the requested date of any Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate
Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans. Each
telephonic notice by the Borrower pursuant to this SECTION 2.02(a) must be
confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Each Borrowing of, conversion to or continuation of
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Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof. Except as provided in SECTIONS 2.03(c)
and 2.04(C) or in the case of a Borrowing of the then entire unborrowed amount
of the Revolving Credit Commitment if less than $500,000, each Borrowing of or
conversion to Base Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof. Each Committed Loan Notice
(whether telephonic or written) shall specify (i) whether the Borrower is
requesting the Term Borrowing, a Revolving Credit Borrowing, a conversion of
Term Loans or Revolving Credit Loans from one Type to the other, or a
continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Loans to be borrowed, converted or continued, (iv)
the Type of Loans to be borrowed or to which existing Term Loans or Revolving
Credit Loans are to be converted, and (v) if applicable, the duration of the
Interest Period with respect thereto. If the Borrower fails to specify a Type of
Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Term Loans or
Revolving Credit Loans shall be made as, or converted to, Base Rate Loans. Any
such automatic conversion to Base Rate Loans shall be effective as of the last
day of the Interest Period then in effect with respect to the applicable
Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to,
or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but
fails to specify an Interest Period, it will be deemed to have specified an
Interest Period of one month.
(b) Following receipt of a Committed Loan Notice, the
Administrative Agent shall promptly notify each Lender of the amount of its Pro
Rata Share of the applicable Term Loans or Revolving Credit Loans, and if no
timely notice of a conversion or continuation is provided by the Borrower, the
Administrative Agent shall notify each Lender of the details of any automatic
conversion to Base Rate Loans described in SECTION 2.02(a). In the case of the
Term Borrowing or a Revolving Credit Borrowing, each Appropriate Lender shall
make the amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent's Office not later than 2:00 p.m. on
the Business Day specified in the applicable Committed Loan Notice. Upon
satisfaction of the applicable conditions set forth in SECTION 4.02 (and, if
such Borrowing is the initial Credit Extension, SECTION 4.01), the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Borrower; PROVIDED, HOWEVER, that if, on the date the Committed Loan
Notice with respect to such Borrowing is given by the Borrower, there are L/C
Borrowings outstanding, then the proceeds of such Borrowing shall be applied
FIRST to the payment in full of any such L/C Borrowings, and SECOND to the
Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan
may be continued or converted only on the last day of an Interest Period for
such Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower
and the Lenders of the interest rate applicable to any Interest Period for
Eurodollar Rate Loans upon
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determination of such interest rate. The determination of the Eurodollar Rate by
the Administrative Agent shall be conclusive in the absence of manifest error.
At any time that Base Rate Loans are outstanding, the Administrative Agent shall
notify the Borrower and the Lenders of any change in Bank of America's prime
rate used in determining the Base Rate promptly following the public
announcement of such change.
(e) After giving effect to the Term Borrowing, all Revolving
Credit Borrowings, all conversions of Term Loans or Revolving Credit Loans from
one Type to the other, and all continuations of Term Loans or Revolving Credit
Loans as the same Type, there shall not be more than ten Interest Periods in
effect.
(f) The failure of any Lender to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
(g) Anything in this SECTION 2.02 to the contrary notwithstanding,
the Borrower may not select (i) Eurodollar Rate Loans for the initial Credit
Extension hereunder or (ii) Interest Periods for Eurodollar Rate Loans that have
a duration of more than one month during the period from the date hereof to May
27, 2004 (or such earlier date as shall be specified in its sole discretion by
the Administrative Agent in a written notice to the Borrower and the Lenders).
2.03 LETTERS OF CREDIT.
(a) THE LETTER OF CREDIT COMMITMENT.
(i) Subject to the terms and conditions set forth herein, (A) each
L/C Issuer agrees, in reliance upon the agreements of the other Revolving
Credit Lenders set forth in this SECTION 2.03, (1) from time to time on any
Business Day during the period from the Closing Date until the Letter of
Credit Expiration Date, to issue Letters of Credit for the account of the
Borrower, and to amend or renew Letters of Credit previously issued by it,
in accordance with SECTION 2.03(b), and (2) to honor drawings under the
Letters of Credit; and (B) the Revolving Credit Lenders severally agree to
participate in Letters of Credit issued for the account of the Borrower and
any drawings thereunder; PROVIDED that the L/C Issuers shall not be
obligated to make any L/C Credit Extension with respect to any Letter of
Credit if (x) the Total Outstandings would exceed the Aggregate
Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of
any Lender, PLUS such Lender's Pro Rata Share of the Outstanding Amount of
all L/C Obligations, PLUS such Lender's Pro Rata Share of the Outstanding
Amount of all Swing Line Loans would exceed such Lender's Revolving Credit
Commitment, or (z) the Outstanding Amount of the L/C Obligations would
exceed the Letter of Credit Sublimit. Each request by the Borrower for the
issuance or amendment of a Letter of Credit shall be deemed to be a
representation by the Borrower that (i) the Outstanding Amount of all
Revolving Credit Loans, PLUS the Outstanding Amount of all L/C Obligations,
PLUS the Outstanding Amount of all Swing Line Loans will not exceed the
Aggregate Revolving Credit Commitments and (ii) the Outstanding Amount of
all L/C Obligations will not exceed the
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Letter of Credit Sublimit, in each case after giving effect to such
issuance or amendment of such Letter of Credit. Within the foregoing
limits, and subject to the terms and conditions hereof, the Borrower's
ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Letters
of Credit to replace Letters of Credit that have expired or that have been
drawn upon and reimbursed. All Existing Letters of Credit shall be deemed
to have been issued pursuant hereto, and from and after the Closing Date
shall be subject to and governed by the terms and conditions hereof.
(ii) No L/C Issuer shall be under any obligation to issue any
Letter of Credit if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain such L/C Issuer from issuing such Letter of Credit, or any
Law applicable to such L/C Issuer or any request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over such L/C Issuer shall prohibit, or request that such
L/C Issuer refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon such L/C
Issuer with respect to such Letter of Credit any restriction, reserve
or capital requirement (for which such L/C Issuer is not otherwise
compensated hereunder) not in effect on the Closing Date, or shall
impose upon such L/C Issuer any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which such L/C Issuer
in good xxxxx xxxxx material to it;
(B) subject to SECTION 2.03(b)(iii), the expiry date of
such requested Letter of Credit would occur more than twelve months
after the date of issuance or last extension, unless the Required
Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of Credit
would occur after the Letter of Credit Expiration Date, unless all the
Revolving Credit Lenders have approved such expiry date or unless such
Letter of Credit has been Cash Collateralized to the satisfaction of
the Administrative Agent and such L/C Issuer in their sole discretion,
and the applicable L/C Issuer, in its sole discretion, has agreed to
issue such Letter of Credit;
(D) the issuance of such Letter of Credit would violate
any Laws or one or more written policies of such L/C Issuer;
(E) except as otherwise agreed by the Administrative Agent
and the applicable L/C Issuer, such Letter of Credit is in an initial
face amount less than $100,000, in the case of a commercial Letter of
Credit, or $500,000, in the case of a standby Letter of Credit;
(F) such Letter of Credit is to be denominated in a
currency other than Dollars; or
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(G) a default of any Lender's obligations to fund under
SECTION 2.03(c) exists or any Lender is at such time a Defaulting
Lender hereunder, unless the L/C Issuer has entered into satisfactory
arrangements with the Borrower or such Lender to eliminate the L/C
Issuer's risk with respect to such Lender.
(iii) No L/C Issuer shall be under any obligation to amend any
Letter of Credit if (A) such L/C Issuer would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept the
proposed amendment to such Letter of Credit.
(b) PROCEDURES FOR ISSUANCE AND AMENDMENT OF LETTERS OF CREDIT;
AUTO-RENEWAL LETTERS OF CREDIT.
(i) Each Letter of Credit shall be issued or amended, as the case
may be, upon the request of the Borrower delivered to an L/C Issuer (with a
copy to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of
the Borrower. Such Letter of Credit Application must be received by such
L/C Issuer and the Administrative Agent not later than 1:00 p.m. at least
two Business Days (or such later date and time as the Administrative Agent
and such L/C Issuer may agree in a particular instance in their sole
discretion) prior to the proposed issuance date or date of amendment, as
the case may be. In the case of a request for an initial issuance of a
Letter of Credit, such Letter of Credit Application shall specify in form
and detail satisfactory to such L/C Issuer: (A) the proposed issuance date
of the requested Letter of Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof; (D) the name and address of
the beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as such L/C Issuer may reasonably
require. In the case of a request for an amendment of any outstanding
Letter of Credit, such Letter of Credit Application shall specify in form
and detail satisfactory to such L/C Issuer (A) the Letter of Credit to be
amended; (B) the proposed date of amendment thereof (which shall be a
Business Day); (C) the nature of the proposed amendment; and (D) such other
matters as such L/C Issuer may reasonably require. Additionally, the
Borrower shall furnish to the applicable L/C Issuer and the Administrative
Agent such other documents and information pertaining to such requested
Letter of Credit issuance or amendment, including any Issuer Documents, as
such L/C Issuer or the Administrative Agent may reasonably require.
(ii) Promptly after receipt of any Letter of Credit Application,
the applicable L/C Issuer will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a copy
of such Letter of Credit Application from the Borrower and, if not, such
L/C Issuer will provide the Administrative Agent with a copy thereof.
Unless such L/C Issuer receives written notice from any Lender or the
Administrative Agent at least one Business Day prior to the requested date
of issuance or amendment of the applicable Letter of Credit that one or
more applicable conditions contained in Article IV shall not be satisfied,
then, subject to the terms and conditions hereof, such L/C Issuer shall, on
the requested date, issue a Letter of Credit for the
43
account of the Borrower or enter into the applicable amendment, as the case
may be, in each case in accordance with such L/C Issuer's usual and
customary business practices for commercial and standby letters of credit,
as applicable. Immediately upon the issuance of each Letter of Credit, each
Revolving Credit Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from such L/C Issuer a risk
participation in such Letter of Credit in an amount equal to the product of
such Lender's Pro Rata Share TIMES the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit
Application, an L/C Issuer may, in its sole and absolute discretion, agree
to issue a Letter of Credit that has automatic renewal provisions (each, an
"AUTO-RENEWAL LETTER OF CREDIT"); PROVIDED that any such Auto-Renewal
Letter of Credit must permit an L/C Issuer to prevent any such renewal at
least once in each twelve-month period (commencing with the date of
issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a day in each such twelve-month period
to be agreed upon at the time such Letter of Credit is issued (the
"NONRENEWAL NOTICE DATE"). Unless otherwise directed by such L/C Issuer,
the Borrower shall not be required to make a specific request to such L/C
Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has been
issued, the Lenders shall be deemed to have authorized (but may not
require) such L/C Issuer to permit the renewal of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration
Date (unless such Letter of Credit has been Cash Collateralized to the
satisfaction of the Administrative Agent and such L/C Issuer in their sole
discretion and the applicable L/C Issuer has agreed in its sole discretion
to any later expiration); PROVIDED, HOWEVER, that such L/C Issuer shall not
permit any such renewal if (A) such L/C Issuer has determined that it would
have no obligation at such time to issue such Letter of Credit in its
renewed form under the terms hereof (by reason of the provisions clauses
(ii) or (iii) of SECTION 2.03(a) or otherwise), or (B) it has received
notice (which may be by telephone or in writing) on or before the day that
is five Business Days before the Nonrenewal Notice Date (1) from the
Administrative Agent that Revolving Credit Lenders holding 50% of the Total
Outstandings (as computed in accordance with CLAUSE (a) of the definition
of Required Lenders) have elected not to permit such extension, (2) from
the Administrative Agent, any Revolving Credit Lender or any Loan Party
that one or more of the applicable conditions specified in SECTION 4.02 is
not then satisfied, and in each case directing the applicable L/C Issuer
not to permit such extension or (3) from the Borrower electing not to agree
to such renewal.
(iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the applicable L/C Issuer will also deliver to
the Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.
(c) DRAWINGS AND REIMBURSEMENTS; FUNDING OF PARTICIPATIONS.
(i) Upon receipt from the beneficiary of any Letter of Credit of
any notice of a drawing under such Letter of Credit, the applicable L/C
Issuer shall notify the Borrower and the Administrative Agent thereof. Not
later than 1:00 p.m. (or if the notice of drawing on such Letter of Credit
is given after 11:00 a.m., then not later than 12:00 noon
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on the next succeeding Business Day on the date of any payment by such L/C
Issuer under a Letter of Credit (each such date, an "HONOR DATE"), the
Borrower shall reimburse such L/C Issuer through the Administrative Agent
in an amount equal to the amount of such drawing. If the Borrower fails to
so reimburse such L/C Issuer by such time, the Administrative Agent shall
promptly notify each Revolving Credit Lender of the Honor Date, the amount
of the unreimbursed drawing (the "UNREIMBURSED AMOUNT"), and the amount of
such Revolving Credit Lender's Pro Rata Share thereof. In such event, the
Borrower shall be deemed to have requested a Revolving Credit Borrowing of
Base Rate Loans to be disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples specified
in SECTION 2.02 for the principal amount of Base Rate Loans, but subject to
the amount of the unutilized portion of the Revolving Credit Commitments
and the absence of a Default under SECTION 8.01(f) or 8.01(g). Any notice
given by such L/C Issuer or the Administrative Agent pursuant to this
SECTION 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; PROVIDED that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(ii) Each Revolving Credit Lender (including the Lender acting as
an L/C Issuer) shall upon any notice pursuant to SECTION 2.03(c)(i) make
funds available to the Administrative Agent for the account of such L/C
Issuer at the Administrative Agent's Office in an amount equal to its Pro
Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the
Business Day specified in such notice by the Administrative Agent,
whereupon, subject to the provisions of SECTION 2.03(c)(iii), each
Revolving Credit Lender that so makes funds available shall be deemed to
have made a Revolving Credit Loan that is a Base Rate Loan to the Borrower
in such amount and the Borrower's obligation to reimburse such L/C Issuer
for such Unreimbursed Amount shall be discharged to the extent funds shall
have been made available by such Revolving Credit Lenders. The
Administrative Agent shall remit the funds so received to such L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Revolving Credit Borrowing of Base Rate Loans because of
the existence or continuance of a Default under SECTION 8.01(f) or 8.01(g),
the Borrower shall be deemed to have incurred from the applicable L/C
Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is
not so refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate. In
such event, each Revolving Credit Lender's payment to the Administrative
Agent for the account of such L/C Issuer pursuant to SECTION 2.03(c)(ii)
shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this SECTION 2.03.
(iv) Until each Revolving Credit Lender funds its Revolving Credit
Loan or L/C Advance pursuant to this SECTION 2.03(c) to reimburse the
applicable L/C Issuer for any amount drawn under any Letter of Credit,
interest in respect of such Lender's Pro Rata Share of such amount shall be
solely for the account of such L/C Issuer.
(v) Each Revolving Credit Lender's obligation to make Revolving
Credit Loans or L/C Advances to reimburse the applicable L/C Issuer for
amounts drawn under
45
Letters of Credit, as contemplated by this SECTION 2.03(c), shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right
which such Lender may have against such L/C Issuer, the Borrower or any
other Person for any reason whatsoever; (B) the occurrence or continuance
of a Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing; PROVIDED, HOWEVER, that each Revolving
Credit Lender's obligation to make Revolving Credit Loans pursuant to this
SECTION 2.03(c) is subject to the amount of the unutilized portion of the
Revolving Credit Commitments and the absence of a Default under SECTION
8.01(f) or 8.01(g). No such making of an L/C Advance shall relieve or
otherwise impair the obligation of the Borrower to reimburse such L/C
Issuer for the amount of any payment made by such L/C Issuer under any
Letter of Credit, together with interest as provided herein.
(vi) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the applicable L/C Issuer any
amount required to be paid by such Lender pursuant to the foregoing
provisions of this SECTION 2.03(c) by the time specified in SECTION
2.03(c)(ii), such L/C Issuer shall be entitled to recover from such Lender
(acting through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to
the date on which such payment is immediately available to such L/C Issuer
at a rate per annum equal to the Federal Funds Rate from time to time in
effect. A certificate of such L/C Issuer submitted to any Revolving Credit
Lender (through the Administrative Agent) with respect to any amounts owing
under this SECTION 2.03(c)(vi) shall be conclusive absent manifest error.
(d) REPAYMENT OF PARTICIPATIONS.
(i) At any time after an L/C Issuer has made a payment under any
Letter of Credit and has received from any Revolving Credit Lender such
Lender's L/C Advance in respect of such payment in accordance with SECTION
2.03(c), if the Administrative Agent receives for the account of the
applicable L/C Issuer any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such
Lender its Pro Rata Share thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender's
L/C Advance was outstanding) in the same funds as those received by the
Administrative Agent.
(ii) If any payment received by the Administrative Agent for the
account of an L/C Issuer pursuant to SECTION 2.03(c)(i) is required to be
returned under any of the circumstances described in SECTION 11.06
(including pursuant to any settlement entered into by such L/C Issuer in
its discretion), each Revolving Credit Lender shall pay to the
Administrative Agent for the account of the applicable L/C Issuer its Pro
Rata Share thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is returned by
such Lender, at a rate per annum equal to the Federal Funds Rate from time
to time in effect.
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(e) OBLIGATIONS ABSOLUTE. The obligation of the Borrower to
reimburse an L/C Issuer for each drawing under each Letter of Credit and to
repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument relating
hereto or thereto;
(ii) the existence of any claim, counterclaim, setoff, defense or
other right that the Borrower or any Subsidiary may have at any time
against any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting),
an L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit
or any agreement or instrument relating thereto, or any unrelated
transaction;
(iii) any draft, demand, certificate or other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission of any
document required in order to make a drawing under such Letter of Credit;
(iv) any payment by an L/C Issuer under such Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit; or any payment made by an
L/C Issuer under such Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to
any beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law;
(v) any exchange, release or nonperfection of any Collateral, or
any release or amendment or waiver of or consent to departure from the
Guaranty or any other guarantee, for all or any of the Obligations of the
Borrower or any Subsidiary in respect of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit
and each amendment thereto that is delivered to it and, in the event of any
claim of noncompliance with the Borrower's instructions or other irregularity,
the Borrower will immediately notify the applicable L/C Issuer. The Borrower
shall be conclusively deemed to have waived any such claim against the
applicable L/C Issuer and its correspondents unless such notice is given as
aforesaid.
(f) ROLE OF L/C ISSUER. Each Lender and the Borrower agree that,
in paying any drawing under a Letter of Credit, an L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the
47
Letter of Credit) or to ascertain or inquire as to the validity or accuracy of
any such document or the authority of the Person executing or delivering any
such document. None of an L/C Issuer, any Agent-Related Person nor any of the
respective correspondents, participants or assignees of an L/C Issuer shall be
liable to any Lender for (i) any action taken or omitted in connection herewith
at the request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Letter of Credit Application. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; PROVIDED, HOWEVER, that this assumption is not intended to,
and shall not, preclude the Borrower's pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. No L/C Issuer, no Agent-Related Person, nor any of the respective
correspondents, participants or assignees of an L/C Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (v) of
SECTION 2.03(e); PROVIDED, HOWEVER, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against an L/C Issuer,
and such L/C Issuer may be liable to the Borrower, to the extent of any direct,
as opposed to consequential or exemplary, damages suffered by the Borrower which
the Borrower proves were caused by such L/C Issuer's willful misconduct or gross
negligence or such L/C Issuer's willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, an L/C Issuer may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and such L/C Issuer shall not be responsible for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
(g) CASH COLLATERAL. Upon the request of the Administrative Agent,
(i) if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing which has not
been refinanced as a Revolving Credit Borrowing, or (ii) if, as of the Letter of
Credit Expiration Date, any Letter of Credit for any reason remains outstanding
and partially or wholly undrawn, the Borrower shall immediately Cash
Collateralize the then Outstanding Amount of all L/C Obligations (in an amount
equal to such Outstanding Amount determined as of the date of such L/C Borrowing
or the Letter of Credit Expiration Date, as the case may be). The Borrower
hereby grants to the Administrative Agent, for the benefit of the L/C Issuers
and the Lenders, a security interest in all the cash, deposit accounts and all
balances therein and all proceeds of the foregoing constituting Cash Collateral.
Cash Collateral shall be maintained in blocked deposit accounts at Bank of
America. If at any time the Administrative Agent determines that the total
amount of funds held as Cash Collateral is less than the aggregate Outstanding
Amount of all L/C Obligations, the Borrower will, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional funds to be
deposited and held in the deposit accounts at Bank of America as aforesaid, an
amount equal to the excess of (a) such aggregate Outstanding Amount over (b) the
total amount of funds, if any, then held as Cash Collateral. Upon the drawing of
any Letter of Credit for which funds are on deposit as Cash Collateral, such
funds shall be applied, to the extent permitted under applicable law, to
reimburse the applicable L/C Issuer. The provisions of
48
this SECTION 2.03(g) shall apply to any situation in which any Obligations are
Cash Collateralized pursuant to this SECTION 2.03.
(h) APPLICABILITY OF ISP98 AND UCP. Unless otherwise expressly
agreed by the applicable L/C Issuer and the Borrower when a Letter of Credit is
issued (including any such agreement applicable to an Existing Letter of
Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the "ICC")
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial Letter of Credit.
(i) LETTER OF CREDIT FEES. The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender in
accordance with its Pro Rata Share a Letter of Credit fee (the "LETTER OF CREDIT
FEE") for each Letter of Credit equal to the Applicable Rate TIMES the daily
maximum amount available to be drawn under such Letter of Credit (whether or not
such maximum amount is then in effect under such Letter of Credit). Letter of
Credit Fees shall be computed on a quarterly basis in arrears and shall be due
and payable on the first Business Day after the end of each May, August,
November and February, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand. If there is any change in the Applicable Rate during any
quarter, the daily maximum amount of each Letter of Credit shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect. Notwithstanding anything to the
contrary contained herein, upon the request of the Required Lenders, while any
Event of Default exists, all Letter of Credit Fees shall accrue at the Default
Rate.
(j) FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO
L/C ISSUERS. Unless otherwise agreed by the Borrower and the applicable L/C
Issuer, the Borrower shall pay directly to each L/C Issuer, for its own account,
a fronting fee of 0.25% per annum with respect to each Letter of Credit payable
on the actual daily maximum amount available to be drawn under such Letter of
Credit (whether or not such maximum amount is then in effect under such Letter
of Credit). Such fronting fee shall be computed on a quarterly basis in arrears.
Such fronting fee shall be due and payable on the first Business Day after the
end of each May, August, November and February, commencing with the first such
date to occur after the issuance of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. In addition, the Borrower shall
pay directly to each L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of such L/C Issuer relating to letters of credit as from time to time
in effect. Such customary fees and standard costs and charges are due and
payable on demand and are nonrefundable.
(k) CONFLICT WITH LETTER OF CREDIT APPLICATIONS. In the event of
any conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
49
(l) DESIGNATION OF SUBSIDIARIES AS ACCOUNT PARTIES.
Notwithstanding anything to the contrary set forth in this Agreement, including
without limitation SECTION 2.03(a), a Letter of Credit issued hereunder shall
upon the request of the Borrower be issued for the account of any Subsidiary of
the Borrower, provided that notwithstanding such request, the Borrower shall be
the actual account party for all purposes of this Agreement for such Letter of
Credit and such request shall not affect the Borrower's reimbursement
obligations hereunder with respect to such Letter of Credit.
2.04 SWING LINE LOANS.
(a) THE SWING LINE. Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees to make loans (each such loan, a "SWING
LINE LOAN") to the Borrower from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of
Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed
the amount of such Lender's Commitment; PROVIDED, HOWEVER, that after giving
effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed the
Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the
Revolving Credit Loans of any Lender, PLUS such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations, PLUS such Lender's Pro Rata Share of
the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Revolving Credit Commitment, and PROVIDED FURTHER that the Borrower shall not
use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line
Loan. Within the foregoing limits, and subject to the other terms and conditions
hereof, the Borrower may borrow under this SECTION 2.04, prepay under SECTION
2.05, and reborrow under this SECTION 2.04. Each Swing Line Loan shall be a Base
Rate Loan. Immediately upon the making of a Swing Line Loan, each Revolving
Credit Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Swing Line Lender a risk participation in such
Swing Line Loan in an amount equal to the product of such Lender's Pro Rata
Share TIMES the amount of such Swing Line Loan.
(b) BORROWING PROCEDURES. Each Swing Line Borrowing shall be made
upon the Borrower's irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be a minimum of $200,000, and (ii) the requested
borrowing date, which shall be a Business Day. Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Revolving Credit Lender) prior to 2:00
p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing
Line Lender not to make such Swing Line Loan as a result of the limitations set
forth in
50
the proviso to the first sentence of SECTION 2.04(a), or (B) that one or more of
the applicable conditions specified in ARTICLE IV is not then satisfied, then,
subject to the terms and conditions hereof, the Swing Line Lender will, not
later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Borrower.
(c) REFINANCING OF SWING LINE LOANS.
(i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Borrower (which hereby irrevocably
authorizes the Swing Line Lender to so request on its behalf), that each
Revolving Credit Lender make a Base Rate Loan in an amount equal to such
Lender's Pro Rata Share of the amount of Swing Line Loans then outstanding.
Such request shall be made in writing (which written request shall be
deemed to be a Committed Loan Notice for purposes hereof) and in accordance
with the requirements of SECTION 2.02, without regard to the minimum and
multiples specified therein for the principal amount of Base Rate Loans,
but subject to the unutilized portion of the Aggregate Revolving Credit
Commitments and the absence of a Default pursuant to SECTION 8.01(f) or
8.01(g). The Swing Line Lender shall furnish the Borrower with a copy of
the applicable Committed Loan Notice promptly after delivering such notice
to the Administrative Agent. Each Revolving Credit Lender shall make an
amount equal to its Pro Rata Share of the amount specified in such
Committed Loan Notice available to the Administrative Agent in immediately
available funds for the account of the Swing Line Lender at the
Administrative Agent's Office not later than 1:00 p.m. on the day specified
in such Committed Loan Notice, whereupon, subject to SECTION 2.04(c)(ii),
each Revolving Credit Lender that so makes funds available shall be deemed
to have made a Base Rate Loan to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the Swing Line
Lender.
(ii) If any Swing Line Loan cannot be refinanced by such a
Revolving Credit Borrowing in accordance with SECTION 2.04(c)(i) for any
reason, the request for Base Rate Loans submitted by the Swing Line Lender
as set forth herein shall be deemed to be a request by the Swing Line
Lender that each of the Revolving Credit Lenders fund its risk
participation in the relevant Swing Line Loan and each Revolving Credit
Lender's payment to the Administrative Agent for the account of the Swing
Line Lender pursuant to SECTION 2.04(c)(i) shall be deemed payment in
respect of such participation.
