BUCKEYE TECHNOLOGIES INC.
CREDIT AGREEMENT
Dated as of April 16, 2001
FLEET NATIONAL BANK, Administrative Agent
FLEET SECURITIES, INC., Arranger
TORONTO DOMINION (TEXAS) INC., Syndication Agent
BANK OF AMERICA, N.A., Documentation Agent
FIRST UNION NATIONAL BANK, Documentation Agent
Table of Contents
Page
1. Definitions; Certain Rules of Construction.................................1
2. The Credits...............................................................21
2.1. Revolving Credit.....................................................21
2.2. Money Market Rate Credit.............................................22
2.3. Swingline Credit.....................................................26
2.4. Letters of Credit....................................................27
2.5. Irish Loans; Mandatory Borrowing.....................................31
2.6. Application of Proceeds..............................................33
3. Interest; LIBOR Pricing Options; Fees.....................................33
3.1. Interest on Revolving Loan...........................................33
3.2. LIBOR Pricing Options................................................34
3.3. Interest on Money Market Loans and Swingline Loan....................36
3.4. Computations of Interest and Fees....................................36
3.5. Commitment Fees......................................................36
3.6. Letter of Credit Fees................................................37
3.7. Changes in Circumstances; Yield Protection...........................37
3.8. Maximum Lawful Interest Rate.........................................39
4. Payment...................................................................39
4.1. Payment at Maturity..................................................39
4.2. Contingent Required Prepayments......................................40
4.3. Letters of Credit....................................................41
4.4. Reborrowing; Application of Payments, etc............................41
5. Conditions to Extending Credit............................................42
5.1. Conditions on Initial Closing Date...................................42
5.2. Conditions to Each Extension of Credit...............................44
6. General Covenants.........................................................44
6.1. Taxes and Other Charges; Accounts Payable............................44
6.2. Conduct of Business, etc.............................................45
6.3. Insurance............................................................46
6.4. Financial Statements and Reports.....................................46
6.5. Certain Financial Tests..............................................50
6.6. Indebtedness.........................................................52
6.7. Liens................................................................53
6.8. Investments and Acquisitions.........................................55
6.9. Distributions........................................................56
-i-
6.10. Asset Dispositions and Mergers......................................57
6.11. Lease Obligations...................................................58
6.12. Issuance of Stock by Subsidiaries; Subsidiary Distributions, etc....58
6.13. Voluntary Prepayments of Other Indebtedness.........................59
6.14. Derivative Contracts................................................59
6.15. Negative Pledge Clauses.............................................59
6.16. ERISA, etc..........................................................60
6.17. Transactions with Affiliates........................................60
6.18. Environmental Laws..................................................60
6.19. Interpretation of Covenants.........................................61
7. Representations and Warranties............................................61
7.1. Organization and Business............................................61
7.2. Financial Statements and Other Information; Material Agreements......62
7.3. Agreements Relating to Financing Debt, Investments, etc..............63
7.4. Changes in Condition.................................................64
7.5. Title to Assets......................................................64
7.6. Operations in Conformity With Law, etc...............................64
7.7. Litigation...........................................................64
7.8. Authorization and Enforceability.....................................64
7.9. No Legal Obstacle to Agreements......................................65
7.10. Defaults............................................................65
7.11. Licenses, etc.......................................................65
7.12. Tax Returns.........................................................66
7.13. Certain Business Representations....................................66
7.14. Environmental Regulations...........................................67
7.15. Pension Plans.......................................................68
7.16. Government Regulation; Margin Stock.................................68
7.17. Disclosure..........................................................68
8. Defaults..................................................................69
8.1. Events of Default....................................................69
8.2. Certain Actions Following an Event of Default........................72
8.3. Annulment of Defaults................................................73
8.4. Waivers..............................................................74
9. Guarantees................................................................74
9.1. Guarantees of Credit Obligations.....................................74
9.2. Continuing Obligation................................................74
9.3. Waivers with Respect to Credit Obligations...........................75
9.4. Lenders' Power to Waive, etc.........................................76
9.5. Information Regarding the Company, etc...............................77
9.6. Certain Guarantor Representations....................................77
9.7. Subrogation..........................................................78
9.8. Subordination........................................................78
9.9. Future Subsidiaries; Further Assurances..............................78
9.10. Contribution Among Guarantors.......................................78
-ii-
10. Expenses; Indemnity......................................................79
10.1. Expenses............................................................79
10.2. General Indemnity...................................................79
10.3. Indemnity With Respect to Letters of Credit.........................80
11. Operations; Agent........................................................80
11.1. Interests in Revolving Loan.........................................80
11.2. Agent's Authority to Act, etc.......................................80
11.3. Company to Pay Agent, etc...........................................80
11.4. Lender Operations for Advances, Letters of Credit, etc..............81
11.5. Sharing of Payments, etc............................................82
11.6. Agent's Resignation.................................................83
11.7. Concerning the Agent................................................83
11.8. Rights as a Lender..................................................85
11.9. Independent Credit Decision.........................................85
11.10. Indemnification....................................................85
12. Successors and Assigns; Lender Assignments and Participations............86
12.1. Assignments by Lenders..............................................86
12.2. Credit Participants.................................................88
12.3. Special Purpose Funding Vehicles....................................89
12.4. Replacement of Lender...............................................90
13. Confidentiality..........................................................91
14. Notices..................................................................91
15. Amendments, Consents, Waivers, etc.......................................92
15.1. Lender Consents for Amendments......................................92
15.2. Course of Dealing; No Implied Waivers...............................93
16. General Provisions.......................................................94
16.1. Defeasance..........................................................94
16.2. No Strict Construction..............................................94
16.3. Certain Obligor Acknowledgments.....................................94
16.4. Venue; Service of Process; Certain Waivers..........................94
16.5. WAIVER OF JURY TRIAL................................................95
16.6. Interpretation; Governing Law; etc..................................95
17. Status for Other Debt Documents..........................................96
-iii-
EXHIBITS
1 -Irish Lender Agreement
2.1.4 -Revolving Note
2.2.1 -Money Market Loan Bid Request
2.2.2 -Invitation to Bid on Money Market Loan
2.2.3A -Money Market Loan Bid
2.2.3B -List of Money Market Loan Bids
2.2.4A -List of Acceptances and Non-Acceptances of Money Market Loan Bids
2.2.4B -Acceptance of Money Market Loan Bid
2.2.4C -Non-Acceptance of Money Market Loan Bid
2.2.4D -Notice of Money Market Loan
2.2.5 -Money Market Note
2.3.3 -Swingline Note
5.1.4 -Foreign Subsidiary Subordination Agreement
5.15 -Security Agreement
5.1.8 -Officer's Certificate as to Solvency and Net Worth
5.2.1 -Officer's Certificate
5.2 -Material Developments
6.4. -Sample Monthly Financial Report
6.8.8 -Investments in Foreign Subsidiaries
7.1 -Company and its Subsidiaries
7.2.2 -Material Agreements
-iv-
7.3 -Financing Debt, Certain Investments, etc.
7.7 -Litigation
7.14 -Environmental Matters
7.15 -Multi-employer and Defined Benefit Plans
11.1 -Revolving Loan Percentage Interests
12.1.1 -Assignment and Acceptance
-v-
BUCKEYE TECHNOLOGIES INC.
CREDIT AGREEMENT
This Agreement, dated as of April 16, 2001, is among Buckeye
Technologies Inc., a Delaware corporation (the "Company"), the Subsidiaries of
the Company from time to time party hereto, the Lenders from time to time party
hereto and Fleet National Bank, both in its capacity as a Lender and in its
capacity as administrative agent for itself and the other Lenders. The parties
agree as follows:
Recitals: Pursuant to this Agreement, the Lenders are extending to the
Company a $215,000,000 revolving credit facility, including a $50,000,000 letter
of credit facility and a $15,000,000 swingline credit facility. A competitive
bid facility is also available under this Agreement and up to $15,000,000 in
Supported Irish Loan Equivalents advanced independently by Affiliates of certain
Lenders that are treated as loans under this Agreement. All facilities mature on
March 31, 2005. Each of the Company's material domestic Subsidiaries guarantees
the credit facilities, and the credit facilities will be secured (pari passu
with Irish Loan Equivalents up to $25,000,000) by (a) substantially all the
personal property of the Company and its domestic Subsidiaries, (b) certain real
property of the Company and its domestic Subsidiaries, (c) the pledge of all the
stock of the Company's material domestic Subsidiaries and (d) the pledge of 66%
of the stock of certain first-tier Foreign Subsidiaries owned directly by the
Company and its domestic Subsidiaries.
1. Definitions; Certain Rules of Construction. Certain capitalized terms are
used in this Agreement and in the other Credit Documents with the specific
meanings defined below in this Section 1. Except as otherwise explicitly
specified to the contrary or unless the context clearly requires otherwise, (a)
the capitalized term "Section" refers to sections of this Agreement, (b) the
capitalized term "Exhibit" refers to exhibits to this Agreement, (c) references
to a particular Section include all subsections thereof, (d) the word
"including" shall be construed as "including without limitation", (e) accounting
terms not otherwise defined herein have the meaning provided under GAAP, (f)
references to a particular statute or regulation include all rules and
regulations thereunder and any successor statute, regulation or rules, in each
case as from time to time in effect, (g) references to a particular Person
include such Person's successors and assigns to the extent not prohibited by
this Agreement and the other Credit Documents and (h) references to "Dollars" or
"$" mean United States Funds. References to "the date hereof" mean the date
first set forth above.
"Accumulated Benefit Obligations" means the actuarial present value of
the accumulated benefit obligations under any Plan, calculated in accordance
with Statement No. 87 of the Financial Accounting Standards Board.
"Affected Lender" is defined in Section 12.4.
"Affiliate" means, with respect to the Company (or any other specified
Person), any other Person directly or indirectly controlling, controlled by or
under direct or indirect common control with the Company, and shall include (a)
any officer or director or general partner of the Company and (b) any Person of
which the Company or any Affiliate (as defined in clause (a) above) of the
Company shall, directly or indirectly, beneficially own either (i) at least 5%
of the outstanding equity securities having the general power to vote or (ii) at
least 5% of all equity interests.
"Agent" means Fleet in its capacity as administrative agent for the
Lenders hereunder, as well as its successors and assigns in such capacity
pursuant to Section 11.6.
"Agreement" means this Agreement as from time to time amended, modified
and in effect.
"Applicable Margin" means (a) through the third Banking Day after
quarterly financial statements have been forwarded by the Company to the Lenders
in accordance with Section 6.4.2 for the fiscal quarter ended March 31, 2001,
the second highest applicable percentage rate set forth in the table below and
(b) on each day thereafter, the percentage in the table below indicated by the
ratio which (a) Consolidated Total Debt on the last day of the most recently
ended fiscal quarter for which financial statements have been (or are required
to have been) furnished by the Company to the Lenders in accordance with Section
6.4.1 or 6.4.2, as the case may be, prior to the first day of such month bore to
(b) Consolidated EBITDA for the period of four consecutive fiscal quarters ended
on the last day of such fiscal quarter:
Ratio of Consolidated Total Applicable Margin Commitment Fee Rate
Debt to Consolidated EBITDA
Greater than or equal to 3.75 1.500% 0.375%
Greater than or equal to 3.50
but less than 3.75 1.375% 0.375%
Greater than or equal to 3.00
but less than 3.50 1.250% 0.300%
Greater than or equal to 2.50 1.000% 0.250%
but less than 3.00
Less than 2.50 0.750% 0.250%
Changes in the Applicable Margin shall occur on the third Banking Day after
quarterly financial statements have been furnished to the Agent in accordance
with Sections 6.4.1 or 6.4.2 from time to time. In the event that the financial
statements required to be delivered pursuant to Section 6.4.1 or 6.4.2, as
applicable, are not delivered when due, then during the period from the third
Banking Day following the date such financial statements were due until the
third Banking Day following the date on which they are actually delivered, the
Applicable Margin shall be the maximum amount set forth in the table above.
"Applicable Rate" means, at any date, the sum of:
(a) (i) with respect to each portion of the Revolving Loan
subject to a LIBOR Pricing Option, the sum of the Applicable Margin
(which may change during the LIBOR Interest Period for such LIBOR
Pricing Option in accordance with the definition of "Applicable
Margin") plus the LIBOR Rate with respect to such LIBOR Pricing Option;
2
(ii) with respect to each other portion of the Revolving Loan,
the Base Rate;
plus (b) an additional 2% per annum effective on the day the Agent
notifies the Company that the interest rates hereunder are increasing
as a result of the occurrence and continuance of an Event of Default
until the earlier of such time as (i) such Event of Default is no
longer continuing or (ii) such Event of Default is deemed no longer to
exist, in each case pursuant to Section 8.3.
"Approved Subordinated Debt" means (a) the Company's 8 1/2 % Senior
Subordinated Notes due 2005 in the original principal amount of $150,000,000,
issued pursuant to the indenture dated November 28, 1995 between the Company and
The Bank of New York, as trustee, as in effect on the date hereof, (b) the
Company's 9 1/4% Senior Subordinated Notes due 2008 in the original principal
amount of $100,000,000, issued pursuant to the indenture dated July 2, 1996
between the Company and The Bank of New York, as trustee, as in effect on the
date hereof and (c) the Company's 8% Senior Subordinated Notes due 2010 in the
original principal amount of $150,000,000, issued pursuant to the indenture
dated June 11, 1998 between the Company and The Bank of New York, as trustee, as
in effect on the date hereof.
"Assignee" is defined in Section 12.1.1.
"Assignment and Acceptance" is defined in Section 12.1.1.
"Banking Day" means (a) any day other than Saturday, Sunday or a day on
which banks in Boston, Massachusetts are authorized or required by law or other
governmental action to close (b) if such term is used in connection with, or in
reference to, a Supported Irish Loan or a bid for the advance of a Supported
Irish Loan, a day on which transactions may be effected by banks in the Dublin
interbank market, and (c) if such term is used with reference to a LIBOR Pricing
Option, any day on which dealings are effected by first-class banks in the
London inter-bank markets in New York, New York and in London, England.
"Bankruptcy Code" means Title 11 of the United States Code.
"Bankruptcy Default" means an Event of Default referred to in Section
8.1.10.
"Base Rate" means, on any date, the greater of (a) the rate of interest
announced by Fleet at the Boston Office as its prime rate or (b) the sum of 1/2%
plus the Federal Funds Rate.
"Boston Office" means the principal banking office of Fleet in Boston,
Massachusetts.
"By-laws" means all written by-laws, rules, regulations and all other
documents relating to the management, governance or internal regulation of any
Person other than an individual, or interpretive of the Charter of such Person,
all as from time to time in effect.
"Capital Expenditures" means, for any period, amounts added or required
to be added to the property, plant and equipment or other fixed assets account
on the Consolidated balance sheet of the Company and its Subsidiaries, prepared
in accordance with GAAP, in respect of (a) the acquisition, construction,
improvement or replacement of land, buildings, machinery, equipment, leaseholds
and any other real or personal property (excluding replacements of and repairs
3
to any real or personal property made out of the proceeds of a casualty
insurance policy), (b) to the extent not included in clause (a) above,
materials, contract labor and direct labor relating thereto (excluding amounts
properly expensed as repairs and maintenance in accordance with GAAP) and (c)
software development costs to the extent not expensed; provided, however, that
Capital Expenditures shall not include (i) the purchase price for the
acquisition of another Person (or substantially all the assets of another
Person) as a going concern permitted by Section 6.8 or (ii) expenditures made in
accordance with this Agreement with the proceeds of insurance claims or
condemnation awards or the Permitted Reinvestment Reserve Amount.
"Capitalized Lease" means any lease which is required to be capitalized
on the balance sheet of the lessee in accordance with GAAP, including Statement
Nos. 13 and 98 of the Financial Accounting Standards Board.
"Capitalized Lease Obligations" means the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with GAAP, including Statement Nos.
13 and 98 of the Financial Accounting Standards Board.
"Cash Equivalents" means:
(a) negotiable certificates of deposit, time deposits
(including sweep accounts), demand deposits and bankers' acceptances
having a maturity of 12 months or less and issued by any United States
financial institution having capital and surplus and undivided profits
aggregating at least $100,000,000 and rated at least Prime-1 by Xxxxx'x
or A-1 by S&P or issued by First Tennessee Bank National Association or
Suntrust Bank, Central Florida, N.A. so long as it has capital and
surplus and undivided profits aggregating at least $100,000,000 and is
rated at least A2 by Xxxxx'x or P2 by S&P or issued by any Lender;
(b) negotiable certificates of deposit, time deposits
(including sweep accounts), demand deposits and bankers' acceptances
having a maturity of nine months or less and issued by any foreign
financial institution having capital and surplus and undivided profits
aggregating at least $200,000,000 in the equivalent amount of United
States Funds and rated at least Prime-1 by Xxxxx'x or A-1 by S&P or
issued by any Lender;
(c) corporate obligations having a maturity of 12 months or
less and rated at least Prime-1 by Xxxxx'x or A-1 by S&P or issued by
any Lender;
(d) any direct obligation of the United States of America
or any agency or instrumentality thereof, or of any state or
municipality thereof, (i) which has a remaining maturity at the time of
purchase of not more than one year or which is subject to a repurchase
agreement with any Lender (or any other financial institution referred
to in clause (a) above)exercisable within one year from the time of
purchase and (ii) which, in the case of obligations of any state or
municipality, is rated at least Aa by Xxxxx'x or AA by S&P;
(e) any mutual fund or other pooled investment vehicle
rated at least Aa by Xxxxx'x or AA by S&P which invests principally in
obligations described above; and
4
(f) any Investment by a Foreign Subsidiary in its local
jurisdiction comparable to the items described above.
"CERCLA" means the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"CERCLIS" means the federal Comprehensive Environmental Response
Compensation Liability Information System List (or any successor document)
promulgated under CERCLA.
"Charter" means the articles of organization, certificate of
incorporation, statute, constitution, joint venture agreement, partnership
agreement, trust indenture, limited liability company agreement or other charter
document of any Person other than an individual, each as from time to time in
effect.
"Closing Date" means the Initial Closing Date, each other date on which
any extension of credit is made pursuant to Sections 2.1, 2.3 or 2.4 and the
Money Market Loan Closing Dates.
"Code" means the federal Internal Revenue Code of 1986.
"Commitment" means, with respect to any Lender, such Lender's
obligations to extend the credits contemplated by Section 2. The original
Commitments are set forth in Section 11.1 and the current Commitments are
recorded from time to time in the Register.
"Commitment Fee Rate" means, at any date, the per annum rate indicated
in the table included in the definition of "Applicable Margin."
"Company" means Buckeye Technologies Inc., a Delaware corporation.
"Computation Covenants" means Sections 6.5, 6.6.7, 6.6.10, 6.6.13,
6.6.14, 6.6.15, 6.6.16, 6.6.18, 6.8.5, 6.8.6, 6.8.7, 6.8.8, 6.9.2, 6.9.5,
6.10.1, 6.10.4, 6.11.2 and 6.16.
"Consolidated" and "Consolidating", when used with reference to any
term, mean that term as applied to the accounts of the Company (or other
specified Person) and all of its Subsidiaries (or other specified group of
Persons), or such of its Subsidiaries as may be specified, consolidated (or
combined) or consolidating (or combining), as the case may be, in accordance
with GAAP and with appropriate deductions for minority interests in
Subsidiaries.
"Consolidated EBITDA" means, for any period, the total of (a)
Consolidated Net Income minus (b) to the extent included in computing such
Consolidated Net Income (i) any extraordinary and nonrecurring gains and (ii)
noncash income items, plus (c) all amounts deducted in computing such
Consolidated Net Income in respect of:
(i) depreciation and amortization;
(ii) interest expense;
(iii) income tax expense;
5
(iv) the write down for impairment purposes of existing
goodwill; and
(v) any extraordinary and nonrecurring losses.
"Consolidated Interest Expense" means, for any period, (a) the
aggregate amount of interest expense, including commitment fees, payments in the
nature of interest under Capitalized Leases and net payments under Interest Rate
Protection Agreements, net of interest income accrued by the Company and its
Subsidiaries in accordance with GAAP on a Consolidated basis, minus (b) to the
extent included in the foregoing clause (a), amortization of Indebtedness
financing costs.
"Consolidated Net Income" means, for any period, the net income (or
loss) of the Company and its Subsidiaries, determined in accordance with GAAP on
a Consolidated basis; provided, however, that Consolidated Net Income shall not
include:
(a) the income (or loss) of any Person accrued prior to the
date such Person becomes a Subsidiary or is merged into or consolidated
with the Company or any of its Subsidiaries; provided, however, that
(i) in the event of an acquisition permitted by Section 6.8, for
purposes only of calculating the Applicable Rate, the Commitment Fee
Rate and the leverage ratio in Section 6.5.2 (but not for any other
Section), the net income (or loss) of any acquired domestic Person
shall be included in Consolidated Net Income for up to four fiscal
quarters prior to the acquisition date, adjusted on a pro forma basis
for specific and quantified reductions in expenses (excluding projected
changes in business conditions, such as projected yield improvement or
increased sales) resulting from the acquisition as agreed between the
Company and the Agent and (ii) in the event of a disposition permitted
by Section 6.10, for purposes only of calculating the Applicable Rate,
the Commitment Fee Rate and the leverage ratio in Section 6.5.2
(but not for any other Section), the net income or loss of any domestic
Person so disposed of shall be excluded from Consolidated Net Income
for up to four fiscal quarters prior to the disposition date.
(b) the income (or loss) of any Person (other than a
Subsidiary) in which the Company or any of its Subsidiaries has an
ownership interest; provided, however, that (i) Consolidated Net Income
shall include amounts in respect of the income of such Person when
actually received in cash by the Company or such Subsidiary in the form
of dividends or similar Distributions and (ii) Consolidated Net Income
shall be reduced by the aggregate amount of all Investments, regardless
of the form thereof, made by the Company or any of its Subsidiaries in
such Person for the purpose of funding any deficit or loss of such
Person;
(c) all amounts included in computing such net income (or
loss) in respect of the write-up of any asset or the retirement of any
Indebtedness or equity at less than face value after June 30, 2000;
(d) the income of any Subsidiary to the extent (i) the
payment of such income in the form of a Distribution or repayment of
Indebtedness to the Company or a Wholly Owned Subsidiary is not
permitted, whether on account of any Charter or By-law restriction,
6
any agreement, instrument, deed or lease or any law, statute, judgment,
decree or governmental order, rule or regulation applicable to such
Subsidiary or (ii) the income of such Subsidiary does not exceed the
tax liability incurred by the Company and its Subsidiaries resulting
from the repatriation of foreign earnings under the Code caused by the
payment of such income in the form of a Distribution or repayment of
Indebtedness to the Company or a Wholly Owned Subsidiary; and
(e) any after-tax gains or losses attributable to returned
surplus assets of any Plan.
"Consolidated Net Worth" means, at any date, the total of:
(a) stockholders' equity of the Company and its Subsidiaries
determined in accordance with GAAP on a Consolidated basis, excluding
the effect of any foreign currency translation adjustments;
minus (b) 75% of the amount by which such stockholders' equity has
been increased after the Initial Closing Date by the issuance and sale
by the Company or any of its Subsidiaries of equity securities in a
public offering.
Consolidated Total Debt" means, at any date, all Financing Debt of the
Company and its Subsidiaries on a Consolidated basis.
"Consolidated Total Net Debt" means, at any date, Consolidated Total
Debt minus cash and Cash Equivalents (other than cash and Cash Equivalents owned
by Foreign Subsidiaries and items described in clauses (b) and (f) of the
definition of "Cash Equivalents") to the extent such cash and Cash Equivalents
exceed $3,000,000.
"Credit Documents" means:
(a) this Agreement, the Notes, the Security Agreement, each
other agreement granting or facilitating the grant of Credit Security,
each Letter of Credit, each draft presented or accepted under a Letter
of Credit, the Foreign Subsidiary Subordination Agreement, the
documents evidencing, relating to, in respect of or in connection with
any Irish Loan, each Hedge Agreement provided by a Lender (or an
Affiliate of a Lender) to the Company or any of its Subsidiaries, each
as from time to time in effect;
(b) all financial statements, reports, notices or
certificates delivered to the Agent or any of the Lenders by the
Company, any of its Subsidiaries or any other Obligor in connection
herewith or therewith; and
(c) any other present or future agreement or instrument
from time to time entered into among the Company, any of its
Subsidiaries or any other Obligor, on one hand, and the Agent, any
Letter of Credit Issuer or all the Lenders or any Irish Lender, on the
other hand, relating to, amending or modifying this Agreement or any
other Credit Document referred to above or which is stated to be a
Credit Document, each as from time to time in effect.
7
"Credit Obligations" means all present and future liabilities,
obligations and Indebtedness of the Company, any of its Subsidiaries or any
other Obligor owing to the Agent or any Lender under or in connection with this
Agreement or any other Credit Document, including obligations in respect of
principal, interest, reimbursement obligations under Letters of Credit and Hedge
Agreements provided by a Lender (or an Affiliate of a Lender), Irish Loans
(subject to the proviso hereto), commitment fees, Letter of Credit fees, amounts
provided for in Sections 3.2.4, 3.7 and 10 and other fees, charges, indemnities
and expenses from time to time owing hereunder or under any other Credit
Document (whether accruing before or after a Bankruptcy Default and regardless
of whether allowed as a claim in bankruptcy or similar proceedings); provided,
however, that the aggregate principal amount of Irish Loans included in the
Credit Obligations at any one time outstanding shall not exceed $25,000,000 in
Irish Loan Equivalents.
"Credit Participant" is defined in Section 12.2.
"Credit Security" means all assets now or from time to time hereafter
subjected to a security interest, mortgage or charge (or intended or required so
to be subjected pursuant to the Security Agreement or any other Credit Document)
to secure the payment or performance of any of the Credit Obligations on a pari
passu, ratable basis among the holders of the Credit Obligations, including the
assets described in section 2.1 of the Security Agreement.
"Currency Exchange Agreement" means any currency swap, foreign exchange
contract or similar arrangement providing for protection against fluctuations in
currency exchange rates, either generally or under specific contingencies.
"Default" means any Event of Default and any event or condition which
with the passage of time or giving of notice, or both, would become an Event of
Default and the filing against the Company, any of its Subsidiaries or any other
Obligor of a petition commencing an involuntary case under the Bankruptcy Code.
"Delinquency Period" is defined in Section 11.4.4.
"Delinquent Lender" is defined in Section 11.4.4.
"Delinquent Payment" is defined in Section 11.4.4.
"Distribution" means, with respect to the Company (or other specified
Person):
(a) the declaration or payment of any dividend or
distribution, including dividends payable in shares of capital stock
of or other equity interests in the Company (or such specified Person),
on or in respect of any shares of any class of capital stock of or
other equity interests in the Company (or such specified Person);
(b) the purchase, redemption or other retirement of any
shares of any class of capital stock of or other equity interest in the
Company (or such specified Person) or of options, warrants or other
rights for the purchase of such shares, directly, indirectly through a
Subsidiary or otherwise;
8
(c) any other distribution on or in respect of any shares
of any class of capital stock of or equity or other beneficial interest
in the Company (or such specified Person);
(d) any payment of principal or interest with respect to,
or any purchase, redemption or defeasance of, any Indebtedness of the
Company (or such specified Person) which by its terms or the terms of
any agreement is subordinated to the payment of the Credit Obligations;
and
(e) any payment, loan or advance by the Company (or such
specified Person) to, or any other Investment by the Company (or such
specified Person)in, the holder of any shares of any class of capital
stock of or equity interest in the Company (or such specified Person),
or any Affiliate of such holder;
provided, however, that the term "Distribution" shall not include (i) dividends
payable in nonredeemable common stock of or other similar equity interests in
the Company (or such specified Person) or (ii) payments in the ordinary course
of business in respect of (A) reasonable compensation paid to employees,
officers and directors, (B) advances to employees for travel expenses, drawing
accounts and similar expenditures, (C) rent paid to, or accounts payable for
services rendered or goods sold by, non-Affiliates that own capital stock of or
other equity interests in the Company (or such specified Person) or (D)
licensing fees and management fees paid by the Company and its Subsidiaries to
each other.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules and regulations (including applicable
consent decrees and administrative orders and the Fenholloway River Agreement)
relating to public health and safety and protection of the environment,
including the federal Occupational Health and Safety Act.
"Equivalent Amount of United States Funds" means, as of any date of
calculation with respect to a particular amount of foreign currency, an amount
of United States Funds equal to such amount of foreign currency, computed (a) in
the case of a Mandatory Borrowing under Section 2.5.2, at the Agent's spot rate
on such date at New York, New York; provided, however, that if no rate of
exchange exists for effecting such spot purchases, the Equivalent Amount of
United States Funds shall mean the amount of United States Funds equivalent to
the actual cost to the Agent of obtaining the foreign currency in the amount and
at the place of payment on such date and (b) in all other cases, at the foreign
exchange rate published for such date in the Wall Street Journal.
"ERISA" means the federal Employee Retirement Income Security Act of
1974.
"ERISA Group Person" means the Company, any Subsidiary of the Company
and any Person which is a member of the controlled group or under common control
with the Company or any Subsidiary within the meaning of section 414 of the Code
or section 4001(a)(14) of ERISA.
"Euro" means such coin or currency of the Republic of Ireland and at
least one other member state of the European Monetary Union as at the time shall
be legal tender therein for the payment of public and private debts; provided,
however, that the Euro will include Irish punts for a transition period
9
prescribed by the European Monetary Union presently scheduled to expire in
January 2002 (as such transition period may be subsequently extended or
modified).
"Event of Default" is defined in Section 8.1.
"Exchange Act" means the federal Securities Exchange Act of 1934.
"Federal Funds Rate" means, for any day, the rate equal to the weighted
average (rounded upward to the nearest 1/8%) of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, (a) as such weighted average is published for such day
(or, if such day is not a Banking Day, for the immediately preceding Banking
Day) by the Federal Reserve Bank of New York or (b) if such rate is not so
published for such Banking Day, as determined by the Agent using any reasonable
means of determination. Each determination by the Agent of the Federal Funds
Rate shall, in the absence of manifest error, be conclusive.
"Fenholloway River Agreement" means the agreement between the State of
Florida Department of Environmental Protection and Buckeye Florida Limited
Partnership dated as of March 29, 1995.
"Final Maturity Date" means March 31, 2005.
"Financial Officer" of the Company (or other specified Person) means
its chief executive officer, chief financial officer, chief operating officer,
chairman, president, treasurer or any of its vice presidents whose primary
responsibility is for its financial affairs, all of whose incumbency and
signatures have been certified to the Agent by the secretary or other
appropriate attesting officer of the Company (or such specified Person).
"Financing Debt" means each of the items described in clauses (a)
through (f) of the definition of the term "Indebtedness" and, without
duplication, any Guarantee of such items.
"Fleet" means Fleet National Bank.
"Foreign Subsidiary" means each Subsidiary that is organized under the
laws of and conducting its business primarily in a jurisdiction outside of the
United States of America.
"Foreign Subsidiary Subordination Agreement" is defined in
Section 5.1.4.
"Funding Liability" means (a) any deposit which was used (or deemed by
Section 2.2.6 or 3.2.6 to have been used) to fund any portion of a Money Market
Loan or any portion of the Revolving Loan subject to a LIBOR Pricing Option, and
(b) any portion of a Money Market Loan or any portion of the Revolving Loan
subject to a LIBOR Pricing Option funded (or deemed by Section 2.2.6 or 3.2.6 to
have been funded) with the proceeds of any such deposit.
"GAAP" means generally accepted accounting principles as from time to
time in effect, including the statements and interpretations of the United
States Financial Accounting Standards Board; provided, however, that for
purposes of compliance with Section 6 (other than Section 6.4) and the related
definitions, (a) "GAAP" means such principles as in effect on June 30, 2000 as
10
applied by the Company and its Subsidiaries in the preparation of the audited
financial statements referred to in Section 7.2.1(a), and consistently followed,
without giving effect to any subsequent changes thereto and (b) in the event of
a change in generally accepted accounting principles after such date, either the
Company or the Required Lenders may request a change in the definition of
"GAAP", in which case the parties hereto shall negotiate in good faith with
respect to an amendment of this Agreement implementing such change.