(iii) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions of
this SECTION 2.04(c) by the time specified in SECTION 2.04(c)(i), the Swing
Line Lender shall be entitled to recover from such Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon for
the period from the date such payment is required to the date on which such
payment is immediately available to the Swing Line Lender at a rate per
annum equal to the Federal Funds Rate from time to time in effect. A
certificate of the Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause
(iii) shall be conclusive absent manifest error.
51
(iv) Each Revolving Credit Lender's obligation to make Revolving
Credit Loans or to purchase and fund risk participations in Swing Line
Loans pursuant to this SECTION 2.04(c) shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the Swing Line Lender, the Borrower or any other Person for any
reason whatsoever, (B) the occurrence or continuance of a Default, or (C)
any other occurrence, event or condition, whether or not similar to any of
the foregoing; PROVIDED, HOWEVER, that each Revolving Credit Lender's
obligation to make Revolving Credit Loans pursuant to this SECTION 2.04(c)
is subject to the absence of a Default pursuant to SECTION 8.01(f) or
8.01(g). No such funding of risk participations shall relieve or otherwise
impair the obligation of the Borrower to repay Swing Line Loans, together
with interest as provided herein.
(d) REPAYMENT OF PARTICIPATIONS.
(i) At any time after any Revolving Credit Lender has purchased
and funded a risk participation in a Swing Line Loan, if the Swing Line
Lender receives any payment on account of such Swing Line Loan, the Swing
Line Lender will distribute to such Lender its Pro Rata Share of such
payment (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's risk participation
was funded) in the same funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by
the Swing Line Lender under any of the circumstances described in SECTION
11.06 (including pursuant to any settlement entered into by the Swing Line
Lender in its discretion), each Revolving Credit Lender shall pay to the
Swing Line Lender its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to
the date such amount is returned, at a rate per annum equal to the Federal
Funds Rate. The Administrative Agent will make such demand upon the request
of the Swing Line Lender.
(e) INTEREST FOR ACCOUNT OF SWING LINE LENDER. The Swing Line
Lender shall be responsible for invoicing the Borrower in writing for interest
on the Swing Line Loans. Until each Revolving Credit Lender funds its Base Rate
Loan or risk participation pursuant to this SECTION 2.04 to refinance such
Lender's Pro Rata Share of any Swing Line Loan, interest in respect of such Pro
Rata Share shall be solely for the account of the Swing Line Lender.
(f) PAYMENTS DIRECTLY TO SWING LINE LENDER. The Borrower shall
make all payments of principal and interest in respect of the Swing Line Loans
directly to the Swing Line Lender.
2.05 PREPAYMENTS.
(a) OPTIONAL. (i) The Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay Loans
in whole or in part without premium or penalty; PROVIDED that (1) such notice
must be received by the Administrative Agent
52
not later than 1:00 p.m. (A) three Business Days prior to any date of prepayment
of Eurodollar Rate Loans and (B) on the date of prepayment of Base Rate Loans;
(2) any prepayment of Eurodollar Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (3) any
prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding. Each such notice shall specify
the date and amount of such prepayment and the Type(s) of Loans to be prepaid.
The Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's Pro Rata Share of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to SECTION 3.05. Each prepayment of the
outstanding Term Loans pursuant to this SECTION 2.05(a) shall be applied FIRST,
to the immediately next following four repayment installments thereof on a pro
rata basis, and SECOND, to the remaining principal repayment installments
thereof on a pro rata basis, and each such prepayment shall be paid to the
Lenders in accordance with their respective Pro Rata Shares.
(ii) The Borrower may, upon notice to the Swing Line Lender (with a
copy to the Administrative Agent), at any time or from time to time,
voluntarily prepay Swing Line Loans in whole or in part without premium or
penalty; PROVIDED that (1) such notice must be received by the Swing Line
Lender and the Administrative Agent not later than 1:00 p.m. on the date of
the prepayment, and (2) any such prepayment shall be in a minimum principal
amount of $100,000. Each such notice shall specify the date and amount of
such prepayment. If such notice is given by the Borrower, the Borrower
shall make such prepayment and the payment amount specified in such notice
shall be due and payable on the date specified therein.
(b) MANDATORY. (i) Within five Business Days after financial
statements have been delivered pursuant to SECTION 6.01(a) and the related
Compliance Certificate has been delivered pursuant to SECTION 6.02(b), the
Borrower shall prepay an aggregate principal amount of Loans equal to 50.0% of
Excess Cash Flow for the fiscal year covered by such financial statements;
PROVIDED that such percentage shall be reduced to 25.0% of Excess Cash Flow if,
and for so long as, the Consolidated Leverage Ratio as of the last day of such
fiscal year is less than 3.50:1.00.
(ii) If Holdings or any of its Subsidiaries Disposes of any
properties or assets (other than any Disposition of any properties or assets
permitted by XXXXXXX 0.00(x), (x)(x), (x), (x), (x), (x), (x), (x), (x) and (p))
which in the aggregate results in the realization by Holdings and its
Subsidiaries during any fiscal year of Net Cash Proceeds (determined as of the
date of receipt) in excess of $10,000,000 in the aggregate (excluding any amount
thereof to the extent reinvested or held for reinvestment pursuant to the first
proviso below and subject to the second proviso) the Borrower shall prepay an
aggregate principal amount of Loans equal to 100% of the amount of all such Net
Cash Proceeds promptly (but in any case within ten Business Days) after receipt
thereof by Holdings or such Subsidiary; PROVIDED, HOWEVER, that, with respect to
any Net Cash Proceeds realized under a Disposition permitted by SECTION
7.05(b)(ii), (f), (h), (j), (l) AND (n) through (o), at the option of the
Borrower (as elected by the Borrower in writing to the
53
Administrative Agent within 10 Business Days of such Disposition), and so long
as no Event of Default shall have occurred and be continuing, the Borrower may
reinvest all or any portion of such Net Cash Proceeds in operating assets of the
Borrower or any Subsidiary Guarantor, so long as within 365 days after the
receipt of such Net Cash Proceeds, such reinvestment shall have been consummated
and paid in cash (as certified by the Borrower in writing to the Administrative
Agent); PROVIDED FURTHER, HOWEVER, that any Net Cash Proceeds not so reinvested
within such period shall be immediately thereafter applied to the prepayment of
the Loans as set forth in this SECTION 2.05.
(iii) Within five Business Days of the sale by Holdings or any of
its Subsidiaries of capital stock or other Equity Interests (other than the sale
of such capital stock or other Equity Interests pursuant to SECTION 7.06(f) and
other than as provided for in clause (ii) above), the Borrower shall prepay an
aggregate principal amount of Loans equal to 50.0% of all Net Cash Proceeds
received therefrom immediately upon receipt thereof by Holdings or such
Subsidiary; PROVIDED that such percentage shall be reduced to 25.0% of such Net
Cash Proceeds if, and for so long as, the Consolidated Leverage Ratio as of the
last day of the most recently completed Measurement Period is less than
3.50:1.00.
(iv) Within five Business Days after the incurrence or issuance by
Holdings or any of its Subsidiaries of any Indebtedness (other than Indebtedness
expressly permitted to be incurred or issued pursuant to SECTION 7.02(a)(A),
(a)(B), (b)(A), (b)(B), (b)(C), (b)(D), (b)(E), (b)(F), (b)(G), (b)(H), (b)(I),
(b)(J), (b)(K), (b)(L), (b)(M) or (b)(N)) in excess of $5,000,000 per fiscal
year, the Borrower shall prepay an aggregate principal amount of Loans equal to
100% of all Net Cash Proceeds received therefrom immediately upon receipt
thereof by Holdings or such Subsidiary.
(v) Within five Business Days of any Extraordinary Receipt
received by or paid to or for the account of Holdings or any of its Subsidiaries
and not otherwise included in CLAUSE (ii), (iii) or (iv) of this SECTION
2.05(b), the Borrower shall prepay an aggregate principal amount of Loans equal
to 100.0% of all Net Cash Proceeds received therefrom immediately upon receipt
thereof by Holdings or such Subsidiary.
(vi) If for any reason the Total Outstandings at any time exceed
the Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; PROVIDED, HOWEVER, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this SECTION 2.05(b)(vi)
unless after the prepayment in full of the Loans and Swing Line Loans the Total
Outstandings exceed the Aggregate Commitments then in effect.
(vii) Each prepayment of Loans pursuant to this SECTION 2.05(b)
shall be applied, FIRST, to the Term Facility and to the principal repayment
installments thereof on a pro rata basis and, THEREAFTER, to the Revolving
Credit Facility in the manner set forth in CLAUSE (viii) of this SECTION
2.05(b).
(viii) Prepayments of the Revolving Credit Facility made pursuant to
CLAUSE (i), (ii), (iii), (iv), (v), (vi) or (vii) of this SECTION 2.05(b),
FIRST, shall be applied to prepay L/C Borrowings outstanding at such time until
all such L/C Borrowings are paid in full, SECOND, shall
54
be applied to prepay Swing Line Loans outstanding at such time until all such
Swing Line Loans are paid in full, THIRD, shall be applied to prepay Revolving
Credit Loans outstanding at such time until all such Revolving Credit Loans are
paid in full and, FOURTH, shall be used to Cash Collateralize the L/C
Obligations; and, in the case of prepayments of the Revolving Credit Facility
required pursuant to CLAUSE (i), (ii), (iii), (iv) or (v) of this SECTION
2.05(b), the amount remaining, if any, after the prepayment in full of all Loans
and L/C Borrowings outstanding at such time and the L/C Obligations have been
Cash Collateralized in full (the sum of such prepayment amounts, cash
collateralization amounts and remaining amount being, collectively, the
"REDUCTION AMOUNT") may be retained by the Borrower for use in the ordinary
course of its business, and the Revolving Credit Facility shall be automatically
and permanently reduced as set forth in SECTION 2.06(b)(iii). Upon the drawing
of any Letter of Credit which has been Cash Collateralized, such funds shall be
applied (without any further action by or notice to or from the Borrower or any
other Loan Party) to reimburse the L/C Issuers or the Revolving Credit Lenders,
as applicable.
2.06 TERMINATION OR REDUCTION OF COMMITMENTS.
(a) OPTIONAL. The Borrower may, upon notice to the Administrative
Agent, terminate the unused portions of the Term Commitments, the Letter of
Credit Sublimit, or the unused Revolving Credit Commitments, or from time to
time permanently reduce the unused portions of the Term Commitments, the Letter
of Credit Sublimit, or the unused Revolving Credit Commitments; PROVIDED that
(i) any such notice shall be received by the Administrative Agent not later than
1:00 p.m. three Business Days prior to the date of termination or reduction,
(ii) any such partial reduction shall be in an aggregate amount of $10,000,000
or any whole multiple of $1,000,000 in excess thereof and (iii) the Borrower
shall not terminate or reduce the unused portions of the Term Commitments, the
Letter of Credit Sublimit, or the unused Revolving Credit Commitments if, after
giving effect thereto and to any concurrent prepayments hereunder, the Total
Outstandings would exceed the Aggregate Commitments.
(b) MANDATORY. (i) The Term Facility shall be automatically and
permanently reduced on the date of the Term Borrowing (after giving effect to
the Term Borrowing), and any Term Loans that shall have been repaid or prepaid
may not be reborrowed.
(ii) The Revolving Credit Facility shall be automatically and
permanently reduced on each date on which the prepayment of Revolving Credit
Loans outstanding thereunder is required to be made pursuant to SECTION
2.05(b)(i), (ii), (iii), (iv) or (v) by an amount equal to the applicable
Reduction Amount.
(iii) If after giving effect to any reduction or termination of
unused Commitments under this SECTION 2.06, the Letter of Credit Sublimit or the
Swing Line Sublimit exceeds the amount of the Aggregate Revolving Credit
Commitments, such Sublimit shall be automatically reduced by the amount of such
excess.
(c) APPLICATION OF COMMITMENT REDUCTIONS; PAYMENT OF FEES. The
Administrative Agent will promptly notify the Lenders of any termination or
reduction of unused portions of the Term Commitment, the Letter of Credit
Sublimit, or the unused Revolving Credit Commitment under this SECTION 2.06.
Upon any reduction of unused Commitments under a
55
Facility, the Commitment of each Lender under such Facility shall be reduced by
such Lender's Pro Rata Share of the amount by which such Facility is reduced.
All fees accrued until the effective date of any termination of the Aggregate
Commitments shall be paid on the effective date of such termination.
2.07 REPAYMENT OF LOANS.
(a) TERM LOANS. The Borrower shall repay to the Administrative
Agent for the ratable account of the Term Lenders the aggregate principal amount
of all Term Loans outstanding on the following dates in the respective amounts
set forth opposite such dates (which amounts shall be reduced as a result of the
application of prepayments in accordance with the order of priority set forth in
SECTION 2.05):
DATE AMOUNT
May 27, 2004 $ 1,625,000
August 27, 2004 $ 1,625,000
November 27, 2004 $ 1,625,000
February 27, 2005 $ 1,625,000
May 27, 2005 $ 1,625,000
August 27, 2005 $ 1,625,000
November 27, 2005 $ 1,625,000
February 27, 2006 $ 1,625,000
May 27_, 2006 $ 6,250,000
August 27, 2006 $ 6,250,000
November 27, 2006 $ 6,250,000
February 27, 2007 $ 6,250,000
May 27, 2007 $ 6,250,000
August 27, 2007 $ 6,250,000
November 27, 2007 $ 6,250,000
February 27, 2008 $ 6,250,000
May 27, 2008 $ 12,500,000
August 27, 2008 $ 12,500,000
November 27, 2008 $ 12,500,000
February 27, 2009 $ 12,500,000
May 27, 2009 $ 12,500,000
August 27, 2009 $ 12,500,000
November 27, 2009 $ 12,500,000
February 27, 2010 $ 12,500,000
May 27, 2010 $ 12,500,000
August 27, 2010 $ 12,500,000
November 27, 2010 $ 12,500,000
February 27, 2011 $ 449,500,000
PROVIDED, HOWEVER, that the final principal repayment installment of the Term
Loans shall be repaid on the Maturity Date for the Facility under which such
Loans were made and in any event
56
shall be in an amount equal to the aggregate principal amount of all Term Loans
outstanding on such date.
(b) REVOLVING CREDIT LOANS. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Maturity Date for the Revolving Credit Facility the aggregate principal
amount of all Revolving Credit Advances outstanding on such date.
(c) SWING LINE LOANS. The Borrower shall repay each Swing Line
Loan on the earlier to occur of (i) the date ten Business Days after such Loan
is made and (ii) the Maturity Date.
2.08 INTEREST.
(a) Subject to the provisions of SECTION 2.08(b), (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period PLUS the Applicable Rate; (ii) each Base Rate Loan
shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate PLUS the
Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate PLUS the Applicable Rate.
(b) (i) If any amount of principal of any Loan is not paid when
due (without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Furthermore,
while any Default exists that constitutes an Event of Default under SECTION
8.01(f) or 8.01(g) or that, with the giving of notice, the passage of time, or
both, would constitute an Event of Default under SECTION 8.01(f) or 8.01(g), the
Borrower shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by
the Borrower under any Loan Document is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, then upon the request of the Required Lenders, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding by or against any Loan Party under any Debtor
Relief Law.
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2.09 FEES. In addition to certain fees described in SECTIONS
2.03(i) and (j):
(a) COMMITMENT FEE. The Borrower shall pay to the Administrative
Agent for the account of each Revolving Credit Lender in accordance with its Pro
Rata Share, a commitment fee equal to 0.50% TIMES the actual daily amount by
which the aggregate Revolving Credit Commitments exceed the sum of (i) the
Outstanding Amount of Revolving Credit Loans and (ii) the Outstanding Amount of
L/C Obligations. The commitment fee shall accrue at all times during the
Availability Period, including at any time during which one or more of the
conditions in ARTICLE IV is not met, and shall be due and payable quarterly in
arrears on the last Business Day of each May, August, November and February,
commencing with the first such date to occur after the Closing Date, and on the
Maturity Date for the Revolving Credit Facility.
(b) OTHER FEES. (i) The Borrower shall pay to the Arrangers and
the Administrative Agent for their own respective accounts fees in the amounts
and at the times specified in the Fee Letter. Such fees shall be fully earned
when paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Administrative Agent such fees
as shall have been separately agreed upon in writing in the amounts and at the
times so specified. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
2.10 COMPUTATION OF INTEREST AND FEES. All computations of interest
for Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, PROVIDED that any Loan that is
repaid on the same day on which it is made shall, subject to SECTION 2.12(a),
bear interest for one day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.
2.11 EVIDENCE OF INDEBTEDNESS.
(a) The Credit Extensions made by each Lender shall be evidenced
by one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Credit Extensions made by the Lenders
to the Borrower and the interest and payments thereon. Any failure to so record
or any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender's Loans in
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addition to such accounts or records. Each Lender may attach schedules to its
Note and endorse thereon the date, Type (if applicable), amount and maturity of
its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in SECTION
2.11(a), each Lender and the Administrative Agent shall maintain in accordance
with its usual practice accounts or records evidencing the purchases and sales
by such Lender of participations in Letters of Credit and Swing Line Loans. In
the event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.
(c) Entries made in good faith by the Administrative Agent in the
Register pursuant to SECTION 2.11(b), and by each Lender in its account or
accounts pursuant to SECTION 2.11(a), shall be PRIMA FACIE evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrower to, in the case of the Register, each Lender and, in the case
of such account or accounts, such Lender, under this Agreement and the other
Loan Documents, absent manifest error; PROVIDED that the failure of the
Administrative Agent or such Lender to make an entry, or any finding that an
entry is incorrect, in the Register or such account or accounts shall not limit
or otherwise affect the obligations of the Borrower under this Agreement and the
other Loan Documents.
2.12 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Pro Rata Share (or other applicable share as provided herein) of
such payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by the Administrative Agent after 2:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due on a
day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest or fees, as the case may be; PROVIDED, HOWEVER, that, if such extension
would cause payment of interest on or principal of Eurodollar Rate Loans to be
made in the next succeeding calendar month, such payment shall be made on the
immediately preceding Business Day.
(c) Unless the Borrower or any Lender has notified the
Administrative Agent, prior to the date any payment is required to be made by it
to the Administrative Agent hereunder, that the Borrower or such Lender, as the
case may be, will not make such payment, the Administrative Agent may assume
that the Borrower or such Lender, as the case may be, has timely made such
payment and may (but shall not be so required to), in reliance thereon, make
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available a corresponding amount to the Person entitled thereto. If and to the
extent that such payment was not in fact made to the Administrative Agent in
immediately available funds, then:
(i) if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately
available funds, together with interest thereon in respect of each day from
and including the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is repaid to the
Administrative Agent in immediately available funds at the Federal Funds
Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period
from the date such amount was made available by the Administrative Agent to
the Borrower to the date such amount is recovered by the Administrative
Agent (the "COMPENSATION PERIOD") at a rate per annum equal to the Federal
Funds Rate from time to time in effect. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's
Loan included in the applicable Borrowing. If such Lender does not pay such
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent may make a demand therefor upon the Borrower, and the
Borrower shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal to
the rate of interest applicable to the applicable Borrowing. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which the Administrative Agent or the
Borrower may have against any Lender as a result of any default by such
Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower
with respect to any amount owing under this SECTION 2.12(c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent
funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this ARTICLE II, and such funds are not made available to the
Borrower by the Administrative Agent because the conditions to the applicable
Credit Extension set forth in ARTICLE IV are not satisfied or waived in
accordance with the terms hereof, the Administrative Agent shall return such
funds (in like funds as received from such Lender) to such Lender, without
interest.
(e) The obligations of the Lenders hereunder to make Loans and to
fund participations in Letters of Credit and Swing Line Loans are several and
not joint. The failure of any Lender to make any Loan or to fund any such
participation on any date required hereunder shall not relieve any other Lender
of its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or purchase
its participation.
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(f) Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
(g) Whenever any payment received by the Administrative Agent
under this Agreement or any of the other Loan Documents is insufficient to pay
in full all amounts due and payable to the Administrative Agent and the Lenders
under or in respect of this Agreement and the other Loan Documents on any date,
such payment shall be distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the order of priority set forth in
SECTION 8.03. If the Administrative Agent receives funds for application to the
Obligations of the Loan Parties under or in respect of the Loan Documents under
circumstances for which the Loan Documents do not specify the manner in which
such funds are to be applied, the Administrative Agent may, but shall not be
obligated to, elect to distribute such funds to each of the Lenders in
accordance with such Lender's Pro Rata Share of the sum of (A) the Outstanding
Amount of all Loans outstanding at such time and (b) the Outstanding Amount of
all L/C Obligations outstanding at such time, in repayment or prepayment of such
of the outstanding Loans or other Obligations then owing to such Lender.
2.13 SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it, or
the participations in L/C Obligations or in Swing Line Loans held by it, any
payment (whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them and/or such subparticipations in the
participations in L/C Obligations or Swing Line Loans held by them, as the case
may be, as shall be necessary to cause such purchasing Lender to share the
excess payment in respect of such Loans or such participations, as the case may
be, pro rata with each of them; PROVIDED, HOWEVER, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Lender under any
of the circumstances described in SECTION 11.06 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's ratable share (according to the proportion of (i)
the amount of such paying Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered,
without further interest thereon. The Borrower agrees that any Lender so
purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
setoff, but subject to SECTION 11.09) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation; PROVIDED FURTHER that, so long as the Obligations under
the Loan Documents shall not have been accelerated, any excess payment received
by any Appropriate Lender shall be shared on a pro rata basis only with other
Appropriate Lenders. The Administrative Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Lenders following
any such purchases or repayments. Each Lender that purchases a participation
pursuant to this Section shall from and after such purchase have the right to
give all notices, requests, demands, directions and other communications under
this
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Agreement with respect to the portion of the Obligations purchased to the same
extent as though the purchasing Lender were the original owner of the
Obligations purchased.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Except as otherwise provided herein, any and all payments by
the Borrower to or for the account of the Administrative Agent or any Lender
under any Loan Document shall be made free and clear of and without deduction
for any and all present or future taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and all liabilities with
respect thereto, EXCLUDING, in the case of the Administrative Agent and each
Lender, (i) taxes imposed on or measured by such Person's overall net income,
and franchise taxes imposed on such Person (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of which such
Person is organized or maintains a Lending Office, (ii) branch profits taxes
imposed on such Person by the United States, (iii) withholding taxes required to
be paid with respect to payments made under this Agreement or any other Loan
Document under any applicable Law, treaty or governmental rule, regulation or
order in effect on the date such Person became a party to this Agreement or such
other Loan Document except to the extent that such Person's assignor (if any)
was entitled, at the time of assignment, to receive additional amounts from the
Borrower pursuant to this SECTION 3.01, and (iv) in the case of any Lender,
taxes arising after the date of this Agreement or other relevant Loan Document
solely as a result of or attributable to such Lender changing its designated
Lending Office after the date such Lender became a party to this Agreement or
such other Loan Document (except if such Lender changed its designated Lending
Office pursuant to SECTION 3.01(e)) (all such non-excluded taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and liabilities being hereinafter referred to as "TAXES"). If the Borrower shall
be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, (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 3.01), each of such Administrative Agent and such Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Laws, and (iv) within 30 days
after the date of such payment, the Borrower shall furnish to the Administrative
Agent (which shall forward the same to such Lender) or Lender (as the case may
be) the original or a certified copy of a receipt evidencing payment thereof to
the extent such a receipt is issued therefor, or other written proof of payment
thereof that is reasonably satisfactory to the Administrative Agent or such
Lender.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise, property,
intangible, mortgage recording or similar taxes, charges or levies which arise
from any payment made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any
Loan Document (hereinafter referred to as "OTHER TAXES").
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(c) Except as otherwise provided herein, the Borrower agrees to
indemnify the Administrative Agent and each Lender for the full amount of Taxes
and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this SECTION 3.01) paid by the
Administrative Agent or such Lender and any liability (including additions to
tax, penalties, interest and reasonable expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority;
PROVIDED that the Borrower shall not be obligated to indemnify any the
Administrative Agent or any Lender pursuant to this SECTION 3.01(c) in respect
of penalties, interest or expenses arising from or with respect to such Taxes or
Other Taxes if such penalties, interest or expenses are attributable to the bad
faith, gross negligence or willful misconduct of the Person seeking
indemnification. Any payment required to be made under this SECTION 3.01(c)
shall be made within 30 days after the date such Lender or the Administrative
Agent makes a demand therefor.
(d) If the Administrative Agent or any Lender receives a refund in
respect of any Taxes or Other Taxes as to which it has received a payment of
additional amounts or been indemnified by the Borrower pursuant to this SECTION
3.01, it shall promptly notify the Borrower of its receipt of such refund and
shall, within 60 days after receipt of a request by the Borrower, pay the amount
of such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this SECTION 3.01 with
respect to Taxes or Other Taxes giving rise to such refund), net of all
reasonable out-of-pocket expenses of the Administrative Agent or any Lender
(including any taxes imposed with respect to such refund) as determined by such
Administrative Agent or such Lender in good faith and in its sole discretion,
and without interest thereon; PROVIDED that the Borrower, upon request by the
Administrative Agent or such Lender, shall promptly return such refund (plus
applicable interest imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender, as the case may be, in the event that the
Administrative Agent or such Lender is required to repay such refund to the
relevant Governmental Authority. Nothing contained in this SECTION 3.01(d) shall
require the Administrative Agent or any Lender to make available to the Borrower
any of its tax returns or any other information relating to its taxes that it
deems to be confidential.
(e) If requested by the Borrower, any Lender claiming any
indemnity or additional amounts payable pursuant to this SECTION 3.01 shall use
its reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its designated Lending
Office if the making of such a change would avoid the need for, or reduce the
amount of, any such indemnity or additional amounts which would be payable or
may thereafter accrue; PROVIDED, that such designation would not, in the sole
judgment of such Lender exercised in good faith, be otherwise disadvantageous to
such Lender; PROVIDED, FURTHER, that nothing in this SECTION 3.01(e) shall
adversely affect or postpone any of the obligations of the Borrower or the
rights of any Lender under this Agreement.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
63
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or promptly (but in
any case not later than the second Business Day of receipt of such notice), if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted. Each Lender agrees to use
reasonable efforts to change the jurisdiction of its Lending Office or designate
a different Lending Office so that it is once again lawful for such Lender to
make, maintain and fund Eurodollar Rate Loans if such change or designation will
avoid the need for such notice and will not, in the good faith judgment of such
Lender, otherwise be materially disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If the Required Lenders
reasonably determine that adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan, or that the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan does
not adequately and fairly reflect the cost to such Lenders of funding such Loan,
the Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended until the Administrative Agent (upon the instruction of
the Required Lenders) revokes such notice. Upon receipt of such notice, the
Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Committed Borrowing of Base Rate
Loans in the amount specified therein and any outstanding Eurodollar Rate Loans
shall be converted on the last day of the then current Interest Period to Base
Rate Loans.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON
EURODOLLAR RATE LOANS.