"Granting Lender" is defined in Section 12.3.
"Guarantee" means, with respect to the Company (or other specified
Person):
(a) any guarantee by the Company (or such specified
Person), of the payment or performance of, or any contingent obligation
by the Company (or such specified Person), in respect of, any
Indebtedness or other obligation of any primary obligor;
(b) any other arrangement whereby credit is extended to a
primary obligor on the basis of any promise or undertaking of the
Company (or such specified Person), including any binding "comfort
letter" or "keep well agreement" written by the Company (or such
specified Person), to a creditor or prospective creditor of such
primary obligor, to (i) pay the Indebtedness of such primary obligor,
(ii) purchase an obligation owed by such primary obligor, (iii) pay for
the purchase or lease of assets or services regardless of the actual
delivery thereof or (iv) maintain the capital, working capital,
solvency or general financial condition of such primary obligor;
(c) any liability of the Company (or such specified
Person), as a general partner of a partnership in respect of
Indebtedness or other obligations of such partnership;
d) any liability of the Company (or such specified Person)
as a joint venturer of a joint venture in respect of Indebtedness or
other obligations of such joint venture;
(e) any liability of the Company (or such specified Person)
with respect to the tax liability of others as a member of a group
(other than a group consisting solely of the Company and its
Subsidiaries) that is consolidated for tax purposes; and
(f) reimbursement obligations, whether contingent or
matured, of the Company (or such specified Person) with respect to
letters of credit, bankers acceptances, surety bonds, other financial
guarantees and Interest Rate Protection Agreements (without duplication
of other Indebtedness supported or guaranteed thereby),
whether or not any of the foregoing are reflected on the balance sheet of the
Company (or such specified Person) or in a footnote thereto; provided, however,
that the term "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business. The amount of any Guarantee and the
amount of Indebtedness resulting from such Guarantee shall be the maximum amount
that the guarantor may become obligated to pay in respect of the obligations
(whether or not such obligations are outstanding at the time of computation).
11
"Guarantor" means each Subsidiary listed on the signature page hereto
or which subsequently becomes party to this Agreement as a Guarantor; provided,
however, that (a) in no event shall a Foreign Subsidiary constitute a Guarantor
and (b) the Company shall be a Guarantor with respect to Supported Irish Loans
participated to the Lenders under Section 2.5.2.
"Hazardous Material" means any pollutant, toxic or hazardous material
or waste, including any "hazardous substance" or "pollutant" or "contaminant" as
defined in section 101(14) of CERCLA or any other Environmental Law or regulated
as toxic or hazardous under RCRA or any other Environmental Law.
"Hedge Agreement" means, collectively, Currency Exchange Agreements and
Interest Rate Protection Agreements.
"Immaterial Subsidiary" means any Subsidiary of the Company whose
assets (at fair market value) do not exceed $500,000 and in which the net
Investment of the Company and its other Subsidiaries is less than $500,000.
"Indebtedness" means all obligations, contingent or otherwise, which in
accordance with GAAP are required to be classified upon the balance sheet of the
Company (or other specified Person) as liabilities, but in any event including
(without duplication):
(a) indebtedness for borrowed money;
(b) indebtedness evidenced by notes, debentures or similar
instruments;
(c) Capitalized Lease Obligations;
(d) the deferred purchase price of assets or securities,
including related noncompetition, consulting and stock repurchase
obligations (other than ordinary trade accounts payable within six
months after the incurrence thereof in the ordinary course of
business);
(e) mandatory redemption or dividend rights on capital
stock (or other equity), including provisions that require the exchange
of such capital stock (or other equity) for Indebtedness from the
issuer;
(f) reimbursement obligations, whether contingent or
matured, with respect to letters of credit, bankers acceptances,
surety bonds, other financial guarantees and Hedge Agreements
(without duplication of other Indebtedness supported or guaranteed
thereby);
(g) liabilities secured by any Lien existing on property
owned or acquired by the Company (or such specified Person), whether or
not the liability secured thereby shall have been assumed; and
(h) all Guarantees in respect of Indebtedness of others.
"Indemnified Party" is defined in Section 10.2.
12
"Initial Closing Date" means April 16, 2001 or such other date prior to
April 17, 2001 agreed to by the Company and the Agent as the first Closing Date
hereunder.
"Interest Rate Protection Agreement" means any interest rate swap,
interest rate cap, interest rate hedge or other contractual arrangement that
converts variable interest rates into fixed interest rates, fixed interest rates
into variable interest rates or other similar arrangements.
"Investment" means, with respect to the Company (or other specified
Person):
(a) any share of capital stock, partnership or other equity
interest, evidence of Indebtedness or other security issued by any
other Person;
(b) any loan, advance or extension of credit to, or
contribution to the capital of, any other Person;
(c) any Guarantee of the Indebtedness of any other Person;
(d) any acquisition of all or any part of the business of
any other Person or the assets comprising such business or part
thereof, excluding Capital Expenditures permitted by Section 6.5.4 and
purchases of inventory and other items in the ordinary course of
business; and
(e) any other similar investment.
The investments described in the foregoing clauses (a) through (e)
shall be included in the term "Investment" whether they are made or acquired by
purchase, exchange, issuance of stock or other securities, merger,
reorganization or any other method; provided, however, that the term
"Investment" shall not include (i) current trade and customer accounts
receivable for property leased, goods furnished or services rendered in the
ordinary course of business and payable in accordance with customary trade
terms, (ii) deposits, advances and prepayments to suppliers for property leased,
goods furnished and services rendered in the ordinary course of business, (iii)
advances to employees for travel expenses, drawing accounts and similar
expenditures, (iv) stock or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due to the Company (or
such specified Person) or as security for any such Indebtedness or claim or (v)
demand deposits in banks or similar financial institutions.
In determining the amount of outstanding Investments:
(A) the amount of any Investment shall be the cost thereof
minus any returns of capital in cash on such Investment (determined in
accordance with GAAP without regard to amounts realized as income on
such Investment);
(B) the amount of any Investment in respect of a purchase
described in clause (d) above shall be increased by the amount of any
Indebtedness assumed in connection with such purchase or secured by any
asset acquired in such purchase (whether or not any Financing Debt is
assumed) or for which any Person that becomes a Subsidiary is liable on
13
the date on which the securities of such Person are acquired and shall
be reduced by the amount of any reductions in such Financing Debt; and
(C) no Investment shall be increased as the result of an
increase in the undistributed retained earnings of the Person in which
the Investment was made or decreased as a result of an equity interest
in the losses of such Person.
"Irish Lender" means (a) any Lender (or any Affiliate of a Lender) or
(b) any other financial institution, in each case that has extended or is
extending Irish Loans and that has executed and delivered to the Company and the
Agent an agreement in substantially the form of Exhibit 1.
"Irish Loans" means any advances or other extensions of credit
denominated in Euros made by a Lender (or any Affiliate of a Lender) to Buckeye
Technologies Ireland Limited pursuant to a request by the Company under Section
2.5.1 or pursuant to separate agreements between Buckeye Technologies Ireland
Limited and such Irish Lender or its Affiliates; provided, however, that "Irish
Loans" as defined in the Prior Credit Agreement extended on or prior to the
Initial Closing Date by Scotiabank (Ireland) Limited in an aggregate amount of
Irish Loan Equivalents not exceeding $15,000,000 as of the Initial Closing Date
shall also constitute Irish Loans hereunder.
"Irish Loan Equivalents" means, at any date, an Equivalent Amount of
United States Funds equal to the aggregate principal amount of Irish Loans then
outstanding, computed as of the later of (a) the date the most recent advance of
any Irish Loan was made or (b) the last day of the most recently completed
fiscal quarter of the Company.
"ISP" is defined in Section 2.4.6.
"Legal Requirement" means any present or future requirement imposed
upon any of the Lenders or the Company and its Subsidiaries by any law, statute,
rule, regulation, directive, order, decree, guideline (or any interpretation
thereof by courts or of administrative bodies) of the United States of America,
or any jurisdiction in which any LIBOR Office is located or any state or
political subdivision of any of the foregoing, or by any board, governmental or
administrative agency, central bank or monetary authority of the United States
of America, any jurisdiction in which any LIBOR Office is located, or any
political subdivision of any of the foregoing, in each case having the force of
law; provided, however, that any such requirement imposed on any of the Lenders
not having the force of law shall be deemed to be a Legal Requirement for
purposes of Section 3 if such Lender reasonably believes that compliance
therewith is in the best interest of such Lender.
"Lender" means each of the Persons listed as lenders on the signature
page hereto, including Fleet in its capacity as a Lender and such other Persons
who may from time to time own a Percentage Interest in the Credit Obligations,
but the term "Lender" shall not include any Credit Participant in such capacity.
"Lending Officer" means such individuals whom the Agent or the
Swingline Lender, as the case may be, may designate by notice to the Company
from time to time as an officer who may receive telephone requests for
borrowings under Sections 2.1.3 or 2.3.1.
14
"Letter of Credit" is defined in Section 2.4.1.
"Letter of Credit Exposure" means, at any date, the sum of (a) the
aggregate face amount of all drafts that may then or thereafter be presented by
beneficiaries under all Letters of Credit then outstanding, plus (b) the
aggregate face amount of all drafts that the Letter of Credit Issuer has
previously accepted under Letters of Credit but has not paid.
"Letter of Credit Issuer" means, for any Letter of Credit, Fleet, or in
the event Fleet does not for any reason issue a requested Letter of Credit,
another Lender designated by the Agent to issue such Letter of Credit in
accordance with Section 2.4.
"LIBOR Basic Rate" means, for any LIBOR Interest Period:
(a) the rate of interest at which U.S. dollar deposits are
offered in the London interbank market in an amount approximately
equal to the portion of the Loan subject to the related LIBOR Pricing
Option for a period of time equal to such LIBOR Interest Period that
appears on the Telerate Page 3750 as of 11:00 a.m. London time two
Business Days prior to the Business Day on which such LIBOR Interest
Period begins or
(b) if no such rate appears on the Telerate Page 3750, the
rate of interest determined by the Agent to be the average of up to
four interest rates per annum at which U.S. Dollar deposits are offered
in the London interbank market in an amount approximately equal to the
portion of the Loan subject to the related LIBOR Pricing Option, for a
period of time equal to such LIBOR Interest Period which appear on the
Xxxxxx'x Screen LIBO Page as of 11:00 a.m. London time two Business
Days prior to the Business Day on which such LIBOR Interest Period
begins if at least two such offered rates so appear on the Xxxxxx'x
Screen LIBO Page or
(c) if no such rate appears on the Telerate Page 3750 and
fewer than two offered rates appear on the Xxxxxx'x Screen LIBO Page,
the rate of interest at which deposits in an amount comparable to the
portion of the Loan as to which the related LIBOR Pricing Option has
been elected and which have a term corresponding to such LIBOR Interest
Period are offered to the Agent by first class banks in the London
inter-bank market for delivery in immediately available funds at a
LIBOR Office on the first day of such LIBOR Interest Period as
determined by the Agent at approximately 10:00 a.m. (Boston time) two
Banking Days prior to the date upon which such LIBOR Interest Period is
to commence (which determination by such Reference Lender shall, in the
absence of manifest error, be conclusive).
"LIBOR Interest Period" means any period, selected as provided in
Section 3.2.1, of one, two, three or six months, commencing on any Banking Day
and ending on the corresponding date in the subsequent calendar month so
indicated (or, if such subsequent calendar month has no corresponding date, on
the last day of such subsequent calendar month); provided, however, that subject
to Section 3.2.3, if any LIBOR Interest Period so selected would otherwise begin
or end on a date which is not a Banking Day, such LIBOR Interest Period shall
instead begin or end, as the case may be, on the immediately preceding or
succeeding Banking Day as determined by the Agent in accordance with the then
current banking practice in the London inter-bank market with respect to
15
deposits at the applicable LIBOR Office, which determination by the Agent shall,
in the absence of manifest error, be conclusive.
"LIBOR Office" means such non-United States office or international
banking facility of any Lender as the Lender may from time to time select.
"LIBOR Pricing Options" means the options granted pursuant to Section
3.2.1 to have the interest on any portion of the Loan computed on the basis of a
LIBOR Rate.
"LIBOR Rate" for any LIBOR Interest Period means the rate, rounded
upward to the nearest 1/100%, obtained by dividing (a) the LIBOR Basic Rate for
such LIBOR Interest Period by (b) an amount equal to 1 minus the LIBOR Reserve
Rate; provided, however, that if at any time during such LIBOR Interest Period
the LIBOR Reserve Rate applicable to any outstanding LIBOR Pricing Option
changes, the LIBOR Rate for such LIBOR Interest Period shall automatically be
adjusted to reflect such change, effective as of the date of such change to the
extent required by the Legal Requirement implementing the change in the LIBOR
Reserve Rate.
"LIBOR Reserve Rate" means the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by any Legal Requirement to be maintained by any Lender against (a)
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System applicable to LIBOR Pricing Options, (b)
any other category of liabilities that includes deposits by reference to which
the interest rate on portions of the Loan subject to LIBOR Pricing Options is
determined, (c) the principal amount of or interest on any portion of the Loan
subject to a LIBOR Pricing Option or (d) any other category of extensions of
credit, or other assets, that includes loans subject to a LIBOR Pricing Option
by a non-United States office of any of the Lenders to United States residents.
"Lien" means, with respect to the Company (or any other specified
Person):
(a) any lien, encumbrance, mortgage, pledge, charge or
security interest of any kind upon any property or assets of the
Company (or such specified Person), whether now owned or hereafter
acquired, or upon the income or profits therefrom;
(b) the acquisition of, or the agreement to acquire,
any property or asset upon conditional sale or subject to any other
title retention agreement, device or arrangement (including a
Capitalized Lease);
(c) the sale, assignment, pledge or transfer for security
of any accounts, general intangibles or chattel paper of the Company
(or such specified Person), with recourse;
(d) in the case of securities, any purchase option, call or
similar purchase right of a third party; and
(e) the transfer of any tangible property or assets for the
purpose of subjecting such items to the payment of previously
outstanding Indebtedness in priority to payment of the general
creditors of the Company (or such specified Person).
16
"Loan" means the Revolving Loan, the Money Market Loan and the Swing
Line Loan, collectively.
"Loan Accounts" means each of the Revolving Loan Accounts, the Money
Market Loan Accounts and the Swingline Loan Account.
"Mandatory Borrowing" means a special mandatory borrowing under the
Revolving Loan contemplated by Sections 2.3.4 and 2.5.2.
"Margin Stock" means "margin stock" within the meaning of Regulations
T, U or X of the Board of Governors of the Federal Reserve System.
"Material Adverse Change" means, since any specified date or from the
circumstances existing immediately prior to the happening of any specified
event, a material adverse change in (a) the business, assets, financial
condition or income of the Company and its Subsidiaries (on a Consolidated
basis) or (b) the ability of the Obligors (i) to perform their material
obligations under the Credit Documents or (ii) to provide to the Agent and the
Lenders the rights and remedies contemplated by the Credit Documents.
"Material Agreements" is defined in Section 7.2.2.
"Maximum Amount of Revolving Credit" is defined in Section 2.1.2.
"Money Market Loan" is defined in Section 2.2.
"Money Market Loan Accounts" is defined in Section 2.2.5.
"Money Market Loan Closing Date" is defined in Section 2.2.1.
"Money Market Loan Interest Payment Date" is defined in Section 2.2.1.
"Money Market Loan Maturity Date" is defined in Section 2.2.1.
"Money Market Note" is defined in Section 2.2.5.
"Money Market Rates" is defined in Section 2.2.3.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" as
defined in section 4001(a)(3) of ERISA.
"Net Asset Sale Proceeds" means the cash proceeds of any sale or
disposition of assets after the Initial Closing Date, and the cash proceeds of
any insurance payments or condemnation awards on account of the destruction or
loss of property, by the Company or any of its Subsidiaries (other than asset
sales permitted by Section 6.10.1) net of (a) any Indebtedness permitted by
Section 6.6.7 (Capitalized Leases and purchase money indebtedness) secured by
assets being sold in such transaction required to be paid from such proceeds,
(b) income taxes that, as estimated by the Company in good faith, will be
required to be paid by the Company or any of its Subsidiaries in cash as a
17
result of, and within 15 months after, such sale or disposition (provided that
any such amounts that are not actually paid in taxes within such period shall
automatically become Net Asset Sale Proceeds), (c) reasonable reserves for
liabilities, indemnification, escrows and purchase price adjustments resulting
from the sale of assets, (d) transfer, sales, use and other similar taxes
payable in connection with such sale or disposition and (e) all reasonable
expenses of the Company or any of its Subsidiaries incurred in connection with
the transaction of (i) asset sales permitted by Section 6.10.1, or (ii) mergers
permitted by Section 6.10.2.
"Nonperforming Lender" is defined in Section 11.4.4.
"Notes" means the Revolving Notes, the Money Market Notes and the
Swingline Note.
"Obligor" means the Company, each Guarantor and each Person
guaranteeing or providing collateral for the Credit Obligations.
"Overdue Reimbursement Rate" means, on any date, a per annum rate of
interest equal to the highest Applicable Rate then in effect.
"Payment Date" means (a) with respect to interest payments with respect
to each portion of the Loan that is not then subject to a LIBOR Pricing Option,
the last Banking Day of each month and the Final Maturity Date and (b) for all
other purposes, the last Banking Day of each March, June, September and December
occurring after the Initial Closing Date and the Final Maturity Date.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
entity.
"Percentage Interest" means, with respect to any Lender, the Commitment
of such Lender with respect to the respective portions of the Loan and Letter of
Credit Exposure. For purposes of determining votes or consents by the Lenders,
the Percentage Interest of any Lender shall be computed as follows: (a) at all
times when no Event of Default under Section 8.1.1 and no Bankruptcy Default
exists, the ratio that the respective Commitments of such Lender bears to the
total Commitments of all Lenders as from time to time in effect and reflected in
the Register, and (b) at all other times, the ratio that the respective amounts
of the outstanding Loan and Letter of Credit Exposure owing to such Lender bear
to the total outstanding Loan and Letter of Credit Exposure owing to all
Lenders.
"Performing Lender" is defined in Section 11.4.4.
"Permitted Reinvestment" means, with respect to any transaction
resulting in Net Asset Sale Proceeds, the acquisition by the Company or a
Subsidiary of a business or other assets permitted by Section 6.8.5, or of other
assets permitted by Section 6.8, or, in the case of insurance or condemnation
proceeds, the repair or replacement by the Company or a Subsidiary of the assets
in question, in each of the foregoing cases that occurs on the date of, or
within 270 days after, such transaction.
"Permitted Reinvestment Reserve Amount" is defined in Section 4.2.2.
18
"Person" means any present or future natural person or any corporation,
association, partnership, joint venture, limited liability, joint stock or other
company, business trust, trust, organization, business or government or any
governmental agency or political subdivision thereof.
"Plan" means, at any date, any pension benefit plan subject to Title IV
of ERISA maintained, or to which contributions have been made or are required to
be made, by any ERISA Group Person within six years prior to such date.
"Prior Credit Agreement" means the Credit Agreement dated as of May 28,
1997, as in effect on the Initial Closing Date, among the Company, the lenders
parties thereto, Fleet National Bank, as lender and as agent for itself and the
other Lenders parties thereto.
"RCRA" means the federal Resource Conservation and Recovery Act, 42
U.S.C.ss.690, et seq.
"Receivables Securitization" means the sale, pledge or other
disposition by the Company or any of its Subsidiaries, with or without recourse,
of a bulk group of its accounts receivables in exchange for cash.
"Receivables Securitization Proceeds" means the cash proceeds (net of
reasonable out-of-pocket transaction fees and expenses) to the Company and its
Subsidiaries from a Receivables Securitization after the Initial Closing Date.
"Register" is defined in Section 12.1.3.
"Replacement Lender" is defined in Section 12.3.
"Request Date" is defined in Section 2.2.1.
"Required Lenders" means, with respect to any approval, consent,
modification, waiver or other action to be taken by the Agent or the Lenders
under the Credit Documents which require action by the Required Lenders, such
Lenders as own at least a majority of the Percentage Interests (so long as such
majority of the Percentage Interests comprises the Percentage Interests of at
least three Lenders at any time when the total number of Lenders is at least
five); provided, however, that with respect to any matters referred to in the
proviso to Section 15.1, Required Lenders means such Lenders as own at least the
respective portions of the Percentage Interests required by Section 15.1.
"Revolving Loan" is defined in Section 2.1.4.
"Revolving Loan Account" is defined in Section 2.1.4.
"Revolving Notes" is defined in Section 2.1.4.
"Securities Act" means the federal Securities Act of 1933.
"Security Agreement" is defined in Section 5.1.5.
19
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw
Hill Companies, Inc.
"SPV" is defined in Section 12.3.
"Subsidiary" means any Person of which the Company (or other specified
Person) shall at the time, directly or indirectly through one or more of its
Subsidiaries, (a) own at least 50% of the outstanding capital stock (or other
shares of beneficial interest) entitled to vote generally, (b) hold at least 50%
of the partnership, joint venture or similar interests or (c) be a general
partner or joint venturer.
"Supported Irish Lender" means an Irish Lender that is (a) a Lender or
an Affiliate of a Lender and (b) designated as a Supported Irish Lender in an
agreement in substantially the form of Exhibit 1.
"Supported Irish Loan Equivalents" means Irish Loan Equivalents
attributable to Supported Irish Loans.
"Supported Irish Loans" means Irish Loans extended by a Supported Irish
Lender, which Supported Irish Loans shall have the credit support of Mandatory
Borrowings to the extent provided under Section 2.5.2. "Irish Loans" as defined
in the Prior Credit Agreement extended on or prior to the Initial Closing Date
by Scotiabank (Ireland) Limited in an aggregate amount of Irish Loan Equivalents
not exceeding $15,000,000 as of the Initial Closing Date shall also constitute
Supported Irish Loans hereunder.
"Swingline Borrower" means the Company.
"Swingline Lender" means Fleet, in its capacity as swingline lender
hereunder.
"Swingline Loan" is defined in Section 2.3.3.
"Swingline Loan Account" is defined in Section 2.3.3.
"Swingline Note" is defined in Section 2.3.3.
"Swingline Rate" means the rate equal to the sum of (a) the Applicable
Rate calculated on the basis of the Base Rate, minus 1/2% per annum, plus (b) an
additional 2% per annum effective on the day the Agent notifies the Company that
the interest rates hereunder are increasing as a result of the occurrence and
continuance of an Event of Default until the earlier of such time as (i) such
Event of Default is no longer continuing or (ii) such Event of Default is deemed
no longer to exist, in each case pursuant to Section 8.3.
"Tax" means any present or future tax, levy, duty, impost, deduction,
withholding or other charges of whatever nature at any time required by any
Legal Requirement (a) to be paid by any Lender or (b) to be withheld or deducted
from any payment otherwise required hereby to be made to any Lender, in each
case on or with respect to such Lender's obligations hereunder, the Loan, any
payment in respect of the Credit Obligations or any Funding Liability not
included in the foregoing; provided, however, that the term "Tax" shall not
20
include taxes imposed upon or measured by the net income of such Lender (other
than withholding taxes that are not creditable for the jurisdiction imposing
such withholding taxes against taxes imposed upon or measured by the net income
of such Lender).
"UCP" is defined in Section 2.4.6.
"United States Funds" means such coin or currency of the United States
of America as at the time shall be legal tender therein for the payment of
public and private debts.
"Unrestricted Affiliate" means a Person which the Company indicates in
writing to the Agent will constitute an "Unrestricted Affiliate" hereunder,
including joint ventures and Persons in which the Company and its Subsidiaries
have a non-controlling equity interest.
"Wholly Owned Subsidiary" means any Subsidiary of which all of the
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally (other than directors' qualifying shares or, in the case of
Foreign Subsidiaries, shares required to be held by foreign nationals) is owned
by the Company (or other specified Person) directly, or indirectly through one
or more Wholly Owned Subsidiaries.
2. The Credits.
2.1. Revolving Credit.
2.1.1. Revolving Loan. Subject to all the terms and
conditions of this Agreement and so long as no Default exists, from time
to time on and after the Initial Closing Date and prior to the Final
Maturity Date the Lenders will, severally in accordance with their
respective Percentage Interests, make loans to the Company in such
amounts as may be requested by the Company in accordance with Section
2.1.3. The sum of the aggregate principal amount of loans made under
this Section 2.1.1 at any one time outstanding plus the Money Market
Loans plus the Swingline Loan plus the Letter of Credit Exposure plus
the Supported Irish Loan Equivalents shall in no event exceed the
Maximum Amount of Revolving Credit. In no event will the principal
amount of loans made by any Lender pursuant to this Section 2.1 at any
one time outstanding exceed such Lender's Commitment.
2.1.2. Maximum Amount of Revolving Credit. The term "Maximum
Amount of Revolving Credit" means the lesser of:
(a)(i) $215,000,000 minus (ii) Net Asset Sale Proceeds to the
extent (A) such Net Asset Sale Proceeds exceed both (1) $5,000,000 in
any fiscal year and (2) $25,000,000 in the aggregate after the Initial
Closing Date and (B) the amount of such excess in the foregoing clause
(A) is not allocated to an effective Permitted Reinvestment Reserve
Amount, minus (iii) Receivables Securitization Proceeds, minus (iv)
$15,000,000 at any time when neither a Supported Irish Loan nor a
Letter of Credit for the benefit of an Irish Lender is outstanding; or
21
(b) the amount (in an integral multiple of $1,000,000) to
which the Maximum Amount of Revolving Credit shall have been
irrevocably reduced from time to time by notice from the Company to the
Agent.
2.1.3. Borrowing Requests. The Company may from time to time
request a loan under Section 2.1.1 by providing to the Agent a notice
(which may be given by a telephone call received by a Lending Officer
if promptly confirmed in writing). Such notice must be not later than
noon (Boston time) on the first Banking Day (third Banking Day if any
portion of such loan will be subject to a LIBOR Pricing Option on the
requested Closing Date) prior to the requested Closing Date for such
loan. The notice must specify (a) the amount of the requested loan
(which shall not be less than $3,000,000 and an integral multiple of
$500,000) and (b) the requested Closing Date therefor (which shall be
a Banking Day). Upon receipt of such notice, the Agent will promptly
inform each other Lender (by telephone or otherwise). Each such
loan will be made at the Boston Office by depositing the amount
thereof to the general account of the Company with the Agent. In
connection with each such loan, the Company shall furnish to the Agent
a certificate in substantially the form of Exhibit 5.2.1.
2.1.4. Revolving Loan Account; Revolving Notes. The aggregate
principal amount of the loans made under this Section 2.1 at any one
time outstanding is referred to as the "Revolving Loan". The Agent
will establish on its books a loan account for the Company (the
"Revolving Loan Account") which the Agent shall administer as follows:
(a) the Agent shall add to the Revolving Loan Account, and the
Revolving Loan Account shall evidence, the amount of the Revolving Loan
from time to time and (b) the Agent shall reduce the Revolving Loan
Account by the amount of all payments made on account of the Revolving
Loan from time to time. The Revolving Loan shall be deemed owed to each
Lender severally in accordance with such Lender's Percentage Interest
therein, and all payments credited to the Revolving Loan Account shall
be for the account of each Lender in accordance with its Percentage
Interest. The Company's obligations to pay each Lender's Percentage
Interest in the Revolving Loan shall be evidenced by a separate note of
the Company in substantially the form of Exhibit 2.1.4 (the "Revolving
Notes"), payable to each Lender in maximum principal amount equal to
such Lender's Percentage Interest in the Revolving Loan.
2.2. Money Market Rate Credit. As provided in this Section 2.2, the
Company may request, and one or more Lenders, each acting in its sole and
absolute discretion, may offer to make, loans on a money market basis (each such
loan made by any of the Lenders pursuant to this Section 2.2 being referred to
as a "Money Market Loan"), which the Company may, in its sole and absolute
discretion, agree to accept; provided, however, that in no event shall the sum
of the aggregate Money Market Loans at any one time outstanding plus the
Revolving Loan plus the Swingline Loan plus the Letter of Credit Exposure plus
the Supported Irish Loan Equivalents exceed the Maximum Amount of Revolving
Credit.
2.2.1. Request by the Company. Subject to all the terms and
conditions of this Agreement and so long as no Default exists, the
Company may, at any time prior to the Final Maturity Date, by telex or
telecopy notice to the Agent substantially in the form of Exhibit 2.2.1
received not later than 12:00 noon (Boston time) on any Banking Day
22
(the "Request Date"), request bids for loans pursuant to this Section
2.2 to be made on the following Banking Day (the "Money Market Loan
Closing Date"), such request to specify:
(a) the aggregate amount of the proposed loans, which shall
not be less than $3,000,000 and which shall be in integral multiples
of $500,000,
(b) the proposed maturity dates (each such date a "Money
Market Loan Maturity Date") for such proposed loans (which maturity
dates shall be not later than the earlier of (i) the 180th day
following the applicable Money Market Loan Closing Date and (ii) the
Final Maturity Date) and,
(c) the proposed dates (each such date a "Money Market Loan
Interest Payment Date"), if any, prior to the applicable Money Market
Loan Maturity Date on which accrued but unpaid interest shall be due
and payable on the principal amount of such proposed loans; provided,
however, that in the event the proposed Money Market Loan Maturity Date
is more than 90 days after the proposed Money Market Loan Closing Date,
the Company shall also pay accrued and unpaid interest on the proposed
loans on the 90th day after the proposed Money Market Loan Closing
Date. No more than 20 LIBOR Pricing Options and Money Market Loans in
the aggregate may be outstanding at any one time.
2.2.2. Dissemination of Requests for Bids for Money Market
Loans. Promptly upon receipt of each request submitted by the Company
pursuant to Section 2.2.1, and in any event not later than 3:00 p.m.
(Boston time) on the applicable Request Date, the Agent shall, by telex
or telecopy notice (or by telephonic notice on a reasonable efforts
basis, promptly confirmed by telex or telecopy) to each Lender in
substantially the form of Exhibit 2.2.2, notify each Lender of such
request, which notice shall constitute an invitation on behalf of the
Company for each Lender to submit bids pertaining to the proposed Money
Market Loans in accordance with Section 2.2.3.
2.2.3. Bids for Money Market Loans. Each Lender may, in its
sole and absolute discretion, respond to such invitation by submitting
a bid by telex or telecopy notice to the Agent no later than 10:00 a.m.
(Boston time) on the proposed Money Market Loan Closing Date. Such
notice shall be in substantially the form of Exhibit 2.2.3A, which
notice shall constitute an offer by such Lender to the Company to make
Money Market Loans on the proposed Money Market Loan Closing Date in
the principal amounts specified in the notice from such Lender, which
principal amounts (a) may be for all or any portion of the proposed
Money Market Loans, notwithstanding the Percentage Interest of such
Lender in the Revolving Loan and Letter of Credit Exposure, (b) may be
different principal amounts for different Money Market Loan Maturity
Dates (subject to an over-all maximum) and (c) shall be an integral
multiple of $1,000,000 maturing on the Money Market Loan Maturity Dates
requested by the Company, with accrued and unpaid interest on the
principal amount thereof to be due and payable on the Money Market Loan
Interest Payment Dates, if any, requested by the Company, and on such
Money Market Loan Maturity Dates, such interest to accrue at the rates
per annum (which shall be in integral multiples of 1/100%) specified in
23
such notice (the "Money Market Rates"). The Agent shall disregard any
bid (i) not submitted by 10:00 a.m. (Boston time) on the proposed Money
Market Loan Closing Date or (ii) not substantially in the form of
Exhibit 2.2.3A, or not complete, or containing qualifying, conditional
or similar language, or terms different from or in addition to those
set forth in the pertinent request, and any late or non-conforming bid
shall be deemed not to have been given for any purpose of this
Agreement. The Agent shall promptly, and in any event not later than
11:00 a.m. (Boston time) on the proposed Money Market Loan Closing
Date, by telephonic notice to the Company, confirmed in writing,
forward to the Company in substantially the form of Exhibit 2.2.3B,
all bids submitted in compliance with this Section 2.2.3.