(a) If any Lender reasonably determines that as a result of the
introduction of or any change in or in the interpretation of any Law or such
Lender's compliance therewith, in each case that occurs after the Closing Date,
there shall be any increase in the cost to such Lender of agreeing to make or
making, funding or maintaining Eurodollar Rate Loans or (as the case may be)
issuing or participating in Letters of Credit, or a reduction in the amount
received or receivable by such Lender in connection with any of the foregoing,
in each case in an amount deemed material by such Lender (excluding for purposes
of this SECTION 3.04(a) any such increased costs or reduction in amount
resulting from (i) Taxes or Other Taxes (as to which SECTION 3.01 shall govern),
(ii) changes in the basis of taxation of overall gross or net income by the
United States or any foreign jurisdiction or any political subdivision of either
thereof under the Laws of which such Lender is organized or has its Lending
Office, and (iii) reserve requirements contemplated by SECTION 3.04(c)), then
from time to time within 20 days following delivery by such Lender of a
certificate described in SECTION 3.06 (with a copy of such certificate to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as
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will compensate such Lender for such increased cost or reduction; PROVIDED that
no such compensation shall be payable in respect of any period more than 180
days prior to the later of the effective date of the event giving rise to the
request for compensation and the date on which such Lender gives written notice
to the Borrower (with a copy to the Administrative Agent) describing such event
(which notice shall describe in reasonable detail the nature of such event and
the basis for any such request for compensation), and in any case each request
for such compensation shall be made promptly after the amount thereof is
ascertainable by such Lender.
(b) If any Lender reasonably determines that the introduction of
any Law applicable to or binding upon such Lender regarding capital adequacy or
any change therein or in the interpretation thereof, or compliance by such
Lender (or its Lending Office) therewith, in each case that occurs after the
Closing Date, has the effect of reducing the rate of return on the capital of
such Lender or any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder (taking into consideration its policies with
respect to capital adequacy and such Lender's desired return on capital), below
that which such Lender or corporation could have achieved but for such
introduction, change or compliance, in an amount deemed material by such Lender,
then from time to time within 20 days following delivery by such Lender of a
certificate described in SECTION 3.06 (with a copy of such certificate to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction; PROVIDED that no such
compensation shall be payable in respect of any period more than 180 days prior
to the later of the effective date of the event giving rise to the request for
compensation and the date on which such Lender gives written notice to the
Borrower (with a copy to the Administrative Agent) describing such event (which
notice shall describe in reasonable detail the nature of such event and the
basis for any such request for compensation), and in any case each request for
such compensation shall be made promptly after the amount thereof is
ascertainable by such Lender.
(c) The Borrower shall pay to each Lender, as long as such Lender
shall be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional interest on the unpaid principal amount
of each Eurodollar Rate Loan equal to the actual costs of such reserves
allocated to such Loan by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive), which shall be due and payable
on each date on which interest is payable on such Loan, PROVIDED the Borrower
shall have received at least 15 days prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender, and PROVIDED
FURTHER that such compensation will be limited to the period commencing not more
than 180 days prior to the date of such demand. If a Lender fails to give notice
15 days prior to the relevant Interest Payment Date, such additional interest
shall be due and payable 15 days from receipt of such notice.
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3.05 COMPENSATION FOR LOSSES. Within 20 days following delivery by
any Lender of a certificate described in SECTION 3.06 (with a copy of such
certificate to the Administrative Agent), the Borrower shall compensate such
Lender for and hold such Lender harmless from any loss, cost or expense incurred
by it as a result of:
(a) any continuation, conversion, payment or prepayment of any
Loan other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the
failure of such Lender to make a Loan) to prepay, borrow, continue or
convert any Loan other than a Base Rate Loan on the date or in the amount
notified by the Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than
the last day of the Interest Period therefor as a result of a request by
the Borrower pursuant to SECTION 3.08;
including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained; PROVIDED, HOWEVER, that such
Lender shall use commercially reasonable efforts to mitigate any such loss, cost
or expense in a manner consistent with internal policies of such Lender and
applicable governmental regulations. The Borrower shall also pay any customary
administrative fees charged by such Lender consistently applied by such Lender
in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this SECTION 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION. Any
request for compensation under this ARTICLE III shall be accompanied by a
certificate of the Administrative Agent or applicable Lender claiming
compensation under this ARTICLE III and setting forth in reasonable detail the
calculation of the additional amount or amounts to be paid to it hereunder and
the basis therefor. Any such certificate shall be conclusive in the absence of
manifest error. In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods.
3.07 SURVIVAL. All of the Borrower's obligations under this ARTICLE
III shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder for a period of one year.
3.08 REPLACEMENT OF LENDERS. On each occasion that a Lender (i)
makes a demand for compensation pursuant to SECTION 3.04 in an amount in excess
of the amount that the Borrower would have had to pay pursuant to such Section
if such Lender's Loan was held by a Lender with respect to which no such amounts
would then be payable pursuant to such Section, (ii) becomes a Defaulting
Lender, or (iii) fails to consent to an amendment requiring the consent
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of each Lender or the Required Lenders, the Borrower may, upon notice to such
Lender and the Administrative Agent, replace such Lender by causing such Lender
to assign its Commitment (with the assignment fee to be paid by the Borrower in
such instance) pursuant to SECTION 11.07(b) to one or more other Lenders or
Eligible Assignees procured by the Borrower. The Borrower shall (A) pay in full
all principal, interest, fees and other amounts owing to such Lender through the
date of replacement (including any amounts payable pursuant to SECTION 3.05),
(B) provide appropriate assurances and indemnities (which may include letters of
credit) to the L/C Issuer and the Swing Line Lender as each may reasonably
require with respect to any continuing obligation to fund participation
interests in any L/C Obligations or any Swing Line Loans then outstanding, and
(C) release such Lender from its obligations under the Loan Documents. Any
Lender being replaced shall execute and deliver an Assignment and Assumption
with respect to such Lender's Commitments and outstanding Loans and
participations in L/C Obligations and Swing Line Loans.
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of
each Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of
which shall be originals or facsimiles (followed promptly by originals)
unless otherwise specified, each properly executed (where applicable) by a
Responsible Officer of the signing Loan Party, each dated the Closing Date
(or, in the case of certificates of governmental officials, a recent date
before the Closing Date) and each in form and substance reasonably
satisfactory to the Administrative Agent and each of the Lenders:
(i) executed counterparts of this Agreement and the Subsidiary
Guaranty, sufficient in number for distribution to the Administrative
Agent, each Lender and the Borrower;
(ii) a Note executed by the Borrower in favor of each Lender
requesting a Note;
(iii) a security agreement, in substantially the form of EXHIBIT G
hereto (together with each other security agreement and security agreement
supplement delivered pursuant to SECTION 6.12, in each case as amended, the
"SECURITY AGREEMENT"), duly executed by each Loan Party, together with:
(A) any certificates representing the Pledged Equity
referred to therein accompanied by undated stock powers
executed in blank and any instruments evidencing the Pledged
Debt indorsed in blank,
(B) copies of proper financing statements, duly
prepared for filing under the Uniform Commercial Code of all
jurisdictions that the
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Administrative Agent may deem necessary or desirable in
order to perfect and protect the liens and security
interests created under the Security Agreement, covering the
Collateral described in the Security Agreement,
(C) completed requests for information, dated on or
before the date of the initial Credit Extension, listing all
effective financing statements filed in the jurisdictions
referred to in clause (B) above that name any Loan Party as
debtor, together with copies of such financing statements,
(D) evidence of the completion of all other recordings
and filings of or with respect to the Security Agreement that
the Administrative Agent may deem necessary or desirable in
order to perfect and protect the Liens created thereby,
(E) evidence of the insurance required by the terms of
the Security Agreement, and
(F) evidence that all other action that the
Administrative Agent may reasonably deem necessary or
desirable in order to perfect and protect the liens and
security interests created under the Security Agreement has
been taken (including, without limitation, receipt of duly
executed payoff letters and UCC-3 termination statements) or
that such actions will be taken by the Administrative Agent.
(iv) an intellectual property security agreement, in substantially
the form of EXHIBIT F to the Security Agreement (together with each other
intellectual property security agreement and IP Security Agreement
Supplement delivered pursuant to SECTION 6.12, in each case as amended, the
"INTELLECTUAL PROPERTY SECURITY AGREEMENT"), duly executed by each Loan
Party owning intellectual property registrations and applications, together
with evidence that all action that the Administrative Agent may reasonably
deem necessary or desirable in order to perfect and protect the liens and
security interests created under the Intellectual Property Security
Agreement has been taken or will be taken by the Administrative Agent;
(v) certified resolutions and incumbency certificates evidencing
the identity, authority and capacity of each Responsible Officer of each
Loan Party authorized to act as a Responsible Officer in connection with
this Agreement and the other Loan Documents to which such Loan Party is a
party or is to be a party;
(vi) certified Organization Documents of each Loan Party and, where
customary in such jurisdiction, certificates of valid existence, good
standing and qualification or comparable certificates for such Person in
each jurisdiction where the ownership, lease or operation of properties or
the conduct of such Person's business requires such qualification, except
to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect;
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(vii) a favorable opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, counsel to the Loan Parties, addressed to the Administrative Agent and
each Lender and substantially in the form of EXHIBIT I-1 attached hereto;
(viii) copies of the opinion of Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP,
special counsel for the Company, and the opinion of the Company's general
counsel, each delivered in connection with the Merger, and reliance letters
which state that the Administrative Agent and the Lenders may rely on such
opinions as if such opinions were addressed to them;
(ix) a certificate of a Responsible Officer of each Loan Party
either (A) attaching copies of all material consents, licenses and
approvals required in connection with the execution, delivery and
performance by such Loan Party and the validity against such Loan Party of
the Loan Documents to which it is a party, and such consents, licenses and
approvals shall be in full force and effect, or (B) stating that no such
consents, licenses or approvals are so required;
(x) a certificate signed by a Responsible Officer of the Borrower
certifying that the conditions specified in SECTIONS 4.02(a) and (b) and
SECTION 4.01(d), as of the initial Credit Extension, have been satisfied;
(xi) certificates attesting to the Solvency of each Loan Party
before and after giving effect to the Transaction, from its chief financial
officer or treasurer;
(xii) the financial statements described in SECTIONS 5.05(a), (b),
and (d), and the consolidated pro forma forecasts of the Borrower and its
Subsidiaries prepared by management of the Borrower, in form and substance
reasonably satisfactory to the Lenders, including balance sheets, income
statements and cash flow statements prepared on an annual basis for each
fiscal year until the Maturity Date for the Term Facility;
(xiii) a certificate of the chief financial officer of the Borrower
certifying that (1) the Closing Date Pro Forma Adjusted EBITDA was not less
than $185,000,000, (2) the ratio of Average Total Debt to Closing Date Pro
Forma Adjusted EBITDA was not greater than 5.3:1.0 and (3) the financial
statements and forecasts delivered pursuant to SECTION 4.01(a)(XII) were
prepared in good faith on the basis of the assumptions stated therein,
which assumptions are reasonable in light of the then existing conditions;
(xiv) evidence that all insurance required to be maintained pursuant
to the Loan Documents as specified in SECTION 6.07 has been obtained and is
in effect and the Administrative Agent shall have received endorsements
naming the Administrative Agent, on behalf of the Lenders, as an additional
insured or loss payee, as the case may be, under all insurance policies to
be maintained with respect to the properties of the Borrower and its
Subsidiaries forming part of the Collateral;
(xv) certified copies of each of the Related Documents duly
executed by the parties thereto, together with all agreements, instruments
and other documents delivered in connection therewith as the Administrative
Agent shall reasonably request;
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(xvi) a confirmation satisfactory to the Administrative Agent of the
consummation of the Merger from the Secretary of State of the State of
Delaware;
(xvii) a Committed Loan Notice or Letter of Credit Application, as
applicable, relating to the initial Credit Extension;
(xviii) evidence that all unsecured Indebtedness of Holdings and its
Subsidiaries (other than the Indebtedness set forth on SCHEDULE 7.02) has
been or concurrently with the Closing Date is being terminated and evidence
that the Existing Secured Indebtedness has been or concurrently with the
Closing Date is being terminated and all Liens securing obligations related
to the Existing Secured Indebtedness have been or concurrently with the
Closing Date are being released;
(xix) evidence that all of the Existing Notes have been or
concurrently with the Closing Date are being tendered for, and for each
series of Existing Notes in an amount sufficient to obtain the consents
required from the respective holders thereof to consummate the Transaction;
(xx) evidence that the covenants with respect to the Existing Xxxxx
Notes have been or concurrently with the Closing Date are being defeased in
accordance with the Existing Xxxxx Notes Indenture and evidence that the
Existing Sweetheart Notes Indenture has been satisfied and discharged and
is of no further force and effect;
(xxi) evidence that arrangements reasonably satisfactory to the
Administrative Agent and the Lenders have been or concurrently with the
Closing Date are being made as to the assumption by the Borrower or any
other Loan Party or termination of the sale/leaseback transaction entered
into pursuant to that certain Participation Agreement dated as of June 1,
2000 by and among certain Subsidiaries of the Company, respectively as
lessee and guarantor thereunder, the owner participants party thereto from
time to time and State Street Bank and Trust Company of Connecticut,
National Association, as owner trustee (the "SALE/LEASEBACK TRANSACTION");
and
(xxii) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, on behalf of the Lenders, may
reasonably require.
(b) All fees required to be paid on or before the Closing Date in
accordance with the Commitment Letter and the Fee Letter shall have been paid in
full.
(c) The Closing Date shall have occurred on or before March 31,
2004.
(d) There shall not have occurred a change, occurrence or
development that either individually or in the aggregate, could reasonably be
expected to (1) have a material adverse effect on the business, assets,
properties, liabilities (actual or contingent), operations, condition (financial
or otherwise) or prospects of (x) the Company and its subsidiaries, taken as a
whole, since September 29, 2002, (y) Old Solo Cup and its subsidiaries, taken as
a whole, since December 31, 2002, or (z) Holdings and its subsidiaries, taken as
a whole, since the formation of Holdings, (2) adversely affect the ability of
the Borrower or any Guarantor to perform its obligations under the Loan
Documents or (3) adversely affect the rights and remedies of the
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Administrative Agent or the Lenders under the Loan Documents; and there shall
exist no action, suit, investigation, litigation or proceeding affecting any
Loan Party or any of its Subsidiaries pending or, to the knowledge of the
Borrower or the Company, overtly threatened before any Governmental Authority or
arbitrator that (i) could be reasonably likely to have a Material Adverse Effect
or purports to affect the Transaction in any material respect or the ability of
the Borrower or any other Loan Party to perform their respective obligations
under the Loan Documents, or (ii) purports to affect the legality, validity or
enforceability of any Loan Document or the consummation of the Transaction.
(e) All governmental authorizations and all third-party consents
and approvals necessary in connection with the Transaction shall have been
obtained (without the imposition of any conditions that are not reasonably
acceptable to the Lenders), except for those filings and recordings to perfect
the Liens pursuant to the Collateral Documents and which are contemplated to be
made pursuant to SECTIONS 4.01(a) and 6.18, and shall remain in effect; all
applicable waiting periods in connection with the Transaction shall have expired
without any action being taken by any Governmental Authority, and no Law shall
be applicable in the reasonable judgment of the Administrative Agent, in each
case that restrains, prevents or imposes materially adverse conditions upon the
Transaction or the rights of the Loan Parties or their Subsidiaries freely to
transfer or otherwise dispose of, or to create any Lien on, any properties now
owned or hereafter acquired by any of them.
(f) The information contained in the Information Memorandum, as
supplemented to the Closing Date, shall be complete and correct in all material
respects, and no changes, occurrences or developments shall have occurred, and
no information shall have been received or discovered that, either individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(g) The Merger shall have been consummated prior to or
simultaneously herewith substantially in accordance with the terms of the Merger
Agreement, without any waiver or amendment not consented to in writing by the
Required Lenders, of any term, provision or condition set forth therein (such
consent not to be unreasonably withheld) or not otherwise contemplated thereby,
and in compliance with all applicable requirements of Law.
(h) The final terms and conditions of all agreements, instruments
and documents related to the Transaction shall be (i) as described in the
Information Memorandum, and (ii) otherwise reasonably satisfactory to the
Administrative Agent and the Lenders.
(i) After giving effect to the Transaction, including all Credit
Extensions made in connection therewith, on the Closing Date the amount by which
the aggregate Revolving Credit Commitments exceeds the sum of (i) the
Outstanding Amount of Revolving Credit Loans and (ii) the Outstanding Amount of
L/C Obligations shall be no less than $100,000,000.
(j) The Borrower shall have received at least (i) $325,000,000 in
gross cash proceeds (prior to, among other things, any underwriting fees) from
the sale of the Senior Subordinated Notes and (ii) $240,000,000 in gross cash
proceeds from the issuance by Holdings of the Preferred Equity to Vestar Capital
Partners IV, L.P., a Delaware limited partnership,
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Vestar Cup Investment, LLC, a Delaware limited liability company and Vestar Cup
Investment II, LLC, a Delaware limited liability company.
4.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each
Lender to honor any Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Loan Parties set
forth in the Loan Documents (including, without limitation, the
representations and warranties of Holdings and the Borrower contained in
ARTICLE V) shall be true and correct on and as of the date of the initial
Credit Extension, and shall be true and correct in all material respects on
and as of the date of any subsequent Credit Extensions, except to the
extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct as of such
earlier date, and except that for purposes of this SECTION 4.02, the
representations and warranties contained in SECTIONS 5.05(a) and (b) shall
be deemed to refer to the most recent statements furnished pursuant to
SECTIONS 6.01(a) and (b), respectively.
(b) No Default shall exist, or would result from such proposed
Credit Extension or from the application of the proceeds therefrom.
(c) The Administrative Agent and, if applicable, the L/C Issuers
or the Swing Line Lender shall have received a Request for Credit Extension
in accordance with the requirements hereof.
Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Loans to the other Type or a continuation of
Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in SECTIONS 4.02(A)
and (B) have been satisfied on and as of the date of the applicable Credit
Extension and the Administrative Agent shall have received for the account of
such Lender or L/C Issuer a certificate signed by a duly authorized officer of
the Borrower, dated the date of such Credit Extension, stating that such
statements are true.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each of Holdings and the Borrower represents and warrants to the
Administrative Agent and the Lenders that:
5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Each
Loan Party and each of its Subsidiaries (a) is duly organized or formed, validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to (i)
own or lease its assets and carry on its business and (ii) execute, deliver and
perform its obligations under the Loan Documents and Related Documents to which
it is a party, (c) is duly qualified and is licensed and in good standing under
the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such
72
qualification or license, and (d) is in compliance with all Laws; except in each
case referred to in CLAUSE (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document and Related Document to
which such Person is a party, and the consummation of the Transaction, are
within such Loan Party's corporate or other powers, have been duly authorized by
all necessary corporate or other organizational action, and do not and will not
(a) contravene the terms of any of such Person's Organization Documents; (b)
conflict with or result in any material breach or contravention of, or the
creation of any Lien under, or require any payment to be made under (i) any
material Contractual Obligation to which such Person is a party or affecting the
properties of such Person or any of its Subsidiaries or (ii) any material order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate in any material
respect any Law applicable to such Loan Party or its properties. No Loan Party
or any of its Subsidiaries is in violation of any Law or in breach of any such
Contractual Obligation, the violation or breach of which could be reasonably
expected to have a Material Adverse Effect.
5.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in
connection with (i) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, (ii) the
execution, delivery or performance by, or enforcement against, any Loan Party of
any Related Document or otherwise for the consummation of the Transaction, (iii)
the grant by any Loan Party of the Liens granted by it pursuant to the
Collateral Documents, (iv) the perfection or maintenance of the Liens created
under the Collateral Documents (including the first priority nature thereof) or
(v) the exercise by the Administrative Agent or any Lender of its rights under
the Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for (a) filings, consents or notices related to
CLAUSE (ii) above which have been made, obtained or given, or which, if not
made, obtained or given, individually or in the aggregate could not be
reasonably expected to have a Material Adverse Effect, (b) filings, consents or
notices related to CLAUSE (i) and (ii) which have been made, obtained or given
and (c) in the case of CLAUSES (iii) and (iv), the authorizations, approvals,
actions, notices and filings listed on SCHEDULE 5.03 hereto, all of which have
been duly obtained, taken, given or made and are in full force and effect, and
those filings and recordings which are contemplated to be made under SECTIONS
4.01(a) and 6.18. All applicable waiting periods in connection with the
Transaction have expired without any action having been taken by any competent
authority restraining, preventing or imposing materially adverse conditions upon
the Transaction. The Merger has been consummated in accordance with the Merger
Agreement and in accordance with applicable Law.
5.04 BINDING EFFECT. This Agreement and each other Loan Document
has been duly executed and delivered by each Loan Party that is party thereto.
This Agreement and each other Loan Document to which any Loan Party is a party
constitutes a legal, valid and binding obligation of such Loan Party,
enforceable against each Loan Party that is party thereto in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
73
moratorium or other similar laws affecting the rights of creditors generally,
and subject to equitable principles of general application.
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in
accordance with GAAP consistently applied throughout the periods covered
thereby, except as otherwise expressly noted therein and (ii) fairly present in
all material respects the financial condition of the Company, Old Solo Cup and
their respective Subsidiaries as of the respective dates thereof and their
results of operations for the respective periods covered thereby in accordance
with GAAP consistently applied throughout the respective periods covered
thereby, except as otherwise expressly noted therein.
(b) (A) The unaudited consolidated financial statements of the
Company and its Subsidiaries for the thirteen weeks ended December 28, 2003, and
the related consolidated statements of income or operations, shareholders'
equity and cash flows for the fiscal quarter ended on that date (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein, and meet the
requirements of Regulation S-X under the Securities Act of 1933 and all other
accounting rules of the SEC promulgated thereunder applicable to a registration
statement under such Act on Form S-1, and (ii) fairly present in all material
respects the financial condition of the Company and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby,
subject, in the case of clauses (i) and (ii), to the absence of footnotes and to
normal year-end audit adjustments; and (B) the unaudited consolidated financial
statements of Old Solo Cup and its Subsidiaries for the fiscal quarters ended
March 31, 2003, June 30, 2003, September 30, 2003 and December 31, 2003, and the
related consolidated statements of income or operations, shareholders' equity
and cash flows for such fiscal quarters (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and meet the requirement of Regulation S-X
under the Securities Act of 1933 and all other accounting rules of the SEC
promulgated thereunder applicable to a registration statement under such Act on
Form S-1, and (ii) fairly present in all material respects the financial
condition of Old Solo Cup and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments. From the date of such financial statements to the Closing Date,
except as set forth on SCHEDULE 5.05, Holdings, the Company, Old Solo Cup and
their respective Subsidiaries have not incurred any material Indebtedness and
other liabilities, direct or contingent, that, in accordance with GAAP, would be
required to be disclosed in such financial statements, other than in connection
with the Transaction and which are reflected in the pro forma financial
statements delivered pursuant to CLAUSE (d) below.
(c) Since the date of the Audited Financial Statements, there has
been no event or circumstance, either individually or in the aggregate, that has
had or could reasonably be expected to have a Material Adverse Effect.
(d) The consolidated pro forma balance sheet of the Borrower and
its Subsidiaries as at September 30, 2003, and the related consolidated pro
forma statements of income and cash flows of the Borrower and its Subsidiaries
for the twelve months then ended,
74
certified by the chief financial officer of the Borrower, copies of which have
been provided to the Administrative Agent for distribution to the Lenders,
fairly present the consolidated pro forma financial condition of the Borrower
and its Subsidiaries as at such date and the consolidated pro forma results of
operations of the Borrower and its Subsidiaries for the period ended on such
date, in each case giving effect to the Transaction, all in accordance with GAAP
and meet the requirements of Regulation S-X under the Securities Act of 1933 and
all other accounting rules of the SEC promulgated thereunder applicable to a
registration statement under such Act on Form S-1.
(e) The consolidated projected balance sheets, statements of
income and statements of cash flows of the Borrower and its Subsidiaries
delivered to the Administrative Agent pursuant to SECTION 4.01 or 5.05 were
prepared in good faith on the basis of the assumptions stated therein, which
assumptions were reasonable in light of the conditions existing at the time of
delivery of such projections.
5.06 LITIGATION. There are no actions, suits, proceedings, claims,
disputes or investigations pending or, to the knowledge of Holdings and the
Borrower after due and diligent investigation, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority, by or
against Holdings, the Borrower or any of their respective Subsidiaries or
against any of their material properties or revenues that (a) purport to affect
the validity or enforceability of this Agreement or any other Loan Document, or
enjoin or attack the validity of any Related Document or the consummation of the
Transaction, or (b) either individually or in the aggregate, if determined
adversely, could reasonably be expected to have a Material Adverse Effect.
5.07 NO DEFAULT. Neither Holdings nor the Borrower nor any of their
respective Subsidiaries is in default under or with respect to any Contractual
Obligation that could, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.08 OWNERSHIP OF PROPERTY; LIENS.
(a) Each Loan Party and each of its Subsidiaries has good
marketable and insurable title in fee simple to, or valid leasehold interests
in, all Owned Real Property and Leased Real Property necessary or used in the
ordinary conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, free and clear of all Liens, other than Liens created or
permitted by the Loan Documents, including, without limitation, such items that
will constitute Permitted Encumbrances and Liens set forth on SCHEDULE 5.08(B).
(b) Set forth on SCHEDULE 5.08(B) hereto is a complete and
accurate list of all contractual or judicial Liens (other than such items that
will constitute Permitted Encumbrances) and all financing statements as of the
date hereof on the property or assets of any Loan Party or any of its
Subsidiaries.
(c) Set forth on PART I of SCHEDULE 5.08(c) hereto is a complete
and accurate list of all Owned Real Property as of the date hereof, showing the
street address or other
75
information sufficient to identify the location of such real property, county or
other relevant jurisdiction, state, record owner and, to the knowledge of any
Loan Party or any of its Subsidiaries based upon the best available information,
the fair value thereof.
(d) (1) Set forth on PART I of SCHEDULE 5.08(d) hereto is a
complete and accurate list of all Real Property Leases as of the date hereof,
showing the street address or other information sufficient to identify the
location of the affected real property, state, lessor, lessee, expiration date
and annual rental cost thereof. Each Real Property Lease is the legal, valid and
binding obligation of the Loan Party or its applicable Subsidiary party thereto,
enforceable in accordance with its terms against such Loan Party or Subsidiary.
(2) Set forth on PART II of SCHEDULE 5.08(d) hereto is a
complete and accurate list of all Real Property Subleases as of the date hereof,
showing the street address or other information sufficient to identify the
location of the affected real property, state, lessor, lessee, expiration date
and annual rental cost thereof. Each Real Property Sublease is the legal, valid
and binding obligation of the Loan Party or its applicable Subsidiary party
thereto, enforceable in accordance with its terms against such Loan Party or
Subsidiary.
(e) The Owned Real Property and the Leased Real Property comprise
all of the real property necessary for carrying on the business of each Loan
Party and its Subsidiaries as and to the extent to which it is presently
conducted.
(f) Set forth on SCHEDULE 5.08(f) hereto is a complete and
accurate list of all Investments held by any Loan Party or any of its
Subsidiaries on the date hereof, showing as of the date hereof the amount,
obligor or issuer and maturity, if any, thereof.
5.09 ENVIRONMENTAL COMPLIANCE.
(a) The Borrower and its Subsidiaries conduct in the ordinary
course of business a review of the effect of existing Environmental Laws and
claims alleging potential liability or responsibility for violation of any
Environmental Law on their respective businesses, operations and properties, and
as a result thereof the Borrower has reasonably concluded, except as identified
on SCHEDULE 5.09, that such Environmental Laws and claims regarding any
property, could not, in any case, reasonably be expected to result in an
Environmental Liability in excess of $1,000,000.
(b) Except as disclosed on SCHEDULE 5.09, the operations of each
Loan Party and each of its Subsidiaries and their respective properties comply
in all material respects with all applicable Environmental Laws and
Environmental Permits, all past non-compliance with such Environmental Laws and
Environmental Permits has been resolved without material ongoing obligations or
costs, and to the knowledge of the Loan Parties no circumstances exist that are
reasonably likely to (i) give rise to any Environmental Liability against any
Loan Party or any of its Subsidiaries or any of their respective properties or
(ii) cause any such properties to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law, except for such
Environmental Liability or restriction as would not, in any case, exceed
$1,000,000.
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(c) None of the properties of any Loan Party or any of its
Subsidiaries is listed or, to the knowledge of the Loan Parties, proposed for
listing on the NPL or any analogous foreign, state or local list. There is no
asbestos or asbestos containing material on any property, and Hazardous
Materials have not been released, discharged or disposed on any property, in any
case, that could reasonably be expected to result in an Environmental Liability
in excess of $1,000,000.
(d) Except as disclosed on SCHEDULE 5.09, neither any Loan Party
nor any of its Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials at
any of their respective properties, either voluntarily or pursuant to the order
of any Governmental Authority or the requirements of any Environmental Law, the
cost of which investigation, assessment or remedial response action could
reasonably be expected to result in an Environmental Liability in excess of
$1,000,000, and all Hazardous Materials generated, used, treated, handled or
stored at, or transported to or from, any of such property have been disposed of
in a manner that could not reasonably be expected to result in an Environmental
Liability in excess of $1,000,000.
5.10 INSURANCE. The properties of the Borrower and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in the respective localities where the Borrower or
the applicable Subsidiary operates.
5.11 TAXES. The Borrower and its Subsidiaries have filed all income
and other material tax returns and reports required to be filed. The Borrower
and its Subsidiaries have paid all income and other material taxes, assessments,
fees and other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which are
being contested in good faith by appropriate proceedings diligently conducted
and for which adequate reserves have been provided in accordance with GAAP.
There is no proposed material tax assessment against the Borrower or any
Subsidiary that would, if made, have a Material Adverse Effect. The
Reorganization will not be taxable to Holdings, the Borrower, Old Solo Cup or
any of Old Solo Cup's Subsidiaries.
5.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower and Holdings, nothing has occurred which would
prevent, or cause the loss of, such qualification. Each Loan Party and each
ERISA Affiliate have made all required contributions to each Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.
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(b) There are no pending or, to the best knowledge of the Borrower
and Holdings, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that could be reasonably be
expected to have a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has an "accumulated funding deficiency" (as defined
in Section 412 of the Code), whether or not waived, and no application for a
waiver of the minimum funding standard has been filed with respect to any
Pension Plan; (iii) neither any Loan Party nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any liability under Title IV of ERISA with
respect to any Pension Plan (other than premiums due and not delinquent under
Section 4007 of ERISA); (iv) neither any Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither any Loan Party nor any ERISA Affiliate has
engaged in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA.
(d) With respect to each scheme or arrangement mandated by a
government other than the United States (a "FOREIGN GOVERNMENT SCHEME OR
ARRANGEMENT") and with respect to each employee benefit plan maintained or
contributed to by any Loan Party or any Subsidiary of any Loan Party that is not
subject to United States law (a "FOREIGN PLAN"):
(A) Any employer and employee contributions required by law or by
the terms of any Foreign Government Scheme or Arrangement or any Foreign
Plan have been made, or, if applicable, accrued, in accordance with normal
accounting practices.
(B) The fair market value of the assets of each funded Foreign
Plan, the liability of each insurer for any Foreign Plan funded through
insurance or the book reserve established for any Foreign Plan, together
with any accrued contributions, is sufficient to procure or provide for the
accrued benefit obligations, as of the date hereof, with respect to all
current and former participants in such Foreign Plan according to the
actuarial assumptions and valuations most recently used to account for such
obligations in accordance with applicable generally accepted accounting
principles.
(C) Each Foreign Plan required to be registered has been
registered and has been maintained in good standing with applicable
regulatory authorities.
5.13 SUBSIDIARIES; EQUITY INTERESTS. As of the Closing Date, no
Loan Party has any Subsidiaries other than those specifically disclosed in PART
(a) of SCHEDULE 5.13, and all of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and non-assessable and are
owned by a Loan Party in the amounts specified on Part (a) of SCHEDULE 5.13 free
and clear of all Liens except those created under the Collateral Documents. No
Loan Party has any equity investments in any other corporation or entity other
than those specifically disclosed in Part (b) of SCHEDULE 5.13. All of the
outstanding Equity Interests in the Borrower have been validly issued, are fully
paid and non-assessable and are owned by Holdings
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(as of the date hereof, in the amounts specified on Part (c) of SCHEDULE 5.13)
free and clear of all Liens except those created under the Collateral Documents.
5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT.
(a) The Borrower is not engaged and will not engage, principally
or as one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock and no
proceeds of any Borrowings or drawings under any Letter of Credit will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
(b) None of the Borrower, any Person Controlling the Borrower, or
any Subsidiary (i) is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, or (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940. Neither the
making of any Loan, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated by the Loan Documents, will
violate any provision of any such Act or any rule, regulation or order of the
SEC thereunder.
5.15 DISCLOSURE. The reports, financial statements, certificates or
other written information furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or any other Loan Document (as modified or supplemented by other information so
furnished) are complete and correct in all material respects and do not contain
any untrue statement of a material fact or do not omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; PROVIDED that, with respect to
projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time made (it being understood that no assurance has been or
will be given that any projections will be achieved).
5.16 COMPLIANCE WITH LAWS. Each Loan Party and each Subsidiary is
in compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.17 INTELLECTUAL PROPERTY; LICENSES, ETC. Each Loan Party and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, "IP RIGHTS") that are material
to the operation of their respective businesses as currently conducted.
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Set forth on SCHEDULE 5.17 is a complete and accurate list, as of the date
hereof, of all IP Rights owned by each Loan Party and its Subsidiaries that are
the subject of a registration or application. To the best knowledge of the
Borrower, no IP Rights, slogan or other advertising device, product, process,
method, substance, part or other material employed by any Loan Party or any
Subsidiary infringes upon any rights held by any other Person which
infringement, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. No claim or litigation regarding any of the
foregoing is pending or, to the best knowledge of the Borrower, threatened,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
5.18 SOLVENCY. As of the date hereof, each Loan Party is Solvent.
The Loan Parties, on a consolidated basis, are Solvent.
5.19 CASUALTY, ETC. Neither the business nor the properties of any
Loan Party or any of its Subsidiaries are currently affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that could reasonably be expected to have
a Material Adverse Effect.
5.20 PERFECTION, ETC.
(a) All filings and other actions (including, without limitation,
the delivery of stock certificates and promissory notes) necessary or desirable
to perfect and protect the security interest in the Collateral created under the
Collateral Documents and subject to the Uniform Commercial Code of any
applicable jurisdiction ("UCC COLLATERAL") have been, as applicable, made, taken
or delivered to the Administrative Agent for filing or possession, and the
Collateral Documents create in favor of the Administrative Agent for the benefit
of the Secured Parties a valid and, together with such filings and other
actions, perfected first priority security interest in the UCC Collateral
(subject to the Liens permitted by SECTION 7.01), securing the payment of the
Secured Obligations (subject, in the case of the Account Collateral (as defined
in the Security Agreement), to the additional actions required by SECTION 6.18).
(b) Subject to such further actions required by SECTION 6.18, all
filings and other actions necessary or desirable to perfect and protect the Lien
in the Owned Real Property Collateral and the Leased Real Property Collateral
under the Collateral Documents have been, as applicable, made or taken, and the
Collateral Documents create in favor of the Administrative Agent for the benefit
of the Secured Parties a valid and, together with such filings and other
actions, perfected first priority Lien in the Owned Real Property Collateral and
the Leased Real Property Collateral (subject only to Permitted Encumbrances),
securing the payment of the Secured Obligations.
(c) Except as set forth on SCHEDULE 5.08(b), the Loan Parties are
the legal and beneficial owners of the UCC Collateral free and clear of any
Lien, except for the liens and security interests created by or permitted under
the Loan Documents.
5.21 EQUITY OBLIGATIONS. Except as set forth on SCHEDULE 5.21, as
of the date hereof, neither Holdings nor any of its Subsidiaries has issued any
Equity Obligation that is
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entitled to a preference or priority over any Equity Interest issued by Holdings
or such Subsidiary upon any distribution of Holdings' or such Subsidiary's
assets, whether by dividend or upon liquidation or that contains any one or more
of the following provisions: (a) such Equity Obligation, by its terms is
redeemable (as defined below) in whole or in part on any date which is earlier
than the date occurring one year after the then latest Maturity Date, (b) such
Equity Obligation provides for payment of any cash dividends or any other cash
payments, including sinking fund payments or (c) such Equity Obligation contains
any provision (including, without limitation, covenants, mandatory redemptions
or offers to purchase or prepay, defaults and remedies) which is more
restrictive or less favorable, as applicable, in any material respect, than the
provisions in the Preferred Equity Documents as in effect on the Closing Date.
As used herein, the term "redeemable" means, with respect to any Equity
Interest, that the issuer thereof has undertaken to redeem or repurchase the
same at a fixed or determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of any event or condition, or that
such Equity Interest is redeemable for any reason at the option of the holder.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, Holdings and the
Borrower shall, and shall (except in the case of the covenants set forth in
SECTIONS 6.01, 6.02, 6.03 and 6.11) cause their respective Subsidiaries to:
6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent (and
in amounts sufficient for further distribution to each Lender), in form and
detail reasonably satisfactory to the Administrative Agent and the Required
Lenders:
(a) as soon as available, but in any event within 120 days after
the end of the fiscal year ended December 31, 2004 and 90 days after the
end of each subsequent fiscal year, a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year, and the
related consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in
reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of an independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and shall not be subject to any
"going concern" or like qualification or exception or any qualification or
exception as to the scope of such audit;
(b) as soon as available, but in any event within 65 days after
the fiscal quarters ended September 30, 2004 and March 31, 2005 and 45 days
after the fiscal quarters ended June 30, 2005, September 30, 2005 and each
of the first three fiscal quarters of each subsequent fiscal year, a
consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of such fiscal quarter, and the related consolidated statements of
income or operations, shareholders' equity and cash flows for such fiscal
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quarter and for the portion of the Borrower's fiscal year then ended,
setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail
and certified by a Responsible Officer of the Borrower as fairly presenting
the financial condition, results of operations, shareholders' equity and
cash flows of the Borrower and its Subsidiaries in accordance with GAAP,
subject only to normal year-end audit adjustments and to the fact that such
financial statements may be abbreviated and may omit footnotes or contain
incomplete footnotes;
(c) as soon as available, but in any event within 45 days after
the end of each month (excluding any month that is also the end of a fiscal
quarter) through and including February 28, 2005 and 30 days after the end
of each month occurring thereafter (excluding any month that is also the
end of a fiscal quarter), a consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such month and a consolidated statements
of income and a consolidated statement of cash flows of the Borrower and
its Subsidiaries for the period commencing at the end of the previous month
and ending with the end of such month and a consolidated statement of
income and a consolidated statement of cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such month, setting forth in each case in
comparative form the corresponding figures for the immediately preceding
month, all in reasonable detail and duly certified by a Responsible Officer
of the Borrower; and
(d) as soon as available, but in any event no later than 45 days
after the end of each fiscal year, projections prepared by management of
the Borrower, in form reasonably satisfactory to the Administrative Agent,
of consolidated balance sheets, income statements and cash flow statements
of the Borrower and its Subsidiaries for the following fiscal year.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative
Agent (and in amounts sufficient for further distribution to each Lender), in
form and detail reasonably satisfactory to the Administrative Agent and the
Required Lenders:
(a) with respect to the delivery of the financial statements
referred to in SECTION 6.01(a), (1) concurrently deliver a certificate of
its independent certified public accountants certifying such financial
statements and stating that in making the examination necessary therefor no
knowledge was obtained of any default in complying with the financial
covenants set forth in SECTION 7.10 or, if any such default shall exist,
stating the nature and status of such event or (2) include a footnote in
such financial statements stating that, as at the end of the fiscal year
covered by such financial statements, the Borrower was in compliance with
all financial covenants set forth in SECTION 7.10, or if the Borrower was
in default under any such financial covenant, describing such default, and
specifying the nature and period of existence thereof;
(b) concurrently with the delivery of the financial statements
referred to in SECTIONS 6.01(a) and (b), a duly completed Compliance
Certificate signed by a Responsible Officer of the Borrower which shall
include (i) for a period of thirty-six
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months after the Closing Date, (x) a computation of the non-recurring cash
capital expenditures made by the Borrower or any of its Subsidiaries
pursuant to the second proviso to SECTION 7.10(c) and (y) a computation of
Inventory Reduction Charges in accordance with the definition thereof; (ii)
in the case of a Compliance Certificate delivered with the financial
statements referred to in SECTION 6.01(a), a report supplementing SCHEDULES
5.08(b), 5.08(c) and 5.08(d), 5.13 and 5.17 hereto, including, as for
SCHEDULES 5.08(c) and 5.08(d), an identification of all Owned Real Property
and Leased Real Property disposed of by any Loan Party or any of its
Subsidiaries during such fiscal year, a list and description (including the
street address or other information sufficient to identify the location of
such real property, county or other relevant jurisdiction, state and, to
the knowledge of any Loan Party or any of its Subsidiaries based upon the
best available information, the fair value thereof, and, in the case of
leases and subleases of real property, street address or other information
sufficient to identify the location of the affected real property, state,
lessor, lessee, the expiration date and annual rental cost thereof) of all
real property acquired or for which new leases were entered into during
such fiscal year, and as to all such Schedules, a description of such other
changes in the information included in such Schedules as may be necessary
for such Schedules to be accurate and complete and (iii) in the case of
Compliance Certificate delivered with the financial statements referred to
in SECTION 6.01(a), the amount of Committed Capital Expenditures for the
fiscal year in which such Compliance Certificate is being delivered and the
Unfunded Committed Capital Expenditures related to the prior fiscal year.
(c) within 10 Business Days after any request by the
Administrative Agent or any Lender, copies of any detailed audit reports or
management letters of any Loan Party by independent accountants in
connection with the accounts or books of any Loan Party or any Subsidiary,
or any audit of any of them;
(d) within 10 Business Days after the same are available, copies
of each annual report, proxy or financial statement or other report or
communication sent to the stockholders of the Borrower, and copies of all
annual, regular, periodic and special reports and registration statements
which the Borrower may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any
Governmental Authority that may be substituted therefor, or with any
national securities exchange, and in any case not otherwise required to be
delivered to the Administrative Agent pursuant hereto;
(e) promptly after the furnishing thereof, copies of any statement
or report furnished to any holder of debt securities of any Loan Party or
of any of its Subsidiaries pursuant to the terms of any indenture, loan or
credit or similar agreement pursuant to which Indebtedness is outstanding
in excess of the Threshold Amount and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this SECTION 6.02;
(f) promptly and in any event within five Business Days after
receipt thereof by any Loan Party or any of its Subsidiaries, (i) copies of
each notice or other correspondence received from the SEC (or comparable
agency in any applicable non-U.S. jurisdiction) concerning any
investigation or possible investigation or other inquiry
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by such agency regarding financial or other operational results of any Loan
Party or any of its Subsidiaries, and (ii) copies of each notice relating
to any default or required prepayment, redemption or repurchase in respect
of any Indebtedness or Guarantee (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate amount (including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount;
(g) promptly after the assertion or occurrence thereof, notice of
any claim against any Loan Party or any of its Subsidiaries under any
Environmental Law or with respect to any Environmental Permit that could
(i) reasonably be expected to have a Material Adverse Effect or (ii) cause
any Real Property Collateral to be subject to any restrictions on
ownership, occupancy, use or transferability under any Environmental Law;
(h) promptly and in any event within 30 days after the filing
thereof with the IRS, furnish to the Administrative Agent and each Lender,
copies of the annual report (Form 5500 series) with respect to each Pension
Plan, including without limitation, Schedule B (actuarial information) to
such annual report; and
(i) promptly, such additional information regarding the business,
financial or corporate affairs of any Loan Party or any Subsidiary, or
compliance with the terms of the Loan Documents, as the Administrative
Agent or any Lender may from time to time reasonably request, except to the
extent that such information is protected by attorney-client privilege and
disclosure of which would waive such privilege.
Documents required to be delivered pursuant to SECTION 6.01(a) or (b)
or SECTION 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on SCHEDULE 11.02; or (ii)
on which such documents are posted on the Borrower's behalf on an internet or
intranet website, if any, to which each Lender and the Administrative Agent have
access (whether a commercial, third-party website or whether sponsored by the
Administrative Agent); PROVIDED that: (i) Holdings and the Borrower shall
deliver paper copies of such documents to the Administrative Agent if the
Administrative Agent or any Lender, through the Administrative Agent, requests
Holdings or the Borrower to deliver such paper copies until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent of the posting of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
(I.E., soft copies) of such documents. Notwithstanding anything contained
herein, in every instance the Borrower shall be required to provide paper copies
of the Compliance Certificates required by SECTION 6.02(b) to the Administrative
Agent. Except for such Compliance Certificates, the Administrative Agent shall
have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by Holdings and the Borrower with any such request for
delivery, and each Lender shall be solely responsible for requesting delivery to
it or maintaining its copies of such documents.
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6.03 NOTICES. Promptly (but in any case not later than five
Business Days after a Responsible Officer of the Borrower obtains actual
knowledge thereof) notify the Administrative Agent and each Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect;
(c) of the occurrence of any ERISA Event;
(d) of any material change in accounting policies or financial
reporting practices by any Loan Party or any Subsidiary; and
(e) of the (A) occurrence of any Disposition of property or assets
for which the Borrower is required to make a mandatory prepayment pursuant
to SECTION 2.05(b)(ii), (b) occurrence of any sale of capital stock or
other Equity Interests for which the Borrower is required to make a
mandatory prepayment pursuant to SECTION 2.05(b)(iii), (c) incurrence or
issuance of any Indebtedness for which the Borrower is required to make a
mandatory prepayment pursuant to SECTION 2.05(b)(iv) and (d) receipt of any
Extraordinary Receipt for which the Borrower is required to make a
mandatory prepayment pursuant to SECTION 2.05(b)(v).
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to SECTION
6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.
6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall
become due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property,
unless the same are being contested in good faith by appropriate proceedings
diligently conducted and adequate reserves in accordance with GAAP are being
maintained by the Borrower or such Subsidiary; (c) all Indebtedness, as and when
due and payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness, except to the extent that
the same is being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP are maintained by the
Borrower or such Subsidiary, except, under this SECTION 6.04, to the extent the
failure to pay or discharge the same could not reasonably be expected to have a
Material Adverse Effect.
6.05 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and
maintain in full force and effect its legal existence and good standing under
the Laws of the jurisdiction of its organization except (i) in a transaction
permitted by SECTION 7.04 or 7.05 or (ii) for the consummation of the Merger and
the Reorganization; (b) take all reasonable action to maintain
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all rights, privileges, permits, licenses and franchises necessary or desirable
in the normal conduct of its business, except to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect; and (c)
preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
6.06 MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect
the Real Property Collateral and all of its material properties and equipment
necessary in the operation of its business in good working order and condition,
ordinary wear and tear excepted and (b) make all necessary repairs thereto and
renewals and replacements thereof except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons and providing for not less than 30 days'
prior notice to the Administrative Agent of termination, lapse or cancellation
of such insurance.
6.08 COMPLIANCE WITH LAWS. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
6.09 BOOKS AND RECORDS. (a) Maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP shall
be made of all financial transactions and matters involving the assets and
business of the Borrower or such Subsidiary, as the case may be; and (b)
maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Borrower or such Subsidiary, as the case may be.
6.10 INSPECTION RIGHTS. Permit representatives and independent
contractors of the Administrative Agent from time to time to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and, if a
Responsible Officer of the Borrower is present, independent public accountants,
at the expense of the Borrower for the first visit of the Administrative Agent
during any fiscal year and at the expense of the Administrative Agent for any
subsequent visits during such fiscal year and at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower and, subject to reasonable safety and
confidentiality requirements; PROVIDED, HOWEVER, that when a Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours, and with reasonable advance
notice and as often as is reasonably necessary in the sole discretion of the
Administrative Agent and the Lenders.
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6.11 USE OF PROCEEDS. Use the proceeds of the Credit Extensions to
finance, in part, the Transaction, to redeem or retire existing debt of the
Borrower or the Company or any of their respective Subsidiaries as part of the
Transaction, and for working capital and other general corporate purposes of the
Borrower and its Subsidiaries not in contravention of any Law or of any Loan
Document.
6.12 COVENANT TO GUARANTEE OBLIGATIONS AND GIVE SECURITY. (a) Upon
(u) the request of the Administrative Agent following the occurrence and during
the continuance of an Event of Default, (v) the formation or acquisition of any
new direct or indirect Significant Subsidiary by any Loan Party, (w) the
acquisition of fee owned real property with a value in excess of $5,000,000 (a
"NEW OWNED PROPERTY"), (x) the entry into any new lease of real property under
which any Loan Party or its Subsidiaries is the lessee with annual rental
payments thereunder in excess of $2,000,000 (a "NEW MATERIAL LEASE"), (y) the
entry into a new lease of real property for manufacturing operations in which
rentable square footage exceeds 100,000 square feet (a "NEW COLLATERAL ACCESS
LEASE") or (z) the acquisition of any personal property by any Loan Party which
property would, if owned by such Loan Party on the date hereof, constitute part
of the Collateral, and such property shall not already be subject to a perfected
security interest in favor of the Administrative Agent for the benefit of the
Secured Parties, then the Borrower shall, in each case at the Borrower's
expense:
(i) in connection with the formation or acquisition of a
Significant Subsidiary, within 30 days after such formation or acquisition,
cause each such Significant Subsidiary that is a Domestic Subsidiary or a
Non-CFC Foreign Subsidiary, and cause each direct and indirect equity
holder of such Subsidiary (if each such equity holder has not already done
so and such equity holder is a Loan Party or a Subsidiary of a Loan Party
and not a "controlled foreign corporation" under Section 957 of the Code)
to duly execute and deliver to the Administrative Agent a guaranty or
guaranty supplement, in form and substance reasonably satisfactory to the
Administrative Agent, guaranteeing the other Loan Parties' obligations
under the Loan Documents,
(ii) notwithstanding anything to the contrary contained in this
SECTION 6.12(a), (x) in connection with the acquisition of a New Owned
Property, (A) within 10 days after such acquisition, furnish to the
Administrative Agent a description, in detail satisfactory to the
Administrative Agent, of such New Owned Property and (B) within 45 days
after such acquisition, furnish to the Administrative Agent (1) each of the
items set forth in SECTIONS 6.18(a)(i), (ii), (iii), (iv) and (vi), MUTATIS
MUTANDIS, in each case in respect of such New Owned Property and (2) such
other approvals, opinions or documents as the Administrative Agent may
reasonably request, and (y) in connection with the entry into a New
Material Lease or New Collateral Access Lease, (A) within 10 days after
entry into such New Material Lease or New Collateral Access Lease, furnish
to the Administrative Agent a description, in detail satisfactory to the
Administrative Agent, of such lease, (B) within 45 days after entry into a
New Material Lease, furnish to the Administrative Agent (1) each of the
items set forth in SECTIONS 6.18(a)(i), (iv), (vi) and (vii), MUTATIS
MUTANDIS, in each case in respect of such New Material Lease and (2) such
other approvals, opinions or documents as the Administrative Agent may
reasonably request and (C) within 45 days after entry into a New Collateral
Access Lease, furnish to the Administrative Agent (1) a collateral access
agreement to the extent set forth in SECTION
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6.18(a)(viii), MUTATIS MUTANDIS, in respect of such New Collateral Access
Lease and (2) such other approvals, opinions or documents as the
Administrative Agent may reasonably request,
(iii) following the occurrence and during the continuance of a
Default, at the request of the Administrative Agent, furnish a description
of the real and personal properties of the Loan Parties and their
respective Subsidiaries in detail reasonably satisfactory to the
Administrative Agent,
(iv) within 45 days after such request, formation acquisition or
entry, duly execute and deliver, and cause each such Significant Subsidiary
that is a Domestic Subsidiary or a Non-CFC Foreign Subsidiary and each
direct and indirect equity holder of such Subsidiary (if each such equity
holder has not already done so and such equity holder is a Loan Party or a
Subsidiary of a Loan Party and is not a "controlled foreign corporation"
under Section 957 of the Code) to duly execute and deliver, to the
Administrative Agent mortgages (solely with respect to Real Property
Collateral), pledges, assignments, Security Agreement Supplements, IP
Security Agreement Supplements and other security agreements, as specified
by and in form and substance reasonably satisfactory to the Administrative
Agent, securing payment of all the Obligations of the applicable Loan
Party, such Subsidiary or such equity holder, as the case may be, under the
Loan Documents and constituting Liens on all such properties,
(v) within 45 days after such request, formation, acquisition or
entry, take, and cause each such Significant Subsidiary that is a Domestic
Subsidiary or a Non-CFC Foreign Subsidiary or such equity holder is a Loan
Party or a Subsidiary of a Loan Party and that is not a "controlled foreign
corporation" under Section 957 of the Code to take, whatever action
(including, without limitation, the recording of mortgages, the filing of
Uniform Commercial Code financing statements, the giving of notices and the
endorsement of notices on title documents) may be necessary or advisable in
the opinion of the Administrative Agent to vest in the Administrative Agent
(or in any representative of the Administrative Agent designated by it)
valid and subsisting Liens on the properties purported to be subject to the
mortgages (solely with respect to Real Property Collateral), pledges,
assignments, Security Agreement Supplements, IP Security Agreement
Supplements and security agreements delivered pursuant to this SECTION
6.12, enforceable against all third parties in accordance with their terms,
(vi) within 60 days after such request, formation, acquisition or
entry, deliver to the Administrative Agent, upon the request of the
Administrative Agent in its sole discretion, a signed copy of a favorable
opinion, addressed to the Administrative Agent and the other Secured
Parties, of counsel for the Loan Parties reasonably acceptable to the
Administrative Agent as to the matters contained in CLAUSES (i), (ii), (iv)
and (v) above, as to such guaranties, guaranty supplements, mortgages,
pledges, assignments, Security Agreement Supplements, IP Security Agreement
Supplements and security agreements being legal, valid and binding
obligations of each Loan Party party thereto enforceable in accordance with
their terms, as to the matters contained in CLAUSE (v) above, as to such
recordings, filings, notices, endorsements and other actions being
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sufficient to create valid perfected Liens on such properties and as to
such other matters as the Administrative Agent may reasonably request,
(vii) as promptly as practicable after such request, formation,
acquisition or entry, deliver, upon the request of the Administrative Agent
in its sole discretion, to the Administrative Agent with respect to each
parcel of real property owned, leased or held by a Subsidiary that is a
Domestic Subsidiary or a Non-CFC Foreign Subsidiary and that is the subject
of such request, formation, acquisition or entry, title reports, surveys
and engineering, soils and other reports, and environmental assessment
reports, each in scope, form and substance satisfactory to the
Administrative Agent, PROVIDED, HOWEVER, that to the extent that any Loan
Party or any of its Subsidiaries shall have otherwise received any of the
foregoing items with respect to such real property (whether owned or
leased), such items shall, promptly after the receipt thereof, be delivered
to the Administrative Agent,
(viii) upon the occurrence and during the continuance of an Event of
Default, promptly cause to be deposited any and all cash dividends paid or
payable to it or any of its Domestic Subsidiaries or Non-CFC Foreign
Subsidiaries from any of its Subsidiaries from time to time into the
Collateral Account (as defined in the Security Agreement), and with respect
to all other dividends paid or payable to it or any of its Domestic
Subsidiaries or Non-CFC Foreign Subsidiaries from time to time, promptly
execute and deliver, or cause such Domestic Subsidiary or Non-CFC Foreign
Subsidiary to promptly execute and deliver, as the case may be, any and all
further instruments and take or cause such Domestic Subsidiary or Non-CFC
Foreign Subsidiary to take, as the case may be, all such other action as
the Administrative Agent may reasonably deem necessary or desirable in
order to obtain and maintain from and after the time such dividend is paid
or payable a perfected, first priority lien on and security interest in
such dividends, and
(ix) at any time and from time to time, promptly execute and
deliver any and all further instruments and documents and take all such
other action as the Administrative Agent may reasonably deem necessary or
desirable in obtaining the full benefits of, or in perfecting and
preserving the Liens of, such guaranties, mortgages, pledges, assignments,
Security Agreement Supplements, IP Security Agreement Supplements and
security agreements.