Notwithstanding the foregoing provisions of this Section 2.2.3, the
Lender constituting the Agent, shall submit its own bid, if any,
to the Company by telex or telecopy not later than 9:45 a.m. (Boston
time) on the proposed Money Market Loan Closing Date.
2.2.4. Acceptance of Bids by the Borrower. Not later than
Noon (Boston time) on the applicable Money Market Loan Closing Date,
the Company shall by telex or telecopy notice to the Agent in
substantially the form of Exhibit 2.2.4A, indicate its acceptance or
non-acceptance of each offer submitted pursuant to Section 2.2.3. In
the case of acceptance, such notice shall be irrevocable and shall
specify the aggregate principal amount of each offered Money Market
Loan that is accepted. Such notice shall be deemed to constitute the
certification of the Company that the closing conditions for such Money
Market Loans contained in Section 5.2 (other than the delivery of an
officer's certificate) have been satisfied. The Company may accept
each such offer in whole or in part; provided, however, that (a) the
aggregate principal amount of all Money Market Loans accepted and made
on any Money Market Loan Closing Date may not exceed the applicable
amount set forth in the applicable request, (b) the principal amount
of each Money Market Loan shall be an integral multiple of $1,000,000,
and (c) acceptance of offers for Money Market Loans with the same
Money Market Loan Maturity Date may be made only on the basis of
ascending quoted Money Market Rates; and provided, further, that if
offers are made by two or more Lenders having the same Money Market
Rate for a greater aggregate principal amount than the amount in
respect of which offers at such rate are accepted, the principal amount
of such Money Market Loans in respect of which such offers are accepted
at such rate shall be allocated by the Agent among such Lenders as
nearly as possible (in integral multiples of $1,000,000) in proportion
to the aggregate principal amount of such offers. Determinations by
the Agent of the amounts of Money Market Loans pursuant to the
immediately preceding sentence shall be conclusive in the absence of
manifest error. The Agent shall, not later than 1:00 p.m. (Boston
time) on the Money Market Loan Closing Date, notify each Lender who
submitted an offer for the particular loans requested pursuant to
Section 2.2.1 whether any offer has been accepted (substantially in the
form of Exhibit 2.2.4B) or rejected (substantially in the form of
Exhibit 2.2.4C) and, if accepted, in what principal amount and
maturity. In the event the Company fails to provide such notice to the
Agent by 12:00 noon (Boston time) on the Money Market Loan Closing
Date, the Agent may conclusively presume that all such offers have been
rejected by the Company and, in such event, the Agent shall, not later
than 1:00 p.m. (Boston time), so notify each Lender which submitted an
offer. Each time a Money Market Loan is made, the Agent shall send a
24
notice to the Company and each Lender in substantially the form of
Exhibit 2.2.4D specifying the principal amount and maturity date of
such Money Market Loan.
2.2.5. Funding by the Agent; Money Market Loan Account, etc.
Each Money Market Loan by any Lender will be made on the terms offered
by such Lender and accepted by the Company in accordance with this
Section 2.2 at the Boston Office on the applicable Money Market Loan
Closing Date by adding the amount thereof to the applicable Money
Market Loan Accounts and either (a) by crediting the amount thereof to
the Revolving Loan Accounts of the Company for the account of the
Lenders in accordance with their respective Percentage Interests
therein or (b) if the Company shall have specified by written notice to
the Agent, by crediting the amount thereof to the general account of
the Company with the Agent at the Boston Office. In conjunction with
each closing under this Section 2.2, the Company shall furnish to the
Agent by telecopy not later than 4:00 p.m. (Boston time) on the
applicable Money Market Loan Closing Date (with a duplicate furnished
promptly by mail) a certificate dated such Money Market Loan Closing
Date in substantially the form of Exhibit 5.2.1 and signed by the
Company, together with any other documents required by Section 5.2.
(a) Money Market Loan Account. The Agent will establish on
its books separate loan accounts (the "Money Market Loan Accounts") for
each Lender extending a Money Market Loan to the Company which the
Agent shall administer as follows: (a) the Agent shall debit to the
pertinent Money Market Loan Account, and the pertinent Money Market
Loan Account shall evidence, the principal amount of all Money Market
Loans from time to time made by such Lender to the Company and (b) the
Agent shall credit to the pertinent Money Market Loan Account of the
Company on whose behalf payment is made, all payments made on account
of the principal amount of Indebtedness evidenced by the pertinent
Money Market Loan Account. The Agent shall also maintain records of
the Money Market Rate and Money Market Loan Maturity Date with respect
to each Money Market Loan. Upon the request of any Lender, the Company
shall issue a note in substantially the form of Exhibit 2.2.5 (a "Money
Market Note") evidencing the Indebtedness evidenced by such Lender's
Money Market Loan Account.
(b) Maturity Date; Interest; Repayment. The stated
maturity date of each Money Market Loan shall be the applicable Money
Market Loan Maturity Date for such Money Market Loan. The Company will
pay interest on the principal amount of each Money Market Loan at the
applicable Money Market Rate (plus an additional 2% per annum effective
on the day the Agent notifies the Company that the interest rates
hereunder are increasing as a result of the occurrence and continuance
of an Event of Default under Section 8.1.1 until the earlier of such
time as (a) such Event of Default is no longer continuing or (b) such
Event of Default is deemed pursuant to Section 8.3 no longer to exist)
for such Money Market Loan on each applicable Money Market Loan
Interest Payment Date, if any, and on the applicable Money Market Loan
Maturity Date for such Money Market Loan. Upon the maturity of any
Money Market Loan, so long as either (i) no Event of Default then
exists or (ii) the Agent shall have received the consent of all the
Lenders if an Event of Default then exists, the Agent shall debit the
Revolving Loan Accounts of the Company in the principal amount of such
25
Money Market Loan for the account of the Lenders in accordance with
their respective Revolving Percentage Interests and shall credit the
same amount to the pertinent Money Market Loan Account.
2.2.6. Prepayments in Respect of Money Market Loans. If any
Money Market Loan is prepaid by the Company prior to the applicable
Money Market Loan Maturity Date (including as a result of
acceleration), the Company will make the payment, if any, which would
be required by Section 3.2.4 with respect to such prepayment (such
payment to be calculated as if (a) such Money Market Loan constituted
a portion of the Revolving Loan subject to a LIBOR Pricing Option and
(b) the applicable Money Market Rate was the Basic LIBOR Rate). For
purposes of this Section 2.2.6, if any portion of a Money Market Loan
which was to have been made pursuant to this Section 2.2 is not
outstanding after the close of business on the applicable Money
Market Loan Closing Date other than by reason of a Lender failing to
perform its obligations hereunder, the Company shall be deemed to have
prepaid such portion of the Money Market Loan.
2.3. Swingline Credit.
2.3.1. Swingline Loan. Subject to all the terms and
conditions of this Agreement and so long as no Default exists, from time
to time on and after the Initial Closing Date and prior to the Final
Maturity Date, the Swingline Lender will make loans to the Company in
such amounts as may be requested by the Company in accordance with
Section 2.3.2. The sum of the aggregate principal amount of loans made
under this Section 2.3 at any one time outstanding plus the Money Market
Loans plus the Revolving Loan plus the Letter of Credit Exposure plus
the Supported Irish Loan Equivalents shall in no event exceed the
Maximum Amount of Revolving Credit. In no event will the principal
amount of loans made pursuant to this Section 2.3 at any one time
outstanding exceed $15,000,000.
2.3.2. Borrowing Requests. The Company may from time to time
request a loan under Section 2.3.1 by providing to the Swingline Lender
a notice (which may be given by a telephone call received by a Lending
Officer). Such notice must be not later than 2:00 p.m. (Boston time)
on the requested Closing Date (which must be a Banking Day) for such
loan. The notice must specify the amount of the requested loan (which
shall be not less than $100,000 and an integral multiple of $50,000).
Each such loan will be made at the Boston office by depositing the
amount thereof to the general account of the Company with the Swingline
Lender. In connection with each such loan, the Company shall furnish to
the Swingline Lender a certificate in substantially the form of
Exhibit 5.2.1.
2.3.3. Swingline Loan Account; Swingline Notes. The Swingline
Lender will establish on its books a loan account for the Company
(the "Swingline Loan Account") which the Swingline Lender shall
administer as follows: (a) the Swingline Lender shall add to the
Swingline Loan Account, and the Swingline Loan Account shall evidence,
the principal amount of all loans from time to time made by the
Swingline Lender to the Company pursuant to Section 2.3.1 and (b) the
Swingline Lender shall reduce the Swingline Loan Account by the amount
of all payments made on account of the Indebtedness evidenced by the
Swingline Loan Account. The aggregate principal amount of the
26
Indebtedness evidenced by the Swingline Loan Account is referred to as
the "Swingline Loan". The Company's obligation to pay the Swingline
Loan shall be evidenced by a note of the Company in substantially the
form of Exhibit 2.3.3 (the "Swingline Note"), payable to the Swingline
Lender in maximum principal amount equal to the Swingline Loan.
2.3.4. Conversion of Swingline Loan into Revolving Loan. On
any Banking Day after the occurrence and during the continuance of an
Event of Default, the Swingline Lender may, in its sole discretion, give
notice to the other Lenders and the Company that the Swingline Loan
shall be paid in full with a Mandatory Borrowing. Such a notice of a
Mandatory Borrowing shall be deemed to have been automatically given
upon a Bankruptcy Default or upon the exercise of any of the remedies
provided in Section 8.2. Upon the giving of any such notice or deemed
notice, a Mandatory Borrowing under the Revolving Loan in the amount
of the Swingline Loan shall be made on the next Banking Day from all
Lenders in accordance with their respective Percentage Interests in the
Revolving Loan, and the proceeds thereof shall be applied to the
Swingline Lender as a repayment of the Swingline Loan. Each Lender
irrevocably agrees to make such loan pursuant to each such Mandatory
Borrowing notice in the amount and in the matter specified above in this
Section 2.3.4, notwithstanding (a) whether any conditions specified in
Section 5 have been satisfied, (b) that a Default or an Event of Default
has occurred and is continuing or (c) the date of such Mandatory
Borrowing. In the event that any Mandatory Borrowing cannot for any
reason be made on the date required above (including as a result of the
commencement of a proceeding under the Bankruptcy Code), each Lender
shall promptly purchase from the Swingline Lender as of the date the
Mandatory Borrowing otherwise would have occurred such participation in
the Swingline Loan as shall be necessary to cause the Lenders to share
in the Swingline Loan ratably based upon their respective Percentage
Interests in the Revolving Loan. In the event of such participations,
all interest payable on the Swingline Loan shall be for the account of
the Swingline Lender until the date on which the participations are
required to be purchased and, to the extent attributable to the
purchased participations, shall be payable to the participants from and
after such date. At the time any such purchase of participations is
actually made, the purchasing Lender shall pay the Swingline Lender
interest on the principal amount of the participation purchased at the
overnight Federal Funds Rate for each day, commencing with the date the
Mandatory Borrowing otherwise would have occurred to the date of
payment for such participation.
2.4. Letters of Credit.
2.4.1. Issuance of Letters of Credit. Subject to all the
terms and conditions of this Agreement and so long as no Default exists,
from time to time on and after the Initial Closing Date and prior to the
Final Maturity Date, the Letter of Credit Issuer will issue for the
account of the Company one or more irrevocable documentary or standby
letters of credit (together with outstanding letters of credit in the
aggregate amount of approximately $859,000 issued by Fleet under the
Prior Credit Agreement that will continue as Letters of Credit issued
under this Agreement, the "Letters of Credit"). The sum of Letter
of Credit Exposure plus the Revolving Loan plus the Money Market Loan
plus the Swingline Loan plus the Supported Irish Loan Equivalents shall
27
in no event exceed the Maximum Amount of Revolving Credit. Letter of
Credit Exposure shall in no event exceed $50,000,000.
2.4.2. Requests for Letters of Credit. The Company may from
time to time request a Letter of Credit to be issued by providing to the
Letter of Credit Issuer (and the Agent if the Letter of Credit Issuer is
not the Agent) a notice which is actually received not less than five
Banking Days prior to the requested Closing Date for such Letter of
Credit specifying (a) the amount of the requested Letter of Credit,
(b) the beneficiary thereof, (c) the requested Closing Date and (d) the
principal terms of the text for such Letter of Credit. Each Letter of
Credit will be issued by forwarding it to the beneficiary thereof
as directed in writing by the Company. In connection with the issuance
of any Letter of Credit, the Company shall furnish to the Letter of
Credit Issuer (and the Agent if the Letter of Credit Issuer is not the
Agent) a certificate in substantially the form of Exhibit 5.2.1 and any
customary application form required by the Letter of Credit Issuer. In
the event of any inconsistency between such application form and this
Agreement, this Agreement shall govern.
2.4.3. Form and Expiration of Letters of Credit. Each Letter
of Credit issued under this Section 2.4 and each draft accepted or paid
under such a Letter of Credit shall be issued, accepted or paid, as the
case may be, by the Letter of Credit Issuer at its principal office. No
Letter of Credit shall provide for the payment of drafts drawn
thereunder, and no draft shall be payable, at a date which is later than
the earlier of (a) the Final Maturity Date or (b) (i) in the case of any
standby Letter of Credit not described in clause (ii) below, the first
anniversary of the date of issuance, (ii) in the case of any direct-pay
Letter of Credit issued in connection with industrial development bonds
permitted by Section 6.6.19, such expiration date as may be customary in
similar transactions and reasonably acceptable to the Required Lenders
(but in any event no earlier than the first anniversary of the date of
issuance) and (iii) in the case of any other Letter of Credit, the date
180 days after the date of issuance. Each Letter of Credit and each
draft accepted under a Letter of Credit shall be in such form and
minimum amount, and shall contain such terms, as the Letter of Credit
Issuer and the Company may agree upon at the time such Letter of Credit
is issued, including a requirement of not less than three Banking Days
after presentation of a draft before payment must be made thereunder.
2.4.4. Lenders' Participation in Letters of Credit. Upon the
issuance of any Letter of Credit, a participation therein, in an amount
equal to each Lender's Percentage Interest, shall automatically be
deemed granted by the Letter of Credit Issuer to each Lender on the date
of such issuance and the Lenders shall automatically be obligated, as
set forth in Section 11.4, to reimburse the Letter of Credit Issuer to
the extent of their respective Percentage Interests for all obligations
incurred by the Letter of Credit Issuer to third parties in respect of
such Letter of Credit not reimbursed by the Company. The Letter of
Credit Issuer will send to each Lender (and to the Agent if the Letter
of Credit Issuer is not the Agent) a confirmation regarding the
participations in Letters of Credit outstanding during such month.
28
2.4.5. Reimbursement of Payment. At such time as a Letter of
Credit Issuer makes any payment on a draft presented or accepted under
a Letter of Credit, the amount of such payment shall be considered a
loan under Section 2.1.1 (regardless of whether the conditions set
forth in Section 5.2 are satisfied) and part of the Revolving Loan as
if the Company had paid in full the amount required with respect to the
Letter of Credit by borrowing such amount under Section 2.1.1, except
as provided below. In the event such amount would cause the Revolving
Loan to exceed the Maximum Amount of Revolving Credit or if during
the existence of an Event of Default the Agent provides written notice
to the Company that Letter of Credit payments will no longer be
considered loans under Section 2.1.1, the Company will on demand pay
to the Agent in immediately available funds the amount of such payment.
2.4.6. UCP; ISP. As to any Letter of Credit that is a
documentary letter of credit, the most recent Uniform Customs and
Practice for Documentary Credits adopted by a Congress of the
International Chamber of Commerce, and any subsequent revisions thereof
approved by a Congress of the International Chamber of Commerce and
adhered to by the Letter of Credit Issuer (the "UCP"), shall be binding
on the Company and the Letter of Credit Issuer except to the extent
otherwise provided herein, in any Letter of Credit or in any other
Credit Document. As to any Letter of Credit that is a standby letter
of credit, the most recent International Standby Practices adopted by a
Congress of the International Chamber of Commerce, and any subsequent
revisions thereof approved by a Congress of the International Chamber
of Commerce and adhered to by the Letter of Credit Issuer (the "ISP"),
shall be binding on the Company and the Letter of Credit Issuer except
to the extent otherwise provided herein, in any Letter of Credit or in
any other Credit Document. Without limiting the foregoing, in the
event of an unexpected closure of the Letter of Credit Issuer, Letter
of Credit draws may be made up to only two Banking Days after the
reopening of the Letter of Credit Issuer rather than the 30 day period
provided in Rule 3.14(a) of the ISP. Anything in the UCP or the ISP to
the contrary notwithstanding:
(a) With respect to each Letter of Credit, neither the
Letter of Credit Issuer nor its correspondents shall be responsible for
or shall have any duty to ascertain (unless the Letter of Credit Issuer
or such correspondent is grossly negligent or willful in failing so to
ascertain):
(i) the genuineness of any signature or the
validity, form, sufficiency, accuracy, genuineness or legal
effect of any endorsements;
(ii) delay in giving, or failure to give,
notice of arrival, notice of refusal of documents or of
discrepancies in respect of which any Letter of Credit Issuer
refuses the documents or any other notice, demand or protest;
(iii) the performance by any beneficiary under any
Letter of Credit of such beneficiary's obligations to the
Company;
(iv) inaccuracy in any notice received by the
Letter of Credit Issuer;
29
(v) the validity, form, sufficiency, accuracy,
genuineness or legal effect of any instrument, draft,
certificate or other document required by such Letter of Credit
to be presented before payment of a draft if such instrument,
draft, certificate or other document appears on its face to
comply with the requirements of the Letter of Credit, or the
office held by or the authority of any Person signing any of
the same; or
(vi) failure of any instrument to bear any
reference or adequate reference to such Letter of Credit, or
failure of any Person to note the amount of any instrument on
the reverse of such Letter of Credit or to surrender such
Letter of Credit or to forward documents in the manner required
by such Letter of Credit.
(b) Except insofar as a particular Letter of Credit
contains express, contrary instructions, the Letter of Credit Issuer
may honor as complying with the terms of any Letter of Credit and with
this Agreement any drafts or other documents otherwise in order signed
or issued by an administrator, executor, conservator, trustee in
bankruptcy, debtor in possession, assignee for benefit of creditors,
liquidator, receiver or other legal representative of the party
authorized under such Letter of Credit to draw or issue such drafts or
other documents.
(c) The occurrence of any of the events referred to in the
UCP or the ISP or in the preceding clauses of this Section 2.4.6 shall
not affect or prevent the vesting of any of the Letter of Credit
Issuer's rights or powers hereunder or the Company's obligation to make
reimbursement (whether by cash payment or refinancing with proceeds of
the Revolving Loan) of amounts paid under any Letter of Credit or any
draft accepted thereunder.
(d) In the event of any conflict between the provisions of
this Agreement and either the UCP or the ISP, the provisions of this
Agreement shall govern.
2.4.7. Subrogation. Upon any payment by a Letter of Credit
Issuer under any Letter of Credit and until the reimbursement of such
Letter of Credit Issuer by the Company with respect to such payment,
the Letter of Credit Issuer shall be entitled to be subrogated to, and
to acquire and retain, the rights which the Person to whom such payment
is made may have against the Company and its Subsidiaries, all for the
benefit of the Lenders. The Company and its Subsidiaries will take
such action as the Letter of Credit Issuer may reasonably request,
including requiring the beneficiary of any Letter of Credit to execute
such documents as the Letter of Credit Issuer may reasonably request,
to assure and confirm to the Letter of Credit Issuer such subrogation
and such rights, including the rights, if any, of the beneficiary to
whom such payment is made in accounts receivable, inventory and other
properties and assets of any Obligor.
2.4.8. Modification, Consent, etc. If the Company requests or
consents in writing to any modification or extension of any Letter of
Credit, or waives any failure of any draft, certificate or other
document to comply with the terms of such Letter of Credit,
and if the Letter of Credit Issuer consents thereto, the Letter of
30
Credit Issuer shall be entitled to rely on such request, consent or
waiver. This Agreement shall be binding upon the Company with respect
to such Letter of Credit as so modified or extended, and with respect
to any action taken or omitted by such Letter of Credit Issuer pursuant
to any such request, consent or waiver.
2.5. Irish Loans; Mandatory Borrowing.
2.5.1. Supported Irish Loan Advances. So long as the Lender
or the Affiliate of a Lender from whom an advance of a Supported Irish
Loan by the Company or Buckeye Technologies Ireland Limited is
requested has not received a written notice from the Company that a
Default exists, the Company may, at any time prior to the Final
Maturity Date, by at least two Banking Days' telex or telecopy notice
to the Agent and any Supported Irish Lender, request bids for the
advance of an Irish Loan in Euros to Buckeye Technologies Ireland
Limited in the amount and on the date specified in such notice. The
Supported Irish Lender receiving such notice may accept or reject such
request, both in its sole discretion. Any acceptance of such request
may be made within one Banking Day after receipt of such request by
telex or telecopy notice to the Agent and the Company or Buckeye
Technologies Ireland Limited. Prior to receiving any advance of a
Supported Irish Loan, the Company or Buckeye Technologies Ireland
Limited shall certify to the applicable Supported Irish Lender that no
Default exists. The final maturity date of any Supported Irish Loan
may not extend later than the Final Maturity Date.
2.5.2. Conversion of Supported Irish Loans into Revolving
Loan. Subject to the further provisions of this Section 2.5.2, on any
Banking Day after the occurrence and during the continuance of an Event
of Default, any Supported Irish Lender may, in its sole discretion,
give notice to the other Lenders and the Company that the Supported
Irish Loans extended by it shall be paid in full with a Mandatory
Borrowing in an Equivalent Amount of United States Funds, computed as
of the date of payment. Such a notice of a Mandatory Borrowing shall
be deemed to have been automatically given upon a Bankruptcy
Default or upon the exercise of any of the remedies provided in Section
8.2. Upon the giving of any such notice or deemed notice, a Mandatory
Borrowing under the Revolving Loan in an Equivalent Amount of United
States Funds, computed as of the date of payment, equal to the amount
of the Supported Irish Loans extended by such Supported Irish Lender
shall be made on the next Banking Day from all Lenders in accordance
with their respective Percentage Interests in the Revolving Loan, and
the proceeds thereof shall be applied to the Supported Irish Loans
extended by such Supported Irish Lender. Each Lender irrevocably
agrees to make such loan pursuant to each such Mandatory Borrowing
notice in the amount and in the manner specified above in this Section
2.5.2, notwithstanding (a) whether any conditions specified in Section
5 have been satisfied, (b) that a Default or an Event of Default has
occurred and is continuing or (c) the date of such Mandatory Borrowing.
In the event that any Mandatory Borrowing cannot for any
reason be made on the date required above (including as a result of the
commencement of a proceeding under the Bankruptcy Code), subject to the
further provisions of this Section 2.5.2, each Lender shall promptly
purchase from such Supported Irish Lender as of the date the Mandatory
31
Borrowing otherwise would have occurred such participation in the
Supported Irish Loans extended by such Supported Irish Lender as shall
be necessary to cause the Lenders to share in the Supported Irish Loans
extended by it ratably based upon their respective Percentage Interests
in the Revolving Loan in an Equivalent Amount of United States Funds,
computed as of the date of payment. In the event of such
participations, all interest payable on the Supported Irish Loans
extended by such Supported Irish Lender shall be for the account of
such Supported Irish Lender until the date on which the participations
are required to be purchased and, to the extent attributable to the
purchased participations, shall be payable to the participants from and
after such date. At the time any such purchase of participations is
actually made, the purchasing Lender shall pay such Supported Irish
Lender interest on the principal amount of the participation purchased
at the overnight Federal Funds Rate for each day, commencing with the
date the Mandatory Borrowing otherwise would have occurred to the date
of payment for such participation. In no event shall the obligations of
any Lender under this Section 2.5.2 exceed such Lender's Commitment.
Notwithstanding the foregoing provisions of this Section 2.5.2, the
aggregate amount of Mandatory Borrowings made at any time under this
Section 2.5.2 shall not exceed the lesser of (a) $15,000,000 or (b) the
excess, if any, of the Maximum Amount of Revolving Credit over the sum
of the Revolving Loans plus the Money Market Loans plus the Swingline
Loan plus Letter of Credit Exposure, calculated with respect to each
Mandatory Borrowing as of the date such Mandatory Borrowing is made.
2.5.3. Maximum Amount of Irish Loans; Notices. The Company
shall ensure that, after giving effect to the advance of each Irish
Loan, (a) the aggregate of all Irish Loan Equivalents shall not exceed
$25,000,000 and (b) the aggregate of all Supported Irish Loan
Equivalents shall not exceed the lesser of (i) $15,000,000 or (ii) the
excess, if any, of the Maximum Amount of Revolving Credit over the sum
of the Revolving Loans plus the Money Market Loans plus the Swingline
Loan plus Letter of Credit Exposure. The Company shall give the Agent
prompt written notice of any advance of, or payment on, any Supported
Irish Loan made at a time when the sum of the Revolving Loans plus the
Money Market Loans plus the Swingline Loan plus Letter of Credit
Exposure exceeds $190,000,000.
2.5.4. Continuity of Contract After Euro. Neither the
introduction of the Euro, nor the substitution of the national currency
of the Republic of Ireland nor the fixing of the official conversion
rate, nor any economic consequences that arise in connection with the
European Monetary Union or from any of such events shall cause this
Agreement or any other Credit Document to terminate or give rise to
any right to terminate prematurely, contest, cancel, rescind, modify or
otherwise renegotiate or alter this Agreement or any other Credit
Document or any of its or their provisions, or to raise any other
objections or exceptions or to assert any claims for compensation in
connection with this Agreement or any other Credit Document.
2.5.5. Single European Currency. If, during the life of the
Agreement, a single European currency becomes the lawful currency of at
least two member states of the European Union, the parties hereto may,
32
and shall, if so requested by any Irish Lender, execute any amendments
to this Agreement as may be required or desirable due to the
introduction of such single European currency.
2.6. Application of Proceeds.
2.6.1. Revolving Loan. Subject to Section 2.6.5, the Company
will apply the proceeds of the Revolving Loan to refinance existing
Indebtedness, for working capital, for acquisitions and for other
lawful corporate purposes of the Company and its Subsidiaries;
provided, however, that a portion of the Maximum Amount of Revolving
Credit equal to any then effective Permitted Reinvestment Reserve
Amount may only be borrowed to finance an Investment permitted by
Section 6.8.5.
2.6.2. Money Market Loan. Subject to Section 2.6.5, the
Company will apply the proceeds of the Money Market Loan for working
capital and other lawful purposes.
2.6.3. Swingline Loan. Subject to Section 2.6.5, the
Company will apply the proceeds of the Swingline Loan for working
capital and other lawful corporate purposes.
2.6.4. Letters of Credit. Letters of Credit shall be issued
only for such lawful corporate purposes as the Company has requested in
writing and to which the Letter of Credit Issuer agrees.
2.6.5. Specifically Prohibited Applications. The Company
will not, directly or indirectly, apply any part of the proceeds of any
extension of credit made pursuant to the Credit Documents (a) to
purchase or to carry Margin Stock in amounts that would result in a
violation of Rules T, U or X of the Board of Governors of the Federal
Reserve System, or (b) to any transaction prohibited by the Foreign
Trade Regulations, by other Legal Requirements applicable to the
Lenders or by the Credit Documents.
3. Interest; LIBOR Pricing Options; Fees.
3.1. Interest on Revolving Loan. The Revolving Loan shall accrue and
bear interest at a rate per annum which shall at all times equal the Applicable
Rate. Prior to any stated or accelerated maturity of the Revolving Loan, the
Company will, on each Payment Date, pay the accrued and unpaid interest on the
portion of the Revolving Loan which was not subject to a LIBOR Pricing Option.
On the last day of each LIBOR Interest Period or on any earlier termination of
any LIBOR Pricing Option, the Company will pay the accrued and unpaid interest
on the portion of the Revolving Loan which was subject to the LIBOR Pricing
Option which expired or terminated on such date. In the case of any LIBOR
Interest Period longer than three months, the Company will also pay the accrued
and unpaid interest on the portion of the Revolving Loan subject to the LIBOR
Pricing Option having such LIBOR Interest Period at three-month intervals, the
first such payment to be made on the last Banking Day of the three-month period
which begins on the first day of such LIBOR Interest Period. On the stated or
any accelerated maturity of the Revolving Loan, the Company will pay all accrued
and unpaid interest on the Revolving Loan, including any accrued and unpaid
interest on any portion of the Revolving Loan which is subject to a LIBOR
Pricing Option. All payments of interest on the Revolving Loan shall be made to
the Agent for the account of each Lender in accordance with such Lender's
Percentage Interest therein. On the Initial Closing Date the Company agrees to
33
pay the Lenders interest for any funds advanced to the Agent prior to the
Initial Closing Date at the request of the Company to facilitate the initial
closing hereunder at a rate equal to the Applicable Rate computed on the basis
of the Base Rate.
3.2. LIBOR Pricing Options.
3.2.1. Election of LIBOR Pricing Options. Subject to all of
the terms and conditions hereof and so long as no Default exists, the
Company may from time to time, by irrevocable notice to the Agent
actually received not less than three Banking Days prior to the
commencement of the LIBOR Interest Period selected in such notice,
elect to have such portion of the Revolving Loan as the Company may
specify in such notice accrue and bear interest during the LIBOR
Interest Period so selected at the Applicable Rate computed on the
basis of the LIBOR Rate. No such election shall become effective:
(a) if, prior to the commencement of any such LIBOR
Interest Period, the Agent determines that (i) the electing or granting
of the LIBOR Pricing Option in question would violate a Legal
Requirement, (ii) LIBOR deposits in an amount comparable to the
principal amount of the Revolving Loan as to which such LIBOR Pricing
Option has been elected and which have a term corresponding to the
proposed LIBOR Interest Period are not readily available in the London
inter-bank market, or (iii) by reason of circumstances affecting the
London inter-bank market, adequate and reasonable methods do not exist
for ascertaining the interest rate applicable to such deposits for the
proposed LIBOR Interest Period; or
(b) if any Lender shall have advised the Agent by telephone
or otherwise at or prior to noon (Boston time) on the second Banking
Day prior to the commencement of such proposed LIBOR Interest Period
(and shall have subsequently confirmed in writing) that, after
reasonable efforts to determine the availability of such deposits, such
Lender reasonably anticipates that deposits in an amount equal to the
Percentage Interest of such Lender in the portion of the Revolving Loan
as to which such LIBOR Pricing Option has been elected and which have a
term corresponding to the LIBOR Interest Period in question will not be
offered in the London inter-bank market to such Lender at a rate of
interest that does not exceed the anticipated LIBOR Basic Rate. Any
such Lender may be replaced by the Company pursuant to Section 12.4.
3.2.2. Notice to Lenders and Company. The Agent will promptly
inform each Lender (by telephone or otherwise) of each notice received
by it from the Company pursuant to Section 3.2.1 and of the LIBOR
Interest Period specified in such notice. Upon determination by the
Agent of the LIBOR Rate for such LIBOR Interest Period or in the event
such election shall not become effective, the Agent will promptly
notify the Company and each Lender (by telephone or otherwise) of the
LIBOR Rate so determined or why such election did not become effective,
as the case may be.
3.2.3. Selection of LIBOR Interest Periods. LIBOR Interest
Periods shall be selected so that:
34
(a) the minimum portion of the Revolving Loan subject to
any LIBOR Pricing Option shall be $3,000,000 and an integral multiple
of $500,000;
(b) no more than 20 LIBOR Pricing Options and Money Market
Options shall be outstanding at any one time; and
(c) no LIBOR Interest Period with respect to any part of
the Revolving Loan subject to a LIBOR Pricing Option shall expire later
than the Final Maturity Date.
3.2.4. Additional Interest. If any portion of the Revolving
Loan subject to a LIBOR Pricing Option is repaid, or any LIBOR Pricing
Option is terminated for any reason (including acceleration of
maturity, but excluding the failure of any Lender to perform its
obligations under this Agreement), on a date which is prior to the last
Banking Day of the LIBOR Interest Period applicable to such LIBOR
Pricing Option, the Company will pay to the Agent for the account of
each Lender in accordance with such Lender's Percentage Interest,
in addition to any amounts of interest otherwise payable hereunder,
an amount equal to the present value (calculated in accordance with
this Section 3.2.4) of interest for the unexpired portion of such
LIBOR Interest Period on the portion of the Revolving Loan so repaid,
or as to which a LIBOR Pricing Option was so terminated, at a per annum
rate equal to the excess, if any, of (a) the rate applicable to such
LIBOR Pricing Option minus (b) the rate of interest obtainable by the
Agent upon the purchase of debt securities customarily issued by the
Treasury of the United States of America which have a maturity date
approximating the last Banking Day of such LIBOR Interest Period. The
present value of such additional interest shall be calculated by
discounting the amount of such interest for each day in the unexpired
portion of such LIBOR Interest Period from such day to the date of such
repayment or termination at a per annum interest rate equal to the
interest rate determined pursuant to clause (b) of the preceding
sentence, and by adding all such amounts for all such days during such
period. The determination by the Agent of such amount of interest
shall, in the absence of manifest error, be conclusive. For purposes
of this Section 3.2.4, if any portion of the Revolving Loan which
was to have been subject to a LIBOR Pricing Option is not outstanding
on the first day of the LIBOR Interest Period applicable to such LIBOR
Pricing Option other than for reasons described in Section 3.2.1, the
Company shall be deemed to have terminated such LIBOR Pricing Option.
3.2.5. Violation of Legal Requirements. If any Legal Requirement
shall prevent any Lender from funding or maintaining through the
purchase of deposits in the London inter-bank market any portion of the
Revolving Loan subject to a LIBOR Pricing Option or otherwise from
giving effect to such Lender's obligations as contemplated by Section
3.2, (a) the Agent may by notice to the Company terminate all of
the affected LIBOR Pricing Options to the extent not doing so would
violate a Legal Requirement, (b) the portion of the Revolving Loan
subject to such terminated LIBOR Pricing Options shall immediately bear
interest thereafter at the Applicable Rate computed on the basis of the
Base Rate and (c) the Company shall make any payment required by
Section 3.2.4. Any such Lender may be replaced by the Company
pursuant to Section 12.3.
35
3.2.6. Funding Procedure. The Lenders may fund any portion of
the Revolving Loan subject to a LIBOR Pricing Option out of any funds
available to the Lenders. Regardless of the source of the funds
actually used by any of the Lenders to fund any portion of the
Revolving Loan subject to a LIBOR Pricing Option, however, all amounts
payable hereunder, including the interest rate applicable to any such
portion of the Revolving Loan and the amounts payable under Sections
3.2.4 and 3.7, shall be computed as if each Lender had actually funded
such Lender's Percentage Interest in such portion of the Revolving Loan
through the purchase of deposits in such amount of the type by which
the LIBOR Basic Rate was determined with a maturity the same as the
applicable LIBOR Interest Period relating thereto and through the
transfer of such deposits from an office of the Lender having the same
location as the applicable LIBOR Office to one of such Lender's offices
in the United States of America.
3.3. Interest on Money Market Loans and Swingline Loan. The Company
will pay its portion of the interest on each Money Market Loan at the rate and
on the dates specified in Section 2.2.5(b). The Swingline Loan shall accrue and
bear interest at a rate per annum which shall at all times equal the Swingline
Rate. Interest on the Swingline Loan shall be calculated on a daily basis and on
the basis of a year of 360 days. Prior to any stated or accelerated maturity of
the Swingline Loan, the Swingline Borrower will on each Payment Date, beginning
on the first Payment Date after the Initial Closing Date, pay the accrued and
unpaid interest on such Indebtedness. On any stated or accelerated maturity of
the Swingline Loan all accrued and unpaid interest thereon shall be forthwith
due and payable. All payments of interest hereunder in respect of the Swingline
Loan shall be made by the Swingline Borrower to the Agent for the account of the
Swingline Lender.
3.4. Computations of Interest and Fees. For purposes of this
Agreement, interest, commitment fees and Letter of Credit fees (and any other
amount expressed as interest or such fees) shall be computed on the basis of a
360-day year for actual days elapsed; provided, however, that interest on any
portion of the Loan calculated with respect to the Base Rate shall be computed
on the basis of a 365-day year. If any payment required by this Agreement
becomes due on any day that is not a Banking Day, such payment shall, except as
otherwise provided in the definition of "LIBOR Interest Period", be made on the
next succeeding Banking Day. If the due date for any payment of principal is
extended as a result of the immediately preceding sentence, interest shall be
payable for the time during which payment is extended at the Applicable Rate.
3.5. Commitment Fees. In consideration of the Lenders' Commitments to
make the extensions of credit provided for in Section 2.1, while such
Commitments are outstanding, the Company will pay to the Agent for the account
of the Lenders in accordance with the Lenders' respective Percentage Interests,
on each Payment Date and on the Final Maturity Date (or the date of any earlier
termination of this Agreement), commencing on the first Payment Date after the
Initial Closing Date and ending on the earlier of the Final Maturity Date or any
earlier termination of this Agreement, an amount equal to interest computed at
the Commitment Fee Rate on the amount by which (a) the average daily Maximum
Amount of Revolving Credit during the three-month period or portion thereof
ending on such Payment Date exceeded (b) the sum of (i) the average daily
Revolving Loan during such period or portion thereof plus (ii) the average daily
Letter of Credit Exposure during such period or portion thereof.
36
3.6. Letter of Credit Fees. The Company will pay to the Agent for the
account of each of the Lenders, in accordance with the Lenders' respective
Percentage Interests, on each Payment Date, a Letter of Credit fee equal to
interest at a per annum rate equal to the Applicable Margin, as from time to
time in effect, on the average daily Letter of Credit Exposure during the
three-month period or portion thereof ending on such Payment Date. The Company
will pay to the Letter of Credit Issuer a facing fee equal to 1/4% of each
Letter of Credit and other customary service charges and expenses for its
services in connection with the Letters of Credit at the times and in the
amounts from time to time in effect in accordance with its general rate
structure, including fees and expenses relating to issuance, amendment,
negotiation, cancellation and similar operations.
3.7. Changes in Circumstances; Yield Protection.
3.7.1. Reserve Requirements, etc. If any Legal Requirement
shall (a) impose, modify, increase or deem applicable any insurance
assessment, reserve, special deposit or similar requirement against any
Funding Liability or the Letters of Credit, (b) impose, modify, increase
or deem applicable any other requirement or condition with respect to
any Funding Liability or the Letters of Credit, or (c) change the basis
of taxation of Funding Liabilities or payments in respect of any Letter
of Credit (other than changes in the rate of taxes measured by the
overall net income of such Lender) and the effect of any of the
foregoing shall be to increase the cost to any Lender of issuing,
making, funding or maintaining its respective Percentage Interest in any
portion of the Loan subject to a LIBOR Pricing Option or any Letter of
Credit, to reduce the amounts received or receivable by such Lender
under this Agreement or to require such Lender to make any payment or
forego any amounts otherwise payable to such Lender under this Agreement
(other than any Tax or any reserves that are included in computing the
LIBOR Reserve Rate), then such Lender may claim compensation from the
Company under Section 3.7.5.
3.7.2. Taxes.
(a) All payments of the Credit Obligations (including the
Supported Irish Loans) shall be made without set-off or counterclaim and
free and clear of any deductions, including deductions for Taxes, unless
the Company is required by law to make such deductions. If (i) any
Lender shall be subject to any Tax with respect to any payment of the
Credit Obligations or its obligations hereunder or (ii) the Company
shall be required to withhold or deduct any Tax on any payment on the
Credit Obligations, then such Lender may claim compensation from the
Company under Section 3.7.5 to the extent such Lender is then in
compliance with any applicable requirements of paragraph (b) below.
Whenever Taxes must be withheld by the Company with respect to any
payments of the Credit Obligations, the Company shall promptly furnish
to the Agent for the account of the applicable Lender official receipts
(to the extent that the relevant governmental authority delivers such
receipts) evidencing payment of any such Taxes so withheld. If the
Company fails to pay any such Taxes when due or fails to remit to the
Agent for the account of the applicable Lender the required receipts
evidencing payment of any such Taxes so withheld or deducted, the
Company shall indemnify the affected Lender for any incremental Taxes
and interest or penalties that may become payable by such Lender as a
result of any such failure. In the event any Lender receives a refund of
37
any Taxes for which it has received payment from the Company under this
Section 3.7.2, such Lender shall promptly pay the amount of such refund
to the Company, together with any interest thereon actually
earned by such Lender.
(b) If any Lender is not created or organized in, or under
the laws of, the United States of America or any state thereof, such
Lender shall deliver to the Company and the Agent such duly executed
forms and statements from time to time as may be necessary so that such
Lender is entitled to receive payments of the Credit Obligations
payable to it without deduction or withholding of any United States
federal income taxes, to the extent such exemption is available to such
Lender. If no such exemption is available at the time a Lender becomes
party to this Agreement or if at any time the Company and the Agent
have not received all forms and statements (including any renewals
thereof) required to be provided by any Lender pursuant to this
paragraph (b), paragraph (a) above shall not apply with respect
to any amount of United States federal income taxes required to be
withheld from payments of the Credit Obligations to such Lender.
3.7.3. Capital Adequacy. If any Lender shall reasonably
determine that compliance by such Lender with any Legal Requirement
regarding capital adequacy of banks or bank holding companies has or
would have the effect of reducing the rate of return on the capital of
such Lender and its Affiliates as a consequence of such Lender's
commitment to make the extensions of credit contemplated hereby, or
such Lender's maintenance of the extensions of credit contemplated
hereby, to a level below that which such Lender could have achieved but
for such compliance (taking into consideration the policies of such
Lender and its Affiliates with respect to capital adequacy immediately
before such compliance and assuming that the capital of such Lender and
its Affiliates was fully utilized prior to such compliance) by an
amount reasonably deemed by such Lender to be material, then such
Lender may claim compensation from the Company under Section 3.7.5.
3.7.4. Regulatory Changes. If any Lender shall determine that
(a) any change in any Legal Requirement (including any new Legal
Requirement and the conversion of Irish Punts into Euros) after the
date hereof shall directly or indirectly (i) reduce the amount of any
sum received or receivable by such Lender with respect to the Loan or
the Letters of Credit or the return to be earned by such Lender on the
Loan or the Letters of Credit, (ii) impose a cost on such Lender or any
Affiliate of such Lender that is attributable to the making or
maintaining of, or such Lender's commitment to make, its portion of the
Loan or the Letters of Credit, or (iii) require such Lender or any
Affiliate of such Lender to make any payment on, or calculated by
reference to, the gross amount of any amount received by such Lender
under any Credit Document (other than Taxes or income or franchise
taxes), and (b) such reduction, increased cost or payment shall not be
fully compensated for by an adjustment in the Applicable Rate or the
Letter of Credit fees, then such Lender may claim compensation from the
Company under Section 3.7.5.
3.7.5. Compensation Claims. Within 15 days after the receipt
by the Company of a certificate from any Lender setting forth why it is
claiming compensation under this Section 3.7 and computations (in
reasonable detail) of the amount thereof, the Company shall pay to such
38
Lender such additional amounts as such Lender sets forth in such
certificate as sufficient fully to compensate it on account of the
foregoing provisions of this Section 3.7, together with interest on
such amount from the 15th day after receipt of such certificate until
payment in full thereof at the Overdue Reimbursement Rate. The
determination by such Lender of the amount to be paid to it and the
basis for computation thereof hereunder shall be conclusive so long as
(a) such determination is made in good faith, (b) no manifest error
appears therein and (c) the Lender uses reasonable averaging and
attribution methods. The Company shall be entitled to replace any such
Lender in accordance with Section 12.4.
3.7.6. Mitigation. Each Lender shall take such commercially
reasonable steps as it may determine are not disadvantageous to it,
including changing lending offices to the extent feasible, in order to
reduce amounts otherwise payable by the Company to such Lender pursuant
to Sections 3.2.4 and 3.7 or to make LIBOR Pricing Options available
under Sections 3.2.1 and 3.2.5. In addition, the Company shall not be
responsible for costs (a) under Section 3.7 arising more than 90 days
prior to receipt by the Company of the certificate from the affected
Lender pursuant to such Section 3.5 or (b) under Section 3.2.4 arising
from the termination of LIBOR Pricing Options more than 90 days prior
to the demand by the Agent for payment under Section 3.2.4.
3.8. Maximum Lawful Interest Rate. All Credit Documents are expressly
limited so that in no event, including the acceleration of the maturity of the
Credit Obligations, shall the amount paid or agreed to be paid in respect of
interest on the Credit Obligations exceed the maximum permissible amount under
applicable law, as in effect on the date hereof and as subsequently amended or
modified to allow a greater amount of interest to be paid under the Credit
Documents. If for any reason the amount in respect of interest required by the
Credit Documents exceeds such maximum permissible amount, the obligation to pay
interest under the Credit Documents shall be automatically reduced to such
maximum permissible amount and any amounts in respect of interest previously
paid to the Lenders in excess of such maximum permissible amount shall be
automatically applied to reduce the amount of the Loans and Letter of Credit
Exposure.
4. Payment.
4.1. Payment at Maturity. Except as set forth in Section 2.2.5, on each
Money Market Loan Maturity Date, the Company will pay to the Agent for credit
to the applicable Money Market Loan Account the outstanding principal amount of
its Money Market Loan maturing on such date, together with all accrued and
unpaid interest with respect thereto. On the Final Maturity Date, the Company
shall pay to the Agent for credit to the Revolving Loan Account the entire
outstanding principal amount of Indebtedness evidenced thereby, together with
all accrued and unpaid interest with respect thereto, and all other Credit
Obligations owing by it to any Lender (to the extent not already paid in
accordance with the preceding sentence). On the Final Maturity Date, the
Swingline Borrower shall pay to the Agent for credit to the Swingline Loan
Account the entire outstanding principal amount of Indebtedness evidenced
thereby, together with all accrued and unpaid interest with respect thereto.
On any accelerated maturity of the Indebtedness evidenced by any Loan Account,
the Company shall pay to the Agent for credit to the Loan Accounts the entire
outstanding principal amount of Indebtedness evidenced thereby, together with
39
all accrued and unpaid interest with respect thereto, and all other Credit
Obligations owing by it to any Lender.
4.2. Contingent Required Prepayments.
4.2.1. Excess Credit Exposure. If at any time the sum of the
respective principal amounts of the Revolving Loan plus the Money
Market Loans plus the Swingline Loan plus the Letter of Credit Exposure
plus Supported Irish Loan Equivalents exceeds the Maximum Amount of
Revolving Credit, the Company will promptly pay the amount of such
excess as a prepayment of the Swingline Loan or the Revolving Loan or
the Money Market Loans, as the case may be. If at any time Letter of
Credit Exposure exceeds $50,000,000, the Company will promptly pay the
amount of such excess to the Agent to be applied as provided in Section
4.4.
4.2.2. Net Asset Sale Proceeds. Upon receipt of Net Asset
Sale Proceeds that exceed both (a) $5,000,000 in any year and
(b) $25,000,000 in the aggregate after the Initial Closing Date, the
Company shall within three Banking Days pay the amount of such excess
to the Agent as a prepayment of the Loan to be applied as provided in
Section 4.4.2; provided, however, that the Company may elect to reserve
all or a portion of such Net Asset Sale Proceeds up to $50,000,000 in
the aggregate, for Permitted Reinvestments. The amount so reserved
(the "Permitted Reinvestment Reserve Amount") must be expended as a
Permitted Reinvestment within 270 days after the transaction creating
the Permitted Reinvestment Reserve Amount(or, in the case of the repair
or replacement of assets with insurance or condemnation proceeds, must
be firmly committed to be expended). In the event the Permitted
Reinvestment is not so expended within such 270-day period (or if the
Company abandons its plans for a Permitted Reinvestment prior to the
end of such period), the Company shall within three Banking Days repay
the Loan in an amount equal to such Permitted Reinvestment Reserve
Amount to be applied as provided in Section 4.4.2.
4.2.3. Receivables Securitization Proceeds. Upon receipt of
Receivables Securitization Proceeds by the Company or any of its
Subsidiaries, the Company shall within one Banking Day pay to the Agent
as a prepayment of the Loan to be applied as provided in Section 4.4.2
the lesser of (a) the amount of such Receivables Securitization
Proceeds or (b) the amount of the Revolving Loan.
4.2.4. Voluntary Prepayments. In addition to the prepayments
required by Section 4.2, at any time or from time to time upon not less
than one Banking Day prior written notice to the Agent (except that no
such notice need be given in the event of an automatic payment on a
Money Market Loan Closing Date in accordance with Section 2.2.5), the
Company shall have the right to prepay, without premium or penalty of
any type (except as provided in Sections 2.2.6 or 3.2.4), all or any
part of its Revolving Loan or any Money Market Loan in such amounts as
are not less than $3,000,000 and in integral multiples of $500,000,
unless such payment is equal to the entire outstanding principal amount
of the Revolving Loan or the Money Market Loan, as the case may be.
At any time or from time to time upon telephone notice to the Swingline
Lender, given not later than 3:00 p.m. (Boston time) on any Banking
40
Day, the Swingline Borrower shall have the right to prepay, without
premium or penalty of any type, all or any part of the outstanding
principal amount of its Swingline Loan in such amounts as are not less
than $100,000 and in integral multiples of $50,000, unless such payment
is equal to the entire outstanding principal amount of the Swingline
Loan.
4.3. Letters of Credit. If on the stated or any accelerated
maturity of the Credit Obligations the Letter of Credit Issuer or the Lenders
shall be obligated in respect of a Letter of Credit or a draft accepted under a
Letter of Credit, the Company will either:
(a) prepay such obligation by depositing with the Agent
an amount of cash, or
(b) deliver to the Agent a standby letter of credit
(designating the Agent as beneficiary and issued by a bank and on terms
reasonably acceptable to the Agent),
in each case in an amount equal to the portion of the then Letter of Credit
Exposure issued for the account of the Company. Any such cash so deposited and
the cash proceeds of any draw under any standby letter of credit so furnished,
including any interest thereon, shall be returned by the Agent to the Company
only when, and to the extent that, the amount of such cash held by the Agent
exceeds the Letter of Credit Exposure at a time when no Default exists;
provided, however, that if an Event of Default occurs and the Credit Obligations
become or are declared immediately due and payable, the Agent may apply such
cash, including any interest thereon, to the payment of any of the Credit
Obligations.
4.4. Reborrowing; Application of Payments, etc.
4.4.1. Reborrowing. The amounts of the Revolving Loan and
Swingline Loan prepaid pursuant to Section 4.2.4 may be reborrowed from
time to time prior to the Final Maturity Date in accordance with
Sections 2.1 and 2.3, respectively, subject to the limits set forth
therein.
4.4.2. Order of Application. Unless specified by the Company
to the contrary, all prepayments shall be deemed to apply to the
Revolving Loan. Any prepayment of the Revolving Loan shall be applied
first to the portion of the Loan not then subject to LIBOR Pricing
Options, then the balance of any such prepayment shall be applied to the
portion of the Revolving Loan then subject to LIBOR Pricing Options, in
the chronological order of the respective maturities thereof (or as the
Company may otherwise specify in writing), together with any payments
required by Section 3.2.4. Unless specified by the Company to the
contrary, prepayments of the Money Market Loan shall be applied pro
rata to the various advances thereof then outstanding in accordance with
the relative principal amounts thereof. Contingent mandatory
prepayments pursuant to Sections 4.2.2 and 4.2.3 shall be applied first
to the Revolving Loan, with any balance to the Swingline Loan, with any
balance to the Money Market Loan, with any balance to be held as
cash collateral for Letter of Credit Exposure in accordance with
Section 4.4.
4.4.3. Payments for Lenders. All payments of principal on
the Revolving Loan hereunder shall be made to the Agent for the account
of the Lenders in accordance with the Lenders' respective Percentage
Interests.
41
5. Conditions to Extending Credit.
5.1. Conditions on Initial Closing Date. The obligations of the Lenders
to make any extension of credit pursuant to Section 2 shall be subject to the
satisfaction, on or before the Initial Closing Date, of the conditions set forth
in this Section 5.1 as well as the further conditions in Section 5.2. If the
conditions set forth in this Section 5.1 are not met on or prior to the Initial
Closing Date, the Lenders shall have no obligation to make any extensions of
credit hereunder.
5.1.1. Notes. The Company shall have duly executed and delivered
to the Agent a Revolving Note for each Lender and a Swingline Note for
the Swingline Lender.
5.1.2. Payment of Fees. The Company shall have paid to the Agent
(a) the fees separately agreed between the Company and the Agent and
(b) the reasonable fees and disbursements of the Agent's special counsel
for which statements have been rendered on or prior to the Initial
Closing Date.
5.1.3. Legal Opinions. On the Initial Closing Date, the Lenders
shall have received from the following counsel their respective opinions
with respect to the transactions contemplated by the Credit Documents,
which opinions shall be in form and substance reasonably satisfactory
to the Required Lenders:
(a) Baker, Donelson, Bearman & Xxxxxxxx, special counsel for
the Company.
(b) Ropes & Xxxx, special counsel for the Agent.
The Company authorizes and directs its counsel to furnish the foregoing
opinions.
5.1.4. Foreign Subsidiary Subordination Agreement. Each of the
material Foreign Subsidiaries of the Company shall have entered into a
Subsidiary Subordination Agreement in substantially the form of Exhibit
5.1.4 (the "Foreign Subsidiary Subordination Agreement") and shall have
delivered it to the Agent.
5.1.5. Security Agreement. Each of the Company and the
Guarantors shall have duly authorized, executed and delivered to the
Agent a Security Agreement in substantially the form of Exhibit 5.1.5
(the "Security Agreement").
5.1.6. Real Estate Collateral. The Obligors shall have duly
authorized, executed, acknowledged and delivered to the Agent, to the
extent required by the Security Agreement, a mortgage on each material
real property owned by the Company and its Subsidiaries and agreed to
be included in the Credit Security by the Company and the Agent and a
leasehold mortgage on each material real property, if any, leased by
the Company and its Subsidiaries and agreed to be included in the
Credit Security by the Company and the Agent, in each case in form and
substance reasonably satisfactory to the Agent, together with such
title insurance, local counsel legal opinions and other items relating
to such real property collateral as may be required by the Security
Agreement.
42
5.1.7. Perfection of Security. Each Obligor shall have duly
authorized, executed, acknowledged, delivered, filed, registered and
recorded such security agreements, notices, financing statements,
memoranda of intellectual property security interests and other
instruments as the Agent may have reasonably requested in order to
perfect the Liens purported or required pursuant to the Credit
Documents to be created in the Credit Security and shall have paid all
filing or recording fees or taxes required to be paid in connection
therewith, including any recording, mortgage, documentary, transfer or
intangible taxes.
5.1.8. Capitalization, etc. On the Initial Closing Date,
immediately before and after giving effect to the initial advance under
this Agreement and the transactions contemplated hereby:
(a) The capitalization of the Company (other than the
Revolving Loan and Letters of Credit) will consist of (i) $400,000,000
in Approved Subordinated Debt, (ii) $66,000,000 of UPM-Kymenne notes,
with $22,000,000 due each of October 2001, October 2002 and October
2003, (iii) $5,000,000 of Stac-Pac Notes, due March 2002,
(iv) $2,000,000 in notes to Wachovia, (v) $15,000,000 in an Equivalent
Amount of United States Funds as Irish Loans, (vi) IEP 8,000,000 in
additional Irish Loans, (vii) other debt listed on Exhibit 7.3 and
(viii) a minimum of $250,000,000 in stockholders' equity (excluding the
effect of foreign currency translation adjustments).
(b) The Company shall have obtained all necessary consents,
if any, under the agreements described in paragraph (a) above to permit
this Agreement and the transactions contemplated hereby.
(c) After giving effect to the Credit Obligations, the
Company and its Subsidiaries, taken as a whole:
(i) will be solvent;
(ii) will have assets having a fair saleable value
in excess of the amount required to pay their probable
liability on their existing debts as such debts become absolute
and mature;
(iii) will have access to adequate capital for the
conduct of their business; and
(iv) will have the ability to pay their debts from time
to time incurred as such debts mature.
(d) The Company shall have furnished to the Lenders a
certificate of a Financial Officer to such effect, and
calculations pursuant to Section 7.2.1 demonstrating compliance
with the Computation Covenants, in each case giving pro forma
effect to the incurrence of the Credit Obligations.
5.1.9. Proper Proceedings. This Agreement, each other Credit
Document and the transactions contemplated hereby and thereby shall
43
have been authorized by all necessary corporate, partnership or other
proceedings on the part of the Company and the Guarantors. All
necessary consents, approvals and authorizations of any governmental
or administrative agency or any other Person of any of the transactions
contemplated hereby or by any other Credit Document shall have been
obtained and shall be in full force and effect.
5.1.10. General. All legal and corporate proceedings in
connection with the transactions contemplated by this Agreement shall
be satisfactory in form and substance to the Agent and the Agent shall
have received copies of all documents, including certified copies of
the Charter and By-Laws of the Company and the Guarantors, records of
corporate and partnership proceedings, certificates as to signatures
and incumbency of officers and opinions of counsel, which the Agent may
have reasonably requested in connection therewith, such documents where
appropriate to be certified by proper corporate or governmental
authorities.
5.2. Conditions to Each Extension of Credit. The obligations of
the Lenders to make any extension of credit pursuant to Section 2 shall
be subject to the satisfaction, on or before the Closing Date for such
extension of credit, of the following conditions:
5.2.1. Officer's Certificate. The representations and
warranties contained in Section 7 shall be true and correct on and as
of such Closing Date with the same force and effect as though made on
and as of such date (except as to any representation or warranty which
refers to a specific earlier date); no Default shall exist on such
Closing Date prior to or immediately after giving effect to the
requested extension of credit; no Material Adverse Change (other than
an event described in Exhibit 5.2) shall have occurred since the later
of June 30, 2000 or the end of the Company's most recently completed
fiscal year for which financial reports have been furnished to the
Lenders in accordance with Section 6.4.1; and the Company shall have
furnished to the Agent in connection with the requested extension of
credit a certificate to these effects, in substantially the form of
Exhibit 5.2.1, signed by a Financial Officer.
5.2.2. Legality, etc. The making of the requested extension of
credit shall not (a) subject any Lender to any penalty or Tax (other
than a Tax for which the Company is required to reimburse the Lenders
under Section 3.7) or (b) be prohibited by any Legal Requirement. If
any Lender is unable to perform its obligations hereunder due to a
lending restriction under clauses (a) or (b), the Company shall be
entitled to replace such Lender pursuant to Section 12.4.
6. General Covenants. Each of the Company and the Guarantors covenants
that, until all of the Credit Obligations shall have been paid in full
and until the Lenders' commitments to extend credit under this Agreement
and any other Credit Document shall have been irrevocably terminated,
the Company and its Subsidiaries will comply with the following
provisions:
6.1. Taxes and Other Charges; Accounts Payable.
6.1.1. Taxes and Other Charges. Each of the Company and its
Subsidiaries shall duly pay and discharge, or cause to be paid and
discharged, before the same becomes in arrears, all material taxes,
44
assessments and other governmental charges imposed upon such Person and
its properties, sales or activities, or upon the income or profits
therefrom, as well as all material claims for labor, materials or
supplies which if unpaid might by law become a Lien upon any of its
property; provided, however, that any such tax, assessment, charge or
claim need not be paid if the validity or amount thereof shall at the
time be contested in good faith by appropriate proceedings and if such
Person shall, in accordance with GAAP, have set aside on its books
adequate reserves with respect thereto; and provided, further, that each
of the Company and its Subsidiaries shall pay or bond, or cause to be
paid or bonded, all such taxes, assessments, charges or other
governmental claims immediately upon the commencement of proceedings to
foreclose any Lien which may have attached as security therefor
(except to the extent such proceedings have been dismissed or stayed).
6.1.2. Accounts Payable. Each of the Company and its
Subsidiaries shall promptly pay when due (taking into account any
applicable grace periods), or in conformity with customary trade terms
and historical practices, all other Indebtedness incident to the
operations of such Person not referred to in Section 6.1.1; provided,
however, that any such Indebtedness need not be paid if the validity or
amount thereof shall at the time be contested in good faith and if such
Person shall, in accordance with GAAP, have set aside on its books
adequate reserves with respect thereto.
6.2. Conduct of Business, etc.
6.2.1. Types of Business. The Company and its Subsidiaries
shall engage principally in the business of (a) specialty cellulose
pulps, (b) nonwoven and air-laid fabrics and (c) other activities
substantially related thereto.
6.2.2. Maintenance of Properties. Each of the Company and its
Subsidiaries:
(a) shall keep its properties in such repair, working order
and condition, and shall from time to time make such repairs,
replacements, additions and improvements thereto as are necessary for
the efficient operation of its businesses (in its reasonable judgment)
and shall comply at all times in all material respects with all
material franchises, licenses and leases to which it is party so as to
prevent any loss or forfeiture thereof or thereunder, except where
(i) compliance is at the time being contested in good faith by
appropriate proceedings or (ii) failure to comply with the provisions
being contested have not resulted, or do not create a material risk of
resulting, in the aggregate in any Material Adverse Change; and
(b) shall do all things necessary to preserve, renew and
keep in full force and effect and in good standing its legal existence
and authority necessary to continue its business; provided, however,
that this Section 6.2.2 (b) shall not prevent the merger,
consolidation, reorganization, amalgamation or liquidation of
Subsidiaries permitted by Section 6.10.
6.2.3. Statutory Compliance. Each of the Company and its
Subsidiaries shall comply in all material respects with all valid and
45
applicable statutes, laws, ordinances, zoning and building codes and
other rules and regulations of the United States of America, of the
states and territories thereof and their counties, municipalities and
other subdivisions and of any foreign country or other jurisdictions
applicable to such Person, except where failure so to comply would not
reasonably be expected to result in the aggregate in any Material
Adverse Change; provided, however, that compliance with Environmental
Laws shall be governed solely by Section 6.18.
6.2.4. Compliance with Material Agreements. Each of the
Company and its Subsidiaries shall comply in all material respects with
the Material Agreements (to the extent not in violation of the other
provisions of this Agreement or any other Credit Document). Without the
prior written consent of the Required Lenders, no Material Agreement so
designated in Exhibit 7.2.2 shall be amended, modified, waived or
terminated in any manner that would have in any material respect an
adverse effect on the interests of the Lenders.
6.3. Insurance.
6.3.1. Business Interruption Insurance. The Company and its
Subsidiaries shall maintain with financially sound and reputable
insurers insurance related to interruption of business, either for loss
of revenues or for extra expense as it relates to the loss of revenues,
in an amount of at least $1,000,000,000 in the aggregate and otherwise
in the manner customary for businesses of similar size engaged in
similar activities at similar locations.
6.3.2. Property Insurance. Each of the Company and its
Subsidiaries shall keep its assets which are of an insurable character
insured by financially sound and reputable insurers against theft and
fraud and against loss or damage by fire, explosion and hazards insured
against by extended coverage to the extent, in amounts and with
deductibles at least as favorable as those generally maintained by
businesses of similar size engaged in similar activities and otherwise
reasonably satisfactory to the Agent.