(b) Notwithstanding any provision of this Agreement or any
Collateral Document to the contrary, no Excluded Subsidiary shall be obligated
to become a Guarantor hereunder, or give security in respect of the Obligations
hereunder.
6.13 COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause all
lessees and other Persons operating or occupying its material properties to
comply, in all material respects, with all applicable Environmental Laws and
Environmental Permits; obtain and renew all Environmental Permits necessary for
its operations and material properties; and conduct any investigation, study,
sampling and testing, and undertake any cleanup, removal, remedial or other
action necessary to remove and clean up all Hazardous Materials, in accordance
with the requirements of applicable Environmental Laws; PROVIDED, HOWEVER, that
neither the Borrower nor any of its Subsidiaries shall be required to undertake
any such cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by
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proper proceedings and appropriate reserves are being maintained with respect to
such circumstances.
6.14 PREPARATION OF ENVIRONMENTAL REPORTS. At the request of the
Required Lenders from time to time based upon the reasonable belief that any
properties of the Borrower present the risk of an Environmental Liability having
a Material Adverse Effect, provide to the Lenders within 60 days after such
request, at the expense of the Borrower, an environmental site assessment report
for the respective properties of the Loan Parties and their respective
Subsidiaries described in such request, prepared by an environmental consulting
firm acceptable to the Administrative Agent, indicating the presence or absence
of Hazardous Materials and the estimated cost of any compliance, removal or
remedial action in connection with any Hazardous Materials on such properties;
without limiting the generality of the foregoing, if the Administrative Agent
determines at any time that a material risk exists that any such report will not
be provided within the time referred to above, the Administrative Agent may
retain an environmental consulting firm to prepare such report at the expense of
the Borrower, and the Borrower hereby grants and agrees to cause any Loan Party
that owns any property described in such request to grant at the time of such
request to the Administrative Agent, the Lenders, such firm and any agents or
representatives thereof an irrevocable non-exclusive license, subject to the
rights of tenants, to enter onto its properties to undertake such an assessment.
6.15 FURTHER ASSURANCES
(a) Promptly upon request by the Administrative Agent, or any
Lender through the Administrative Agent, (i) correct any material defect or
error that may be discovered in the execution, acknowledgment, filing or
recordation of any Loan Document or other document or instrument relating to any
Collateral, and (ii) do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register any and all such further acts, deeds,
certificates, assurances and other instruments as the Administrative Agent, or
any Lender through the Administrative Agent, may reasonably require from time to
time in order to carry out more effectively the purposes of the Loan Documents.
(b) Except as set forth in SECTION 6.18(d), within 60 Business
Days after the date any Foreign Subsidiary that is a "controlled foreign
corporation" under Section 957 of the Code and that is directly owned by one or
more Loan Parties (hereafter, a "FIRST-TIER FOREIGN CFC SUBSIDIARY"), together
with its Subsidiaries, contributes on a consolidated basis more than $3,000,000
to Consolidated EBITDA, furnish to the Administrative Agent all documents
necessary or desirable to perfect, under the laws of the jurisdiction of
formation of such First-Tier Foreign CFC Subsidiary, the security interest
granted, pursuant to the Security Agreement, in the Equity Interest of such
First-Tier Foreign CFC Subsidiary, together with an opinion of local counsel
qualified in such jurisdiction of formation substantially in the form of EXHIBIT
I-4 (such opinion, together with any such documents, collectively, the "LOCAL
LAW PERFECTION DOCUMENTS").
6.16 COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments and
otherwise perform all obligations in respect of the Real Property Leases and the
Real Property Subleases, keep such leases in full force and effect, not allow
such leases and subleases to terminate prior to the respective expiration dates
thereof, notify the Administrative Agent of any default by any
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party with respect to such leases and subleases and cooperate with the
Administrative Agent in all respects to cure any default on the part of the
Borrower, and cause each of its Subsidiaries to do so, except, in any case,
where the failure to do so, either individually or in the aggregate, could not
be reasonably likely to have a Material Adverse Effect.
6.17 INTEREST RATE HEDGING. Enter into within 90 days after the
Closing Date, and maintain for a period of three years thereafter, one or more
interest rate Swap Contracts with Persons reasonably acceptable to the
Administrative Agent and providing for protection against fluctuations in
interest rates with coverage in a notional amount, together with the amount of
Funded Debt of the Borrower and its Subsidiaries on a consolidated basis that is
bearing interest at a fixed rate, at least equal to 50% of the aggregate amount
of all Funded Debt of the Borrower and its Subsidiaries on a consolidated basis
outstanding from time to time.
6.18 CONDITIONS SUBSEQUENT TO THE CLOSING DATE. (a) Within 60 days
after the Closing Date (PROVIDED that so long as the Borrower shall have used
commercially reasonable efforts to satisfy the conditions set forth below within
such 60-day period, the Administrative Agent shall, upon the request of the
Borrower, extend the 60-day period for such additional period as shall be
requested by the Borrower, not to exceed 60 additional days; PROVIDED FURTHER,
that any additional extensions thereafter shall be subject to the approval of
the Required Lenders), furnish to the Administrative Agent deeds of trust, trust
deeds, mortgages, leasehold mortgages and leasehold deeds of trust (subject to
SECTION 6.18(a)(vii)), as applicable, in substantially the form of EXHIBIT H
hereto (with such changes as may be reasonably satisfactory to the
Administrative Agent and the Borrower and their respective counsel to account
for local law matters), covering the Real Property Collateral (together with the
Assignments of Leases and Rents referred to therein, as amended, the
"MORTGAGES"), duly executed by the appropriate Loan Party, together with:
(i) evidence that counterparts of the Mortgages have been duly
executed, acknowledged and delivered and are in form suitable for filing or
recording in all filing or recording offices that the Administrative Agent
may deem necessary or desirable in order to create a valid first and
subsisting Lien on the property described therein in favor of the
Administrative Agent for the benefit of the Secured Parties and that all
filing and recording taxes and fees necessary to record the Mortgages in
the applicable recording offices have been paid,
(ii) with respect to the Owned Real Property Collateral, fully paid
American Land Title Association Lender's Extended Coverage title insurance
policies (the "MORTGAGE POLICIES") in form and substance, with endorsements
and in amounts reasonably acceptable to the Administrative Agent, issued by
Chicago Title Insurance Company, insuring the Mortgages of the Owned Real
Property Collateral to be valid first and subsisting Liens on the property
described therein, free and clear of all defects (including, but not
limited to, mechanics' and materialmen's Liens) and encumbrances, excepting
only Permitted Encumbrances, and providing for such other affirmative
insurance (including endorsements for future advances under the Loan
Documents and for mechanics' and materialmen's Liens) and such direct
access reinsurance as the Administrative Agent may reasonably deem
necessary or desirable,
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(iii) with respect to the Owned Real Property Collateral, American
Land Title Association/American Congress on Surveying and Mapping form
surveys for which all necessary fees (where applicable) have been paid, and
dated no more than 30 days before the filing of the related Mortgage,
certified to the Administrative Agent and Chicago Title Insurance Company
in a manner reasonably satisfactory to the Administrative Agent by a land
surveyor duly registered and licensed in the States in which the Owned Real
Property Collateral described in such surveys is located and reasonably
acceptable to the Administrative Agent, showing all buildings and other
improvements, any off-site improvements, the location of any easements,
parking spaces, rights of way, building set-back lines and other
dimensional regulations and the absence of encroachments, either by such
improvements or on to such property, and other defects, other than
encroachments and other defects reasonably acceptable to the Administrative
Agent or for which affirmative insurance coverage is provided by the
Mortgage Policies,
(iv) evidence of the insurance required by the terms of the
Mortgages,
(v) estoppel certificates executed by the tenants of the Material
Real Property Subleases. Notwithstanding anything to the contrary in this
Agreement, if the Borrower shall fail to obtain an estoppel certificate
with respect to any Material Real Property Sublease within the specified
time period, after using commercially reasonable efforts to do so (as
defined in SECTION 6.18(a)(vii) below), the Borrower shall have no further
obligation to execute and deliver to the Administrative Agent the same and
the condition set forth in this SECTION 6.18 with respect thereto shall be
deemed to be satisfied by the Borrower. The Borrower shall promptly, upon
request, provide the Administrative Agent with a report in reasonable
detail summarizing the commercially reasonable efforts undertaken to obtain
the estoppel certificates referenced in this SECTION 6.18(a)(v),
(vi) favorable opinions of local counsel to the Loan Parties, in
substantially the forms of EXHIBITS I-2 and I-3 hereto and otherwise in
form and substance reasonably satisfactory to the Administrative Agent,
(vii) with respect to the Leased Real Property Collateral, the
Borrower shall use commercially reasonable efforts to obtain estoppel and
consent agreements, in form and substance reasonably satisfactory to the
Administrative Agent, executed by each of the lessors of the Leased Real
Property Collateral, along with (x) a memorandum of lease in recordable
form with respect to such leasehold interest in the Leased Real Property
Collateral, executed and acknowledged by the owner of the affected Leased
Real Property Collateral, as lessor, or (y) evidence that the applicable
lease with respect to such leasehold interest or a memorandum thereof has
been recorded in all places necessary, in the Administrative Agent's
reasonable judgment, to give constructive notice to third-party purchasers
of such leasehold interest. Notwithstanding anything to the contrary in
this Agreement, if the Borrower shall fail to obtain the foregoing
documents with respect to any Leased Real Property Collateral within the
specified time period, after using commercially reasonable efforts to do
so, the Borrower shall have no further obligation to execute and deliver to
the Administrative Agent any Mortgage with respect to the applicable Leased
Real Property Collateral and the condition set forth in this SECTION 6.18
with respect thereto shall be deemed to be satisfied by the Borrower. As
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used in this SECTION 6.18(a) and (b), "commercially reasonable efforts"
shall require the Borrower to commence and prosecute the matter referred to
with diligence and in a manner consistent with customary business
practices, but shall not require that the Borrower expend any sums of money
except such sums which are designed to compensate a lessor for reasonable
expenses in reviewing the applicable documentation (including reasonable
legal fees). The Borrower shall promptly, upon request, provide the
Administrative Agent with a report in reasonable detail summarizing the
commercially reasonable efforts undertaken to obtain the items referenced
in this SECTION 6.18(a)(vii),
(viii) with respect to the Collateral Access Leases, the Borrower
shall use commercially reasonable efforts to obtain collateral access
agreements, in form and substance reasonably satisfactory to the
Administrative Agent, in each case, executed by the lessor under the
applicable Collateral Access Lease. Notwithstanding anything to the
contrary in this Agreement, if the Borrower shall fail to obtain the
collateral access agreement with respect to any Collateral Access Lease
within the specified time period, after using commercially reasonable
efforts to do so, the Borrower shall have no further obligation to execute
and deliver to the Administrative Agent the same and the condition set
forth in this SECTION 6.18 with respect thereto shall be deemed to be
satisfied by the Borrower. The Borrower shall promptly, upon request,
provide the Administrative Agent with a report in reasonable detail
summarizing the commercially reasonable efforts undertaken to obtain the
collateral access agreements referenced in this SECTION 6.18(a)(viii), and
(ix) with respect to the Real Property Collateral, such other
consents, agreements and confirmations of third parties as the
Administrative Agent may deem necessary or desirable and evidence that all
other actions that the Administrative Agent may deem necessary or desirable
in order to create valid first and subsisting Liens on the property
described in the Mortgages has been taken.
(b) The parties acknowledge that, as a condition to encumbering
the Owned Real Property located at 0000 Xxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx, the
Borrower or its applicable Subsidiary is required to obtain the prior written
consent of the City of Chicago thereto. If the Borrower shall fail to obtain the
such consent from the City of Chicago within 90 days after the Closing Date,
after using commercially reasonable efforts to do so, the Borrower shall have no
further obligation to execute and deliver to the Administrative Agent any
Mortgage with respect to the Owned Real Property located at 0000 Xxxx 00xx
Xxxxxx, Xxxxxxx, Xxxxxxxx and the condition set forth in this SECTION 6.18 with
respect thereto shall be deemed to be satisfied by the Borrower.
(c) Within 75 days after the Closing Date (which time period may
be extended by an additional 120 days at the sole discretion of the
Administrative Agent), the Borrower shall furnish to the Administrative Agent
Account Control Agreements (as defined in the Security Agreement) or such other
"control agreements" in form and substance reasonably satisfactory to the
Administrative Agent covering all of the Loan Parties' Account Collateral or
Security Collateral (each as defined in the Security Agreement), but subject in
any case to SECTION 5 of the Security Agreement.
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(d) Within 180 days after the Closing Date, the Borrower shall
furnish to the Administrative Agent Local Law Perfection Documents with respect
to the Equity Interests maintained by the Loan Parties in Solo Cup Denmark ApS,
an entity incorporated under the laws of Denmark.
(e) Within fifteen Business Days after the Closing Date, the
Borrower shall furnish to the Administrative Agent, evidence reasonably
satisfactory to the Administrative Agent that the equipment subject to the
Sale/Leaseback Transaction shall have been repurchased by the Borrower or any
Loan Party and that the trust arrangements and any and all Liens related thereto
shall have been terminated or released.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, Holdings and the
Borrower shall not, nor shall they permit any of their Subsidiaries to, directly
or indirectly:
7.01 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets, or revenues, whether now owned or hereafter
acquired, or sign or file or suffer to exist under the Uniform Commercial Code
of any jurisdiction a financing statement with respect to such property, assets
or revenues that names Holdings, the Borrower or any of their Subsidiaries as
debtor, or sign, file or suffer to exist any security agreement authorizing any
secured party thereunder to file such financing statement, or assign any
accounts or other right to receive income, other than the following:
(a) Liens pursuant to any of the Loan Documents securing any
Obligations;
(b) Liens and financing statements existing on the date hereof and
listed on SCHEDULE 5.08(b) and any renewals, modifications, replacements or
extensions thereof, PROVIDED that such Liens do not extend to any
additional property and the renewal, refinancing, refunding or extension of
the obligations secured or benefited by such Liens is permitted by SECTION
7.02(b)(B);
(c) Liens for taxes, assessments or governmental charges or levies
not yet due or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto
are maintained on the books of the applicable Person in accordance with
GAAP;
(d) carrier's, warehousemen's, processor's, landlord's, suppliers',
mechanics', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a period of more than
60 days or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto
are maintained on the books of the applicable Person in accordance with
GAAP;
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(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation, other than any Lien imposed by ERISA;
(f) utility deposits and pledges or deposits to secure the
performance of tenders, bids, trade contracts and leases (other than
Indebtedness for borrowed money), statutory obligations, insurance
statutory bonds, surety and customs bonds (other than bonds related to
judgments or litigation), performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(g) the Permitted Encumbrances and such other easements
(including, without limitation, reciprocal easement agreements and utility
easements), rights-of-way, restrictions (including zoning restrictions),
covenants, conditions, encroachments, variations, subdivisions, minor
defects or irregularities in title and other similar charges or
encumbrances (whether recorded or unrecorded) affecting real property
which, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect;
(h) Liens securing any judgment not constituting an Event of
Default under SECTION 8.01(h) or securing appeal or other surety bonds
related to such judgments;
(i) Liens securing Indebtedness permitted under SECTION
7.02(b)(E); PROVIDED that (i) such Liens do not at any time encumber any
property other than the property acquired, constructed or improved by such
Indebtedness, (ii) the Indebtedness secured thereby does not exceed the
cost or fair market value, whichever is lower, of the property being
acquired or the portion thereof being constructed or improved, on the date
of acquisition or the completion date of such construction or improvement
and (iii) with respect to Capitalized Lease Obligations, such Liens do not
at any time extend to assets other than the assets subject to such
Capitalized Lease Obligations;
(j) any Lien on any asset (i) of any Person existing at the time
such Person becomes a Subsidiary of Holdings and not created in
contemplation of such event, (ii) of any Person existing at the time such
Person is merged or consolidated with or into Holdings or any of its
Subsidiaries and not created in contemplation of such event or (iii)
existing prior to the acquisition thereof by Holdings or any of its
Subsidiaries and not created in contemplation of such acquisition;
(k) Liens on accounts receivable that are the subject of the
Permitted Receivables Financings;
(l) Liens of sellers of goods to the Borrower and any of its
Subsidiaries arising under Article 2 of the Uniform Commercial Code or
similar provisions of applicable law in the ordinary course of business,
covering only the goods sold and securing only the unpaid purchase price
for such goods and related expenses;
(m) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions;
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(n) leases or subleases granted to others in the ordinary course
of business not interfering in any material respect with the ordinary
course of the business of the grantor thereof;
(o) Liens on property of any Foreign Subsidiary securing
Indebtedness permitted under SECTION 7.02 outstanding in an aggregate
principal amount not to exceed $30,000,000 at any time;
(p) Liens not otherwise permitted hereunder securing Indebtedness
outstanding not to exceed $10,000,000 at any time; and
(q) licenses of IP Rights in the ordinary course of business not
detrimental to the ordinary conduct of the business of the Borrower and/or
its Subsidiaries and substantially consistent with past practice and
licenses and sublicenses of IP Rights among the Borrower and/or its
Subsidiaries.
7.02 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) in the case of the Borrower:
(A) Indebtedness in respect of Swap Contracts designed to
hedge against fluctuations in interest rates or foreign exchange rates
incurred in the ordinary course of business, consistent with prudent
business practice and not for speculative purposes;
(B) Indebtedness evidenced by the Senior Subordinated
Notes or any Permitted Refinancing Subordinated Indebtedness which
refinances the Senior Subordinated Notes or any prior Permitted
Refinancing Subordinated Indebtedness; and
(C) any Permitted Refinancing Subordinated Indebtedness to
the extent subject to SECTION 2.05(b)(iv); and
(b) in the case of the Borrower and its Subsidiaries:
(A) Indebtedness arising under any of the Loan Documents;
(B) Indebtedness outstanding on the date hereof and listed
on SCHEDULE 7.02 and any refinancings, refundings, renewals or
extensions thereof; PROVIDED that the amount of such Indebtedness is
not increased at the time of such refinancing, refunding, renewal or
extension except by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in
connection with such refinancing and by an amount equal to any
existing commitments unutilized;
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(C) Guarantees of the Borrower or any Subsidiary, as the
case may be, in respect of Indebtedness otherwise permitted hereunder
of the Borrower or such Subsidiary;
(D) obligations (contingent or otherwise) of the Borrower
or any Subsidiary existing or arising under any Swap Contract,
PROVIDED that (i) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by
such Person, or changes in the value of securities issued by such
Person, and not for purposes of speculation; and (ii) such Swap
Contract does not contain any provision exonerating the non-defaulting
party from its obligation to make payments on outstanding transactions
to the defaulting party;
(E) Indebtedness in respect of Capitalized Lease
Obligations, Synthetic Lease Obligations and purchase money
obligations, in each case to acquire, construct or improve fixed or
capital assets within the limitations set forth in SECTION 7.01(i);
PROVIDED, HOWEVER, that the aggregate amount of all such Indebtedness,
together with any Capital Expenditures otherwise made in respect of
this Agreement, shall not exceed the amounts set forth in SECTION
7.10(c);
(F) Indebtedness of any Person existing at the time such
Person becomes a Subsidiary of the Borrower or is merged or
consolidated into the Borrower or any of its Subsidiaries and not
created in contemplation of such event;
(G) Indebtedness arising in connection with the Permitted
Receivables Financings;
(H) unsecured Indebtedness arising by reason of
endorsement of negotiable instruments or similar transactions in the
ordinary course of business;
(I) the Existing Xxxxx Notes and the Existing Sweetheart
Notes; provided that such notes are either (x) covenant defeased on
the date hereof and redeemed in full within 40 days after the date
hereof and an amount equal to the redemption price with respect to
such notes shall have been deposited as of the date hereof, with the
trustee or (y) satisfied and discharged on the date hereof;
(J) Indebtedness of Foreign Subsidiaries in an aggregate
principal amount not to exceed $35,000,000 at any time outstanding;
(K) Indebtedness owed to the Borrower or a Subsidiary
Guarantor, which Indebtedness (x) shall constitute Pledged Debt, (y)
shall be on terms acceptable to the Administrative Agent and (z) shall
be subject to the terms of the Security Agreement;
(L) unsecured Indebtedness in an aggregate principal
amount not to exceed $10,000,000 at any time outstanding;
97
(M) unsecured intercompany Indebtedness of Solo Cup Japan
Co., Ltd. owing to Sanyo Pax Operations Co. Ltd., in an amount not to
exceed $10,000,000 outstanding at any one time; and
(N) Indebtedness owed by a Subsidiary of the Borrower that
is not a Subsidiary Guarantor to another Subsidiary of the Borrower
that is not a Subsidiary Guarantor.
7.03 INVESTMENTS. Make or hold any Investments, except:
(a) Investments held by the Borrower or such Subsidiary in the
form of cash and Cash Equivalents;
(b) (x) advances to officers, directors and employees of the
Borrower and Subsidiaries in an aggregate amount not to exceed $500,000 at
any time outstanding, for travel, entertainment, relocation and analogous
ordinary business purposes and (y) advances to officers, directors and
employees of the Borrower and Subsidiaries for travel and relocation
expenses related to the post-Merger integration of the Company and Old Solo
Cup if adequate reserves with respect thereto are maintained on the books
of the applicable Person in accordance with GAAP;
(c) loans or advances to employees of the Borrower or any of its
Subsidiaries that are approved by a majority of the disinterested members
of the Board of Directors of the Borrower in an aggregate principal amount
not to exceed $2,000,000 at any one time outstanding;
(d) equity Investments of the Borrower in any Subsidiary Guarantor
and Investments of any Subsidiary Guarantor in the Borrower or in another
Subsidiary Guarantor;
(e) equity Investments of the Borrower or any Subsidiary which
constitute the purchase of minority interests in Foreign Subsidiaries in an
aggregate amount not to exceed $10,000,000;
(f) Investments consisting of extensions of credit arising from
the grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction thereof;
(g) Investments received by the Borrower or any Subsidiary in
connection with (i) the bankruptcy or reorganization of suppliers or
customers of the Borrower or such Subsidiary or (ii) in settlement of
delinquent obligations of, or other disputes with, customers and suppliers
of the Borrower or such Subsidiary arising in the ordinary course of
business;
(h) deposits of cash with banks or other depository institutions
in the ordinary course of business and deposits required by government
agencies or utilities;
(i) Guarantees permitted by SECTION 7.02;
98
(j) Investments existing on the date hereof and set forth on
SCHEDULE 5.08(f) and any modification, replacement, renewal or extension
thereof; PROVIDED, that the amount of the original Investment is not
increased except by the terms of such Investment or as otherwise permitted
by this SECTION 7.03;
(k) Investments by the Borrower in Swap Contracts permitted under
SECTION 7.02(a)(a) and by the Borrower or its Subsidiaries in Swap
Contracts permitted under SECTION 7.02(b)(d);
(l) Investments consisting of intercompany debt permitted under
SECTION 7.02(b)(f), SECTION 7.02(b)(g), SECTION 7.02(b)(m) or SECTION
7.02(b)(n);
(m) Investments permitted under SECTIONS 7.05, 7.06 and 7.10(c);
(n) the purchase or other acquisition of all of the Equity
Interests in, or all or substantially all of the property and assets of,
any Person that, upon the consummation thereof, will be wholly owned
directly by the Borrower or one or more of its wholly owned Subsidiaries
(including, without limitation, as a result of a merger or consolidation);
PROVIDED that, with respect to each purchase or other acquisition made
pursuant to this SECTION 7.03(n):
(A) any such newly created or acquired Subsidiary shall
comply with the requirements of SECTION 6.12;
(B) the lines of business of the Person to be (or the
property and assets of which are to be) so purchased or otherwise
acquired shall be substantially similar or complementary lines of
business as one or more of the principal businesses of the Borrower
and its Subsidiaries;
(C) the total cash and noncash consideration (including,
without limitation, the fair market value of all Equity Interests
issued or transferred to the sellers thereof, all indemnities,
earnouts and other contingent payment obligations to, and the
aggregate amounts paid or to be paid under noncompete, consulting and
other affiliated agreements with, the sellers thereof, all write-downs
of property and assets and reserves for liabilities with respect
thereto and all debt, liabilities and other obligations in connection
therewith) paid by or on behalf of the Borrower and its Subsidiaries
for (or included as part of) any such purchase or other acquisition,
when aggregated with the total cash and noncash consideration paid by
or on behalf of the Borrower and its Subsidiaries for (or included as
part of) all other purchases and other acquisitions made by the
Borrower and its Subsidiaries pursuant to this SECTION 7.03(n), shall
not exceed $50,000,000; and
(D) (1) immediately before and immediately after giving
pro forma effect to any such purchase or other acquisition, no Default
shall have occurred and be continuing and (2) immediately after giving
effect to such purchase or other acquisition, the Borrower and its
Subsidiaries shall be in pro forma compliance with all of the
covenants set forth in SECTION 7.10, such compliance to be determined
on the basis of the financial information most recently delivered to
99
the Administrative Agent and the Lenders pursuant to SECTION 6.01(a)
or (b) as though such purchase or other acquisition had been
consummated as of the first day of the fiscal period covered thereby;
(o) other Investments not exceeding $3,000,000 in the aggregate in
any fiscal year of the Borrower; PROVIDED that (i) immediately before and
immediately after giving pro forma effect to any such Investment, no Event
of Default shall have occurred and be continuing and (ii) immediately after
giving effect to such Investment, the Borrower and its Subsidiaries shall
be in pro forma compliance with all of the covenants set forth in SECTION
7.10, such compliance to be determined on the basis of the financial
information most recently delivered to the Administrative Agent pursuant to
SECTION 6.01(a) or (b) as though such Investment had been consummated as of
the first day of the fiscal period covered thereby; and
(p) for a period of 90 days after the Closing Date, an Investment
of up to $10,000,000 in the Foreign Subsidiaries of the Borrower
incorporated in Canada for the sole purpose of refinancing outstanding
Indebtedness thereof and providing working capital with respect to such
Subsidiaries; PROVIDED, that, after such 90-day period such Investment
shall be repaid or redeemed.
7.04 FUNDAMENTAL CHANGES. Merge, dissolve, liquidate, consolidate
with or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) the Borrower, PROVIDED that
the Borrower shall be the continuing or surviving Person, or (ii) any one
or more other Subsidiaries, PROVIDED that when any Subsidiary Guarantor is
merging with another Subsidiary, the Subsidiary Guarantor shall be the
continuing or surviving Person;
(b) any Subsidiary may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or to
another Subsidiary; PROVIDED that if the transferor in such a transaction
is a Subsidiary Guarantor, then the transferee must either be the Borrower
or a Subsidiary Guarantor;
(c) any Subsidiary may dissolve, liquidate or wind up its affairs
at any time provided that such dissolution, liquidation or winding up, as
applicable, could not reasonably be expected to have a Material Adverse
Effect to the extent any Disposition related thereto is otherwise permitted
pursuant to SECTION 7.05;
(d) the Borrower and its Subsidiaries may consummate the Merger
and the Reorganization; and
(e) in connection with any acquisition permitted under SECTION
7.03, any Subsidiary of the Borrower may merge into or consolidate with any
other Person or permit any other Person to merge into or consolidate with
it; PROVIDED that the Person surviving such merger shall be a wholly owned
Subsidiary of the Borrower; and PROVIDED FURTHER that to the extent any
Subsidiary Guarantor merges into or consolidates with any
100
other Person and is not the surviving entity, the surviving entity of such
merger shall be either the Borrower or another Subsidiary Guarantor;
PROVIDED, HOWEVER, that in each case, immediately after giving effect thereto,
in the case of any such merger to which the Borrower is a party, the Borrower is
the surviving corporation.
7.05 DISPOSITIONS. Make any Disposition or enter into any agreement
to make any Disposition, except:
(a) any Subsidiary may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or to
another Subsidiary; PROVIDED that if the transferor in such a transaction
is a Subsidiary Guarantor, then the transferee must either be the Borrower
or a Subsidiary Guarantor;
(b) (i) Dispositions of obsolete or worn out property, whether
now owned or hereafter acquired, in the ordinary course of business, and
(ii) Dispositions of equipment (including, without limitation, any
equipment no longer used or useful in the business) by the Borrower or any
Subsidiary Guarantor to a Subsidiary that is not a Subsidiary Guarantor in
an aggregate amount not to exceed $2,000,000 in any fiscal year;
(c) Dispositions of inventory (i) in the ordinary course of
business or (ii) by the Borrower or any of its Subsidiaries to the Borrower
or any of its Subsidiaries in arms-length transactions in the ordinary
course of business;
(d) the sale or discount of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof;
(e) Dispositions of assets consisting of accounts receivable and
related assets in connection with any Permitted Receivables Financings;
(f) Dispositions of equipment or real property (or any interest
therein) or IP Rights (other than licenses of IP Rights) to the extent that
(i) such property is exchanged for credit against the purchase price of
similar replacement property, (ii) the proceeds of such Disposition are
reinvested pursuant to SECTION 2.05(b)(ii) or (iii) the proceeds of such
Disposition are used to repay the Loans pursuant to SECTION 2.05(b)(ii);
(g) Dispositions of property, including Equity Interests, by the
Borrower or any Subsidiary to the Borrower or to any Subsidiary; PROVIDED
that if the transferor of such property is the Borrower or a Subsidiary
Guarantor, the transferee thereof must either be the Borrower or a
Subsidiary Guarantor;
(h) Dispositions involving the liquidation of any Foreign
Subsidiary or a foreign branch of any Domestic Subsidiary for the purpose
of converting the Borrower's business in such foreign region into licensee
operations;
(i) Dispositions constituting leases, subleases or licenses
granted to others in the ordinary course of business not detrimental to the
ordinary conduct of the business of the grantor thereof;
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(j) Dispositions of a business line or segment, provided that the
aggregate assets to be transferred or utilized in a business line or
segment to be so Disposed, combined with all other assets transferred and
all other assets utilized in all other business lines or segments Disposed
of during such fiscal quarter and the immediately preceding 3 fiscal
quarters, shall not constitute more than 3% of consolidated total assets at
the end of the most recently ended fiscal year;
(k) the sale or other Disposition of Cash Equivalents otherwise
permitted hereunder;
(l) Dispositions of owned or leased vehicles in the ordinary
course of business;
(m) licenses of IP Rights in the ordinary course of business not
detrimental to the ordinary conduct of the business of the Borrower and/or
its Subsidiaries and substantially consistent with past practice and
licenses and sublicenses of IP Rights among the Borrower and/or its
Subsidiaries;
(n) Dispositions by the Borrower and its Subsidiaries not
otherwise permitted under this SECTION 7.05; PROVIDED that (i) at the time
of such Disposition, no Default shall exist or would result from such
Disposition, (ii) the aggregate book value of all property Disposed of in
reliance on this clause (n) in any fiscal year shall not exceed $7,500,000
and (iii) at least 75% of the purchase price for such asset shall be paid
to the Borrower or such Subsidiary in cash;
(o) so long as no Default shall occur and be continuing, the grant
of any option or other right to purchase any asset in a transaction that
would be permitted under the provisions of SECTION 7.05(n) above; and
(p) an intercompany lease of personal property, plant and
machinery between the Borrower, as lessor, and Solo Cup Europe Limited, as
lessee, with an approximate fair market value of the assets leased
thereunder not to exceed 13,000,000 British pounds.
PROVIDED, HOWEVER, that any Disposition pursuant to SECTION 7.05(b) through
SECTION 7.05(p) shall be for fair market value.
7.06 RESTRICTED PAYMENTS. Declare or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, or issue, sell or Guarantee any Equity Interests, except that, so long as no
Default shall have occurred and be continuing at the time of any action
described below or would result therefrom:
(a) each Subsidiary may make Restricted Payments to the Borrower
and to another Subsidiary with respect to Equity Interests issued by it
(and, in the case of any such Restricted Payment by a non-wholly-owned
Subsidiary, to the Borrower and any Subsidiary and to each other owner of
capital stock or other Equity Interests of such Subsidiary on a pro rata
basis based on their relative ownership interests), PROVIDED that no
Subsidiary Guarantor may make any Restricted Payments to any Subsidiary
that is not a Subsidiary Guarantor;
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(b) Holdings, the Borrower and each Subsidiary may declare and
make dividend payments or other distributions payable solely in the common
stock or other common Equity Interests of such Person;
(c) in the event that, and for each taxable year in which,
Holdings is treated as an association taxable as a corporation for Federal,
state and local income tax purposes and the Borrower and its Subsidiaries
are included in a consolidated or combined tax group with Holdings, the
payment of dividends or distributions by the Borrower to Holdings in an
amount equal to the share of the consolidated or combined income tax
liability allocable to the Borrower and its Subsidiaries (after giving
effect to any offsetting deductions) in accordance with applicable Treasury
Regulations; PROVIDED that any refunds received by Holdings attributable to
the Borrower and its Subsidiaries shall promptly be paid by Holdings to the
Borrower;
(d) Holdings and the Borrower may purchase, redeem or other
acquire or retire for value any Equity Interests of Holdings or any
Subsidiary of the Borrower held by any director, officer, consultant or
employee of the Borrower, Holdings or any Subsidiary, or their estates or
the beneficiaries of such estates, in an amount not to exceed $3,000,000
any fiscal year; PROVIDED that the principal amount of any such Equity
Interest that is sold, transferred or reissued for value by Holdings or the
Borrower to a replacement director, officer, consultant or employee of
Borrower, Holdings or any Subsidiary within such fiscal year shall be
subtracted from such amount; and PROVIDED FURTHER the Borrower may carry
over and so utilize in subsequent fiscal years the portion of such
$3,000,000 not utilized in any prior year so long as the aggregate amount
so utilized in any fiscal year, including the $3,000,000 otherwise
available during such year, does not exceed $10,000,000;
(e) the Borrower or any of its Subsidiaries may make Restricted
Payments to Holdings the proceeds of which shall be used by Holdings (i) to
satisfy its payment obligations under the Vestar Management Agreement and
the SCC Holding Management Agreement; PROVIDED that the aggregate amount of
such Restricted Payments, together with any other direct or indirect
payments by the Borrower or any of its Subsidiaries on account of such
management agreements shall not exceed $3,300,000 plus expenses in any
fiscal year or (ii) to pay Holdings's actual out-of-pocket administrative
and operating fees and expenses so long as Holdings has no operations and
no Investments other than its ownership of Equity Interests of the Borrower
and cash or Cash Equivalents; PROVIDED that the aggregate amount of all
such Restricted Payments pursuant to this clause (ii) in any calendar year
shall not exceed $1,000,000;
(f) Holdings may issue and sell its common stock, Preferred Equity
and Qualified Preferred Stock to the Co-Investors, the Principal
Shareholders and management of Holdings, the Borrower or any Subsidiary and
to any permitted transferee thereof under the Stockholders' Agreement;
(g) Holdings may issue and sell its common stock, Qualified
Preferred Stock to any Person other than (i) the Co-Investors, (ii) the
Principal Shareholders, (iii) management of Holdings, the Borrower or any
Subsidiary and (iv) any permitted
103
transferee of the foregoing under the Stockholders' Agreement, in each case
to the extent the Net Cash Proceeds thereof are required to be applied to
the prepayment of Loans in accordance with SECTION 2.05(b)(iii);
(h) any Foreign Subsidiary of the Borrower may issue Equity
Interests to the extent not prohibited by SECTION 7.16(b);
(i) the Borrower or any of its Subsidiaries may purchase minority
interests in Foreign Subsidiaries to the extent permitted in SECTION
7.03(o) or SECTION 7.03(e);
(j) for so long as no Default shall have occurred and be
continuing, if the Consolidated Leverage Ratio for any fiscal year of the
Borrower shall be equal to or less than 3.00:1.00 (both before and after
giving effect to the Restricted Payments made pursuant to this SECTION
7.06(j)), the Borrower may make Restricted Payments to Holdings during the
12-month period following the end of such fiscal year, the proceeds of
which may be utilized by Holdings to make additional Restricted Payments,
in an aggregate amount not to exceed 37.5% of the Excess Cash Flow for such
fiscal year;
(k) Holdings or any Subsidiary Guarantor may issue its common
stock in connection with the Reorganization consisting of a contribution by
Holdings LLC of the shares of Old Solo Cup to Holdings and the subsequent
contribution by Holdings of such shares of Old Solo Cup to the Borrower;
(l) any Loan Party and any Subsidiary of any Loan Party may
create, incur, assume or suffer to exist any Equity Obligation or Guarantee
thereof in favor of any other Loan Party to the same extent and on the same
terms that any such Person would be permitted in incur Indebtedness in
favor of such other Loan Party under SECTION 7.02; and Holdings may incur
Equity Obligations in connection with the issuance of Qualified Preferred
Stock and Preferred Equity to the extent permitted hereunder; and
(m) Holdings may make an initial public offering of its common
stock to the extent the proceeds thereof are applied in accordance with
SECTION 2.05(b)(iii).
7.07 CHANGE IN NATURE OF BUSINESS. Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on the date hereof or any business substantially
related, incidental or complementary thereto or that is a reasonable extension
or expansion thereof.
7.08 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of
any kind with any Affiliate of the Borrower, whether or not in the ordinary
course of business, other than on fair and reasonable terms substantially as
favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm's length transaction
with a Person other than an Affiliate, other than in respect of:
(a) any transactions entered into solely by and among Loan
Parties;
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(b) loans or advances to officers and employees of the Borrower or
any of its Subsidiaries for bona fide business purposes in the ordinary
course of business subject to the limitations set forth in SECTION 7.03(c);
(c) any employment, consulting, service or termination agreement,
or reasonable and customary indemnification arrangements, entered into by
the Borrower or any of its Subsidiaries with officers and employees of the
Borrower or any of its Subsidiaries and the payment of compensation to
officers and employees of the Borrower or any of its Subsidiaries
(including amounts paid pursuant to employee benefit plans, employee stock
option or similar plans), in each case in the ordinary course of business;
(d) licenses or sublicenses of IP Rights in the ordinary course of
business not detrimental to the ordinary conduct of the business of the
Borrower and/or its Subsidiaries and licenses and sublicenses of IP Rights
among the Borrower and/or its Subsidiaries;
(e) payments by the Borrower or any of its Subsidiaries to Vestar
Capital Partners and its Affiliates made for any financial advisory
services, financing, underwriting or placement services or in respect of
other investment banking services, including without limitation, in
connection with acquisitions or divestitures, which payments are approved
by a majority of the disinterested members of the Board of Directors of the
Borrower, it being understood that such payments made by the Borrower and
its Subsidiaries shall not exceed $2,000,000 in the aggregate;
(f) transactions pursuant to the Preferred Equity Stock Purchase
Agreement, the Vestar Management Agreement, the SCC Holding Management
Agreement, the Stockholders' Agreement, the Stockholders' Registration
Rights Agreement and other agreements or arrangements in each case as in
effect on the date hereof; and
(g) any other agreements or arrangements in effect on the Closing
Date, or any amendment, modification or supplement thereto, in an aggregate
amount not to exceed $250,000 in any calendar year.
7.09 BURDENSOME AGREEMENTS. Enter into or permit to exist any
Contractual Obligation (other than this Agreement or any other Loan
Document) that (a) limits the ability (i) of any Subsidiary to make
Restricted Payments to the Borrower or any Guarantor or to otherwise
transfer property to or invest in the Borrower or any Guarantor, except for
any agreement in effect (A) on the date hereof or (B) at the time any
Subsidiary becomes a Subsidiary of the Borrower, so long as such agreement
was not entered into solely in contemplation of such Person becoming a
Subsidiary of the Borrower, (ii) of any Subsidiary other than a Non-CFC
Foreign Subsidiary to Guarantee the Indebtedness of the Borrower or (iii)
of the Borrower or any Subsidiary other than a Non-CFC Foreign Subsidiary
to create, incur, assume or suffer to exist Liens on property of such
Person or (b) requires the grant of a Lien to secure an obligation of such
Person if a Lien is granted to secure another obligation of such Person;
PROVIDED, HOWEVER, that CLAUSE (a)(iii) shall not prohibit (1) any negative
pledge incurred or provided in favor of any holder of Indebtedness
permitted under SECTION 7.02(b)(E) solely to the extent any
105
such negative pledge relates to the property financed by or the subject of
such Indebtedness, (2) any negative pledge incurred or provided in
connection with any Lien permitted by SECTION 7.01 or any document or
instrument governing any Lien permitted by SECTION 7.01, PROVIDED that any
such restriction contained therein relates only to the asset or assets
subject to such Lien permitted by SECTION 7.01, and (3) customary
restrictions and conditions contained in any agreement relating to the sale
of any property permitted under SECTION 7.05 pending the consummation of
such sale; and PROVIDED FURTHER that CLAUSES (a)(i), (ii) and (iii) above
shall not apply to any Contractual Obligation of any Foreign Subsidiary as
long as such Contractual Obligation by its terms may be terminated by such
Foreign Subsidiary at its option (whether or not such termination requires
payment of additional consideration).
7.10 FINANCIAL COVENANTS.
(a) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the Consolidated
Interest Coverage Ratio as of the end of any fiscal quarter as set forth below
to be less than the ratio set forth below for such fiscal quarter:
FISCAL YEAR MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
----------------------------------------------------------------------
2004 -- 2.50 : 1.00 2.50 : 1.00 2.50 : 1.00
2005 2.50 : 1.00 2.50 : 1.00 2.75 : 1.00 2.75 : 1.00
2006 2.75 : 1.00 3.00 : 1.00 3.00 : 1.00 3.00 : 1.00
2007 3.25 : 1.00 3.25 : 1.00 3.50 : 1.00 3.50 : 1.00
2008 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00
2009 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00
2010 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00
2011 3.50 : 1.00 -- -- --
(b) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated Leverage
Ratio, on the last day of any quarter ending during any fiscal year set forth
below, or on any day during the immediately following fiscal quarter (other than
the last day thereof) to be greater than the ratio set forth below for such
fiscal quarter:
FISCAL YEAR MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
----------------------------------------------------------------------
2004 -- 5.75 : 1.00 5.75 : 1.00 5.75 : 1.00
2005 5.50 : 1.00 5.50 : 1.00 5.00 : 1.00 5.00 : 1.00
2006 4.75 : 1.00 4.75 : 1.00 4.25 : 1.00 4.25 : 1.00
2007 3.75 : 1.00 3.75 : 1.00 3.50 : 1.00 3.50 : 1.00
2008 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00
2009 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00
106
2010 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00 3.50 : 1.00
2011 3.50 : 1.00 -- -- --
(c) CAPITAL EXPENDITURES. Make or become legally obligated to make
any Capital Expenditure, except for Capital Expenditures not exceeding, in the
aggregate for the Borrower and it Subsidiaries during each fiscal year set forth
below, the amount set forth opposite such fiscal year:
Fiscal Year Amount
----------------------------------------
2004 $ 65,000,000
2005 $ 65,000,000
2006 $ 65,000,000
2007 $ 65,000,000
2008 $ 65,000,000
2009 $ 65,000,000
2010 $ 65,000,000
2011 $ 65,000,000
PROVIDED HOWEVER, that so long as no Default has occurred and is continuing or
would result from such expenditure, any portion of any amount set forth above
for any fiscal year, if not expended in such fiscal year (such amount, the
"CAPITAL EXPENDITURE CARRYOVER AMOUNT"), may be carried over for expenditure in
the next following (but not any subsequent) fiscal year (and for purposes of
this SECTION 7.10(c), any Capital Expenditures during any fiscal year shall be
applied first to reduce the amount permitted during such year as set forth
opposite such year above and then to the Capital Expenditure Carryover Amount)
and, PROVIDED, FURTHER, that the Borrower or any of its Subsidiaries may make
any Capital Expenditures in excess of the above levels to the extent they
constitute non-recurring cash capital expenditures incurred with respect to the
post-Merger integration of the Company and Old Solo Cup in an aggregate amount
not to exceed $25,000,000.
7.11 AMENDMENTS OF ORGANIZATION DOCUMENTS. Amend any of its
Organization Documents in a manner materially adverse to the Administrative
Agent and the Lenders.
7.12 ACCOUNTING CHANGES. Make any change in fiscal year, except
that (i) any Subsidiary may change its fiscal year, and (ii) the Borrower may
change its fiscal year once following the Closing Date to a "4, 4, 5" accounting
convention (to make consistent the accounting periods of the Company and Old
Solo Cup).
7.13 PREPAYMENTS, ETC., OF INDEBTEDNESS. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, the
Senior Subordinated Notes or any Permitted Refinancing Subordinated
Indebtedness, except the refinancing thereof with the proceeds of any Permitted
Refinancing Subordinated Indebtedness.
7.14 AMENDMENT, ETC., OF PREFERRED EQUITY DOCUMENTS, SENIOR
SUBORDINATED NOTES DOCUMENTS AND DOCUMENTS RELATED TO QUALIFIED PREFERRED STOCK
AND PERMITTED REFINANCING SUBORDINATED INDEBTEDNESS. (a) Cancel or terminate any
Preferred Equity
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Document or any document related to any Qualified Preferred Stock or consent to
or accept any cancellation or termination thereof, amend, modify or change in
any manner any term or condition of any Preferred Equity Document or any
document related to any Qualified Preferred Stock or give any consent, waiver or
approval thereunder, waive any default under or any breach of any term or
condition of any Preferred Equity Document or any document related to any
Qualified Preferred Stock, agree in any manner to any other amendment,
modification or change of any term or condition of any Preferred Equity Document
or any document related to any Qualified Preferred Stock or take any other
action in connection with any Preferred Equity Document or any document related
to any Qualified Preferred Stock that would, in each case under this SECTION
7.14(b), impair in any material respect the value of the interest or rights of
any Loan Party thereunder or that would impair in any material respect the
rights or interests of the Administrative Agent or any Lender.
(b) Amend, modify or change in any manner any term or condition of
any Senior Subordinated Notes Documents or any document related to any Permitted
Refinancing Subordinated Indebtedness, unless after taking into effect such
amendment, modification or change (i) such Indebtedness shall require no
amortization, sinking fund payment or any other scheduled maturity of the
principal amount thereof on any date which is earlier than the date occurring
one year after the then latest Maturity Date, (ii) the weighted average interest
rate for such Indebtedness shall not exceed 10% per annum and (iii) the terms
governing any such Indebtedness shall not contain any provision (including,
without limitation, covenants, mandatory redemptions or offers to purchase or
prepay, defaults, remedies and subordination provisions) which, in the
reasonable judgment of the Administrative Agent or in the absence of a
determination by the Administrative Agent, the Required Lenders, is more
restrictive or less favorable, as applicable, in any material respect, than the
provisions in the Senior Subordinated Note Documents as of the Closing Date.
7.15 PARTNERSHIPS, ETC. Become a general partner in any general or
limited partnership or joint venture.
7.16 EQUITY INTERESTS OF THE BORROWER. (a) Permit Holdings to own
directly or indirectly less than 100% of the Equity Interests of the Borrower;
or
(b) Permit the Borrower or any of its Subsidiaries to own directly
or indirectly less than 100% of the Equity Interests of any Subsidiaries; EXCEPT
that (i) up to 20% of the Equity Interests in any Foreign Subsidiary may be
owned by a Person other than the Borrower or any of its Subsidiaries, and (ii)
up to 49% of the Equity Interests in a Foreign Subsidiary may be owned by a
Person other than the Borrower or any of its Subsidiaries, PROVIDED that the
aggregate amount of all Investments by the Borrower and its Subsidiaries in
Foreign Subsidiaries described in CLAUSE (ii) shall not exceed $12,500,000 in
the aggregate, outstanding at any one time.
7.17 HOLDING COMPANY. (a) In the case of Holdings, conduct,
transact or otherwise engage in any business or operations other than those
incidental to its ownership of the Equity Interests of the Borrower, the
performance of the Loan Documents and any transactions that Holdings is
permitted to enter into or consummate under this ARTICLE VII.
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(b) Permit S Credit Corporation, an Illinois corporation, to
conduct, transact or otherwise engage in any business or operations or incur any
Indebtedness or other Obligations or hold or acquire any properties or assets.
7.18 DESIGNATED SENIOR DEBT. Designate any Indebtedness (other
than the Indebtedness under the Loan Documents) of the Borrower or any of its
Subsidiaries as "DESIGNATED SENIOR DEBT" (or any similar term) under, and as
defined in, the Senior Subordinated Notes Indenture or in any agreement
evidencing any Permitted Refinancing Subordinated Indebtedness.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. The occurrence or continuance of any of
the following shall constitute an Event of Default:
(a) NON-PAYMENT. The Borrower or any other Loan Party fails to pay
(i) when and as required to be paid herein, any amount of principal of any
Loan or any L/C Obligation or (ii) within three Business Days after the
same becomes due, any interest on any Loan or on any L/C Obligation, or any
commitment or other fee due hereunder, or any other amount payable
hereunder or under any other Loan Document; or
(b) SPECIFIC COVENANTS. (1) The Borrower fails to perform or
observe any term, covenant or agreement contained in any of SECTION 6.03,
6.05, 6.10, 6.11, 6.12, 6.18, or ARTICLE VII; or (2) the Borrower fails to
perform or observe any term, covenant or agreement contained in any of
SECTION 6.01 or 6.02 for five Business Days after the earlier of a
Responsible Officer of the Borrower becoming aware of such default or
notice from the Administrative Agent or the Required Lenders; or
(c) OTHER DEFAULTS. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in SECTION 8.01(a) or (b) above)
contained in any Loan Document on its part to be performed or observed and
such failure continues for 30 days after the earlier of a Responsible
Officer of the Borrower becoming aware of such default or notice from the
Administrative Agent or the Required Lenders; or
(d) REPRESENTATIONS AND WARRANTIES. Any representation or warranty
made or deemed made by or on behalf of the Borrower or any other Loan Party
herein, in any other Loan Document, or in any certificate or document
delivered in connection herewith or therewith shall prove to have been
inaccurate in any material respect when made or deemed made; or
(e) CROSS-DEFAULT. (i) Any Loan Party or any Significant
Subsidiary (A) fails to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise, in each
case after any applicable grace period) in respect of any Indebtedness or
Guarantee (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more
than the Threshold Amount, or (B) fails to observe or perform any other
agreement
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or condition relating to any such Indebtedness or Guarantee, or any other
event occurs, the effect of which failure to observe or perform or other
event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause, with the giving of notice if required, such Indebtedness to be
demanded or to become due or to be repurchased, prepaid, defeased or
redeemed (automatically or otherwise), or an offer to repurchase, prepay,
defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an
Early Termination Date (as defined in such Swap Contract) resulting from
(A) any event of default under such Swap Contract as to which a Loan Party
or any Significant Subsidiary is the Defaulting Party (as defined in such
Swap Contract) or (B) any Termination Event (as so defined) under such Swap
Contract as to which a Loan Party or any Significant Subsidiary is an
Affected Party (as defined in such Swap Contract) and, in either event, the
Swap Termination Value owed by the Loan Party or such Significant
Subsidiary as a result thereof is greater than the Threshold Amount; or
(f) INSOLVENCY PROCEEDINGS, ETC. Any of Borrower, any Significant
Subsidiary or any Loan Parties that taken together would constitute a
Significant Subsidiary institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer for it or for all or any material part of its property; or
any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of such
Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to
any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any
such proceeding; or
(g) INABILITY TO PAY DEBTS; ATTACHMENT. (i) Any of the Borrower,
any Significant Subsidiary or any Loan Parties that taken together would
constitute a Significant Subsidiary becomes unable or admits in writing its
inability or fails generally to pay its debts as they become due, or (ii)
any writ or warrant of attachment or execution or similar process is issued
or levied against all or any material part of the property of any such
Person and is not released, vacated or fully bonded within 45 days after
its issue or levy; or
(h) JUDGMENTS. There is entered against any Loan Party or any
Significant Subsidiary (i) a final judgment or order for the payment of
money in an aggregate amount exceeding the Threshold Amount (to the extent
not covered by independent third-party insurance which has been notified of
such potential claim and does not dispute coverage), or (ii) any one or
more non-monetary final judgments that have, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect and, in either case, (A) enforcement proceedings are commenced by
any creditor upon such judgment or order, or (B) there is a period of 20
consecutive days during which a stay of
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enforcement of such judgment, by reason of a pending appeal or otherwise,
is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of any Loan Party under Title IV or Section
515 of ERISA to the Pension Plan, Multiemployer Plan or the PBGC, that,
individually or in the aggregate, would or could reasonably be expected to
have a Material Adverse Effect, or (ii) any Loan Party or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan that,
individually or in the aggregate, would or could reasonably be expected to
have a Material Adverse Effect; or
(j) INVALIDITY OF LOAN DOCUMENTS. Any provision of any Loan
Document, at any time after its execution and delivery and for any reason
other than as expressly permitted hereunder or thereunder or satisfaction
in full of all the Obligations, ceases to be in full force and effect; or
any Loan Party or any other Person contests in any manner the validity or
enforceability of any provision of any Loan Document; or any Loan Party
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or
(k) CHANGE OF CONTROL. There occurs any Change of Control; or
(l) COLLATERAL DOCUMENT. Any Collateral Document after delivery
thereof pursuant to SECTION 4.01 or 6.12 shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected lien
on and security interest in the Collateral purported to be covered thereby
(subject to only such exceptions as expressly permitted by the terms
thereof); or
(m) SENIOR SUBORDINATED NOTES INDENTURE. (i) Any of the
Obligations of the Loan Parties under the Loan Documents for any reason
shall cease to be "DESIGNATED SENIOR DEBT" or "SENIOR DEBT" (or any similar
term) under, and as defined in, the Senior Subordinated Notes Indenture or
in any agreement evidencing any Permitted Refinancing Subordinated
Indebtedness or (ii) the subordination provisions set forth in the Senior
Subordinated Notes Indenture or in any agreement evidencing any Permitted
Refinancing Subordinated Indebtedness shall, in whole or in part, cease to
be effective or cease to be legally valid, binding and enforceable against
the holders of the Senior Subordinated Notes or any Permitted Refinancing
Subordinated Indebtedness .