6.3.3. Liability Insurance. Each of the Company and its
Subsidiaries shall maintain with financially sound and reputable
insurers insurance against liability for hazards, risks and liability
to persons and property, including product liability insurance, to the
extent, in amounts and with deductibles at least as favorable as those
generally maintained by businesses of similar size engaged in similar
activities at similar locations and otherwise reasonably satisfactory
to the Agent; provided, however, that it may effect workers'
compensation insurance or similar coverage with respect to operations
in any particular state or other jurisdiction through an insurance fund
operated by such state or jurisdiction or by meeting the self-insurance
requirements of such state or jurisdiction.
6.4. Financial Statements and Reports. Each of the Company and its
Subsidiaries shall maintain a system of accounting in which correct entries
shall be made of all transactions in relation to their business and affairs in
accordance with generally accepted accounting practice. The fiscal year of the
Company and its Subsidiaries shall end on June 30 in each year (except, in the
case of Foreign Subsidiaries, as otherwise required by local foreign law).
46
The fiscal quarters of the Company and its Subsidiaries shall end on September
30, December 31, March 31 and June 30 in each year.
6.4.1. Annual Reports. The Company shall furnish to the Lenders
as soon as available, and in any event within 95 days after the end of
each fiscal year, the Consolidated and Consolidating balance sheets of
the Company and its Subsidiaries as at the end of such fiscal year, the
Consolidated and Consolidating statements of income and Consolidated
statements of changes in shareholders' equity and of cash flows of the
Company and its Subsidiaries for such fiscal year (all in reasonable
detail) and together, in the case of Consolidated financial statements,
with comparative figures for the immediately preceding fiscal year, all
accompanied by:
(a) Unqualified reports of Ernst & Young LLP (or, if they
cease to be auditors of the Company and its Subsidiaries, other
independent certified public accountants of recognized national
standing reasonably
satisfactory to the Required Lenders), containing no material
uncertainty, to the effect that they have audited the foregoing
Consolidated financial statements in accordance with generally accepted
auditing standards and that such Consolidated financial statements
present fairly, in all material respects, the financial position of the
Company and its Subsidiaries covered thereby at the dates thereof and
the results of their operations for the periods covered thereby in
conformity with GAAP.
(b) The statement of such accountants that they have caused
this Agreement to be reviewed and that in the course of their audit of
the Company and its Subsidiaries no facts have come to their attention
that cause them to believe that any Default exists and in particular
that they have no knowledge of any Default under Sections 6.5 through
6.17 or, if such is not the case, specifying such Default and the
nature thereof. This statement is furnished by such accountants with
the understanding that the examination of such accountants cannot be
relied upon to give such accountants knowledge of any such Default
except as it relates to accounting or auditing matters within the scope
of their audit.
(c) A certificate of the Company signed by a Financial
Officer to the effect that such officer has caused this Agreement to be
reviewed and has no knowledge of any Default, or if such officer has
such knowledge, specifying such Default and the nature thereof, and
what action the Company has taken, is taking or proposes to take with
respect thereto.
(d) Computations by the Company, substantially in the form
historically prepared by the Company, comparing the financial
statements referred to above with the most recent budget for such
fiscal year furnished to the Lenders in accordance with Section 6.4.4.
(e) Computations by the Company in substantially the form of
Exhibit 6.4 demonstrating, as of the end of such fiscal year,
compliance with the Computation Covenants, certified by a Financial
Officer.
47
(f) Financial information as to the assets of and Investments
of the Company and its Subsidiaries in each Immaterial Subsidiary as of
the end of such fiscal year.
(g) Calculations, as at the end of such fiscal year, of
(i) the Accumulated Benefit Obligations for each Plan covered by Title
IV of ERISA (other than Multiemployer Plans) and (ii) the fair market
value of the assets of such Plan allocable to such benefits.
(h) Supplements to Exhibits 7.1 and 7.3 showing any changes
in the information set forth in such Exhibits not previously furnished
to the Lenders in writing, as well as any changes in the Charter,
Bylaws or incumbency of officers of the Company or its Subsidiaries
from those previously certified to the Agent.
(i) In the event of a change in GAAP after June 30, 2000,
computations by the Company, certified by a Financial Officer,
reconciling the financial statements referred to above with financial
statements prepared in accordance with GAAP as applied to the other
covenants in Section 6 and related definitions.
6.4.2. Quarterly Reports. The Company shall furnish to the
Lenders as soon as available and, in any event, within 45 days after
the end of each of the first three fiscal quarters of the Company, the
internally prepared Consolidated balance sheets of the Company and its
Subsidiaries as of the end of such fiscal quarter, the Consolidated
statements of income, of changes in shareholders' equity and of cash
flows of the Company and its Subsidiaries for such fiscal quarter and
for the portion of the fiscal year then ended (all in reasonable
detail) and together, with comparative figures for the same period in
the preceding fiscal year, all accompanied by:
(a) A certificate of the Company signed by a Financial
Officer to the effect that such financial statements have been prepared
in accordance with GAAP and present fairly, in all material respects,
the financial position of the Company and its Subsidiaries covered
thereby at the dates thereof and the results of their operations for
the periods covered thereby, subject only to normal year-end audit
adjustments and the addition of footnotes.
(b) A certificate of the Company signed by a Financial
Officer to the effect that such officer has caused this Agreement to be
reviewed and has no knowledge of any Default, or if such officer has
such knowledge, specifying such Default and the nature thereof and what
action the Company has taken, is taking or proposes to take with
respect thereto.
(c) Computations by the Company, substantially in the form
historically prepared by the Company comparing the financial
statements referred to above with the most recent budget for the period
covered thereby furnished to the Lenders in accordance with
Section 6.4.4.
(d) Computations by the Company in substantially the form
of Exhibit 6.4 demonstrating, as of the end of such quarter, compliance
with the Computation Covenants, certified by a Financial Officer.
48
(e) Supplements to Exhibits 7.1 and 7.3 showing any changes
in the information set forth in such Exhibits not previously furnished
to the Lenders in writing, as well as any changes in the Charter,
Bylaws or incumbency of officers of the Company and its Subsidiaries
from those previously certified to the Agent.
(f) In the event of a change in GAAP after June 30, 2000,
computations by the Company, certified by a Financial Officer,
reconciling the financial statements referred to above with financial
statements prepared in accordance with GAAP as applied to the other
covenants in Section 6 and related definitions.
6.4.3. Monthly Reports; Weekly Irish Loan Reports. The Company
shall furnish to the Lenders as soon as available and, in any event,
within 30 days after the end of each month, the internally prepared
financial data for such month in the form prepared by management for
its internal purposes. The Company shall furnish to the Agent and the
Irish Lenders by Friday of each week a summary of outstanding Irish
Loans as of Friday of the previous week.
6.4.4. Other Reports. The Company shall promptly furnish to
the Lenders:
(a) As soon as prepared and in any event before the
beginning of each fiscal year, an annual plan for each fiscal quarter
in such fiscal year of the Company and its Subsidiaries, prepared in a
manner substantially consistent with the Company's historical practices
and with the manner in which the financial projections described in
Section 7.2.1 were prepared.
(b) On at least a quarterly basis, any material updates of
such budget and projections formally prepared by the Company.
(c) Any management letters furnished to the Company or any
of its Subsidiaries by the Company's auditors.
(d) All budgets, projections, statements of operations and
other reports furnished generally to the shareholders of the Company.
(e) Such registration statements, proxy statements and
reports, including Forms X-0, X-0, X-0, X-0, 10-K, 10-Q and 8-K, as may
be filed by the Company or any of its Subsidiaries with the Securities
and Exchange Commission.
(f) Any 90-day letter or 30-day letter from the federal
Internal Revenue Service (or the equivalent notice received from state
or other taxing authorities) asserting tax deficiencies against the
Company or any of its Subsidiaries.
(g) Progress reports as required under the Fenholloway
River Agreement (whether on a quarterly basis or otherwise).
6.4.5. Notice of Litigation; Notice of Defaults. Except with
respect to matters arising under Environmental Laws for which notices
are required by Section 6.18, the Company shall promptly furnish to the
49
Lenders notice of any litigation or any administrative or arbitration
proceeding (a) which would reasonably be expected to create a material
risk of resulting, after giving effect to any applicable insurance, in
the payment by the Company and its Subsidiaries of more than $5,000,000
or (b) which results, or would reasonably be expected to create a
material risk of resulting, in a Material Adverse Change. Promptly
upon acquiring knowledge thereof, the Company shall notify the Lenders
of the existence of any Default or Material Adverse Change, specifying
the nature thereof and what action the Company or any Subsidiary
has taken, is taking or proposes to take with respect thereto.
6.4.6. ERISA Reports. The Company shall furnish to the
Lenders as soon as reasonably available the following items with
respect to any Plan:
(a) any request for a waiver of the funding standards or an
extension of the amortization period,
(b) any reportable event (as defined in section 4043 of
ERISA), unless the notice requirement with respect thereto has been
waived by regulation,
(c) any notice received by any ERISA Group Person that the
PBGC has instituted or intends to institute proceedings to terminate
any Plan, or that any Multiemployer Plan is insolvent or in
reorganization,
(d) notice of the possibility of the termination of any
Plan by its administrator pursuant to section 4041 of ERISA, and
(e) notice of the intention of any ERISA Group Person to
withdraw, in whole or in part, from any Multiemployer Plan.
6.4.7. Other Information. From time to time at reasonable
intervals upon request of any authorized officer of any Lender, the
Company shall furnish to the Lenders such other information,
substantially consistent in form and substance to information
historically prepared by the Company, regarding the business, assets,
financial condition or income of the Company and its Subsidiaries as
such officer may reasonably request, including copies of all tax
returns and material licenses, agreements, leases and instruments
to which any of the Company or its Subsidiaries is party. The Lenders'
authorized officers and representatives shall have the right during
normal business hours upon reasonable notice and at reasonable
intervals to inspect the properties and to examine the books and
records of the Company and its Subsidiaries and to make copies and
notes therefrom for the purpose of ascertaining compliance with
or obtaining enforcement of this Agreement or any other Credit
Document.
6.5. Certain Financial Tests.
6.5.1. Consolidated Net Worth. Consolidated Net Worth shall
not at any time be less than $250,000,000; provided, however, that on
the last day of each fiscal quarter of the Company, the then effective
dollar amount in this Section 6.5.1 shall be increased by 50% of
Consolidated Net Income (if positive) of the Company and its
Subsidiaries determined in accordance with GAAP for the quarter then
ended.
50
6.5.2. Consolidated Total Net Debt to Consolidated EBITDA.
Consolidated Total Net Debt as of the end of any fiscal quarter of the
Company shall not exceed the applicable percentage set forth in the
table below of Consolidated EBITDA for the period of four consecutive
fiscal quarters then ending:
Fiscal Quarter Ending Percentage
Prior to June 30, 2001 400%
June 30, 2001 425%
September 30, 2001 445%
through March 31, 2002
June 30, 2002 415%
through September 30, 2002
December 31, 2002 400%
through March 31, 2003
June 30, 2003 375%
through December 31, 2003
March 31, 2004 350%
and thereafter
6.5.3. Consolidated EBITDA to Consolidated Interest Expense.
For each period of four consecutive fiscal quarters of the Company,
Consolidated EBITDA shall equal or exceed the percentage of
Consolidated Interest Expense set forth in the table below:
Fiscal Quarter Ending Percentage
Prior to September 30, 2001 300%
September 30, 2001 275%
through March 31, 2002
June 30, 2002 300%
through December 31, 2002
March 31, 2003 315%
June 30, 2003 325%
and thereafter
6.5.4. Consolidated EBITDA Minus Capital Expenditures to
Consolidated Interest Expense. For each period of four consecutive
fiscal quarters of the Company, the excess of consolidated EBITDA minus
Capital Expenditures of the Company and its Subsidiaries shall equal or
exceed the percentage of Consolidated Interest Expense set forth in the
table below, provided, however, that for the purposes of this
Section 6.5.4, Capital Expenditures shall exclude capital expenditures
for the construction of an air-laid facility in Gaston, North Carolina
in an amount not exceeding $85,000,000 for any fiscal quarter and
$95,000,000 in the aggregate:
Fiscal Quarter Ending Percentage
Prior to September 30, 2001 175%
September 30, 2001 150%
through March 31, 2002
51
June 30, 2002 175%
and thereafter
6.6. Indebtedness. Neither the Company nor any of its Subsidiaries
shall create, incur, assume or otherwise become or remain liable with respect
to any indebtedness including Guarantees of Indebtedness of others and
reimbursement obligations, whether contingent or matured, under letters of
credit or other financial guarantees by third parties, (or become contractually
committed to do so), except the following:
6.6.1. Indebtedness in respect of the Credit Obligations.
6.6.2. Guarantees by the Company and its Subsidiaries of
Indebtedness incurred by its Subsidiaries and permitted by the other
provisions of this Section 6.6.
6.6.3. Current liabilities, other than Financing Debt,
incurred in the ordinary course of business (including (a) accrued
salaries, vacation and benefits, accounts payable for services,
inventory and equipment and other trade accounts payable and (b) such
current liabilities incurred in the ordinary course of business by
Persons acquired by the Company and its Subsidiaries in accordance
with Section 6.8).
6.6.4. To the extent that payment thereof shall not at the
time be required by Section 6.1, Indebtedness in respect of taxes,
assessments, governmental charges and claims for labor, materials and
supplies.
6.6.5. Indebtedness secured by Liens of carriers, warehouses,
mechanics and landlords permitted by Sections 6.7.4 and 6.7.5.
6.6.6. Indebtedness in respect of judgments or awards
(a) which have been in force for less than the applicable appeal period
or (b) in respect of which the Company or any Subsidiary shall at the
time in good faith be prosecuting an appeal or proceedings for review
and, in the case of each of clauses (a) and (b), the Company or such
Subsidiary shall have taken appropriate reserves therefor in accordance
with GAAP and execution of such judgment or award shall not be levied.
6.6.7. To the extent permitted by Section 6.7.8, Indebtedness
in respect of Capitalized Lease Obligations or secured by purchase
money security interests; provided, however, that the aggregate
principal amount of all Indebtedness permitted by this Section 6.6.7
and by Section 6.6.18 at any one time outstanding shall not exceed
$50,000,000.
6.6.8. Indebtedness in respect of deferred taxes arising in
the ordinary course of business.
6.6.9. Indebtedness in respect of inter-company loans and
advances among the Company and its Subsidiaries which are not
prohibited by Section 6.8.
6.6.10. Guarantees by the Company of loans by third parties to
its employees in an amount not to exceed $4,000,000 in the aggregate at
any one time outstanding.
52
6.6.11. Unfunded pension liabilities and obligations with
respect to Plans so long as the Company is in compliance with
Section 6.16.
6.6.12. Indebtedness outstanding on the date hereof and
described in Exhibit 7.3 and all renewals and extensions thereof not
in excess of the amount thereof outstanding immediately prior to such
renewal or extension.
6.6.13. Letters of Credit issued by foreign financial
institutions for the account of Foreign Subsidiaries in an aggregate
face amount not exceeding $10,000,000 in the equivalent amount of
United States Funds at any one time outstanding.
6.6.14. Indebtedness (other than Financing Debt) in addition to
the Indebtedness permitted by the other provisions of this Section 6.6;
provided, however, that the aggregate amount of all such Indebtedness
at any one time outstanding shall not exceed $20,000,000.
6.6.15. Financing Debt and unfunded pension liabilities of
Subsidiaries acquired in accordance with Section 6.8.5 or otherwise
assumed by the Company and its Subsidiaries in acquisitions permitted
by Section 6.8.5 in an aggregate amount not exceeding $15,000,000 for
all such acquisitions after the Initial Closing Date.
6.6.16. Indebtedness of Foreign Subsidiaries in respect of
credit facilities to finance working capital and other valid business
purposes in an aggregate amount not to exceed $70,000,000 in the
Equivalent Amount of United States Funds, computed as of the most
recent date such indebtedness was incurred, minus Irish Loan
Equivalents.
6.6.17. Indebtedness in respect of Hedge Agreements entered into
in the ordinary course of business.
6.6.18. Indebtedness of the Company in respect of an industrial
development bond or other special purpose financing for environmental
Capital Expenditures at its Xxxxx, Florida plant; provided, however,
that the aggregate principal amount of all Indebtedness permitted by
this Section 6.6.18 and by Section 6.6.7 at any time outstanding shall
not exceed $50,000,000.
6.7. Liens. Neither the Company nor any of its Subsidiaries shall
create, incur or enter into, or suffer to be created or incurred or to exist,
any Lien, (or become contractually committed to do so) except the following:
6.7.1. Liens to secure taxes, assessments and other
governmental charges, to the extent that payment thereof shall not at
the time be required by Section 6.1.
6.7.2. Deposits or pledges made (a) in connection with, or to
secure payment of, workers' compensation, unemployment insurance, old
age pensions or other social security, (b) in connection with casualty
insurance maintained in accordance with Section 6.3, (c) to secure the
performance of bids, tenders, contracts (other than contracts relating
to Financing Debt), utilities or leases, (d) to secure statutory
obligations or surety or appeal bonds, (e) to secure indemnity,
performance or other similar bonds in the ordinary course of business
53
or (f) in connection with contested amounts to the extent that payment
thereof shall not at that time be required by Section 6.1.
6.7.3. Liens in respect of judgments or awards, to the extent
that such judgments or awards are permitted by Section 6.6.6.
6.7.4. Liens of carriers, warehouses, mechanics, suppliers and
similar Liens, in each case (a) in existence less than 90 days from the
later of (i) the date of creation thereof or (ii) the date payment of
Indebtedness secured thereby is due, or (b) being contested in good
faith by the Company or any Subsidiary in appropriate proceedings (so
long as the Company or such Subsidiary shall, in accordance with GAAP,
have set aside on its books adequate reserves with respect thereto).
6.7.5. Encumbrances in the nature of (a) zoning restrictions,
(b) easements, (c) restrictions of record on the use of real property,
(d) landlords' and lessors' Liens on rented premises and
(e) restrictions on transfers or assignment of leases, licenses and
other contracts, which in each case do not materially detract from the
value of the encumbered property or impair the use thereof in the
business of the Company or any Subsidiary.
6.7.6. Restrictions under federal and state securities laws
and shareholder agreements on the transfer of securities.
6.7.7. Restrictions under foreign trade regulations on the
transfer or licensing of certain assets of the Company and its
Subsidiaries.
6.7.8. Liens constituting (a) purchase money security
interests (including mortgages, conditional sales, Capitalized Leases
and any other title retention or deferred purchase devices) in real
property, interests in leases or tangible personal property (other than
inventory) existing or created on the date on which such property is
acquired or within 90 days thereafter, and (b) the renewal, extension
or refunding of any security interest referred to in the foregoing
clause (a) in an amount not to exceed the amount thereof remaining
unpaid immediately prior to such renewal, extension or refunding;
provided, however, that (i) each such security interest shall attach
solely to the particular item of property so acquired, and the
principal amount of Indebtedness (including Indebtedness in respect of
Capitalized Lease Obligations) secured thereby shall not exceed the
cost (including all such Indebtedness secured thereby, whether or not
assumed) of such item of property; and (ii) the aggregate principal
amount of all Indebtedness secured by Liens permitted by this
Section 6.7.8 shall not exceed the amount permitted by Section 6.6.7.
6.7.9. Liens securing industrial development bonds or other
special purpose financing permitted by Section 6.6.18 on the assets
being acquired, constructed or improved with the proceeds of such
bonds.
6.7.10. Liens securing the Credit Obligations.
6.7.11. Rights of set-off held by any banks.
54
6.7.12. Liens on foreign assets owned by Foreign Subsidiaries
to secure Indebtedness of Foreign Subsidiaries in respect of credit
facilities permitted by Section 6.6.16.
6.7.13. Pledge of certificates of deposit of the Company
constituting Guarantees permitted by Section 6.6.10.
6.7.14. Liens existing on the Initial Closing Date as described
on Exhibit 7.3, and all subsequent Liens on the same assets to secure
Indebtedness permitted by Section 6.6.12.
6.7.15. Receivables Securitizations permitted by
Section 6.10.6.
6.8. Investments and Acquisitions. Neither the Company nor any of
its Subsidiaries shall have outstanding, acquire, commit itself to acquire or
hold any Investment (including any Investment consisting of the acquisition
of any business) (or become contractually committed to do so) except for the
following:
6.8.1. Investments of the Company and its Subsidiaries in
Wholly Owned Subsidiaries (a) which are domestic Subsidiaries as of the
date of this Agreement or (b) which become domestic Wholly Owned
Subsidiaries after the Initial Closing Date and become Guarantors to the
extent required by Section 9.9; provided, however, that no such
Investment shall involve the transfer by the Company of any substantial
assets (other than cash).
6.8.2. Intercompany loans and advances from any Subsidiary to
the Company or any Guarantor that are subordinated to the Credit
Obligations in accordance with the Foreign Subsidiary Subordination
Agreement.
6.8.3. Investments in Cash Equivalents.
6.8.4. Guarantees permitted by Section 6.6.
6.8.5. So long as immediately before and after giving effect
thereto no Default exists, and so long as the Company (if the Company is
party thereto) or a Guarantor (if the Company is not party thereto) is
the surviving entity, the Company and its Subsidiaries may acquire
another entity in the same line of business as the Company as described
in Section 6.2.1 for a purchase price not exceeding, except with the
consent of the Required Lenders:
(a) at all times when Consolidated Total Net Debt
(calculated on a pro forma basis giving effect to the proposed
acquisition) is less than 150% of Consolidated EBITDA for the most
recent period of four consecutive fiscal quarters (calculated on a pro
forma basis giving effect to the proposed acquisition as if such
acquisition had been consummated at the beginning of such period) for
which financial reports have been (or are required to have been)
furnished to the Lenders in accordance with Sections 6.4.1 or 6.4.2,
$75,000,000 for any single acquisition and $100,000,000 in cumulative
55
aggregate purchase price for all acquisitions permitted by this
Section 6.8.5 during the period from the Initial Closing Date
through the Final Maturity Date and
(b) at all other times, $50,000,000 for any single
acquisition and $100,000,000 in cumulative aggregate purchase price for
all acquisitions permitted by this Section 6.8.5 during the period from
the Initial Closing Date through the Final Maturity Date; provided,
however, that (i) the acquisition must be approved by the target
entity's board of directors, (ii) the Company must be in compliance
with the Computation Covenants immediately after giving effect to such
acquisition, (iii) the acquired entity must not have any environmental
liabilities which, after giving effect to such acquisition, would
reasonably be expected to result in a Material Adverse Change and (iv)
any Subsidiary (other than a Foreign Subsidiary) acquired under this
Section 6.8.5 shall guarantee the Credit Obligations, as contemplated
by Section 9.9.
6.8.6. Investments in Unrestricted Affiliates engaged in
businesses contemplated by Section 6.2.1 in an aggregate outstanding
amount not to exceed, at the time any such Investment is made,
(a) $25,000,000 at all times when Consolidated Total Net Debt exceeds
150% of Consolidated EBITDA for the most recent period of four
consecutive fiscal quarters for which financial reports have been (or
are required to have been) furnished to the Lenders in accordance with
Sections 6.4.1 or 6.4.2 and (b) $45,000,000 at all other times.
6.8.7. Loans or advances to employees of the Company in an
amount not to exceed (a) $1,000,000 in the aggregate outstanding at any
time for the purchase of capital stock of the Company and
(b) $5,000,000 in the aggregate outstanding at any time for all other
purposes.
6.8.8. So long as immediately before and after giving effect
thereto no Default exists, Investments of the Company and its
Subsidiaries in foreign Wholly Owned Subsidiaries; provided, however,
that:
(a) such Investments shall not involve the transfer of
substantial noncash assets from the Company and its domestic
Subsidiaries to its Foreign Subsidiaries other than up to $35,000,000
in book value of foreign patents, foreign trademarks and an airlaid
machine located in Ireland but owned by Buckeye Mt. Xxxxx LLC and
(b) net cash Investments of the Company and its domestic
Subsidiaries in Foreign Subsidiaries made pursuant to this Section
6.8.8 at any one time outstanding shall not exceed the sum of (i)
$50,000,000, plus (ii) the amount of Capital Expenditures permitted by
Section 6.5.4 incurred by such Foreign Subsidiaries, plus (iii)
Investments outstanding on the date hereof as described in Exhibit
6.8.8.
6.9. Distributions. Neither the Company nor any of its
Subsidiaries shall make any Distribution (or become contractually committed to
do so) except for the following:
56
6.9.1. Subsidiaries of the Company may make Distributions to
the Company or any Wholly Owned Subsidiary of the Company, and the
Company and its Subsidiaries may make Investments permitted by
Section 6.8.
6.9.2. So long as immediately before and after giving effect
thereto no Default exists, the Company may make Distributions in an
aggregate amount which shall not exceed the sum of (i) 50% of the sum
of the Consolidated Net Income (which may be a negative number) for
each fiscal quarter after March 31, 2001, plus (ii) the net amount
received by the Company from the exercise of options and other
purchases of Company stock after March 31, 2001 by Company employees
plus (iii) $35,000,000, which amount in this clause (iii) may be
applied to pay dividends to stockholders or to repurchase shares of the
Company's capital stock from its stockholders only after the amounts in
clauses (i) and (ii) have already been applied in their entirety to pay
dividends or to make stock repurchases.
6.9.3. The Company may pay interest and principal of the
Approved Subordinated Debt each in accordance with the respective
subordination provisions thereof.
6.9.4. So long as immediately before and after giving effect
thereto no Default exists, any of the Company and its Subsidiaries may
repay intercompany Indebtedness and interest thereon owing to any of
the Company and its Subsidiaries.
6.9.5. So long as immediately before and after giving effect
thereto no Default exists, the Company may repurchase shares of its
stock from employees whose employment with the Company and its
Subsidiaries has terminated, to the extent required by the Company's
nonqualified employee benefit plans and contracts in an aggregate
amount not exceeding the sum of $1,000,000 in any fiscal year plus net
amounts received by the Company during such fiscal year from the
exercise of options and other purchases of Company stock by employees.
6.10. Asset Dispositions and Mergers. Neither the Company nor any of
its Subsidiaries shall merge or enter into a consolidation or sell, lease, sell
and lease back, sublease or otherwise dispose of any of its assets, (or become
contractually committed to do so), except the following:
6.10.1. The Company and any of its Subsidiaries may sell or
otherwise dispose of (a) inventory in the ordinary course of business,
(b) tangible assets to be replaced in the ordinary course of business
within 12 months by other tangible assets of equal or greater value
and (c) tangible assets that are no longer used or useful in the
business of the Company or such Subsidiary; provided, however, that the
fair market value of all items so sold or disposed of pursuant to this
clause (c) plus all items sold or disposed of pursuant to Section
6.10.4 shall not exceed $5,000,000 in any fiscal year.
6.10.2. Any Subsidiary of the Company may merge, amalgamate or
be liquidated or reorganized into the Company or any Wholly Owned
Subsidiary of the Company so long as after giving effect to any such
merger to which the Company or a Guarantor is a party the Company or
57
(if the Company is not party thereto) a Guarantor shall be the
surviving or resulting Person.
6.10.3. So long as immediately before and after giving effect
thereto no Default exists, the Company may, in addition to transactions
permitted under 6.10.1, sell or otherwise dispose of assets for fair
value; provided, however, that the Company shall make any prepayments
of the Loan required by Section 4.2.2 as a result of such disposition.
6.10.4. So long as immediately before and after giving effect
thereto no Default exists, the Company may sell or otherwise dispose of
assets for fair market value so long as the fair market value of all
items so sold or disposed of pursuant to this Section 6.10.4 plus all
items sold or disposed of pursuant to Section 6.10.1(c) shall not
exceed $5,000,000 in any fiscal year.
6.10.5. Mergers constituting Investments permitted by
Section 6.8.5.
6.10.6. So long as immediately before and after giving effect
thereto no Default exists, the Company and its Subsidiaries may enter
into a Receivables Securitization; provided, however, that the Company
shall make any prepayments of the loan required by Section 4.2.3 as a
result of such Receivables Securitization.
6.10.7. Transfers by the Company and its domestic Subsidiaries
of foreign patents, foreign trademarks and other foreign assets to its
Foreign Subsidiaries to the extent permitted by Section 6.8.8.
6.11. Lease Obligations. Neither the Company nor any of its
Subsidiaries shall be or become obligated as lessee under any lease except:
6.11.1. Capitalized Leases permitted by Sections 6.6.7, 6.7.8
and 6.7.9.
6.11.2. Leases other than Capitalized Leases; provided,
however, that the aggregate fixed rental obligations for any year
(excluding payments required to be made by the lessee in respect of
taxes, insurance and operating expenses whether or not denominated as
rent) shall not exceed $15,000,000.
6.12. Issuance of Stock by Subsidiaries; Subsidiary Distributions,
etc.
6.12.1. Issuance of Stock by Subsidiaries. No Wholly Owned
Subsidiary shall issue or sell any shares of its capital stock or other
evidence of beneficial ownership (except for directors' qualifying
shares and, in the case of Foreign Subsidiaries, shares required to be
held by foreign nationals) to any Person other than the Company or any
Wholly Owned Subsidiary of the Company.
6.12.2. No Restrictions on Subsidiary Distributions. Except for
this Agreement and the Credit Documents and except as provided in the
credit facilities of the Foreign Subsidiaries permitted by Section
6.15.4 or required by law, neither the Company nor any Subsidiary shall
enter into or be bound by any agreement (including covenants requiring
58
the maintenance of specified amounts of net worth or working capital)
restricting the right of any Subsidiary to make Distributions or
extensions of credit to the Company (directly or indirectly through
another Subsidiary).
6.12.3. Observance of Corporate Formalities. The Company's
Subsidiaries shall observe all Legal Requirements necessary to preserve
their separate existences as independent corporations, limited
partnerships or other entities, including keeping separate corporate
records and financial statements, electing offices and directors,
holding director meetings, formally issuing equity interests and
recording as independent all transactions with the Company and its other
Subsidiaries.
6.13. Voluntary Prepayments of Other Indebtedness. Neither the Company
nor any of its Domestic Subsidiaries shall make any voluntary prepayment of
principal of or interest on any Financing Debt (other than the Credit
Obligations) or make any voluntary redemptions or repurchases of Financing Debt
(other than the Credit Obligations) in an aggregate amount exceeding $20,000,000
since the Initial Closing Date, except that the Company and its Domestic
Subsidiaries may refinance Financing Debt to the extent permitted by Section
6.6, provided, however, that such amount shall increase to $40,000,000 at any
time when Total Net Debt/EBIDTA is less than 250%, and provided, further, that
if Total Net Debt/EBITDA decreases below 250% and then subsequently becomes
greater than 250%, such amount shall be limited to the greater of $20,000,000
in the aggregate or the aggregate amount of such prepayments made as of the
time Total Net Debt/EBITDA again became greater than 250%.
6.14. Derivative Contracts. Neither the Company nor any of its
Subsidiaries shall enter into any Hedging Agreement or other financial or
commodity derivative contracts except to provide hedge protection for an
underlying economic transaction in the ordinary course of business.
6.15. Negative Pledge Clauses. Neither the Company nor any of its
Subsidiaries shall enter into any agreement, instrument, deed or lease which
prohibits or limits the ability of the Company or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of their respective
properties, assets or revenues, whether now owned or hereafter acquired or which
requires the grant of any collateral for such obligation if collateral is
granted for another obligation, except the following:
6.15.1. This Agreement and the other Credit Documents.
6.15.2. Covenants in documents creating Liens permitted by
Section 6.7 prohibiting further Liens on the assets encumbered thereby.
6.15.3. Covenants in the indentures for the Approved
Subordinated Debt as in effect on the Initial Closing Date.
6.15.4. Covenants in the credit facilities of the Foreign
Subsidiaries permitted by Section 6.6.16 prohibiting further Liens on
the assets of the Foreign Subsidiaries, restrictions required by law
or customary non-assignment provisions.