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs
and is continuing, the Administrative Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions:
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuers to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;
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(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due
and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C
Obligations (in an amount equal to the then Outstanding Amount thereof);
and
(d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or
applicable Law;
PROVIDED, HOWEVER, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower, any Significant Subsidiary or any
Loan Parties that taken together would constitute a Significant Subsidiary under
the Bankruptcy Code of the United States, the obligation of each Lender to make
Loans and any obligation of the L/C Issuers to make L/C Credit Extensions shall
automatically terminate, the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable, and the obligation of the Borrower to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender. Anything in this
SECTION 8.02 to the contrary notwithstanding, the Administrative Agent shall, at
the request of all the Lenders, rescind and annul any acceleration of the Loans
and the termination of the Commitments by written instrument filed with the
Borrower. Upon any such rescission and annulment, the Administrative Agent shall
promptly return to the Borrower any cash collateral deliveries pursuant to this
SECTION 8.02.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided
for in SECTION 8.02 (or after the Loans have automatically become immediately
due and payable and the L/C Obligations have automatically been required to be
Cash Collateralized as set forth in the proviso to SECTION 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
FIRST, to payment of that portion of the Obligations constituting
fees, indemnities, expenses and other amounts (other than principal and
interest) payable to the Agents in their capacities as such (including
Attorney Costs and amounts payable under ARTICLE III) ratably among them in
proportion to the amounts described in this clause FIRST payable to them;
SECOND, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest)
payable to the Lenders (including Attorney Costs and amounts payable under
ARTICLE III), ratably among them in proportion to the amounts described in
this clause SECOND payable to them;
THIRD, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans, L/C Borrowings and other
Obligations, ratably among the
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Lenders in proportion to the respective amounts described in this clause
THIRD payable to them;
FOURTH, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders
in proportion to the respective amounts described in this clause FOURTH
held by them;
FIFTH, to the Administrative Agent for the account of the L/C Issuers,
to Cash Collateralize that portion of L/C Obligations comprised of the
aggregate undrawn amount of Letters of Credit;
SIXTH, to the payment of all other Obligations of the Loan Parties
owing under or in respect of the Loan Documents that are due and payable to
the Administrative Agent and the other Secured Parties on such date,
ratably based upon the respective aggregate amounts of all such Obligations
owing to the Administrative Agent and the other Secured Parties on such
date; and
LAST, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to SECTION 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause FIFTH above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION OF THE ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
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(b) Each of the L/C Issuers shall act on behalf of the Lenders
with respect to any Letters of Credit issued by it and the documents associated
therewith, and each of the L/C Issuers shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this ARTICLE IX with
respect to any acts taken or omissions suffered by it in connection with Letters
of Credit issued by it or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to such Letters of Credit as fully
as if the term "Administrative Agent" as used in this ARTICLE IX and in the
definition of "Agent-Related Person" included the L/C Issuers with respect to
such acts or omissions, and (ii) as additionally provided herein with respect to
the L/C Issuers.
(c) The Administrative Agent shall also act as the "COLLATERAL
AGENT" under the Loan Documents, and each of the Lenders (in its capacities as a
Lender, Swing Line Lender (if applicable), L/C Issuers (if applicable) and a
potential Hedge Bank) hereby irrevocably appoints and authorizes the
Administrative Agent to act as the agent of such Lender for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any
of the Loan Parties to secure any of the Secured Obligations, together with such
powers and discretion as are reasonably incidental thereto. In this connection,
the Administrative Agent, as "collateral agent" (and any co-agents, sub-agents
and attorneys-in-fact appointed by the Administrative Agent pursuant to SECTION
9.02 for purposes of holding or enforcing any Lien on the Collateral (or any
portion thereof) granted under the Collateral Documents, or for exercising any
rights and remedies thereunder at the direction of the Administrative Agent),
shall be entitled to the benefits of all provisions of this ARTICLE IX
(including, without limitation, SECTION 9.07, as though such co-agents,
sub-agents and attorneys-in-fact were the "collateral agent" under the Loan
Documents) as if set forth in full herein with respect thereto.
9.02 DELEGATION OF DUTIES. The Administrative Agent may execute
any of its duties under this Agreement or any other Loan Document (including for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents or of exercising any rights and
remedies thereunder at the direction of the Administrative Agent) by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.
9.03 LIABILITY OF AGENT-RELATED PERSON. No Agent-Related Person
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Loan Party or any officer
thereof, contained herein or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or the perfection
or priority of any Lien or security interest created or purported to be created
under the Collateral Documents, or for any failure of any Loan Party or any
other party to any Loan Document
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to perform its obligations hereunder or thereunder. No Agent-Related Person
shall be under any obligation to any Lender or participant to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Loan Party or any Affiliate thereof.
9.04 RELIANCE BY AGENTS.
(a) Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Loan Party),
independent accountants and other experts selected by such Agent. Each Agent
shall be fully justified in failing or refusing to take any action under any
Loan Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. Each Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Required Lenders (or
such greater number of Lenders as may be expressly required hereby in any
instance) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in SECTION 4.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.
9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to Events of Default in the payment of principal,
interest and fees required to be paid to the Administrative Agent for the
account of the Lenders, unless the Administrative Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default." The Administrative Agent will notify the Lenders of its
receipt of any such notice. The Administrative Agent shall take such action with
respect to any such Default or Event of Default as may be directed by the
Required Lenders in accordance with ARTICLE VIII; PROVIDED, HOWEVER, that unless
and until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable or in the best interest of the Lenders.
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY AGENTS. Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and
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that no act by any Agent-Related Person hereafter taken, including any consent
to and acceptance of any assignment or review of the affairs of any Loan Party
or any Affiliate thereof, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender as to any matter, including
whether Agent-Related Persons have disclosed material information in their
possession. Each Lender represents to each Agent that it has, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Loan Parties and their respective
Subsidiaries, and all applicable bank or other regulatory Laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower and the other Loan Parties
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
the other Loan Parties. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by any Agent herein, such
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any of the Loan
Parties or any of their respective Affiliates which may come into the possession
of any Agent-Related Person.
9.07 INDEMNIFICATION OF AGENTS. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of any
Loan Party and without limiting the obligation of any Loan Party to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; PROVIDED, HOWEVER, that no Lender shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person's own gross negligence or willful misconduct; PROVIDED,
HOWEVER, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section; PROVIDED, FURTHER, that to the extent an L/C Issuer is
entitled to indemnification under this SECTION 9.07 solely in connection with
its role as an L/C Issuer, only the Revolving Credit Lenders shall be required
to indemnify the L/C Issuer in accordance with this SECTION 9.07. In the case of
any investigation, litigation or proceeding giving rise to any Indemnified
Liabilities, this SECTION 9.07 applies whether any such investigation,
litigation or proceeding is brought by any Lender or any other Person. Without
limitation of the foregoing, each Lender shall reimburse each Agent upon demand
for its ratable share of any costs or out-of-pocket expenses (including Attorney
Costs) incurred by such Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that such Agent is not reimbursed for such expenses by or on behalf of the
Borrower. The undertaking in this Section shall survive
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termination of the Aggregate Commitments, the payment of all other Obligations
and the resignation of such Agent.
9.08 ADMINISTRATIVE AGENT IN THEIR INDIVIDUAL CAPACITIES. Bank of
America and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire Equity Interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with each of the Loan Parties and their respective Affiliates as though
Bank of America were not the Administrative Agent or an L/C Issuer hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent or an L/C Issuer, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders; provided
that any such resignation by Bank of America shall also constitute its
resignation as an L/C Issuer and Swing Line Lender. If the Administrative Agent
resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall be
consented to by the Borrower at all times other than during the existence of an
Event of Default (which consent of the Borrower shall not be unreasonably
withheld or delayed). If no successor agent is appointed prior to the effective
date of the resignation of the Administrative Agent, the Administrative Agent
may appoint, after consulting with the Lenders and the Borrower, a successor
agent from among the Lenders. Upon the acceptance of its appointment as
successor agent hereunder, the Person acting as such successor agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent, L/C Issuer and Swing Line Lender and the terms "Administrative Agent,"
"L/C Issuer" and "Swing Line Lender" shall mean (or, in the case of "L/C
Issuer," include) such successor agent, Letter of Credit issuer and swing line
lender, the retiring Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated and the retiring L/C Issuer's and Swing
Line Lender's rights, powers and duties as such shall be terminated, without any
other or further act or deed on the part of such retiring L/C Issuer or Swing
Line Lender or any other Lender, other than the obligation of the successor L/C
Issuer to issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or to make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this ARTICLE IX and SECTIONS 11.04 and 11.05 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
the Administrative Agent under this Agreement. If no successor agent has
accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor and upon the
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execution and filing or recording of such financing statements, or amendments
thereto, and such amendments or supplements to the Mortgages, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges, and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents. After any retiring
Administrative Agent's resignation hereunder as the Administrative Agent, the
provisions of this ARTICLE IX shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Administrative Agent.
9.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C
Obligations and all other Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of the Lenders and the Agents (including any claim for the
reasonable compensation, expenses and disbursements and advances of the
Lenders and the Agents and their respective agents and counsel and all
other amounts due the Lenders and the Agents under SECTIONS 2.03(i) and
(j), 2.09 and 11.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses and disbursements and advances of the
Agents and their respective agents and counsel, and any other amounts due the
Agents under SECTIONS 2.09 and 11.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
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9.11 COLLATERAL AND GUARANTY MATTERS. The Lenders irrevocably
authorize the Administrative Agent,
(a) to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations not yet accrued and payable) and the
expiration or termination of all Letters of Credit (unless such Letter of
Credit has been Cash Collateralized to the satisfaction of the
Administrative Agent and such L/C Issuer in their sole discretion), (ii)
that is sold or to be sold as part of or in connection with any merger,
sale or other Disposition permitted hereunder or under any other Loan
Document (unless the transferee would be required to xxxxx x Xxxx thereon
under the Loan Documents), or (iii) subject to SECTION 11.01, if approved,
authorized or ratified in writing by the Required Lenders; and
(b) to release any Subsidiary Guarantor from its obligations under
the Subsidiary Guaranty if such Person ceases to be a Subsidiary as a
result of a transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to release
its interest in particular types or items of property, or to release any
Subsidiary Guarantor from its obligations under the Subsidiary Guaranty pursuant
to this SECTION 9.11. In each case as specified in this SECTION 9.11, the
Administrative Agent will, at the Borrower's expense, authorize the Loan Party
to prepare and file any appropriate lien termination statements and authorize
and deliver to the applicable Loan Party such documents as such Loan Party may
reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted under the Collateral Documents or to
release such Subsidiary Guarantor from its obligations under the Subsidiary
Guaranty, in each case in accordance with the terms of the Loan Documents and
this SECTION 9.11.
9.12 OTHER AGENTS; ARRANGERS AND MANAGERS. None of the Lenders or
other Persons identified on the facing page or signature pages of this Agreement
as a "syndication agent," "documentation agent," "co-agent," "bookrunning
manager," "lead manager," "arranger," "lead arranger" or "co-arranger" shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than, in the case of such Lenders, those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders or other
Persons so identified shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders or other Persons so identified in deciding to enter
into this Agreement or in taking or not taking action hereunder.
9.13 SUPPLEMENTAL COLLATERAL AGENT. Anything contained herein or in
the Collateral Documents to the contrary notwithstanding, the Administrative
Agent may from time to time, when the Administrative Agent deems it necessary,
appoint one or more trustees, co-trustees, collateral co-agents or collateral
subagents (each a "SUPPLEMENTAL COLLATERAL AGENT") with respect to all or any
part of the Real Property Collateral. In the event that the
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Administrative Agent so appoints any Supplemental Collateral Agent with respect
to any Real Property Collateral, (i) such Supplemental Collateral Agent shall
automatically be vested, in addition to the Administrative Agent, with all
rights, powers, privileges, interests and remedies of the Administrative Agent
under the Collateral Documents with respect to such Real Property Collateral;
(ii) such Supplemental Collateral Agent shall be deemed to be an "Agent" for
purposes of this Agreement and the other Loan Documents, and the provisions of
SECTION 24 of the Security Agreement, this Article and SECTION 11.05 hereof that
refer to the Agents (or either of them) shall inure to the benefit of such
Supplemental Collateral Agent, and all references therein and in the other Loan
Documents to the Administrative Agent shall be deemed to be references to the
Administrative Agent and/or such Supplemental Collateral Agent, as the context
may require; and (iii) the term "Administrative Agent," when used herein or in
any applicable Collateral Document in relation to the Liens on or security
interests in such Real Property Collateral granted in favor of the
Administrative Agent, and any rights, powers, privileges, interests and remedies
of the Administrative Agent with respect to such Real Property Collateral, shall
be deemed to include such Supplemental Collateral Agent; PROVIDED, HOWEVER, that
no such Supplemental Collateral Agent shall be authorized to take any action
with respect to any such Real Property Collateral unless and except to the
extent expressly authorized in writing by the Administrative Agent. Should any
instrument in writing from any of the Borrowers or any other Loan Party be
required by any Supplemental Collateral Agent so appointed by the Administrative
Agent to more fully or certainly vest in and confirming to such Supplemental
Collateral Agent such rights, powers, privileges and duties, such Borrower
shall, or shall cause such Loan Party to, execute, acknowledge and deliver any
and all such instruments promptly upon request by the Administrative Agent. If
any Supplemental Collateral Agent, or successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall automatically vest in and be exercised by the Administrative Agent
until the appointment of a new Supplemental Collateral Agent.
ARTICLE X
PARENT GUARANTY
10.01 GUARANTY.
(a) Holdings hereby absolutely, unconditionally and irrevocably
guarantees, as primary obligor and not as surety, the punctual payment when due,
whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise, of all Obligations of each other Loan Party
now or hereafter existing under or in respect of the Loan Documents (including,
without limitation, any extensions, modifications, substitutions, amendments or
renewals of any or all of the foregoing Obligations), whether direct or
indirect, absolute or contingent, and whether for principal, interest, premiums,
fees, indemnities, contract causes of action, costs, expenses or otherwise (such
Obligations being the "GUARANTEED OBLIGATIONS"), and agrees to pay any and all
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Administrative Agent or any other Secured Party in
enforcing any rights under this Parent Guaranty or any other Loan Document.
Without limiting the generality of the foregoing, Holdings's liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by any other Loan Party to any Secured Party under or in respect
of the Loan Documents but for the fact that they are
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unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.
(b) Holdings hereby unconditionally and irrevocably agrees that in
the event any payment shall be required to be made to any Secured Party under
this Parent Guaranty or the Subsidiary Guaranty or any other guaranty, Holdings
will contribute, to the maximum extent permitted by law, such amounts to each
other guarantor so as to maximize the aggregate amount paid to the Secured
Parties under or in respect of the Loan Documents.
10.02 GUARANTY ABSOLUTE. Holdings guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of any Secured
Party with respect thereto. The Obligations of Holdings under or in respect of
this Parent Guaranty are independent of the Guaranteed Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan Documents,
and a separate action or actions may be brought and prosecuted against Holdings
to enforce this Parent Guaranty, irrespective of whether any action is brought
against the Borrower or any other Loan Party or whether the Borrower or any
other Loan Party is joined in any such action or actions. The liability of
Holdings under this Parent Guaranty shall be irrevocable, absolute and
unconditional irrespective of, and Holdings hereby irrevocably waives any
defenses it may now have or hereafter acquire in any way relating to, any or all
of the following:
(a) any lack of validity or enforceability of any Loan Document
(other than this Parent Guaranty) or any agreement or instrument relating
thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan
Documents, or any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or any of its Subsidiaries or otherwise (except to the
extent otherwise specifically amended in any amendment to this Parent
Guaranty);
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or amendment or
waiver of, or consent to departure from, any other guaranty, for all or any
of the Guaranteed Obligations;
(d) any manner of application of Collateral or any other
collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any Collateral
or any other collateral for all or any of the Guaranteed Obligations or any
other Obligations of any Loan Party under the Loan Documents or any other
assets of any Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to any Loan Party
any information relating to the business, condition (financial or
otherwise), operations,
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performance, properties or prospects of any other Loan Party now or
hereafter known to such Secured Party (Holdings waiving any duty on the
part of the Secured Parties to disclose such information);
(g) the failure of any other Person to execute or deliver any
other guaranty or agreement or the release or reduction of liability of any
other guarantor or surety with respect to the Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute a
defense available to, or a discharge of, any Loan Party or any other
guarantor or surety.
This Parent Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by any Secured Party or any other Person
upon the insolvency, bankruptcy or reorganization of the Borrower or any other
Loan Party or otherwise, all as though such payment had not been made.
10.03 WAIVERS AND ACKNOWLEDGMENTS.
(a) Holdings hereby unconditionally and irrevocably waives
promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or
dishonor and any other notice with respect to any of the Guaranteed Obligations
and this Parent Guaranty and any requirement that any Secured Party protect,
secure, perfect or insure any Lien or any property subject thereto or exhaust
any right or take any action against any Loan Party or any other Person or any
Collateral.
(b) Holdings hereby unconditionally and irrevocably waives any
right to revoke this Parent Guaranty and acknowledges that this Parent Guaranty
is continuing in nature and applies to all Guaranteed Obligations, whether
existing now or in the future.
(c) Holdings hereby unconditionally and irrevocably waives (i) any
defense arising by reason of any claim or defense based upon an election of
remedies by any Secured Party that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of Holdings or other rights of Holdings
to proceed against any of the other Loan Parties, any other guarantor or any
other Person or any Collateral and (ii) any defense based on any right of
set-off or counterclaim against or in respect of the Obligations of Holdings
hereunder.
(d) Holdings acknowledges that the Administrative Agent may,
without notice to or demand upon Holdings and without affecting the liability of
Holdings under this Parent Guaranty, foreclose under any mortgage by nonjudicial
sale in accordance with the terms of the Loan Documents and applicable Law, and
Holdings hereby waives any defense to the recovery by the Administrative Agent
and the other Secured Parties against Holdings of any deficiency after such
nonjudicial sale and any defense or benefits that may be afforded by applicable
law.
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(e) Holdings hereby unconditionally and irrevocably waives any
duty on the part of any Secured Party to disclose to Holdings any matter, fact
or thing relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party or any
of its Subsidiaries now or hereafter known by such Secured Party.
(f) Holdings acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in SECTION 10.02 hereof and this
SECTION 10.03 are knowingly made in contemplation of such benefits.
10.04 SUBROGATION. Holdings hereby unconditionally and irrevocably
agrees not to exercise any rights that it may now have or hereafter acquire
against the Borrower, any other Loan Party or any other insider guarantor that
arise from the existence, payment, performance or enforcement of Holdings'
Obligations under or in respect of this Parent Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against the Borrower,
any other Loan Party or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Parent Guaranty shall have been paid in full in cash, all Letters of Credit and
all Secured Hedge Agreements shall have expired or been terminated and the
Commitments shall have expired or been terminated. If any amount shall be paid
to Holdings in violation of the immediately preceding sentence at any time prior
to the latest of (a) the payment in full in cash of the Guaranteed Obligations
and all other amounts payable under this Parent Guaranty, (b) the Maturity Date
and (c) the latest date of expiration or termination of all Letters of Credit
and all Secured Hedge Agreements, such amount shall be received and held in
trust for the benefit of the Secured Parties, shall be segregated from other
property and funds of Holdings and shall forthwith be paid or delivered to the
Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Parent Guaranty, whether
matured or unmatured, in accordance with the terms of the Loan Documents, or to
be held as Collateral for any Guaranteed Obligations or other amounts payable
under this Parent Guaranty thereafter arising. If (i) Holdings shall make
payment to any Secured Party of all or any part of the Guaranteed Obligations,
(ii) all of the Guaranteed Obligations and all other amounts payable under this
Parent Guaranty shall have been paid in full in cash, (iii) the Maturity Date
shall have occurred and (iv) all Letters of Credit and all Secured Hedge
Agreements shall have expired or been terminated (unless such Letter of Credit
has been Cash Collateralized to the satisfaction of the Administrative Agent and
such L/C Issuer in their sole discretion), the Secured Parties will, at
Holdings's request and expense, execute and deliver to Holdings appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to Holdings of an interest in the
Guaranteed Obligations resulting from such payment made by Holdings pursuant to
this Parent Guaranty.
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10.05 CONTINUING GUARANTY; ASSIGNMENTS. This Parent Guaranty is a
continuing guaranty and shall (a) remain in full force and effect until the
latest of (i) the payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Parent Guaranty, (ii) the Maturity Date and
(iii) the latest date of expiration or termination of all Letters of Credit and
all Secured Hedge Agreements (unless such Letter of Credit has been Cash
Collateralized to the satisfaction of the Administrative Agent and such L/C
Issuer in their sole discretion), (b) be binding upon Holdings, its successors
and assigns and (c) inure to the benefit of and be enforceable by the Secured
Parties and their successors, transferees and assigns. Without limiting the
generality of clause (c) of the immediately preceding sentence, any Secured
Party may assign or otherwise transfer all or any portion of its rights and
obligations under this Agreement (including, without limitation, all or any
portion of its Commitments, the Loans owing to it and the Note or Notes, if any,
held by it) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Secured Party
herein or otherwise, in each case as and to the extent provided in SECTION
11.07. Holdings shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Secured Parties.
ARTICLE XI
MISCELLANEOUS
11.01 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent and each
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; PROVIDED, HOWEVER, that no such amendment,
waiver or consent shall:
(a) waive any condition set forth in SECTION 4.01(a), or, in the
case of the initial Credit Extension, SECTION 4.02, without the written
consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate
any Commitment terminated pursuant to SECTION 8.02) without the written
consent of such Lender;
(c) postpone any date scheduled for any payment of principal or
interest under SECTIONS 2.07 or 2.08, or any date fixed by the
Administrative Agent for the payment of fees or other amounts due to the
Lenders (or any of them) hereunder or under any other Loan Document
(excluding any mandatory prepayments) without the written consent of each
Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or (subject to clause (v) of the
second proviso to this SECTION 11.01) any fees or other amounts payable
hereunder or under any other Loan Document without the written consent of
each Lender directly affected thereby; PROVIDED, HOWEVER, that only the
consent of the Required Lenders shall be necessary (i) to amend the
definition of "Default Rate" or to waive any obligation of the Borrower to
pay interest or Letter of
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Credit Fees at the Default Rate or (ii) to amend any financial covenant
hereunder (or any defined term used therein) even if the effect of such
amendment would be to reduce the rate of interest on any Loan or L/C
Borrowing or to reduce any fee payable hereunder;
(e) change the order of application of any reduction in the
Commitments or any prepayment of Loans between the Facilities from the
application thereof set forth in the applicable provisions of SECTION
2.05(b), 2.06(b) or 2.06(c), respectively, in any manner that materially
and adversely affects the Lenders under such Facilities without the written
consent of each such Lender directly affected thereby;
(f) change any provision of this SECTION 11.01 or the definition
of "Required Lenders" or any other provision hereof specifying the number
or percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender;
(g) release all or substantially all of the Collateral in any
transaction or series of related transactions, without the written consent
of each Lender;
(h) release all or substantially all of the value of the Guaranty,
without the written consent of each Lender; or
(i) impose any greater restriction on the ability of any Lender to
assign any of its rights or obligations hereunder without the written
consent of Lenders having more than 50% of the Aggregate Credit Exposures
then in effect within each of the following classes of Commitments, Loans
and other Credit Extensions: (i) the class consisting of the Revolving
Credit Commitment and (ii) the class consisting of the Term Commitment. For
purposes of this clause, the aggregate amount of each Lender's risk
participation and funded participation in L/C Obligations and Swing Line
Loans shall be deemed to be held by such Lender;
and PROVIDED FURTHER that (i) no amendment, waiver or consent shall, unless in
writing and signed by the applicable L/C Issuer in addition to the Lenders
required above, affect the rights or duties of such L/C Issuer under this
Agreement or any Letter of Credit Application relating to any Letter of Credit
issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless
in writing and signed by the Swing Line Lender in addition to the Lenders
required above, affect the rights or duties of the Swing Line Lender under this
Agreement; (iii) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required above,
affect the rights or duties of, or any fees or other amounts payable to, the
Administrative Agent under this Agreement or any other Loan Document; (iv)
SECTION 11.07(h) may not be amended, waived or otherwise modified without the
consent of each Granting Lender all or any part of whose Loans are being funded
by an SPC at the time of such amendment, waiver or other modification; and (v)
the Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the
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Commitment of such Lender may not be increased or extended without the consent
of such Lender.
11.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) GENERAL. Unless otherwise expressly provided herein, all
notices and other communications provided for under the Loan Documents shall be
in writing (including by facsimile transmission). All such written notices shall
be mailed certified or registered mail, faxed or delivered to the applicable
address, facsimile number or (subject to SECTION 11.02(b)) electronic mail
address, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
(i) if the Borrower, Holdings, the Administrative Agent, any L/C
Issuer or the Swing Line Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on
SCHEDULE 11.02 or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a
notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its Administrative
Questionnaire or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a
notice to the Borrower, the Administrative Agent, any L/C Issuer and the
Swing Line Lender.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in SECTION 11.02(b), shall be effective as provided in SECTION
11.02(b).
(b) ELECTRONIC COMMUNICATIONS. Notices and other communications to
the Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, PROVIDED that the foregoing shall not
apply to notices to any Lender pursuant to ARTICLE II if such Lender has
notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by such Person, PROVIDED that approval of such procedures
may be limited to particular notices or communications.
(c) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Administrative Agent and the Lenders. The Administrative Agent
may also require that any such documents and signatures be
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confirmed by a manually-signed original thereof; PROVIDED, HOWEVER, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.
(d) RELIANCE BY ADMINISTRATIVE AGENT AND LENDERS. The
Administrative Agent and the Lenders shall be entitled to rely and act upon any
notices (including telephonic Committed Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of the Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Borrower shall indemnify each Agent-Related Person and each Lender
from all losses, costs, expenses and liabilities resulting from the reliance by
such Person on each notice purportedly given by or on behalf of the Borrower.
All telephonic notices to the Administrative Agent in respect of credit services
may be recorded and each of the parties hereto hereby consents to such recording
(it being understood that telephonic voicemail shall in any case be permitted).
11.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder or under any other
Loan Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided, and
provided under each other Loan Document, are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a) to
pay or reimburse each Agent for all reasonable out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation and execution of this
Agreement and the other Loan Documents, and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse each Agent
and each Lender for all reasonable out-of-pocket costs and expenses (without
duplication of amounts required to be paid or reimbursed pursuant to SECTION
3.01) incurred in connection with the enforcement of any rights or remedies
under this Agreement or the other Loan Documents (including all such costs and
expenses incurred during any legal proceeding, including any proceeding under
any Debtor Relief Law), including all Attorney Costs. The foregoing costs and
expenses shall include all reasonable search, filing, recording, title insurance
and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses incurred by the Administrative Agent and the reasonable
cost of independent public accountants and other outside experts retained by any
Agent or any Lender. All amounts due under this SECTION 11.04 shall be payable
within twenty days after written demand therefor. The agreements in this SECTION
11.04 shall survive the termination of the Aggregate Commitments and repayment
of all other Obligations. If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it hereunder or under any Loan Document,
including, without limitation, Attorney Costs and indemnities, such amount may
be paid on behalf of such Loan Party by any Agent or any Lender, in its sole
discretion; PROVIDED that prior to any payment of any such amount by any Agent
or Lender on behalf of any Loan Party, such Agent or Lender shall give notice to
such Loan Party.
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11.05 INDEMNIFICATION BY THE BORROWER. Whether or not the
Transactions are consummated, the Borrower shall indemnify and hold harmless
each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, agents and attorneys-in-fact (collectively, the
"INDEMNITEES") from and against any and all liabilities, obligations, losses,
damages, penalties, claims, demands, actions, judgments, suits, costs,
reasonable expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time be imposed on, incurred by or asserted
against any such Indemnitee in any way relating to or arising out of or in
connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) any Commitment, Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by any L/C Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (c) any actual or
alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by the Borrower, any Subsidiary or any
other Loan Party, or any Environmental Liability related in any way to the
Borrower, any Subsidiary or any other Loan Party, or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"), in all cases, (x) whether or not caused by or arising, in whole
or in part, out of the negligence of the Indemnitee and (y) without duplication
of any amounts required to be indemnified under SECTION 3.01; PROVIDED that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee. No Indemnitee shall be
liable for any damages arising from the use by others of any information or
other materials obtained through IntraLinks or other similar information
transmission systems in connection with this Agreement except to the extent such
damages arise from the gross negligence or willful misconduct of such
Indemnitee, nor shall any Indemnitee have any liability for any indirect or
consequential damages relating to this Agreement or any other Loan Document or
arising out of its activities related hereto or thereto (whether before or after
the Closing Date). In the case of an investigation, litigation or other
proceeding to which the indemnity in this SECTION 11.05 applies, such indemnity
shall be effective whether or not such investigation, litigation or proceeding
is brought by any Loan Party, its directors, shareholders or creditors or an
Indemnitee or any other Person, whether or not any Indemnitee is otherwise a
party thereto and whether or not any of the transactions contemplated hereunder
or under any of the other Loan Documents is consummated. All amounts due under
this SECTION 11.05 shall be payable within twenty days after written demand
therefor. The agreements in this SECTION 11.05 shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.
11.06 PAYMENTS SET ASIDE. To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any
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part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Administrative Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by the Administrative Agent,
plus interest thereon from the date of such demand to the date such payment is
made at a rate per annum equal to the Federal Funds Rate from time to time in
effect.
11.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in accordance
with the provisions of SECTION 11.07(b), (ii) by way of participation in
accordance with the provisions of SECTION 11.07(d), (iii) by way of pledge or
assignment of a security interest subject to the restrictions of SECTION
11.07(f) or (iv) to an SPC in accordance with the provisions of SECTION 11.07(h)
(and any other attempted assignment or transfer by any party hereto shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this SECTION 11.07(b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it); PROVIDED that (i) except in the case
of an assignment of the entire remaining amount of the assigning Lender's
Commitment and the Loans at the time owing to it or in the case of an assignment
to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a
Lender, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the applicable Commitment is not then in
effect, the principal outstanding balance of the Loan of the assigning Lender
subject to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of
the Trade Date, shall not be less than $1,000,000, in the case of any assignment
in respect of each of the Revolving Credit Facility and the Term Facility,
unless each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed); (ii) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not (x) apply to rights
in respect of Swing Line Loans or (y) prohibit any Lender from assigning all
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or a portion of its rights and obligations among separate Facilities on a
non-pro rata basis; (iii) any assignment of a Revolving Credit Commitment must
be approved by the Administrative Agent, the L/C Issuer and the Swing Line
Lender unless the Person that is the proposed assignee is itself a Revolving
Credit Lender (whether or not the proposed assignee would otherwise qualify as
an Eligible Assignee); and (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500 which fee shall not be reimbursed by
the Borrower except as otherwise provided in Section 3.08. Subject to acceptance
and recording thereof by the Administrative Agent pursuant to SECTION 11.07(c),
from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of SECTIONS
3.01, 3.04, 3.05, 11.04 and 11.05 with respect to facts and circumstances
occurring prior to the effective date of such assignment; PROVIDED that the
Eligible Assignee shall not be entitled to receive any greater payment under
SECTIONS 3.01, 3.04, 3.05, 11.04 and 11.05 than the assigning Lender would have
been entitled to receive with respect to the interest assigned to such Eligible
Assignee under the Law in effect as of the effective date of such assignment.
Upon request by the Lender, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
SECTION 11.07(d).
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be conclusive absent manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower at any reasonable
time and from time to time upon reasonable prior notice. In addition, at any
time that a request for a consent for a material or other substantive change to
the Loan Documents is pending, any Lender may inspect and receive from the
Administrative Agent a copy of the Register.
(d) Any Lender may at any time, without the consent of, or notice
to, the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a "PARTICIPANT") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participations in L/C
Obligations and/or Swing Line Loans) owing to it); PROVIDED that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain
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solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; PROVIDED that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification which would (i) extend or increase the
Commitment of such Lender to the extent such Participant is affected thereby
without the written consent of such Participant, (ii) postpone any date fixed by
this Agreement or any other Loan Document for any payment of principal
(excluding mandatory prepayments), interest or fees due to the Lenders (or any
of them) hereunder or under any other Loan Document, without the written consent
of such Participant to the extent such Participant is directly affected thereby,
(iii) release all or substantially all of the Collateral in any transaction or
series of related transactions or (iv) release all or substantially all of the
value of the Guaranty. Subject to SECTION 11.07(e), the Borrower agrees that
each Participant shall be entitled to the benefits of SECTIONS 3.01, 3.04 and
3.05 to the same extent as the Lender from whom the participation was acquired
and as if such Participant were a Lender and had acquired its interest by
assignment pursuant to SECTION 11.07(b). To the extent permitted by law, each
Participant also shall be entitled to the benefits of SECTION 11.09 as though it
were a Lender, PROVIDED such Participant agrees to be subject to SECTION 2.13 as
though it were a Lender.
(e) A Participant shall not be entitled to receive any greater
payment under SECTION 3.01 or 3.04 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant.
A Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of SECTION 3.01 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with SECTION 3.01 and SECTION 11.15 as though
it were a Lender.
(f) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank or a Farm
Credit Bank; PROVIDED that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following
meanings:
"ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural
person) approved by (i) the Administrative Agent, (ii) in the case of any
assignment of a Revolving Commitment, any L/C Issuer and the Swing Line
Lender, and (iii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed); PROVIDED that notwithstanding the foregoing,
"Eligible Assignee" shall not include the Borrower or any of the Borrower's
Affiliates or Subsidiaries.
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"FUND" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its business.
"APPROVED FUND" means any Fund that is administered or managed by (a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, any
Lender (a "GRANTING LENDER") may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an "SPC") the option to provide all or
any part of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; PROVIDED that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof or, if it fails to do so, to make such payment to the
Administrative Agent as is required under SECTION 2.12(c)(ii). Each party hereto
hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC
of such option shall increase the costs or expenses or otherwise increase or
change the obligations of the Borrower under this Agreement (including its
obligations under SECTION 3.04), (ii) no SPC shall be liable for any indemnity
or similar payment obligation under this Agreement for which a Lender would be
liable, and (iii) the Granting Lender shall for all purposes, including the
approval of any amendment, waiver or other modification of any provision of any
Loan Document, remain the lender of record hereunder. The making of a Loan by an
SPC hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by such Granting Lender. In furtherance
of the foregoing, each party hereto hereby agrees (which agreement shall survive
the termination of this Agreement) that, prior to the date that is one year and
one day after the payment in full of all outstanding commercial paper or other
senior debt of any SPC, it will not institute against, or join any other Person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding under the laws of the United States or any
State thereof. Notwithstanding anything to the contrary contained herein, any
SPC may (i) with prior written notice to, but without prior consent of the
Borrower and the Administrative Agent and with the payment of a processing fee
of $3,500, assign all or any portion of its right to receive payment with
respect to any Loan to the Granting Lender and (ii) disclose on a confidential
basis any non-public information relating to its funding of Loans to any rating
agency, commercial paper dealer or provider of any surety or Guarantee or credit
or liquidity enhancement, in each case that requires access to information about
such SPC's portfolio, to such SPC.
(i) Notwithstanding anything to the contrary contained herein, if
at any time Bank of America assigns all of its Commitments and Loans pursuant to
SECTION 11.07(b), Bank of America may, (i) upon 30 days' notice to the Borrower
and the Lenders, resign as an L/C Issuer and/or (ii) upon 30 days' notice to the
Borrower, resign as Swing Line Lender. In the event of any such resignation as
an L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint
from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder;
PROVIDED, HOWEVER, that no failure by the Borrower to appoint any such successor
shall affect the resignation of Bank of America as an L/C Issuer or Swing Line
Lender, as the
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case may be. If Bank of America resigns as an L/C Issuer, it shall retain all
the rights and obligations of an L/C Issuer hereunder with respect to all
Letters of Credit issued by it and outstanding as of the effective date of its
resignation as an L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant to SECTION 2.03(c)). If Bank of
America resigns as Swing Line Lender, it shall retain all the rights of the
Swing Line Lender provided for hereunder with respect to Swing Line Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to make Base Rate Loans or fund risk
participations in outstanding Swing Line Loans pursuant to SECTION 2.04(c).
11.08 CONFIDENTIALITY. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates' respective directors, officers, employees, agents and
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority purporting to have jurisdiction over it (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, subject, if permitted by applicable
Laws, to providing notice to the Borrower and the opportunity to seek a
protective order, (d) to any other party to this Agreement, (e) in connection
with the exercise of any remedies hereunder or under any other Loan Document or
any action or proceeding relating to this Agreement or any other Loan Document
or the enforcement of its rights hereunder or, (f) subject to an agreement
containing provisions substantially the same as those of this SECTION 11.08, to
(i) any Eligible Assignee of or, Participant in, or any prospective Eligible
Assignee of or, Participant in, any of its rights or obligations under this
Agreement or (ii) any direct or indirect contractual counterparty or prospective
counterparty (or such contractual counterparty's or prospective counterparty's
professional advisor) to any swap or other credit derivative transaction
relating to the Borrower and its obligations, (g) with the written consent of
the Borrower or (h) to the extent such Information (x) becomes publicly
available other than as a result of a breach of this SECTION 11.08 or (y)
becomes available to the Administrative Agent or any Lender on a nonconfidential
basis from a source other than the Borrower and such information from such
source is not, to the knowledge of the Administrative Agent or such Lender,
subject to an obligation of confidentiality). For purposes of this SECTION
11.08, "INFORMATION" means all information received from the Borrower or any
Subsidiary relating to the Borrower or any Subsidiary or any of their respective
businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower or any Subsidiary; PROVIDED that, in the case of
information received from the Borrower or any Subsidiary after the date hereof,
such information is clearly identified at the time of delivery as confidential;
PROVIDED, FURTHER, that any financial information (including projections) not
otherwise publicly disclosed in a Report on Form 10-K, 10-Q or 8-K shall be
deemed confidential. Any Person required to maintain the confidentiality of
Information as provided in this SECTION 11.08 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
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11.09 SETOFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender and each of their respective Affiliates is authorized at
any time and from time to time, without prior notice to the Borrower or any
other Loan Party, any such notice being waived by the Borrower (on its own
behalf and on behalf of each Loan Party) to the fullest extent permitted by law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other Indebtedness at any time
owing by, such Lender or such Affiliate to or for the credit or the account of
the respective Loan Parties against any and all Obligations owing to such Lender
hereunder or under any other Loan Document, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Document and although
such Obligations may be contingent or unmatured. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such set-off and
application made by such Lender; PROVIDED, HOWEVER, that the failure to give
such notice shall not affect the validity of such setoff and application. The
rights of the Administrative Agent and each Lender and their respective
Affiliates under this Section are in addition to other rights and remedies
(including, without limitation, other rights of setoff) that the Administrative
Agent, such Lender and their respective Affiliates may have.
11.10 INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "MAXIMUM RATE"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
11.11 COUNTERPARTS. This Agreement and each other Loan Document
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. Delivery by telecopier of an executed counterpart of a signature
page to this Agreement and each other Loan Document shall be effective as
delivery of an original executed counterpart of this Agreement and such other
Loan Document. The Administrative Agent may also require that any such documents
and signatures delivered by telecopier be confirmed by a manually-signed
original thereof; PROVIDED that the failure to request or deliver the same shall
not limit the effectiveness of any document or signature delivered by
telecopier.
11.12 INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; PROVIDED that the inclusion of
supplemental rights
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or remedies in favor of the Administrative Agent or the Lenders in any other
Loan Document shall not be deemed a conflict with this Agreement. Each Loan
Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.
11.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any other Loan Document
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding
(unless such Letter of Credit has been Cash Collateralized to the satisfaction
of the Administrative Agent and such L/C Issuer).
11.14 SEVERABILITY. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11.15 TAX FORMS.
(a) (i) Each Foreign Lender shall deliver to the Borrower and the
Administrative Agent, prior to receipt of the first payment to be made under
this Agreement or any other Loan Document (or upon accepting an assignment of an
interest herein), two duly signed completed copies of IRS Form W-8BEN or any
successor thereto (relating to such Foreign Lender and entitling it to an
exemption from, or reduction of, withholding tax on all payments to be made to
or for the account of such Foreign Lender by the Borrower pursuant to this
Agreement or any other Loan Document) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to or for the account of such
Foreign Lender by the Borrower pursuant to this Agreement or any other Loan
Document) or such other evidence satisfactory to the Borrower and the
Administrative Agent that such Foreign Lender is entitled to an exemption from,
or reduction of, United States withholding tax, including any exemption pursuant
to Section 881(c) of the Code, and in the case of a Foreign Lender claiming such
an exemption under Section 881(c) of the Code, a certificate that establishes in
writing to the Borrower and the Administrative Agent that such Foreign Lender is
not (i) a "bank" as defined in Section 881(c)(3)(a) of the Code, (ii) a
10-percent shareholder of the Borrower within the meaning of Section
871(h)(3)(b) of the Code, or (iii) a "controlled foreign corporation" related to
the Borrower within the meaning of Section 864(d) of the Code. Thereafter and
from time to time, each such Foreign Lender shall (A) prior to the expiration of
any previously delivered form, within 30 days of any change in circumstances
that makes the information on any previously delivered form incorrect or
promptly upon written request of the Borrower, submit to
135
the Borrower and the Administrative Agent such new or additional duly completed
and signed copies of one of such forms (or such successor forms as shall be
adopted from time to time by the relevant United States taxing authorities) as
may then be available under then current United States laws and regulations to
avoid, or such evidence as is satisfactory to the Borrower and the
Administrative Agent of any available exemption from or reduction of, United
States withholding taxes in respect of all payments to be made to or for the
account of such Foreign Lender by the Borrower pursuant to this Agreement or any
other Loan Document, (B) promptly notify the Borrower and the Administrative
Agent of any change in circumstances which would modify or render invalid any
claimed exemption or reduction, and (C) take such steps as shall not be
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable Laws that the Borrower make any deduction or
withholding for taxes from amounts payable to or for the account of such Foreign
Lender.
(ii) Each Lender, to the extent it does not act or ceases to act
for its own account with respect to any portion of any sums paid or payable to
such Lender under any of the Loan Documents (for example, in the case of a
typical participation by such Lender), shall deliver to the Borrower and the
Administrative Agent on the date when such Lender ceases to act for its own
account with respect to any portion of any such sums paid or payable, and at
such other times as may be necessary in the reasonable determination of the
Borrower and the Administrative Agent, (A) two duly signed completed copies of
the forms or statements required to be provided by such Lender as set forth in
SECTION 11.15(a)(i), to establish the portion of any such sums paid or payable
with respect to which such Lender acts for its own account that is not subject
to United States withholding tax, and (B) two duly signed completed copies of
IRS Form W-8IMY (or any successor thereto), together with any information such
Lender chooses to transmit with such form, and any other certificate or
statement of exemption required under the applicable Treasury Regulations, to
establish that such Lender is not acting for its own account with respect to a
portion of any such sums payable to such Lender.
(iii) Notwithstanding anything to the contrary in SECTION 3.01, the
Borrower shall not be required to pay any additional amount to or indemnify any
Foreign Lender under SECTION 3.01 (A) with respect to any Taxes required to be
deducted or withheld on the basis of the information, certificates or statements
of exemption that such Lender transmits with an IRS Form W-8IMY pursuant to
SECTION 11.15(a)(ii) or (B) with respect to any Taxes that would not have been
imposed but for the failure of such Lender to satisfy the foregoing provisions
of this SECTION 11.15(a); PROVIDED that if such Lender shall have satisfied the
requirement of this SECTION 11.15(a) on the date such Lender became a Lender or
ceased to act for its own account with respect to any payment under any of the
Loan Documents, nothing in this SECTION 11.15(a) shall relieve the Borrower of
its obligation to pay any amounts required to be paid pursuant to SECTION 3.01
in the event that, as a result of any change, after the date of this Agreement
or other applicable Loan Document (as the case may be), in any applicable Law,
treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no longer
legally entitled to deliver forms, certificates or other evidence at a
subsequent date establishing that the Lender or other Person for the account of
which such Lender receives any sums payable under any of the Loan Documents is
not subject to withholding or is subject to withholding at a reduced rate.
136
(iv) The Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of the
Loan Documents with respect to which the Borrower is not required to pay
additional amounts under SECTION 3.01.
(b) Prior to receiving the first payment to be made under this
Agreement or any other Loan Document, each Lender that (x) is not a Foreign
Lender and (y) is not a corporation shall deliver to the Borrower and the
Administrative Agent two duly signed completed copies of IRS Form W-9. If any
such Lender does not timely deliver such forms, then, to the extent required by
applicable Law, the Borrower or the Administrative Agent may withhold from any
"reportable payment" (as defined in Section 3406(b) of the Code) to such Lender
the applicable backup withholding tax imposed by the Code, without reduction,
and the Borrower shall not be required to pay any additional amount to, or
indemnify, such Lender under SECTION 3.01.
(c) If any Governmental Authority asserts that the Administrative
Agent did not properly withhold or backup withhold, as the case may be, any tax
or other amount from payments made to or for the account of any Lender, such
Lender shall indemnify the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this SECTION 11.15, and costs and
expenses (including Attorney Costs) of the Administrative Agent. The obligation
of the Lenders under this SECTION 11.15 shall survive the termination of the
Aggregate Commitments, repayment of all other Obligations hereunder and the
resignation of the Administrative Agent.
11.16 GOVERNING LAW.
(a) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX
SITTING IN
NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
137
11.17 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION 11.17 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.18 BINDING EFFECT. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent shall have
been notified by each Lender, Swing Line Lender and L/C Issuer that each such
Lender, Swing Line Lender and L/C Issuer has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, each Agent and each
Lender and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Lenders.
11.19 USA PATRIOT ACT NOTICE. Each Lender and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies each Loan
Party that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the "ACT"), it is required
to obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of each Loan Party and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify such Loan Party as required by the Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
SOLO CUP COMPANY
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
SOLO CUP INVESTMENT CORPORATION
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
BANK OF AMERICA, N.A., as
Administrative Agent
By /s/ Xxxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Managing Director
BANK OF AMERICA, N.A., as a Lender, an L/C
Issuer and Swing Line Lender
By /s/ Xxxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Managing Director
CITICORP NORTH AMERICA, INC., as a Lender
By /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx XxXxxxx
Title: Vice President
CITICORP NORTH AMERICA, INC., as
Syndication Agent
By /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx XxXxxxx
Title: Vice President
XXXXXX TRUST AND SAVINGS BANK, as
Documentation Agent and L/C Issuer
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
XXXXXX TRUST AND SAVINGS BANK, as a
Lender
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
BANK OF MONTREAL
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
GENERAL ELECTRIC CAPITAL
CORPORATION
By /s/ W. Xxxxxx Xxxxxxxxx
---------------------------------------
Name: W. Xxxxxx XxXxxxxxx
Title: Duly Authorized Signatory
LASALLE BANK NATIONAL
ASSOCIATION
By /s/ Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: First Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
INTERNATIONAL"
NEW YORK BRANCH
By /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Director
By /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Director
THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
By /s/ Shinichibo Munechika
-------------------------------------
Name: Shinichibo Munechika
Title: Deputy General Manager
MIZUHO CORPORATE BANK, LTD.
By /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
NATIONAL CITY BANK
By /s/ Xxx Xxxxxxx
-------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President
AMERICAN AGCREDIT, PCA
By /s/ Vem Xxxxxx
-------------------------------------
Name: Vem Xxxxxx
Title: Vice President
THE NORTHERN TRUST CO.
By /s/ Xxxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
FIRSTTRUST BANK
By /s/ Xxxx Xxxxxx
-------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
KZH CRESCENT-2 LLC
By /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Agent
KZH CRESCENT-3 LLC
By /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Agent
KZH CYPRESSTREE-1 LLC
By /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Agent
KZH ING-2 LLC
By /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Agent
KZH PONDVIEW LLC
By /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Agent
KZH SOLEIL LLC
By /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Agent
KZH SOLEIL-2 LLC
By /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Agent
KZH RIVERSIDE LLC
By /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Agent
KZH STERLING LLC
By /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Agent
ERSTE BANK
By /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
Title: Director
Erste Bank
New York Branch
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: First Vice President
SCHEDULES TO
CREDIT AGREEMENT
SCHEDULE 1.01
CONSOLIDATED EBITDA
Quarter Ended Month Ended
-------------------------------------- --------------------------------------------------------
September 30, 2003 December 31, 2003 January 31, 2004 February 29, 2004 March 31, 2004
-------------------------------------- --------------------------------------------------------
PRO FORMA:
EBITDA $ 52,823,899 $ 36,142,637
Less: Management Fee (825,000) (825,000) (275,000) (275,000) (275,000)
Add: Synergies 3,850,000 3,850,000 1,283,333 1,283,333 1,283,333
-------------------------------------------------------------------------------------------------
Adjustment to
Consolidated EBITDA $ 55,848,899 $ 39,167,637 $ 1,008,333 $ 1,008,333 $ 1,008,333
SCHEDULES TO
CREDIT AGREEMENT
SCHEDULE 11.02
ADMINISTRATIVE AGENT'S OFFICE,
CERTAIN ADDRESSES FOR NOTICES
BORROWER:
Solo Cup Company
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxx.xxxxxx@xxxxxxx.xxx
Website Address: xxx.xxxxxxx.xxx
HOLDINGS:
Solo Cup Investment Corporation
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxx.xxxxxx@xxxxxxx.xxx
Website Address: xxx.xxxxxxx.xxx
ADMINISTRATIVE AGENT:
ADMINISTRATIVE AGENT'S OFFICE
(FOR PAYMENTS AND REQUESTS FOR CREDIT EXTENSIONS):
Bank of America, N.A.
One Independence Center
000 Xxxxx Xxxxx Xxxxxx
Mail Code: NC1-001-15-04
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Electronic Mail: xxxxxxxx.xxxxx@xxxxxxxxxxxxx.xxx
Account No.: 8666207134
ABA# 000000000
OTHER NOTICES AS ADMINISTRATIVE AGENT:
Bank of America, N.A., as Agent
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Mail Code: CA5-701-05-19
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxx, Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
Electronic Mail: xxxxxx.x.xxxxxxxxxxx@xxxxxxxxxxxxx.xxx
L/C ISSUERS:
Bank of America, N.A.
Trade Operations-Los Angeles #22621
000 X. Xxxxxxx Xxxxxx, 00xx Xxxxx
Mail Code: CA9-703-19-23
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxx, Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
Electronic Mail: xxxxxx.xxxx@xxxxxxxxxxxxx.xxx
Xxxxxx Trust and Savings Bank
Global Trade Services
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx Xxxxxxx, X0X 0X0
Attention: Xxx Xxxxxx, Client Services Representative
Telephone: 000-000-0000
Facsimile: 000-000-0000
Electronic Mail: xxx.xxxxxx@xxx.xxx
SWING LINE LENDER:
Bank of America, N.A.
One Independence Center
000 Xxxxx Xxxxx Xxxxxx
Mail Code: NC1-001-15-04
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Electronic Mail: xxxxxxxx.xxxxx@xxxxxxxxxxxxx.xxx
Account No.: 8666207134
ABA# 000000000