59
6.16. ERISA, etc. Each of the Company and its Subsidiaries shall comply,
and shall cause all ERISA Group Persons to comply, in all material respects,
with the provisions of ERISA and the Code applicable to each Plan. Each of the
Company and its Subsidiaries shall meet, and shall cause all ERISA Group Persons
to meet, all minimum funding requirements applicable to them with respect to any
Plan pursuant to section 302 of ERISA or section 412 of the Code, without giving
effect to any waivers of such requirements or extensions of the related
amortization periods which may be granted, except if the failure to comply would
not reasonably be expected to result in a Material Adverse Change. At no time
shall the Accumulated Benefit Obligations under any Plan that is not a
Multiemployer Plan exceed the fair market value of the assets of such Plan
allocable to such benefits by more than $5,000,000. The Company and its
Subsidiaries shall not withdraw, and shall cause all other ERISA Group Persons
not to withdraw, in whole or in part, from any Multiemployer Plan so as to give
rise to withdrawal liability exceeding $5,000,000 in the aggregate. At no time
shall the actuarial present value of unfunded liabilities for post-employment
health care benefits, whether or not provided under a Plan, calculated in a
manner consistent with Statement No. 106 of the Financial Accounting Standards
Board, exceed $30,000,000.
6.17. Transactions with Affiliates. Neither the Company nor any of its
Subsidiaries shall effect any transaction with any of their respective
Affiliates (except for the Company and its Subsidiaries) on a basis less
favorable, in the reasonable, good faith judgment of the Company, to the Company
and its Subsidiaries than would be the case if such transaction had been
effected with a non-Affiliate.
6.18. Environmental Laws.
6.18.1. Compliance with Law and Permits. Each of the Company
and its Subsidiaries shall use and operate all of its facilities and
properties in material compliance with all Environmental Laws (for
purposes of this sentence, any such facility that is now or hereafter
listed on the National Priorities List pursuant to procedures described
in 40 C.F.R. ss.300.425 shall be deemed solely for purposes of this
sentence not to be in material compliance with Environmental Laws), keep
all necessary permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain in
material compliance therewith, and handle all Hazardous Materials in
material compliance with all applicable Environmental Laws, except where
such failure to use, operate, keep, or handle in compliance would not
reasonably be expected to result in a Material Adverse Change.
6.18.2. Notice of Claims, etc. Each of the Company and its
Subsidiaries shall, as soon as reasonably practicable, notify the Agent,
and provide copies (when applicable) of (a) any failure to comply with
Section 6.18.1 or (b) upon receipt, of all written claims, complaints,
notices or inquiries from governmental authorities relating to any
alleged noncompliance with or liability under Environmental Laws with
respect to the facilities or properties that might reasonably be expected
to result in payments by the Company and its Subsidiaries in an aggregate
amount exceeding $5,000,000 in excess of applicable insurance.
60
6.19. Interpretation of Covenants. In Sections 6.6 through 6.18, the
various permitted transactions provided in the subsections to each Section are
cumulative and not exclusive of each other. The Company and its Subsidiaries may
decide in their reasonable discretion which of the various applicable
subsections shall apply to a particular transaction.
7. Representations and Warranties. In order to induce the Lenders to
extend credit to the Company hereunder, each of the Company and such of its
Subsidiaries as are party hereto from time to time jointly and severally
represents and warrants as follows:
7.1. Organization and Business.
7.1.1. The Company. The Company is a duly organized and
validly existing corporation, in good standing under the laws of
Delaware with all power and authority, corporate or otherwise, necessary
to (a) enter into and perform this Agreement and each other Credit
Document to which it is party and (b) own its properties and carry on
the business now conducted by it. Certified copies of the Charter and
By-laws of the Company have been previously delivered to the Agent and
are correct and complete. Exhibit 7.1, as from time to time hereafter
supplemented in accordance with Sections 6.4.1 and 6.4.2, sets forth, as
of the later of the date hereof or as of the end of the most recent
fiscal quarter for which financial statements are required to be
furnished in accordance with such Sections, (i) the jurisdiction of
incorporation of the Company, (ii) the address of the Company's
principal executive office and chief place of business, (iii) each name,
including any trade name, under which the Company conducts its
business and (iv) the jurisdictions in which the Company owns real or
tangible personal property.
7.1.2. Subsidiaries. Each Subsidiary of the Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized, with all power and authority,
corporate or otherwise, necessary to (a) enter into and perform this
Agreement and each other Credit Document to which it is party,
(b) guarantee the Credit Obligations and (c) own its properties and
carry on the business now conducted by it. Certified copies of the
Charter and By-laws of each Subsidiary party hereto have been previously
delivered to the Agent and are correct and complete. Exhibit 7.1, as
from time to time hereafter supplemented in accordance with Sections
6.4.1 and 6.4.2, sets forth, as of the later of the date hereof or as of
the end of the most recent fiscal quarter for which financial statements
are required to be furnished in accordance with such Sections, (i) the
name and jurisdiction of organization of each Subsidiary of the Company,
(ii) the address of the chief executive office and principal place of
business of each such Subsidiary, (iii) each name under which each such
Subsidiary conducts its business, (iv) each jurisdiction in which each
such Subsidiary owns real or tangible personal property, (v) the number
of authorized and issued shares and ownership of each such Subsidiary
and (vi) whether such Subsidiary is a Guarantor or an Immaterial
Subsidiary.
7.1.3. Qualification. Each of the Company and its Subsidiaries
is duly and legally qualified to do business as a foreign corporation or
other entity and is in good standing in each state or jurisdiction in
which such qualification is required and is duly authorized, qualified
and licensed under all laws, regulations, ordinances or orders of public
61
authorities, or otherwise, to carry on its business in the places and
in the manner in which it is conducted, except for failures to be so
qualified, authorized or licensed which would not in the aggregate
reasonably be expected to result, or create a material risk of
resulting, in any Material Adverse Change.
7.1.4. Capitalization. No options, warrants, conversion
rights, preemptive rights or other statutory or contractual rights to
purchase shares of capital stock or other securities of any Subsidiary
now exist, nor has any Subsidiary authorized any such right, nor is any
Subsidiary obligated in any other manner to issue shares of its capital
stock or other securities, except for share pledges described in
Exhibit 7.3.
7.2. Financial Statements and Other Information; Material
Agreements.
7.2.1. Financial Statements and Other Information. The
Company has previously furnished to the Lenders copies of the
following:
(a) The audited Consolidated balance sheets of the Company
and its Subsidiaries as at June 30 in each of 1999 and 2000 and the
audited Consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries for the
fiscal years of the Company then ended.
(b) The unaudited Consolidated balance sheet of the
Company and its Subsidiaries as at December 31, 2000 and the unaudited
Consolidated statements of income, changes in shareholders' equity and
cash flows of the Company and its Subsidiaries for the portion of the
fiscal year then ended.
(c) The five-year financial and operational projections
for the Company previously supplied to the Lenders and included as part
of the offering memorandum for the initial syndication of the Credit
Obligations
(d) Calculations demonstrating compliance with the
Computation Covenants as of December 31, 2000.
The audited Consolidated financial statements (including the
notes thereto) referred to in clause (a) above were prepared in
accordance with GAAP and fairly present the financial position of the
Company and its Subsidiaries on a Consolidated basis at the respective
dates thereof and the results of their operations for the periods
covered thereby. The unaudited Consolidated financial statements
referred to in clause (b) above were prepared in accordance with GAAP
and fairly present the financial position of the Company and its
Subsidiaries at the respective dates thereof and the results of their
operations for the periods covered thereby, subject to normal year-end
audit adjustment and the addition of footnotes in the case of interim
financial statements. Neither the Company nor any of its Subsidiaries
has any known contingent liability material to the Company and its
Subsidiaries on a Consolidated basis which is not reflected in the
balance sheets referred to in clauses (a) or (b) above (or delivered
pursuant to Sections 6.4.1 or 6.4.2) or in the notes thereto or
otherwise disclosed to the Agent in writing.
62
In the Company's judgment, the financial and operational
projections referred to in clause (d) above constitute a reasonable
basis as of the Initial Closing Date for the assessment of the future
performance of the Company and its Subsidiaries during the periods
indicated therein, it being understood that any projected financial
information represents an estimate, based on various assumptions, of
future results of operations which may or may not in fact occur.
7.2.2. Material Agreements. The Company has previously
furnished to the Lenders correct and complete copies, including all
exhibits, schedules and amendments thereto, of the agreements and
registration statements, each as in effect on the date hereof, listed
in Exhibit 7.2.2 (together with the Charters and Bylaws for the Company
and its Subsidiaries, the "Material Agreements").
7.3. Agreements Relating to Financing Debt, Investments, etc.
Exhibit 7.3, as from time to time hereafter supplemented in accordance with
Sections 6.4.1 and 6.4.2, sets forth:
(a) The amounts (as of the dates indicated in Exhibit 7.3,
as so supplemented) of all Financing Debt of the Company and its
Subsidiaries and all agreements which relate to such Financing Debt.
(b) All Liens and Guarantees with respect to such
Financing Debt.
(c) All agreements which directly or indirectly require the
Company or any Subsidiary to make any Investment.
(d) Material license agreements with respect to the
products of the Company and its Subsidiaries, including the parties
thereto and the expiration dates thereof.
(e) All trademarks, tradenames, service marks, service
names and patents owned by the Company and its Subsidiaries that are
registered with the federal Patent and Trademark Office (or with
respect to which applications for such registration have been filed).
(f) All copyrights owned by the Company and its
Subsidiaries that are registered with the federal Copyright Office.
(g) All internet domain names owned by the Company and its
Subsidiaries and the related registry information.
(h) All commercial tort claims held by the Company and its
Subsidiaries.
(i) All bank and deposit accounts owned by the Company and
its domestic Subsidiaries.
The Company has furnished the Lenders correct and complete copies of
any agreements described above in this Section 7.3 requested by the Required
Lenders
63
7.4. Changes in Condition. Since the later of June 30, 2000 or the end
of the Company's most recently completed fiscal year for which financial reports
have been furnished to the Lenders in accordance with Section 6.4.1 no Material
Adverse Change (other than an event described in Exhibit 5.2) has occurred and
between the later of June 30, 2000 or the end of the Company's most recently
completed fiscal year for which financial reports have been furnished to the
Lenders in accordance with Section 6.4.1and the date hereof, neither the Company
nor any Subsidiary of the Company has entered into any material transaction
outside the ordinary course of business except for the transactions permitted by
this Agreement and the Material Agreements or as described in Exhibit 5.2.
7.5. Title to Assets. The Company and its Subsidiaries have good and
marketable title to, or adequate license or leasehold rights in, all assets
necessary for or used in the operations of their business as now conducted by
them and reflected in the most recent balance sheet referred to in Section 7.2.1
(or the balance sheet most recently furnished to the Lenders pursuant to
Sections 6.4.1 or 6.4.2), and to all assets acquired subsequent to the date of
such balance sheet, subject to no Liens except for Liens permitted by Section
6.7 and except for assets disposed of as permitted by Section 6.10.
7.6. Operations in Conformity With Law, etc. The operations of the
Company and its Subsidiaries as now conducted or proposed to be conducted are
not in violation of, nor is the Company or its Subsidiaries in default under,
any Legal Requirement presently in effect, except for such violations and
defaults as do not and would not reasonably be expected, in the aggregate, to
result, or create a material risk of resulting, in any Material Adverse Change.
The Company has received no notice of any such violation or default and has no
knowledge of any basis on which the operations of the Company or its
Subsidiaries, as now conducted and as currently proposed to be conducted after
the date hereof, would be held so as to violate or to give rise to any such
violation or default.
7.7. Litigation. Except as described in Exhibit 7.7, no litigation, at
law or in equity, or any proceeding before any court, board or other
governmental or administrative agency or any arbitrator is pending or, to the
knowledge of the Company or any Guarantor, threatened which may involve any
material risk of any final judgment, order or liability which, after giving
effect to any applicable insurance, has resulted, or is reasonably expected to
create a material risk of resulting, in any Material Adverse Change or which
seeks to enjoin the consummation, or which questions the validity, of any of the
transactions contemplated by this Agreement or any other Credit Document. No
judgment, decree or order of any court, board or other governmental or
administrative agency or any arbitrator has been issued against or binds the
Company or any of its Subsidiaries which has resulted, or is reasonably likely
to create a material risk of resulting, in any Material Adverse Change.
7.8. Authorization and Enforceability. Each of the Company and each
other Obligor has taken all corporate action required to execute, deliver and
perform this Agreement and each other Credit Document to which it is party. No
consent of stockholders of the Company is necessary in order to authorize the
execution, delivery or performance of this Agreement or any other Credit
Document to which the Company is party. Each of this Agreement and each other
Credit Document constitutes the legal, valid and binding obligation of each
Obligor party thereto and is enforceable against such Obligor in accordance with
its terms except as the enforceability of such documents may be limited by
64
bankruptcy, insolvency, reorganization, moratorium or other similar laws from
time to time in effect and affecting the rights of creditors generally and by
general principles of equity, good faith and fair dealing.
7.9. No Legal Obstacle to Agreements. Neither the execution and delivery
of this Agreement or any other Credit Document, nor the making of any borrowings
hereunder, nor the guaranteeing of the Credit Obligations, nor the consummation
of any transaction referred to in or contemplated by this Agreement or any other
Credit Document, nor the fulfillment of the terms hereof or thereof or of any
other agreement, instrument, deed or lease contemplated by this Agreement or any
other Credit Document, has constituted or resulted in or will constitute or
result in:
(a) any breach or termination of the provisions of any
agreement, instrument, deed or lease to which the Company, any of its
Subsidiaries or any other Obligor is a party or by which it is bound,
or of the Charter or By-laws of the Company, any of its Subsidiaries or
any other Obligor;
(b) the violation in any material respect of any law,
statute, judgment, decree or governmental order, rule or regulation
applicable to the Company, any of its Subsidiaries or any other
Obligor;
(c) the creation under any agreement, instrument, deed or
lease of any Lien (other than Liens which secure the Credit
Obligations) upon any of the assets of the Company, any of its
Subsidiaries or any other Obligor; or
(d) any redemption, retirement or other repurchase obligation
of the Company, any of its Subsidiaries or any other Obligor under any
Charter, By-law, agreement, instrument, deed or lease.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person is required to
be obtained or made by the Company, any of its Subsidiaries or any other Obligor
in connection with the execution, delivery and performance of this Agreement,
the Notes or any other Credit Document, the transactions contemplated hereby or
thereby, the making of any borrowing hereunder or the guaranteeing of the Credit
Obligations.
7.10. Defaults. Neither the Company nor any of its Subsidiaries is in
default under any provision of its Charter or By-laws or of this Agreement or
any other Credit Document. Neither the Company nor any of its Subsidiaries is in
default under any provision of any agreement, instrument, deed or lease to which
it is party or by which it or its property is bound. Neither the Company nor any
of its Subsidiaries has violated any law, judgment, decree or governmental
order, rule or regulation, in each case so as to result, or to be reasonably
expected to create a material risk of resulting, in any Material Adverse Change.
7.11. Licenses, etc. The Company and its Subsidiaries have all patents,
patent applications, patent licenses, patent rights, trademarks, trademark
rights, trade names, trade name rights, copyrights, licenses, franchises,
permits, authorizations and other rights as are necessary for the conduct of the
business of the Company and its Subsidiaries as now conducted by them. All of
65
the foregoing are in full force and effect in all material respects, and each of
the Company and its Subsidiaries is in substantial compliance with the foregoing
without any known conflict with the valid rights of others which has resulted,
or is reasonably likely to create a material risk of resulting, in any Material
Adverse Change. No event has occurred which permits, or after notice or lapse of
time or both would permit, the revocation or termination of any such license,
franchise or other right or which affects the rights of any of the Company and
its Subsidiaries thereunder so as to result, or is reasonably expected to create
a material risk of resulting, in any Material Adverse Change. Except as
described in Exhibit 7.7, no litigation or other proceeding or dispute exists
with respect to the validity or, where applicable, the extension or renewal, of
any of the foregoing which has resulted, or is reasonably likely to create a
material risk of resulting, in any Material Adverse Change.
7.12. Tax Returns. Each of the Company and its Subsidiaries has filed
all material tax and information returns which are required to be filed by it
and has paid, or made adequate provision for the payment of, all taxes which
have become due pursuant to such returns or to any assessment received by it,
except with respect to those taxes that the Company or its Subsidiaries are
contesting in good faith. Neither the Company nor any of its Subsidiaries knows
of any material additional assessments or any basis therefor. The Company
reasonably believes that the charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of taxes or other governmental charges
are adequate.
7.13. Certain Business Representations.
7.13.1. Labor Relations. No dispute or controversy between the
Company or any of its Subsidiaries and any of their respective employees
has resulted, or is reasonably likely to result, in any Material Adverse
Change, and neither the Company nor any of its Subsidiaries anticipates
that its relationships with its unions or employees will result, or are
reasonably likely to result, in any Material Adverse Change. The Company
has not experienced a strike or other labor interruption in the past
five years. The Company and each of its Subsidiaries is in compliance in
all material respects with all federal and state laws with respect to
(a) non-discrimination in employment with which the failure to comply,
in the aggregate, has resulted, or is reasonably likely to create a
material risk of resulting, in a Material Adverse Change and (b) the
payment of wages.
7.13.2. Antitrust. Each of the Company and its Subsidiaries is
in compliance in all material respects with all federal and state
antitrust laws relating to its business and the geographic concentration
of its business.
7.13.3. Consumer Protection. Neither the Company nor any of its
Subsidiaries is in violation of any rule, regulation, order, or
interpretation of any rule, regulation or order of the Federal Trade
Commission (including truth-in-lending), with which the failure to
comply, in the aggregate, has resulted, or is reasonably likely to
create a material risk of resulting, in a Material Adverse Change.
7.13.4. Burdensome Obligations. Neither the Company nor any of
its Subsidiaries is party to or bound by any agreement, instrument, deed
or lease or is subject to any Charter, By-law or other restriction,
66
commitment or requirement which, in the opinion of the management of
such Person, is so unusual or burdensome as in the foreseeable future
to result, or to be reasonably likely to create a material risk of
resulting, in a Material Adverse Change.
7.13.5. Future Expenditures. Neither the Company nor any of its
Subsidiaries anticipate that the future expenditures, if any, by the
Company and its Subsidiaries needed to meet the provisions of any
federal, state or foreign governmental statutes, orders, rules or
regulations will be so burdensome as to result, or create a material
risk of resulting, in any Material Adverse Change.
7.14. Environmental Regulations. Except to the extent setforth in
Exhibit 7.14:
7.14.1. Environmental Compliance. Each of the Company and its
Subsidiaries is in compliance in all material respects with the
Environmental Laws in effect in any jurisdiction in which any
properties of the Company or any of its Subsidiaries are located or
where any of them conducts its business, and with all applicable
published rules and regulations (and applicable standards and
requirements) of the federal Environmental Protection Agency and of any
similar agencies in states or foreign countries in which the Company or
its Subsidiaries conducts its business other than those which in the
aggregate have not resulted, and do not create a material risk of
resulting, in a Material Adverse Change.
7.14.2. Environmental Litigation. As of the date hereof and
except where any matter described in clauses (i) or (ii) would not
reasonably be expected to result in a Material Adverse Change, (i) no
suit, claim, action or proceeding of which the Company or any of its
Subsidiaries has been given notice or otherwise has knowledge is now
pending before any court, governmental agency or board or other forum,
or to the Company's or any of its Subsidiaries' knowledge, threatened
by any Person for, and (ii) neither the Company nor any of its
Subsidiaries have received written correspondence from any federal,
state or local governmental authority with respect to:
(a) noncompliance by the Company or any of its Subsidiaries
with any Environmental Law;
(b) personal injury, wrongful death or other tortious
conduct relating to materials, commodities or products used, generated,
sold, transferred or manufactured by the Company or any of its
Subsidiaries (including products made of, containing or incorporating
asbestos, lead or other hazardous materials, commodities or toxic
substances); or
(c) the release into the environment by the Company or any
of its Subsidiaries of any Hazardous Material generated by the Company
or any of its Subsidiaries whether or not occurring at or on a site
owned, leased or operated by the Company or any of its Subsidiaries.
7.14.3. Hazardous Material. The disposal or arrangement for
disposal at any waste disposal or dump sites at which Hazardous
Material generated by either the Company or any of its Subsidiaries has
been disposed of directly by the Company or any of its Subsidiaries and
67
all independent contractors to whom the Company or any of its
Subsidiaries have delivered Hazardous Material for disposal, or to the
Company's or any of its Subsidiaries' knowledge, where Hazardous
Material finally came to be located, has not resulted, and would not
reasonably be expected to result in a Material Adverse Change.
7.14.4. Environmental Condition of Properties. No release of
any Hazardous Material is present in any real property currently or
formerly owned or operated by the Company or any of its Subsidiaries
except that which has not resulted, and could not reasonably be
expected to result in a Material Adverse Change.
7.14.5. No Other Representations and Warranties. The
representations and warranties in this Section 7.14 constitute the sole
and exclusive representations and warranties of the Company and its
Subsidiaries with respect to all matters arising under Environmental
Laws.
7.15. Pension Plans. Each Plan (other than a Multiemployer Plan) and,
to the knowledge of the Company and its Subsidiaries, each Multiemployer Plan is
in material compliance with the applicable provisions of ERISA and the Code. As
of the date hereof, each Multiemployer Plan and each Plan that constitutes a
"defined benefit plan" (as defined in ERISA) are set forth in Exhibit 7.15. Each
ERISA Group Person has met all of the funding standards applicable to all Plans
that are not Multiemployer Plans, and no condition exists which would permit the
institution of proceedings to terminate any Plan that is not a Multiemployer
Plan under section 4042 of ERISA. To the best knowledge of the Company and each
Subsidiary, no Plan that is a Multiemployer Plan is currently insolvent or in
reorganization or has been terminated within the meaning of ERISA.
7.16. Government Regulation; Margin Stock
7.16.1. Government Regulation. Neither the Company nor any of
its Subsidiaries, nor any Person controlling the Company or any of its
Subsidiaries or under common control with the Company or any of its
Subsidiaries, is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act,
the Interstate Commerce Act or any statute or regulation which
regulates the incurring by the Company or any of its Subsidiaries of
Financing Debt as contemplated by this Agreement and the other Credit
Documents.
7.16.2. Margin Stock. Neither the Company nor any of its
Subsidiaries owns any Margin Stock in excess of 25% of the value of the
assets subject to any negative pledge arrangement or covenants
restricting asset sales.
7.17. Disclosure. Neither this Agreement nor any other Credit Document
to be furnished to the Lenders by or on behalf of the Company or any of its
Subsidiaries in connection with the transactions contemplated hereby or by such
Credit Document contains any untrue statement of material fact or omits to state
a material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
No fact is actually known to the Company or any of its Subsidiaries which has
68
not been disclosed to the Lenders and which has resulted, or in the future (so
far as the Company or any of its Subsidiaries can reasonably foresee) will
result, or is reasonably expected to create a material risk of resulting, in any
Material Adverse Change, except to the extent that present or future general
economic conditions may result in a Material Adverse Change.
8. Defaults.
8.1. Events of Default. The following events are referred to as
"Events of Default":
8.1.1. Payment. The Company shall fail to make any payment in
respect of: (a) interest or any fee on or in respect of any of the
Credit Obligations owed by it as the same shall become due and payable,
and such failure shall continue for a period of three Banking Days, or
(b) any Credit Obligation with respect to payments made by any Letter
of Credit Issuer under any Letter of Credit or any draft drawn
thereunder within three Banking Days after demand therefor by such
Letter of Credit Issuer or (c) principal of any of the Credit
Obligations owed by it as the same shall become due, whether at
maturity or by acceleration or otherwise.
8.1.2. Specified Covenants. The Company or any of its
Subsidiaries shall fail to perform or observe any of the provisions of
Sections 6.5 through 6.15.
8.1.3. Other Covenants. The Company, any of its Subsidiaries
or any other Obligor, shall fail to perform or observe any covenant,
agreement or provision to be performed or observed by it under this
Agreement or any other Credit Document (other than covenants,
agreements or provisions with which the failure to comply would
constitute an Event of Default under Sections 8.1.2, 8.1.9, 8.1.10 or
8.1.11), and such failure shall not be rectified or cured (i) to the
written satisfaction of the Irish Lender, in the case of a failure to
perform or observe any covenant, agreement or provision to be performed
by the Company or Buckeye Technologies Ireland Limited under any
agreement or document evidencing or relating to any Irish Loan, or
(ii) to the written satisfaction of the Required Lenders, in the case
of the failure to perform or observe any other covenant, agreement or
provision, in either case within 30 days after the earlier of
(a) notice thereof by the Agent to the Company or (b) a Financial
Officer shall have actual knowledge thereof.
8.1.4. Representations and Warranties. Any representation or
warranty of or with respect to the Company, any of its Subsidiaries or
any other Obligor made to the Lenders or the Agent in, pursuant to or
in connection with this Agreement or any other Credit Document shall be
false in any material respect on the date as of which it was made.
8.1.5. Cross Default, etc.
(a) The Company or any of its Subsidiaries shall fail to
make any payment when due (after giving effect to any applicable grace
periods) in respect of any Financing Debt (other than the Credit
Obligations or the Stac-Pac notes described in Exhibit 7.7) outstanding
in an aggregate amount of principal (whether or not due) and accrued
interest exceeding $5,000,000;
69
(b) the Company or any of its Subsidiaries shall fail to
perform or observe the terms of any agreement or instrument relating to
such Financing Debt, and such failure shall continue, without having
been duly cured, waived or consented to, beyond the period of grace,
if any, specified in such agreement or instrument, and such failure
shall permit the acceleration of such Financing Debt;
(c) all or any part of such Financing Debt of the Company
or any of its Subsidiaries shall be accelerated or shall become due or
payable prior to its stated maturity for any reason whatsoever;
(d) any Lien on any property of the Company or any of its
Subsidiaries securing any such Financing Debt shall be enforced by
foreclosure or similar action; or
(e) any holder of any such Financing Debt shall exercise
any right of rescission or put right with respect thereto.
8.1.6. Ownership; Liquidation; etc. Except as permitted by
Section 6.10:
(a) the Company shall cease to own, directly or
indirectly, all the capital stock of its Wholly Owned Subsidiaries
(other than director's qualifying shares and, in the case of Foreign
Subsidiaries, shares required to be owned by foreign nationals);
(b) (i) any "person" or "group" (as such terms are used in
sections 13(d) and 14(d) of the Exchange Act), other than the current
members of the Company's management who directly (or indirectly through
Affiliates) own capital stock of the Company is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 35% of the total voting
stock of the Company;
(ii) the Company consolidates with, or mergers with or into,
another Person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any
Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which any
voting stock of the Company is reclassified or changed into or
exchanged for cash, securities or other property, other than any such
transaction where (A) any voting stock of the Company is reclassified
or changed into or exchanged for voting stock (other than redeemable
capital stock) of the surviving or transferee corporation and (B)
immediately after such transaction no "person" or "group" (as such
terms are used in sections 13(d) and 14(d) of the Exchange Act), other
than the current members of the Company's management who directly (or
indirectly through Affiliates) own capital stock of the Company, is the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 35% of the total voting
stock of the surviving or transferee corporation;
70
(iii) during any consecutive two-year period, individuals who
at the beginning of such period constituted the board of directors of
the Company (together with any new directors whose election by such
board of directors or whose nomination for election by the stockholders
of the Company was approved by a vote of two thirds of the directors
then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the board of
directors of the Company then in office; or
(iv) any final order, judgment or decree of a court of
competent jurisdiction shall be entered against the Company decreeing
the dissolution or liquidation of the Company; and
(c) the Company or any of its Subsidiaries or any other
Obligor shall initiate any action to dissolve, liquidate or otherwise
terminate its existence.
8.1.7. Enforceability, etc. Any Credit Document shall cease
for any reason (other than the scheduled termination thereof in
accordance with its terms) to be enforceable in accordance with its
terms or in full force and effect; or any party to any Credit Document
shall so assert in a judicial or similar proceeding; or the security
interests (if any) created by this Agreement or any other Credit
Documents shall cease to be enforceable and of the same effect and
priority purported to be created hereby.
8.1.8. Judgments. A final judgment (a) which, with other
outstanding final judgments against the Company and its Subsidiaries,
exceeds an aggregate of $5,000,000 in excess of applicable insurance
coverage shall be rendered against the Company or any of its
Subsidiaries, or (b) which grants injunctive relief that results, or is
reasonably likely to create a material risk of resulting, in a Material
Adverse Change and in either case if, (i) within 30 days after entry
thereof, such judgment shall not have been discharged or execution
thereof stayed pending appeal or (ii) within 30 days after the
expiration of any such stay, such judgment shall not have been
discharged.
8.1.9. ERISA. Any "reportable event" (as defined in section
4043 of ERISA) shall have occurred that reasonably could be expected to
result in termination of a Plan or the appointment by the appropriate
United States District Court of a trustee to administer any Plan or the
imposition of a Lien in favor of a Plan; or any ERISA Group Person
shall fail to pay when due amounts aggregating in excess of $5,000,000
which it shall have become liable to pay to the PBGC or to a Plan under
Title IV of ERISA; or notice of intent to terminate a Plan shall be
filed under Title IV of ERISA by any ERISA Group Person or
administrator; or the PBGC shall institute proceedings under Title IV
of ERISA to terminate or to cause a trustee to be appointed to
administer any Plan or a proceeding shall be instituted by a fiduciary
of any Plan against any ERISA Group Person to enforce section 515 or
4219(c)(5) of ERISA and such proceeding shall not have been dismissed
within 30 days thereafter; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that
any Plan must be terminated.
8.1.10. Bankruptcy, etc. The Company, any of its Subsidiaries
or any other Obligor shall:
71
(a) commence a voluntary case under the Bankruptcy Code or
authorize, by appropriate proceedings of its board of directors or
other governing body, the commencement of such a voluntary case;
(b) (i) have filed against it a petition commencing an
involuntary case under the Bankruptcy Code that shall not have been
dismissed within 60 days after the date on which such petition is
filed, or (ii) file an answer or other pleading within such 60-day
period admitting or failing to deny the material allegations of such a
petition or seeking, consenting to or acquiescing in the relief therein
provided, or (iii) have entered against it an order for relief in any
involuntary case commenced under the Bankruptcy Code;
(c) seek relief as a debtor under any applicable law, other
than the Bankruptcy Code, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors, or consent to or acquiesce in
such relief;
(d) have entered against it an order by a court of
competent jurisdiction (i) finding it to be bankrupt or insolvent,
(ii) ordering or approving its liquidation or reorganization as a
debtor or any modification or alteration of the rights of its creditors
or (iii) assuming custody of, or appointing a receiver or other
custodian for, all or a substantial portion of its property; or
(e) make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint, or consent to the
appointment of, or suffer to exist a receiver or other custodian for,
all or a substantial portion of its property.
8.1.11. Environmental Matters. The Company or any of its
Subsidiaries shall fail to comply with any Environmental Law in effect
in any jurisdiction in which any properties of the Company or any of
its Subsidiaries are located or where any of them conducts its
business, which failure would be reasonably likely to result in or
create a material risk of resulting in a Material Adverse Change and
within 30 days after such noncompliance, the Company or its
Subsidiaries shall continue to be out of compliance with such
Environmental Law; provided, however, that such 30-day period may be
extended for up to an additional 150 days so long as (a) such
noncompliance is reasonably capable of cure within such 150-day period,
and the Company and its Subsidiaries shall have commenced, and shall
continue to pursue diligently, a cure for such noncompliance and
(b) no Material Adverse Change shall have occurred.
8.2. Certain Actions Following an Event of Default. If any one or
more Events of Default shall occur, then in each and every such case:
8.2.1. Terminate Obligation to Extend Credit. Upon request of
the Required Lenders, the Agent on behalf of the Lenders shall
terminate the obligations of the Lenders to make any further
extensions of credit under the Credit Documents by furnishing notice
of such termination to the Company.
8.2.2. Specific Performance; Exercise of Rights. Upon request
of the Required Lenders, the Agent on behalf of the Lenders shall
proceed to protect and enforce the Lenders' rights by suit in equity,
72
action at law and/or other appropriate proceeding, either for specific
performance of any covenant or condition contained in this Agreement or
any other Credit Document or in any instrument or assignment delivered
to the Lenders pursuant to this Agreement or any other Credit Document,
or in aid of the exercise of any power granted in this Agreement or any
other Credit Document or any such instrument or assignment.
8.2.3. Acceleration. Upon request of the Required Lenders,
the Agent on behalf of the Lenders shall by notice in writing to the
Company (a) declare all or any part of the unpaid balance of the Credit
Obligations then outstanding (other than Hedge Agreements) to be
immediately due and payable, and (b) require the Company immediately to
deposit with the Agent in cash an amount equal to the then Letter of
Credit Exposure (which cash shall be held and applied as provided in
Section 4.4), and thereupon such unpaid balance or part thereof and
such amount equal to the Letter of Credit Exposure shall become so due
and payable without presentation, protest or further demand or notice
of any kind, all of which are hereby expressly waived; provided,
however, that if a Bankruptcy Default shall have occurred, the unpaid
balance of the Credit Obligations (other than Hedge Agreements) shall
automatically become immediately due and payable.
8.2.4. Enforcement of Payment; Setoff. Upon request of the
Required Lenders, the Agent on behalf of the Lenders shall proceed to
enforce payment of the Credit Obligations in such manner as it may
elect, and to cancel, or instruct other Letter of Credit Issuers to
cancel, any outstanding Letters of Credit which permit the cancellation
thereof. The Lenders may offset and apply toward the payment of the
Credit Obligations (and/or toward the curing of any Event of Default)
any Indebtedness from the Lenders to the respective Obligors, including
any Indebtedness represented by deposits in any account maintained with
the Lenders, regardless of the adequacy of any security for the Credit
Obligations. The Lenders shall have no duty to determine the adequacy
of any such security in connection with any such offset.
8.2.5. Cumulative Remedies. To the extent not prohibited by
applicable law which cannot be waived, all of the Lenders' rights
hereunder and under each other Credit Document shall be cumulative.
8.3. Annulment of Defaults. Once an Event of Default has occurred,
such Event of Default shall be deemed to exist and be continuing for all
purposes of the Credit Documents until the Required Lenders or the Agent (with
the consent of the Required Lenders) shall have waived such Event of Default in
writing, stated in writing that the same has been cured to such Lenders'
reasonable satisfaction or entered into an amendment to this Agreement which by
its express terms cures such Event of Default, at which time such Event of
Default shall no longer be deemed to exist or to have continued. No such action
by the Lenders or the Agent shall extend to or affect any subsequent Event of
Default or impair any rights of the Lenders upon the occurrence thereof. The
making of any extension of credit during the existence of any Default or Event
of Default shall not constitute a waiver thereof.
73
8.4. Waivers. To the extent that such waiver is not prohibited by
the provisions of applicable law that cannot be waived, each of the Company and
the other Obligors waives:
(a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by this Agreement or any
other Credit Document), protests, notices of protest and notices of
dishonor;
(b) any requirement of diligence or promptness on the part
of any Lender in the enforcement of its rights under this Agreement,
the Notes or any other Credit Document;
(c) any right it may have to claim or recover from the
Agent or any Lender any special, exemplary, punitive or consequential
damages;
(d) any and all notices of every kind and description which
may be required to be given by any statute or rule of law; and
(e) any defense (other than indefeasible payment in full)
which it may now or hereafter have with respect to its liability under
this Agreement, the Notes or any other Credit Document or with respect
to the Credit Obligations.
9. Guarantees.
9.1. Guarantees of Credit Obligations. Each Guarantor unconditionally
jointly and severally guarantees that the Credit Obligations will be performed
and will be paid in full in cash when due and payable, whether at the stated or
accelerated maturity thereof or otherwise, this guarantee being a guarantee of
payment and not of collectability and being absolute and in no way conditional
or contingent. In the event any part of the Credit Obligations shall not have
been so paid in full when due and payable, each Guarantor will, immediately upon
notice by the Agent or, without notice, immediately upon the occurrence of a
Bankruptcy Default, pay or cause to be paid to the Agent for the account of each
Lender in accordance with the Lenders' respective Percentage Interests the
amount of such Credit Obligations which are then due and payable and unpaid. The
obligations of each Guarantor hereunder shall not be affected by the invalidity,
unenforceability or irrecoverability of any of the Credit Obligations as against
any other Obligor, any other guarantor thereof or any other Person. For purposes
hereof, the Credit Obligations shall be due and payable when and as the same
shall be due and payable under the terms of this Agreement or any other Credit
Document notwithstanding the fact that the collection or enforcement thereof may
be stayed or enjoined under the Bankruptcy Code or other applicable law.
9.2. Continuing Obligation. Each Guarantor acknowledges that the
Lenders and the Agent have entered into this Agreement (and, to the extent that
the Lenders or the Agent may enter into any future Credit Document, will have
entered into such agreement) in reliance on this Section 9 being a continuing
irrevocable agreement, and such Guarantor agrees that its guarantee may not be
revoked in whole or in part. The obligations of the Guarantors hereunder shall
terminate when the commitment of the Lenders to extend credit under this
Agreement shall have terminated and all of the Credit Obligations have been
indefeasibly paid in full in cash and discharged; provided, however, that:
74
(a) if a claim is made upon the Lenders at any time for
repayment or recovery of any amounts or any property received by the
Lenders from any source on account of any of the Credit Obligations and
the Lenders repay or return any amounts or property so received
(including interest thereon to the extent required to be paid by the
Lenders) or
(b) if the Lenders become liable for any part of such claim
by reason of (i) any judgment or order of any court or administrative
authority having competent jurisdiction, or (ii) any settlement or
compromise of any such claim,
then the Guarantors shall remain liable under this Agreement for the amounts so
repaid or property so returned or the amounts for which the Lenders become
liable (such amounts being deemed part of the Credit Obligations) to the same
extent as if such amounts or property had never been received by the Lenders,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any of the Credit Obligations. Not later than five days
after receipt of notice from the Agent, the Guarantors shall jointly and
severally pay to the Agent an amount equal to the amount of such repayment or
return for which the Lenders have so become liable. Payments hereunder by a
Guarantor may be required by the Agent on any number of occasions.
9.3. Waivers with Respect to Credit Obligations. Except to the extent
expressly required by this Agreement or any other Credit Document, each
Guarantor waives, to the fullest extent permitted by the provisions of
applicable law, all of the following (including all defenses, counterclaims and
other rights of any nature based upon any of the following):
(a) presentment, demand for payment and protest of
nonpayment of any of the Credit Obligations, and notice of protest,
dishonor or nonperformance;
(b) notice of acceptance of this guarantee and notice that
credit has been extended in reliance on the Guarantor's guarantee of
the Credit Obligations;
(c) notice of any Default or of any inability to enforce
performance of the obligations of the Company or any other Person with
respect to any Credit Document, or notice of any acceleration of
maturity of any Credit Obligations;
(d) demand for performance or observance of, and any
enforcement of any provision of, the Credit Obligations, this Agreement
or any other Credit Document or any pursuit or exhaustion of rights or
remedies against the Company or any other Person in respect of the
Credit Obligations or any requirement of diligence or promptness on the
part of the Agent or the Lenders in connection with any of the
foregoing;
(e) any act or omission on the part of the Agent or the
Lenders which may impair or prejudice the rights of the Guarantor,
including rights to obtain subrogation, exoneration, contribution,
indemnification or any other reimbursement from the Company or any
other Person, or otherwise operate as a deemed release or discharge;
(f) any statute of limitations or any statute or rule of law
which provides that the obligation of a surety must be neither larger
in amount nor in other respects more burdensome than the obligation of
the principal;
75
(g) any "single action" or "anti-deficiency" law which
would otherwise prevent the Lenders from bringing any action, including
any claim for a deficiency, against the Guarantor before or after the
Agent's or the Lenders' commencement or completion of any foreclosure
action, whether judicially, by exercise of power of sale or otherwise,
or any other law which would otherwise require any election of remedies
by the Agent or the Lenders;
(h) all demands and notices of every kind with respect to
the foregoing; and
(i) to the extent not referred to above, all defenses
(other than payment) which the Company may now or hereafter have to the
payment of the Credit Obligations, together with all suretyship
defenses, which could otherwise be asserted by such Guarantor.
Each Guarantor represents that it has obtained the advice of counsel as to the
extent to which suretyship and other defenses may be available to it with
respect to its obligations hereunder in the absence of the waivers contained in
this Section 9.3.
No delay or omission on the part of the Agent or the Lenders in exercising any
right under this Agreement or any other Credit Document or under any guarantee
of the Credit Obligations shall operate as a waiver or relinquishment of such
right. No action which the Agent or the Lenders or the Company may take or
refrain from taking with respect to the Credit Obligations, including any
amendments thereto or modifications thereof or waivers with respect thereto,
shall affect the provisions of this Agreement or the obligations of the
Guarantor hereunder. None of the Lenders' or the Agent's rights shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of any Obligor, or by any noncompliance by the Company with the terms,
provisions and covenants of this Agreement, regardless of any knowledge thereof
which the Agent or the Lenders may have or otherwise be charged with.
9.4. Lenders' Power to Waive, etc. Each Guarantor grants to the Lenders
full power in their discretion, without notice to or consent of such Guarantor,
such notice and consent being expressly waived to the fullest extent permitted
by applicable law, and without in any way affecting the liability of the
Guarantor under its guarantee hereunder:
(a) To waive compliance with, and any Default under, and to
consent to any amendment to or modification or termination of any terms
or provisions of, or to give any waiver in respect of, this Agreement,
any other Credit Document, the Credit Obligations or any guarantee
thereof (each as from time to time in effect);
(b) To grant any extensions of the Credit Obligations (for
any duration), and any other indulgence with respect thereto, and to
effect any total or partial release (by operation of law or otherwise),
discharge, compromise or settlement with respect to the obligations of
the Obligors or any other Person in respect of the Credit Obligations,
whether or not rights against the Guarantor under this Agreement are
reserved in connection therewith;
76
(c) To collect or liquidate or realize upon any of the
Credit Obligations in any manner or to refrain from collecting or
liquidating or realizing upon any of the Credit Obligations; and
(d) To extend credit under this Agreement, any other
Credit Document or
otherwise in such amount as the Lenders may determine, including
increasing the amount of credit and the interest rate and fees with
respect thereto, even though the condition of the Obligors (financial
or otherwise on an individual or Consolidated basis) may have
deteriorated since the date hereof.
9.5. Information Regarding the Company, etc. Each Guarantor has made such
investigation as it deems desirable of the risks undertaken by it in entering
into this Agreement and is fully satisfied that it understands all such risks.
Each Guarantor waives any obligation which may now or hereafter exist on the
part of the Agent or the Lenders to inform it of the risks being undertaken by
entering into this Agreement or of any changes in such risks and, from and after
the date hereof, each Guarantor undertakes to keep itself informed of such risks
and any changes therein. Each Guarantor expressly waives any duty which may now
or hereafter exist on the part of the Agent or the Lenders to disclose to the
Guarantor any matter related to the business, operations, character, collateral,
credit, condition (financial or otherwise), income or prospects of the Company
or its Affiliates or their properties or management, whether now or hereafter
known by the Agent or the Lenders. Each Guarantor represents, warrants and
agrees that it assumes sole responsibility for obtaining from the Company all
information concerning this Agreement and all other Credit Documents and all
other information as to the Company and its Affiliates or their properties or
management as such Guarantor deems necessary or desirable.
9.6. Certain Guarantor Representations. Each Guarantor represents
that:
(a) it is in its best interest and in pursuit of the
purposes for which it was organized as an integral part of the business
conducted and proposed to be conducted by the Company and its
Subsidiaries, and reasonably necessary and convenient in connection
with the conduct of the business conducted and proposed to be conducted
by them, to induce the Lenders to enter into this Agreement and to
extend credit to the Company by making the Guarantees contemplated by
this Section 9,
(b) the credit available hereunder will directly or
indirectly inure to its benefit,
(c) by virtue of the foregoing it is receiving at least
reasonably equivalent value from the Lenders for its Guarantee,
(d) it will not be rendered insolvent as a result of
entering into this Agreement,
(e) after giving effect to the transactions contemplated
by this Agreement, it will have assets having a fair saleable value in
excess of the amount required to pay its probable liability on its
existing debts as they become absolute and matured,
(f) it has, and will have, access to adequate capital for
the conduct of its business,
77
(g) it has the ability to pay its debts from time to time
incurred in connection therewith as such debts mature, and
(h) it has been advised by the Agent that the Lenders are
unwilling to enter into this Agreement unless the Guarantees
contemplated by this Section 9 are given by it.
9.7. Subrogation. Each Guarantor agrees that, until the Credit
Obligations are paid in full, it will not exercise any right of reimbursement,
subrogation, contribution, offset or other claims against the other Obligors
arising by contract or operation of law in connection with any payment made or
required to be made by such Guarantor under this Agreement. After the payment
in full of the Credit Obligations, each Guarantor shall be entitled to exercise
against the Company and the other Obligors all such rights of reimbursement,
subrogation, contribution and offset, and all such other claims, to the fullest
extent permitted by law.
9.8. Subordination. Each Guarantor covenants and agrees that all
Indebtedness, claims and liabilities now or hereafter owing by the Company or
any other Obligor to such Guarantor, whether arising hereunder or otherwise, are
subordinated to the prior payment in full of the Credit Obligations and are so
subordinated as a claim against such Obligor or any of its assets, whether such
claim be in the ordinary course of business or in the event of voluntary or
involuntary liquidation, dissolution, insolvency or bankruptcy, so that no
payment with respect to any such Indebtedness, claim or liability will be made
or received while any Event of Default exists.
9.9. Future Subsidiaries; Further Assurances. The Company will from
time to time cause (a) any present Wholly Owned Subsidiary that is not a
Guarantor or an Immaterial Subsidiary within 30 days after notice from the
Agent or (b) any future Wholly Owned Subsidiary that is not an Immaterial
Subsidiary within 30 days after any such Person becomes a Wholly Owned
Subsidiary, to join this Agreement as a Guarantor and to join the Security
Agreement as an Obligor pursuant to a joinder agreement in form and substance
satisfactory to the Agent; provided, however, that in the event such a Wholly
Owned Subsidiary is prohibited by any valid law, statute, rule or regulation
from guaranteeing the Credit Obligations, or if such a guarantee by any Foreign
Subsidiary would result in a repatriation of a material amount of foreign
earnings under the Code (including the "deemed dividend" provisions of section
956 of the Code), (i)such guarantee will be limited to the extent necessary to
comply with such prohibition or to prevent such repatriation of foreign earnings
or (ii) if such limitation on the guaranteed amount is not sufficient to avoid
such prohibition or repatriation, no such guarantee shall be required. Each
Guarantor will, promptly upon the request of the Agent from time to time,
execute, acknowledge and deliver, and file and record, all such instruments,
and take all such action, including providing a legal opinion with respect to
its guarantee and grant of security interests, as the Agent deems necessary or
advisable to carry out the intent and purposes of this Section 9.9.
9.10. Contribution Among Guarantors. The Guarantors agree that, as
among themselves in their capacity as guarantors of the Credit Obligations, the
ultimate responsibility for repayment of the Credit Obligations, in the event
that the Company fails to pay when due its Credit Obligations, shall be
equitably apportioned, to the extent consistent with the Credit Documents, among
the respective Guarantors (a) in the proportion that each, in its capacity as a
78
guarantor, has benefited from the extensions of credit to the Company by the
Lenders under the Credit Agreement, or (b) if such equitable apportionment
cannot reasonably be determined or agreed upon among the affected Guarantors, in
proportion to their respective net worths determined on or about the date hereof
(or such later date as such Guarantor becomes party hereto). In the event that
any Guarantor, in its capacity as a guarantor, pays an amount with respect to
the Credit Obligations in excess of its proportionate share as set forth in this
Section 9.10, each other Guarantor shall, to the extent consistent with the
Credit Documents, make a contribution payment to such Guarantor in an amount
such that the aggregate amount paid by each Guarantor reflects its proportionate
share of the Credit Obligations. In the event of any default by any Guarantor
under this Section 9.10, each other Guarantor will bear, to the extent
consistent with the Credit Documents, its proportionate share of the defaulting
Guarantor's obligation under this Section 9.10. This Section 9.10 is intended to
set forth only the rights and obligations of the Guarantors among themselves and
shall not in any way affect the obligations of any Guarantor to the Lenders
under the Credit Documents (which obligations shall at all times constitute the
joint and several obligations of all the Guarantors).
10. Expenses; Indemnity.
10.1. Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company will pay:
(a) all reasonable expenses of the Agent (including the
out-of-pocket expenses related to forming the group of Lenders and
reasonable fees and disbursements of the counsel to the Agent) in
connection with the preparation and duplication of this Agreement, each
other Credit Document, any environmental audit report, the transactions
contemplated hereby and thereby and amendments, waivers, consents and
other operations hereunder and thereunder;
(b) all recording and filing fees and transfer and
documentary stamp and similar taxes at any time payable in respect of
this Agreement, any other Credit Document or the incurrence of the
Credit Obligations; and
(c) all other reasonable expenses incurred by the Lenders
or the holder of any Credit Obligation in connection with the
enforcement of any rights hereunder or under any other Credit Document,
including costs of collection and reasonable attorneys' fees (including
a reasonable allowance for the hourly cost of attorneys employed by the
Lenders on a salaried basis) and expenses.
10.2. General Indemnity. The Company shall indemnify the Lenders and the
Agent and hold them harmless from any liability, loss or damage resulting from
the violation by the Company of Section 2.6.5. In addition, the Company shall
indemnify each Lender, the Agent, each of the Lenders' or the Agent's directors,
officers and employees, and each Person, if any, who controls any Lender or the
Agent (each Lender, the Agent and each of such directors, officers, employees
and control Persons is referred to as an "Indemnified Party") and hold each of
79
reasonable expenses (including reasonable fees and disbursements of counsel with
whom any Indemnified Party may consult in connection therewith and all
reasonable expenses of litigation or preparation therefor) which any Indemnified
Party may incur or which may be asserted against any Indemnified Party in
connection with (a) the Indemnified Party's compliance with or contest of any
subpoena or other process issued against it in any proceeding involving the
Company or any of its Subsidiaries or their Affiliates, (b) any litigation or
investigation involving the Company, any of its Subsidiaries or their
Affiliates, or any officer, director or employee thereof, (c) the existence or
exercise of any security rights with respect to the Credit Security in
accordance with the Credit Documents, or (d) this Agreement, any other Credit
Document or any transaction contemplated hereby or thereby; provided, however,
that the foregoing indemnity shall not apply (i) to litigation commenced by the
Company against the Lenders or the Agent which seeks enforcement of any of the
rights of the Company hereunder or under any other Credit Document and is
determined adversely to the Lenders or the Agent in a final nonappealable
judgment or (ii) to the extent such claims, damages, liabilities and expenses
result from a Lender's or the Agent's gross negligence or willful misconduct.
10.3. Indemnity With Respect to Letters of Credit. The Company shall
indemnify each Letter of Credit Issuer and its correspondents and hold each of
them harmless from and against any and all claims, losses, liabilities, damages
and reasonable expenses (including reasonable attorneys' fees) arising from or
in connection with any Letter of Credit, including any such claim, loss,
liability, damage or expense arising out of any transfer, sale, delivery,
surrender or endorsement of any invoice, xxxx of lading, warehouse receipt or
other document at any time held by the Agent, any other Letter of Credit Issuer
or held for their respective accounts by any of their correspondents, in
connection with any Letter of Credit, except to the extent such claims, losses,
liabilities, damages and expenses result from gross negligence or willful
misconduct on the part of the Agent or any other Letter of Credit Issuer.
11. Operations; Agent.
11.1. Interests in Revolving Loan. The percentage interest of each
Lender in the Revolving Loan and Letters of Credit, and the related Commitments,
shall be computed based on the maximum principal amount for each Lender as set
forth in Exhibit 11.1.
11.2. Agent's Authority to Act, etc. Each of the Lenders appoints and
authorizes Fleet to act for the Lenders as the Lenders' Agent in connection with
the transactions contemplated by this Agreement and the other Credit Documents
on the terms set forth herein. In acting hereunder, the Agent is acting for the
account of Fleet to the extent of its Percentage Interest in the Revolving Loan
and of its interest in Money Market Loans and Swingline Loans made by it and for
the account of the other Lenders to the extent of the Lenders' respective
Percentage Interests or each of their interests in the Money Market Loans and
Swingline Loans made by them, and all action in connection with the enforcement
of, or the exercise of any remedies (other than the Lenders' rights of set-off
as provided in Section 8.2.4 or in any Credit Document) in respect of the Credit
Obligations and Credit Documents shall be taken by the Agent. No agent or
arranger named hereunder (other than the Agent) shall have any duties or
obligations under the Credit Documents.
11.3. Company to Pay Agent, etc. The Company and each Guarantor shall be
fully protected in making all payments in respect of the Credit Obligations to
the Agent, in relying upon consents, modifications and amendments executed by
80
the Agent purportedly on the Lenders' behalf, and in dealing with the Agent as
herein provided. The Agent may charge the accounts of the Company, on the dates
when the amounts thereof become due and payable, with the amounts of the
principal of and interest on the Loan, any amounts paid by the Letter of Credit
Issuers to third parties under Letters of Credit or drafts presented thereunder,
commitment fees, Letter of Credit fees and all other fees and amounts owing
under any Credit Document.
11.4. Lender Operations for Advances, Letters of Credit, etc.
11.4.1. Advances. On each Closing Date, each Lender shall
advance to the Agent in immediately available funds such Lender's
Percentage Interest in the portion of the Revolving Loan advanced on
such Closing Date prior to 12:00 noon (Boston time). If such funds are
not received at such time, but all applicable conditions set forth in
Section 5 have been satisfied, each Lender authorizes and requests the
Agent to advance for the Lender's account, pursuant to the terms hereof,
the Lender's respective Percentage Interest in such portion of the
Revolving Loan and agrees to reimburse the Agent in immediately
available funds for the amount thereof prior to 2:00 p.m. (Boston time)
on the day any portion of the Revolving Loan is advanced hereunder;
provided, however, that the Agent is not authorized to make any such
advance for the account of any Lender who has previously notified the
Agent in writing that such Lender will not be performing its obligations
to make further advances hereunder; and provided, further, that the
Agent shall be under no obligation to make any such advance.
11.4.2. Letters of Credit. Each of the Lenders authorizes and
requests each Letter of Credit Issuer to issue the Letters of Credit
provided for in Section 2.4 and to grant each Lender a participation in
each of such Letters of Credit in an amount equal to its Percentage
Interest in the amount of each such Letter of Credit. Promptly upon the
request of the Letter of Credit Issuer, each Lender shall reimburse the
Letter of Credit Issuer in immediately available funds for such Lender's
Percentage Interest in the amount of all obligations to third parties
incurred by the Letter of Credit Issuer in respect of each Letter of
Credit and each draft accepted under a Letter of Credit to the extent
not reimbursed by the Company. The Letter of Credit Issuer will notify
each Lender of the issuance of any Letter of Credit, the amount and
date of payment of any draft drawn or accepted under a Letter of Credit
and whether in connection with the payment of any such draft the amount
thereof was added to the Revolving Loan or was reimbursed by the
Company.
11.4.3. Agent to Allocate Payments, etc. All payments of
principal and interest in respect of the extensions of the Revolving
Loan made pursuant to this Agreement, reimbursement of amounts paid by
any Letter of Credit Issuer to third parties under Letters of Credit or
drafts presented thereunder, commitment fees, Letter of Credit fees and
other fees under this Agreement shall, as a matter of convenience, be
made by the Company and the Guarantors to the Agent in immediately
available funds. The share of each Lender shall be credited to such
Lender by the Agent in immediately available funds in such manner that
the principal amount of the Credit Obligations to be paid shall be paid
proportionately in accordance with the Lenders' respective Percentage
Interests in such Credit Obligations, except as otherwise provided in
this Agreement. Under no circumstances shall any Lender be required to
produce or present its Notes as evidence of its interests in the Credit
81
Obligations in any action or proceeding relating to the Credit
Obligations.
11.4.4. Delinquent Lenders; Nonperforming Lenders. In the event
that any Lender fails to reimburse the Agent pursuant to Section 11.4.1
for the Percentage Interest of such Lender (a "Delinquent Lender") in
any credit advanced by the Agent pursuant hereto, overdue amounts (the
"Delinquent Payment") due from the Delinquent Lender to the Agent shall
bear interest, payable by the Delinquent Lender on demand, at a per
annum rate equal to (a) the Federal Funds Rate for the first three days
overdue and (b) the sum of 2% plus the Federal Funds Rate for any
longer period. Such interest shall be payable to the Agent for its own
account for the period commencing on the date of the Delinquent Payment
and ending on the date the Delinquent Lender reimburses the Agent on
account of the Delinquent Payment (to the extent not paid by the
Company as provided below) and the accrued interest thereon (the
"Delinquency Period"), whether pursuant to the assignments referred to
below or otherwise. Upon notice by the Agent, the Company will pay to
the Agent the principal (but not the interest) portion of the
Delinquent Payment. During the Delinquency Period, in order to make
reimbursements for the Delinquent Payment and accrued interest thereon,
the Delinquent Lender shall be deemed to have assigned to the Agent all
interest, commitment fees and other payments made by the Company under
Section 3 that would have thereafter otherwise been payable under the
Credit Documents to the Delinquent Lender. During any other period in
which any Lender is not performing its obligations to extend credit
under Section 2 (a "Nonperforming Lender"), the Nonperforming Lender
shall be deemed to have assigned to each Lender that is not a
Nonperforming Lender (a "Performing Lender") all principal and other
payments made by the Company under Section 4 that would have thereafter
otherwise been payable under the Credit Documents to the Nonperforming
Lender. The Agent shall credit a portion of such payments to each
Performing Lender in an amount equal to the Percentage Interest of such
Performing Lender in an amount equal to the Percentage Interest of such
Performing Lender divided by one minus the Percentage Interest of the
Nonperforming Lender until the respective portions of the Loan owed to
all the Lenders are the same as the Percentage Interests of the Lenders
immediately prior to the failure of the Nonperforming Lender to perform
its obligations under Section 2. The foregoing provisions shall be in
addition to any other remedies the Agent, the Performing Lenders or the
Company may have under law or equity against the Delinquent Lender as a
result of the Delinquent Payment or against the Nonperforming Lender as
a result of its failure to perform its obligations under Section 2.
11.5. Sharing of Payments, etc. Each Lender agrees that (a) if by
exercising any right of set-off or counterclaim or otherwise, it shall receive
payment of (i) a proportion of the aggregate amount due with respect to its
Percentage Interest in the Revolving Loan and Letter of Credit Exposure which is
greater than (ii) the proportion received by any other Lender in respect of the
aggregate amount due with respect to such other Lender's Percentage Interest in
the Revolving Loan and Letter of Credit Exposure and (b) if such inequality
shall continue for more than 10 days, the Lender receiving such proportionately
greater payment shall purchase participations in the Percentage Interests in the
Revolving Loan and Letter of Credit Exposure held by the other Lenders, and such
other adjustments shall be made from time to time (including rescission of such
purchases of participations in the event the unequal payment originally received
82
is recovered from such Lender through bankruptcy proceedings or otherwise), as
may be required so that all such payments of principal and interest with respect
to the Revolving Loan and Letter of Credit Exposure held by the Lenders shall be
shared by the Lenders pro rata in accordance with their respective Percentage
Interests; provided, however, that this Section 11.5 shall not impair the right
of any Lender to exercise any right of set-off or counterclaim it may have and
to apply the amount subject to such exercise to the payment of Indebtedness of
any Obligor other than such Obligor's Indebtedness with respect to the Revolving
Loan and Letter of Credit Exposure. Each Lender that grants a participation in
the Credit Obligations to a Credit Participant shall require as a condition to
the granting of such participation that such Credit Participant agree to share
payments received in respect of the Credit Obligations as provided in this
Section 11.5. The provisions of this Section 11.5 are for the sole and exclusive
benefit of the Lenders and no failure of any Lender to comply with the terms
hereof shall be available to any Obligor as a defense to the payment of the
Credit Obligations.
11.6. Agent's Resignation. The Agent may resign at any time by giving at
least 60 days' prior written notice of its intention to do so to each of the
Lenders and the Company and upon the appointment by the Required Lenders of a
successor Agent satisfactory to the Company. If no successor Agent shall have
been so appointed and shall have accepted such appointment within 45 days after
the retiring Agent's giving of such notice of resignation, then the retiring
Agent may with the consent of the Company, which shall not be unreasonably
withheld, appoint a successor Agent which shall be a bank or a trust company
organized under the laws of the United States of America or any state thereof
and having a combined capital, surplus and undivided profit of at least
$100,000,000; provided, however, that any successor Agent appointed under this
sentence may be removed upon the written request of the Required Lenders, which
request shall also appoint a successor Agent satisfactory to the Company. If the
Agent assigns its entire Percentage Interest in the Loans hereunder, the Company
shall be entitled to remove the Agent. A successor Agent shall be appointed in
accordance with this Section 11.6. Upon the appointment of a new Agent
hereunder, the term "Agent" shall for all purposes of this Agreement thereafter
mean such successor. After any retiring Agent's resignation hereunder as Agent,
or the removal hereunder of any successor Agent, the provisions of this
Agreement shall continue to inure to the benefit of such Agent as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
11.7. Concerning the Agent.
11.7.1. Action in Good Faith, etc. The Agent and its officers,
directors, employees and agents shall be under no liability to any of
the Lenders or to any future holder of any interest in the Credit
Obligations for any action or failure to act taken or suffered in good
faith, and any action or failure to act in accordance with an opinion of
its counsel shall conclusively be deemed to be in good faith. The Agent
shall in all cases be entitled to rely, and shall be fully protected in
relying, on instructions given to the Agent by the required holders of
Credit Obligations as provided in this Agreement.
11.7.2. No Implied Duties, etc. The Agent shall have and may
exercise such powers as are specifically delegated to the Agent under
this Agreement or any other Credit Document together with all other
powers incidental thereto. The Agent shall have no implied duties to any
Person or any obligation to take any action under this Agreement
83
or any other Credit Document except for action specifically provided
for in this Agreement or any other Credit Document to be taken by the
Agent. Before taking any action under this Agreement or any other
Credit Document, the Agent may request an appropriate specific
indemnity satisfactory to it from each Lender in addition to the
general indemnity provided for in Section 11.10. Until the Agent has
received such specific indemnity, the Agent shall not be obligated to
take (although it may in its sole discretion take) any such action
under this Agreement or any other Credit Document. Each Lender confirms
that the Agent does not have a fiduciary relationship to it under the
Credit Documents. Each of the Company and its Subsidiaries party hereto
confirms that neither the Agent nor any other Lender has a fiduciary
relationship to it under the Credit Documents.
11.7.3. Validity, etc. The Agent shall not be responsible to
any Lender or any future holder of any interest in the Credit
Obligations (a) for the legality, validity, enforceability or
effectiveness of this Agreement or any other Credit Document, (b) for
any recitals, reports, representations, warranties or statements
contained in or made in connection with this Agreement or any other
Credit Document and (c) for the existence or value of any assets
included in any security for the Credit Obligations, (d) for the
effectiveness of any Lien purported to be included in any security for
the Credit Obligations or (e) unless the Agent shall have failed to
comply with Section 11.7.1, for the perfection of any security for the
Credit Obligations.
11.7.4. Compliance. The Agent shall not be obligated to
ascertain or inquire as to the performance or observance of any of the
terms of this Agreement or any other Credit Document; and in connection
with any extension of credit under this Agreement or any other Credit
Document, the Agent shall be fully protected in relying on a
certificate of the Company as to the fulfillment by the Company of any
conditions to such extension of credit.
11.7.5. Employment of Agents and Counsel. The Agent may execute
any of its duties as Agent under this Agreement or any other Credit
Document by or through employees, agents and attorneys-in-fact and
shall not be responsible to any of the Lenders, the Company or any
other Obligor for the default or misconduct of any such agents or
attorneys-in-fact selected by the Agent acting in good faith. The Agent
shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder or
under any other Credit Document.
11.7.6. Reliance on Documents and Counsel. The Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
affidavit, certificate, cablegram, consent, instrument, letter, notice,
order, document, statement, telecopy, telegram, telex or teletype
message or writing reasonably believed in good faith by the Agent to be
genuine and correct and to have been signed, sent or made by the Person
in question, including any telephonic or oral statement made by such
Person, and, with respect to legal matters, upon an opinion or the
advice of counsel selected by the Agent.
11.7.7. Agent's Reimbursement. Each of the Lenders severally
agrees to reimburse the Agent, in the amount of such Lender's
Percentage Interest, for any reasonable expenses not reimbursed by the
84
Company or the Guarantors (without limiting the obligation of the
Company or the Guarantors to make such reimbursement): (a) for which
the Agent is entitled to reimbursement by the Company or the Guarantors
under this Agreement or any other Credit Document, and (b) after the
occurrence of a Default, for any other reasonable expenses incurred by
the Agent on the Lenders' behalf in connection with the enforcement of
the Lenders' rights under this Agreement or any other Credit Document.
11.7.8. Agent's Fees. The Company shall pay to the Agent for
its own account an agent's fee in the amounts separately agreed to from
time to time by the Company and the Agent.
11.8. Rights as a Lender. With respect to any credit extended by it
hereunder, Fleet shall have the same rights, obligations and powers hereunder
as any other Lender and may exercise such rights and powers as though it were
not the Agent, and unless the context otherwise specifies, Fleet shall be
treated in its individual capacity as though it were not the Agent hereunder.
Without limiting the generality of the foregoing, the Percentage Interest of
Fleet shall be included in any computations of Percentage Interests. Fleet and
its Affiliates may accept deposits from, lend money to, act as trustee for and
generally engage in any kind of banking or trust business with the Company, any
of its Subsidiaries or any Affiliate of any of them and any Person who may do
business with or own an equity interest in the Company, any of its Subsidiaries
or any Affiliate of any of them, all as if Fleet were not the Agent and without
any duty to account therefor to the other Lenders.
11.9. Independent Credit Decision. Each of the Lenders acknowledges that
it has independently and without reliance upon the Agent, based on the financial
statements and other documents referred to in Section 7.2, on the other
representations and warranties contained herein and on such other information
with respect to the Company and its Subsidiaries as such Lender deemed
appropriate, made such Lender's own credit analysis and decision to enter into
this Agreement and to make the extensions of credit provided for hereunder. Each
Lender represents to the Agent that such Lender will continue to make its own
independent credit and other decisions in taking or not taking action under this
Agreement or any other Credit Document. Each Lender expressly acknowledges that
neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
such Lender, and no act by the Agent taken under this Agreement or any other
Credit Document, including any review of the affairs of the Company and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent. Except for notices, reports and other documents expressly required to
be furnished to each Lender by the Agent under this Agreement or any other
Credit Document, the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition, financial or otherwise, or creditworthiness of
the Company or any Subsidiary which may come into the possession of the Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
11.10. Indemnification. The holders of the Credit Obligations shall
indemnify the Agent and its officers, directors, employees and agents (to the
extent not reimbursed by the Obligors and without limiting the obligation of
any of theObligors to do so), pro rata in accordance with their respective
85
Percentage Interests, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time be imposed on,
incurred by or asserted against the Agent or such Persons relating to or arising
out of this Agreement, any other Credit Document, the transactions contemplated
hereby or thereby, or any action taken or omitted by the Agent in connection
with any of the foregoing; provided, however, that the foregoing shall not
extend to actions or omissions which are taken by the Agent with gross
negligence or willful misconduct.
12. Successors and Assigns; Lender Assignments and Participations. Any reference
in this Agreement to any of the parties hereto shall be deemed to include the
successors and assigns of such party, and all covenants and agreements by or on
behalf of the Company, the Guarantors, the Agent or the Lenders that are
contained in this Agreement or any other Credit Documents shall bind and inure
to the benefit of their respective successors and assigns; provided, however,
that (a) the Company and its Subsidiaries may not assign their rights or
obligations under this Agreement except for mergers or liquidations permitted by
Section 6.10 and (b) the Lenders shall be not entitled to assign their
respective Percentage Interests in the Loan hereunder except as set forth below
in this Section 12.
12.1. Assignments by Lenders.
12.1.1. Assignees and Assignment Procedures. Each Lender may
(a) without the consent of the Agent or the Company if the proposed
assignee is already a Lender hereunder or a Wholly Owned Subsidiary of
the same corporate parent of which the assigning Lender is a Subsidiary
or a fund advised by the same advisor as the assigning lender, or
(b) otherwise with the consents of the Agent and (so long as no Event
of Default exists) the Company (which consents will not be unreasonably
withheld), in compliance with applicable laws in connection with such
assignment, assign to one or more commercial banks or other financial
institutions (each, an "Assignee") all or a portion of its interests,
rights and obligations under this Agreement and the other Credit
Documents, including all or a portion, which need not be pro rata
between the Loan and the Letter of Credit Exposure, of its Commitment,
the portion of the Loan and Letter of Credit Exposure at the time owing
to it and the Notes held by it, but excluding its rights and obligations
as a Letter of Credit Issuer; provided, however, that:
(i) the aggregate amount of the Commitment of the
assigning Lender subject to each such assignment to any
Assignee other than another Lender (determined as of the date
the Assignment and Acceptance with respect to such assignment
is delivered to the Agent) shall be not less than $5,000,000
and in increments of $1,000,000 and after giving effect to such
assignment, the Commitment of the assigning Lender shall be at
least $5,000,000 (unless an assignment of a Lender's entire
Commitment is made); and
(ii) the parties to each such assignment shall
execute and deliver to the Agent an Assignment and Acceptance
(the "Assignment and Acceptance") substantially in the form of
Exhibit 12.1.1, together with the Note subject to such
assignment and a processing and recordation fee of $3,000
payable to the Agent by the assigning Lender or the Assignee.
86
Upon acceptance and recording pursuant to Section 12.1.4, from and after the
effective date specified in each Assignment and Acceptance (which effective date
shall be at least five Banking Days after the execution thereof unless waived by
the Agent):
(A) the Assignee shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and
(B) the assigning Lender shall, to the extent provided in
such assignment, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an 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 3.2.4, 3.7 and 10,
as well as to any fees accrued for its account hereunder and not yet
paid).
12.1.2. Terms of Assignment and Acceptance. By executing and
delivering an Assignment and Acceptance, the assigning Lender and
Assignee shall be deemed to confirm to and agree with each other and
the other parties hereto as follows:
(a) other than the representation and warranty that it is
the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement,
any other Credit Document or any other instrument or document furnished
pursuant hereto;
(b) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Company and its Subsidiaries or the performance or
observance by the Company or any of its Subsidiaries of any of its
obligations under this Agreement, any other Credit Document or any
other instrument or document furnished pursuant hereto;
(c) such Assignee confirms that it has received a copy of
this Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 7.2 or Section 6.4 and such
other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance;
(d) such Assignee will independently and without reliance
upon the Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement;
(e) such Assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and
87
(f) such Assignee agrees that it will perform in accordance
with the terms of this Agreement all the obligations which are required
to be performed by it as a Lender.
12.1.3. Register. The Agent shall maintain at the Boston Office
a register (the "Register") for the recordation of (a) the names and
addresses of the Lenders and the Assignees which assume rights and
obligations pursuant to an assignment under Section 12.1.1, (b) the
Percentage Interest of each such Lender as set forth in Section 11.1
and (c) the amount of the Revolving Loan, Money Market Loan, Swingline
Loan and Letter of Credit Exposure owing to each Lender from time to
time. The entries in the Register shall be conclusive, in the absence
of manifest error, and the Company, the Agent and the Lenders may treat
each Person whose name is registered therein for all purposes as a
party to this Agreement. The Register shall be available for inspection
by the Company or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
12.1.4. Acceptance of Assignment and Assumption. Upon its
receipt of a completed Assignment and Acceptance executed by an
assigning Lender and an Assignee together with the Note subject to such
assignment, and the processing and recordation fee referred to in
Section 12.1.1, the Agent shall (a) accept such Assignment and
Acceptance, (b) record the information contained therein in the
Register and (c) give prompt notice thereof to the Company. Within five
Banking Days after receipt of notice, the Company, at its own expense,
shall execute and deliver to the Agent, in exchange for the surrendered
Note, a new Note to the order of such Assignee in a principal amount
equal to the applicable Commitment and Loan assumed by it pursuant
to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment and portion of the Loan, a new Note to the order
of such assigning Lender in a principal amount equal to the applicable
Commitment and Loan retained by it. Such new Note shall be in an
aggregate principal amount equal to the aggregate principal amount of
such surrendered Note, and shall be dated the date of the surrendered
Note which it replaces.
12.1.5. Federal Reserve Bank. Notwithstanding the foregoing
provisions of this Section 12, any Lender may at any time pledge or
assign all or any portion of such Lender's rights under this Agreement
and the other Credit Documents to a Federal Reserve Bank; or, in the
case of any Lender that is a fund, to the trustee of such fund to
support the fund's obligations to such trustee, provided, however,
that no such pledge or assignment shall release such Lender from such
Lender's obligations hereunder or under any other Credit Document.
12.1.6. Further Assurances. The Company and its Subsidiaries
shall sign such documents and take such other actions from time to time
reasonably requested by an Assignee to enable it to share in the
benefits of the rights created by the Credit Documents.
12.2. Credit Participants. Each Lender may, without the consent of the
Company or the Agent, in compliance with applicable laws in connection with such
participation, sell to one or more commercial banks or other financial
institutions (each a "Credit Participant") participations in all or a portion of
its interests, rights and obligations under this Agreement and the other Credit
88
Documents (including all or a portion of its Commitment, the Loan and Letter of
Credit Exposure owing to it and the Note held by it); provided, however, that:
(a) such Lender's obligations under this Agreement shall
remain unchanged;
(b) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations;
(c) the Credit Participant shall be entitled to the benefit
of the cost protection provisions contained in Sections 3.2.4, 3.7
and 10; provided, however, that the Credit Participant shall not be
entitled to receive any greater payment thereunder than the selling
Lender would have been entitled to receive with respect to the interest
so sold if such interest had not been sold; provided, further, that the
Credit Participant shall not be entitled to receive any greater payment
hereunder than the Credit Participant would have been entitled to
receive if such Credit Participant itself were a Lender; and
(d) the Company, the 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, and
such Lender shall retain the sole right in its discretion as one of the
Lenders to vote with respect to the enforcement of the obligations of
the Company relating to the Loan and Letter of Credit Exposure and the
approval of any amendment, modification or waiver of any provision of
this Agreement (other than amendments, modifications, consents or
waivers described in clause (b) of the proviso to Section 15.1).
Each Obligor agrees, to the fullest extent permitted by applicable law, that any
Credit Participant and any Lender purchasing a participation from another Lender
pursuant to Section 11.5 may exercise all rights of payment (including the right
of set-off), with respect to its participation as fully as if such Credit
Participant or such Lender were the direct creditor of the Obligors and a Lender
hereunder in the amount of such participation.
12.3. Special Purpose Funding Vehicles. Notwithstanding anything to the
contrary contained herein, any Lender (a "Granting Lender") may grant to a
special purpose funding vehicle identified in writing by the Granting Lender to
the Agent and the Company from time to time (an "SPV") the option to provide to
the Company all or part of any extension of credit that such Granting Lender
would otherwise be obligated to make to the Company pursuant hereto; provided,
however, that (a) nothing herein shall constitute a commitment by any SPV to
make any extension of credit, (b) if an SPV elects not to exercise such option
or otherwise fails to provide all or any part of such extension of credit, the
Granting Lender shall be obligated to make such extension of credit pursuant to
the terms hereof and (c) the Granting Lender shall remain for all purposes the
Lender of record under the Credit Documents, including for the purposes of
approving amendments, waivers and other modifications of the Credit Documents.
The making of an extension of credit by an SPV hereunder shall utilize the
Commitment of the Granting Lender to the same extent as if such extension of
credit had been made by such Granting Lender. No SPV shall be liable for any
indemnity or similar payment obligation under the Credit Documents (all
liability for which shall remain with the Granting Lender). Prior to the date
that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPV, no party hereto will
89
institute against, or join any other Person in instituting against, such SPV any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings.
In addition, notwithstanding anything to the contrary contained herein, any SPV
may (i) with notice to, but without the prior consent of, the Borrower and the
Agent and without paying any processing fee therefor, assign all or a portion of
its interests in any Credit Obligations to the Granting Lender or to any
financial institutions (consented to in writing by the Borrower and Agent)
providing liquidity or credit support to such SPV to support the funding or
maintenance of extensions of credit and (ii) disclose on a confidential basis
any non-public information relating to its extensions of credit to any rating
agency, commercial paper dealer or provider of any surety, guarantee or credit
or liquidity enhancement to such SPV. This Section shall survive the termination
of this Agreement and may not be amended without the written consent of each SPV
to which a grant has been made pursuant to this Section.
12.4. Replacement of Lender. In the event that any Lender or, to the
extent applicable, any Credit Participant (the "Affected Lender"):
(a) fails to perform its obligations to fund any portion
of the Loan or to issue any Letter of Credit on any Closing Date when
required to do so by the terms of the Credit Documents or excused only
by virtue of Section 5.2.2, or fails to provide its portion of any
LIBOR Pricing Option pursuant to Section 3.2.1 or on account of a Legal
Requirement as contemplated by Section 3.2.5;
(b) demands payment under Section 3.7 in an amount the
Company deems materially in excess of the amounts with respect thereto
demanded by the other Lenders; or
(c) refuses to consent to a proposed amendment,
modification, waiver or other action requiring consent of the holders
of 100% of the Percentage Interests under Section 15.1(b) that is
consented to by the Lenders owning at least two-thirds of the
Percentage Interests;
then, so long as no Event of Default exists, the Company shall have the right to
seek a replacement lender which is reasonably satisfactory to the Agent (the
"Replacement Lender"). The Replacement Lender shall purchase the interests of
the Affected Lender in the Loan, Letters of Credit and its Commitment and shall
assume the obligations of the Affected Lender hereunder and under the other
Credit Documents upon execution by the Replacement Lender of an Assignment and
Acceptance and the tender by it to the Affected Lender of a purchase price
agreed between it and the Affected Lender (or, if they are unable to agree, a
purchase price in the amount of the Affected Lender's Percentage Interest in the
Loan and Letter of Credit Exposure, or appropriate credit support for contingent
amounts included therein, and all other outstanding Credit Obligations then owed
to the Affected Lender). Such assignment by the Affected Lender shall be deemed
an early termination of any LIBOR Pricing Option to the extent of the Affected
Lender's portion thereof, and the Company will pay to the Affected Lender any
resulting amounts due under Section 3.2.4. Upon consummation of such assignment,
the Replacement Lender shall become party to this Agreement as a signatory
hereto and shall have all the rights and obligations of the Affected Lender
under this Agreement and the other Credit Documents with a Percentage Interest
equal to the Percentage Interest of the Affected Lender, the Affected Lender
90
shall be released from its obligations hereunder and under the other Credit
Documents, and no further consent or action by any party shall be required. Upon
the consummation of such assignment, the Company, the Agent and the Affected
Lender shall make appropriate arrangements so that a new Revolving Note is
issued to the Replacement Lender if it has acquired a portion of the Revolving
Loan. The Company and the Guarantors shall sign such documents and take such
other actions reasonably requested by the Replacement Lender to enable it to
share in the benefits of the rights created by the Credit Documents. The
Affected Lender shall use reasonable efforts to minimize any increased costs,
taxes and the impact of adverse Legal Requirements or market conditions. Until
the consummation of an assignment in accordance with the foregoing provisions of
this Section 12.4, the Company shall continue to pay to the Affected Lender any
Credit Obligations as they become due and payable.
13. Confidentiality. Each Lender will make no disclosure of confidential
information furnished to it by the Company or any of its Subsidiaries unless
such information shall have become public, except:
(a) in connection with operations under or the enforcement
of this Agreement or any other Credit Document to Persons who have a
reasonable need to be furnished such confidential information and who
agree to comply with the restrictions contained in this Section 13 with
respect to such information;
(b) pursuant to any statutory or regulatory requirement or
any mandatory court order, subpoena or other legal process;
(c) to any parent or corporate Affiliate of such Lender or
to any Credit Participant, proposed Credit Participant or proposed
Assignee; provided, however, that any such Person shall agree to comply
with the restrictions set forth in this Section 13 with respect to such
information;
(d) to its independent counsel, auditors and other
professional advisors with an instruction to such Person to keep such
information confidential; and
(e) with the prior written consent of the Company, to any
other Person.
14. Notices. Except as otherwise specified in this Agreement, any notice
required to be given pursuant to this Agreement shall be given in writing. Any
notice, consent, approval, demand or other communication in connection with this
Agreement shall be deemed to be given if given in writing (including telex,
telecopy or similar teletransmission) addressed as provided below (or to the
addressee at such other address as the addressee shall have specified by notice
actually received by the addressor), and if either (a) actually delivered in
fully legible form to such address (evidenced in the case of a telex by receipt
of the correct answer back) or (b) in the case of a letter, unless actual
receipt of the notice is required by any Credit Document five days shall have
elapsed after the same shall have been deposited in the United States mails,
with first-class postage prepaid and registered or certified.
If to the Company or any of its Subsidiaries, to it at its address set
forth in Exhibit 7.1 (as supplemented pursuant to Sections 6.4.1 and 6.4.2), to
the attention of the chief financial officer.
91
If to any Lender or the Agent, to it at its address set forth on the
signature pages of this Agreement or in the Register, with a copy to the Agent.
15. Amendments, Consents, Waivers, etc.
15.1. Lender Consents for Amendments. Except as otherwise set forth
herein, the Agent may (and upon the written request of the Required Lenders the
Agent shall) take or refrain from taking any action under this Agreement or any
other Credit Document, including giving its written consent to any modification
of or amendment to and waiving in writing compliance with any covenant or
condition in this Agreement or any other Credit Document (other than a Hedge
Agreement or the documents evidencing any Irish Loan) or any Default or Event of
Default, all of which actions shall be binding upon all of the Lenders;
provided, however, that:
(a) Except as provided below, without the written consent
of the Lenders owning at least a majority of the Percentage Interests,
no written modification of, amendment to, consent with respect to,
waiver of compliance with or waiver of a Default under, any of the
Credit Documents (other than a Hedge Agreement or the documents
evidencing or relating to any Irish Loan) shall be made.
(b) Without the written consent of such Lenders as own 100%
of the Percentage Interests (disregarding the Percentage Interest of
any Nonperforming Lender so long as such Lender is treated equally with
the other Lenders with respect to any actions enumerated below):
(i) No release of, or subordination of the Lenders'
interests in, all or a substantial portion of the Credit
Security and no release of the Company or any material
Guarantor shall be made (in any event, without the written
consent of the Lenders, the Agent may release particular items
of Credit Security or particular Guarantors in dispositions
permitted by Section 6.10, as modified by amendments thereto
approved by the Required Lenders, and may release all Credit
Security pursuant to Section 16.1 upon payment in full of the
Credit Obligations and termination of the Commitments).
(ii) No incurrence or existence of any Lien on all
or substantially all of the Credit Security shall be permitted
(other than Liens securing the Credit Obligations).
(iii) No increase shall be made in the amount, or
extension of the term, of the stated Commitments of the Lenders
beyond that provided for under Section 2.
(iv) No alteration shall be made of the Lenders'
rights of set-off contained in Section 8.2.4.
(v) No amendment to or modification of this Section
15.1 or the definition of "Required Lenders" shall be made.
92
(c) Without the written consent of each Lender that is
directly affected thereby, as well as such Lenders as own at least a
majority of the Percentage Interests (disregarding the Percentage
Interest of Nonperforming Lender so long as such Lender is treated
equally with the other Lenders with respect to any actions enumerated
below):
(i) No reduction shall be made in (A) the amount of
principal of the Loan owing to such Lender or reimbursement
obligations for payments made under Letters of Credit payable
or participated to such Lender, (B) the interest rate on the
portion of the Loan owing to such Lender or (C) the Letter of
Credit fees or commitment fees owing to such Lender with
respect to the credit facility provided herein.
(ii) No change shall be made in the stated, scheduled
time of payment of any portion of the Loan owing to such
Lender or interest thereon or reimbursement of payments made
under Letters of Credit or fees relating to any of the
foregoing payable to such Lender and no waiver shall be made of
any Default under Section 8.1.1 with respect to such Lender.
(d) Without the written consent of the Agent, no amendment
or modification of any Credit Document shall affect the rights or
duties of the Agent under the Credit Documents.
(e) Without the written consent of a Letter of Credit
Issuer, no amendment or modification of any Credit Document shall
affect the rights or duties of such Letter of Credit Issuer under the
Credit Documents.
(f) Without the written consent of the Swingline Lender, no
amendment or modification of any Credit Document shall affect the
rights or duties of such Letter of Credit Issues under the Credit
Documents.
15.2. Course of Dealing; No Implied Waivers. No course of dealing
between any Lender or the Agent, on one hand, and the Company or any other
Obligor, on the other hand, shall operate as a waiver of any of the Lenders' or
the Agent's rights under this Agreement or any other Credit Document or with
respect to the Credit Obligations. Each of the Company and the Guarantors
acknowledges that if the Lenders or the Agent, without being required to do so
by this Agreement or any other Credit Document, give any notice or information
to, or obtain any consent from, the Company or any other Obligor, the Lenders
and the Agent shall not by implication have amended, waived or modified any
provision of this Agreement or any other Credit Document, or created any duty to
give any such notice or information or to obtain any such consent on any future
occasion. No delay or omission on the part of any Lender of the Agent in
exercising any right under this Agreement or any other Credit Document or with
respect to the Credit Obligations shall operate as a waiver of such right or any
other right hereunder or thereunder. A waiver on any one occasion shall not be
construed as a bar to or waiver of any right or remedy on any future occasion.
No waiver, consent or amendment with respect to this Agreement or any other
Credit Document shall be binding unless it is in writing and signed by the Agent
or the Required Lenders.
93
16. General Provisions.
16.1. Defeasance. When all Credit Obligations have been paid, performed
and reasonably determined by the Agent to have been indefeasibly discharged in
full, and if at the time no Lender continues to be committed to extend any
credit to the Company hereunder or under any other Credit Document, this
Agreement and the other Credit Documents shall terminate and, at the Company's
written request, accompanied by such certificates and other items as the Agent
shall reasonably deem necessary, the Credit Security shall revert to the
Obligors and the right, title and interest of the Agent and the Lenders therein
shall terminate. Thereupon, on the Obligors' demand and at their cost and
expense, the Agent shall execute proper instruments, acknowledging satisfaction
of and discharging this Agreement and the other Credit Documents, and shall
redeliver to the Obligors any Credit Security then in its possession; provided,
however, that Sections 3.2.4, 3.7,10, 11.7.7, 11.10, 13 and 16 shall survive
the termination of this Agreement.
16.2. No Strict Construction. The parties have participated jointly in
the negotiation and drafting of this Agreement and the other Credit Documents
with counsel sophisticated in financing transactions. In the event an ambiguity
or question of intent or interpretation arises, this Agreement and the other
Credit Documents shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement and the other
Credit Documents.
16.3. Certain Obligor Acknowledgments. Each of the Company and the
other Obligors acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Credit Documents;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Obligors arising out of or in
connection with this Agreement or any other Credit Document, and the
relationship between the Agent and Lenders, on one hand, and the
Obligors, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Credit Documents or otherwise exists by virtue of the transactions
contemplated hereby or thereby among the Obligors and the Lenders.
16.4. Venue; Service of Process; Certain Waivers. Each of the
Company, the other Obligors, the Agent and the Lenders:
(a) Irrevocably submits to the nonexclusive jurisdiction of
the state courts of The Commonwealth of Massachusetts and to the
nonexclusive jurisdiction of the United States District Court for the
District of Massachusetts for the purpose of any suit, action or other
proceeding arising out of or based upon this Agreement or any other
Credit Document or the subject matter hereof or thereof;
94
(b) Waives to the extent not prohibited by applicable law
that cannot be waived, and agrees not to assert, by way of motion, as a
defense or otherwise, in any such proceeding brought in any of the
above-named courts, any claim that it is not subject personally to the
jurisdiction of such court, that its property is exempt or immune from
attachment or execution, that such proceeding is brought in an
inconvenient forum, that the venue of such proceeding is improper, or
that this Agreement or any other Credit Document, or the subject matter
hereof or thereof, may not be enforced in or by such court;
(c) Consents to service of process in any such proceeding
in any manner at the time permitted by Chapter 223A of the General Laws
of The Commonwealth of Massachusetts and agrees that service of process
by registered or certified mail, return receipt requested, at its
address specified in or pursuant to Section 14 is reasonably calculated
to give actual notice; and
(d) Waives to the extent not prohibited by applicable law
that cannot be waived any right it may have to claim or recover in any
such proceeding any special, exemplary, punitive or consequential
damages.
16.5. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW THAT CANNOT BE WAIVED, EACH OF THE COMPANY, THE OTHER OBLIGORS, THE AGENT
AND THE LENDERS WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN
RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY CREDIT
OBLIGATION OR IN ANY WAY CONNECTED WITH THE DEALINGS OF THE LENDERS, THE AGENT,
THE COMPANY OR ANY OTHER OBLIGOR IN CONNECTION WITH ANY OF THE ABOVE, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR
OTHERWISE. Each of the Company and the other Obligors acknowledges that it has
been informed by the Agent that the foregoing sentence constitutes a material
inducement upon which each of the Lenders has relied and will rely in entering
into this Agreement and any other Credit Document. Any Lender, the Agent, the
Company or any other Obligor may file an original counterpart or a copy of this
Agreement with any court as written evidence of the consent of the Company,
the other Obligors, the Agent and the Lenders to the waiver of their rights to
trial by jury.
16.6. Interpretation; Governing Law; etc. Time is (and shall be) of the
essence in this Agreement and the other Credit Documents. All covenants,
agreements, representations and warranties made in this Agreement or any other
Credit Document or in certificates delivered pursuant hereto or thereto shall be
deemed to have been relied on by each Lender, notwithstanding any investigation
made by any Lender on its behalf, and shall survive the execution and delivery
to the Lenders hereof and thereof. The invalidity or unenforceability of any
provision hereof shall not affect the validity or enforceability of any other
provision hereof, and any invalid or unenforceable provision shall be modified
so as to be enforced to the maximum extent of its validity or enforceability.
The headings in this Agreement are for convenience of reference only and shall
95
not limit or otherwise affect the meaning hereof. This Agreement and the other
Credit Documents constitute the entire understanding of the parties with respect
to the subject matter hereof and thereof and supersede all prior and
contemporaneous understandings and agreements, whether written or oral. This
Agreement may be executed in any number of counterparts which together shall
constitute one instrument. This Agreement shall be governed by and construed in
accordance with the laws (other than the conflict of laws rules) of The
Commonwealth of Massachusetts.
17. Status for Other Debt Documents. This Agreement refinances and replaces the
Credit Agreement dated as of May 28, 1997, as amended, among the Company,
certain of its Subsidiaries, Fleet and the other Lenders parties thereto for
purposes of constituting the "Bank Credit Agreement" and "Bank Credit Facility"
as defined in the indentures for the Approved Subordinated Debt.
[The remainder of this page is intentionally blank]
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
BUCKEYE TECHNOLOGIES INC.
BUCKEYE FLORIDA CORPORATION
BUCKEYE XXXXX CORPORATION
BUCKEYE LUMBERTON INC.
BKI FINANCE CORPORATION
BKI INTERNATIONAL INC.
By: /S/ XXXXX X. XXXXXXXX
-----------------------------
As an authorized officer of each of the
foregoing corporations
BUCKEYE FLORIDA, LIMITED PARTNERSHIP
By Buckeye Florida Corporation, general partner
By: /S/ XXXXX X. XXXXXXXX
-----------------------------
Title: Vice President
BUCKEYE MT. XXXXX LLC
By Buckeye Lumberton Inc., manager
By: /S/ XXXXX X. XXXXXXXX
----------------------------
Title: Vice President
BKI ASSET MANAGEMENT CORPORATION
BKI HOLDING CORPORATION
By: /S/ XXXXXXX X. XXXXXX
----------------------------
Title: President
BFC I CORP.
By: /S/ XXXXX X. XXXXX
---------------------------
Xxxxx X. Xxxxx, Secretary
BFOL 1 CORP.
By: /S/ XXXXX X. XXXXX
---------------------------
Xxxxx X. Xxxxx, President
BFC 2 LP
By: BFOL 1 Corp., its general partner
By: S/S XXXXX X. XXXXX
----------------------------
Xxxxx X. Xxxxx, President
BFOL 2 LP
By: BFC I Corp., its general partner
By: /S/ XXXXX X. XXXXX
-----------------------------
Xxxxx X. Xxxxx, Secretary
BFC 3 LLC
By: BFOL 2 LP, its manager
By: BFC I Corp., its general partner
By: /S/ XXXXX X. XXXXX
--------------------------
Xxxxx X. Xxxxx, Secretary
BFOL 3 LLC
By: BFC 2 LP, its manager
By: BFOL 1 Corp., its general partner
By: /S/ XXXXX X. XXXXX
---------------------------
Xxxxx X. Xxxxx, President
MERFIN SYSTEMS INC.
By: /S/ XXXXX X. XXXXXXXX
------------------------------
Title: Vice President
FLEET NATIONAL BANK
By: /S/ XXXXXX X. XXXXXXX
--------------------------------
Title: Director
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
ABN AMRO BANK, N.V.
By: /S/ XXXXXX X. XXXX
-------------------------------
Title: Senior Vice President
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Credit Administration
Telecopy: (000) 000-0000
With a copy to:
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxxxxxx Xxxx
Telecopy: (000) 000-0000
By: /S/ XXXXX XXXXXXX
---------------------------------
Vice President
BANK OF AMERICA, N.A.
By: /S/ XXXXXX XXXXXXX
------------------------------
Title:
0000 Xxxxxx Xxx
Xxxxxxx, XX 00000
000-000-0000
THE BANK OF NOVA SCOTIA
By: /S/ A. S. XXXXXXXXXX
----------------------------
Title: Senior Team Leader-Loan Operations
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: 000-000-0000
FIRST PIONEER FARM CREDIT, ACA
By: /S/ INELIGIBLE SIGNATURE
-------------------------------
Title: Vice President
000 Xxxxx Xxxx
Xxxxxxx, XX 00000
Telecopy: 000-000-0000
FIRST UNION NATIONAL BANK
By: /S/ G. XXXXXX XXX, XX.
-----------------------------
Title: Senior Vice President
Xxx Xxxxx Xxxxx Xxxxxx 0xx
Xx 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopy: 000-000-0000
FIRSTAR BANK, NATIONAL ASSOCIATION
By: /S/ XXXX X. XXXXXX
----------------------------
Title: Senior Vice President
Firstar Tower 000 Xxxxxx
Xxxxxx 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopy: 000-000-0000
TORONTO DOMINION (TEXAS), INC.
By: /S/ XXX X. XXXXXX
----------------------------
Title: Vice President
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Telecopy: 000-000-0000
UNION PLANTERS BANK, NA
By: /S/ XXXXX X. XXXXXXXX
---------------------------
Title: Senior Vice President
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy: 000-000-0000
WACHOVIA BANK, NA
By: XXXX X. XXXXX
--------------------------
Title: Senior Vice President
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Telecopy: 000-000-0000
