Exhibit 10.1.3
Execution Copy
THIRD AMENDMENT, WAIVER AND AGREEMENT TO CREDIT
AGREEMENT AND FIRST AMENDMENT TO SECURITY AGREEMENT
THIRD AMENDMENT, WAIVER AND AGREEMENT TO CREDIT AGREEMENT AND FIRST
AMENDMENT TO SECURITY AGREEMENT, dated as of September 22, 2003 (this
"Amendment"), among TEKNI-PLEX, INC. (the "Borrower"), the Guarantors party to
the Credit Agreement and the Security Agreement referred to below (the
"Guarantors"), various lending institutions party to the Credit Agreement (the
"Lenders") and JPMORGAN CHASE BANK (f/k/a Xxxxxx Guaranty Trust Company of New
York), as Agent (in such capacity, the "Agent") under the Credit Agreement and
as Collateral Agent (in such capacity, the "Collateral Agent") under the
Security Agreement. All capitalized terms used herein and not otherwise defined
herein shall have the respective meanings provided such terms in the Credit
Agreement referred to below.
W I T N E S S E T H
WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent are
parties to a Credit Agreement, dated as of June 21, 2000 (as amended, modified
and/or supplemented to, but not including, the date hereof, the "Credit
Agreement");
WHEREAS, the Borrower, the Guarantors and the Collateral Agent are parties
to a Security Agreement, dated as of June 21, 2000 (as amended, modified and/or
supplemented to, but not including, the date hereof, the "Security Agreement");
and
WHEREAS, the Borrower has requested that the Lenders amend and waive
certain provisions of the Credit Agreement and amend the Security Agreement,
and the Lenders have agreed, subject to the terms and conditions set forth
herein, to amend the Security Agreement and to amend the Credit Agreement and
waive certain provisions thereof as herein provided;
NOW, THEREFORE, it is agreed:
I. Amendments, Waivers and Agreements to the Credit Agreement.
1. The definition of "Additional Debt Incurrence" appearing in Section
1.01 of the Credit Agreement is hereby amended by inserting the words "as in
effect on the Effective Date" immediately following the text "Section 5.10"
appearing in the parenthetical thereof.
2. The definition of "Consolidated EBITDA" appearing in Section 1.01 of
the Credit Agreement is hereby amended by (x) inserting the parenthetical
"(excluding any non-cash write-up of the value of assets)" immediately after
the first reference to the words "Consolidated Net Income" appearing therein,
(y) deleting the word "and" appearing at the end of clause (ii) thereof and
inserting a comma in lieu thereof and (z) inserting the following new clause
(iv) immediately following clause (iii) thereof:
"and (iv) (x) for each Fiscal Quarter set forth below, the
integration reserves arising from prior acquisitions incurred during
such Fiscal Quarter in the amounts set forth opposite such Fiscal
Quarters below:
-------------------------------------- -------------------------------
Fiscal Quarter Ended Amount
-------------------------------------- -------------------------------
September 30, 2002 $0
-------------------------------------- -------------------------------
December 31, 2002 $1,900,000
-------------------------------------- -------------------------------
March 31, 2003 $6,375,000
-------------------------------------- -------------------------------
June 30, 2003 $2,900,000
-------------------------------------- -------------------------------
and (y) for the Fiscal Quarters ending after June 30, 2003 and prior
to July 1, 2004, integration reserves arising from prior acquisitions;
provided that the aggregate amount added back pursuant to this clause
(y) shall not exceed $1,000,000 for all such Fiscal Quarters."
3. The definition of "Loan" appearing in Section 1.01 of the Credit
Agreement is hereby amended by inserting the text "each Additional Facility
Loan," immediately following the text "each Tranche B Term Loan," appearing
therein.
4. The definition of "Maximum Swingline Amount" appearing in Section 1.01
of the Credit Agreement is hereby amended by deleting the amount "$10,000,000"
appearing therein and inserting the amount "$5,000,000" in lieu thereof.
5. The definition of "Net Cash Proceeds" appearing in Section 1.01 of the
Credit Agreement is hereby amended by inserting the parenthetical "(other than
the Loans)" immediately following the words "the amount of any Debt" appearing
in clause (y)(I) thereof.
6. The definition of "Repayment Event" appearing in Section 1.01 of the
Credit Agreement is hereby amended by inserting the parenthetical "(other than
any Equity Issuance, the net cash proceeds of which are used to make a
Permitted Acquisition pursuant to Section 5.15(ix))" immediately following the
words "Equity Issuance" appearing in clause (iii) thereof.
7. The definition of "Required Lenders" appearing in Section 1.01 of the
Credit Agreement is hereby amended by (x) inserting the text ", Additional
Facility Commitments (or, if after the Total Additional Facility Commitment has
been terminated, outstanding Additional Facility Loans)" immediately following
the words "sum of whose outstanding Term Loans" appearing therein and (y)
deleting the text "and (ii)" appearing therein and inserting the text ", (ii)
the Total Additional Facility Commitment less the aggregate Additional Facility
Commitments of Defaulting Lenders (or, if after the Total Additional Facility
Commitment has been terminated, the then total outstanding Additional Facility
Loans of Non-Defaulting Lenders) and (iii)" in lieu thereof.
-2-
8. The definition of "Tranche" appearing in Section 1.01 of the Credit
Agreement is hereby amended by (x) deleting the word "four" appearing therein
and inserting the word "five" in lieu thereof and (y) inserting the text
"Additional Facility Loans," immediately following the text "Tranche B Term
Loans," appearing therein.
9. Section 1.01 of the Credit Agreement is hereby further amended by (x)
deleting the definitions of "Applicable Base Rate Margin," "Applicable
Euro-Dollar Margin," "Applicable Period," "Applicable Repayment Percentage,"
"Reduction Discount," "Start Date" and "Test Date" appearing therein in their
entirety and (y) inserting the following new definitions in the appropriate
alphabetical order:
"Additional Facility Commitment" has the meaning set forth in
the definition of Additional Facility Lender and as the same may be
(x) reduced pursuant to Section 2.01(f)(ii)(I) or (y) terminated
pursuant to Sections 2.01(f)(ii)(G) and 6.01.
"Additional Facility Lender" means one or more Lenders
(and/or one of more other Persons, which Persons shall be qualified as
Eligible Transferees and otherwise satisfactory to the Agent which
become Lenders pursuant to a supplement to this Agreement as described
in clause (ii) below) (i) with outstanding Additional Facility Loans
or (ii) which has agreed to provide Additional Facility Loans pursuant
to a supplement to this Agreement in form and substance satisfactory
to the Agent, which supplement shall set forth (x) the commitment (the
"Additional Facility Commitment") of such Lenders and/or other Persons
to make Additional Facility Loans and (y) in the event such Persons
are not Lenders, the agreement to make each such Person a Lender. For
the avoidance of doubt, no Lender shall be obligated to provide an
Additional Facility Commitment or Additional Facility Loans until such
time as such Lender, in its sole discretion, has agreed to provide an
Additional Facility Commitment pursuant to a supplement as set forth
in clause (ii) above.
"Additional Facility Loans" has the meaning set forth in
Section 2.01(f)(i).
"Applicable Base Rate Margin" means a percentage per annum
equal to, (x) in the case of any period preceding the occurrence of a
De-Leveraging Event, (I) with respect to Tranche A Term Loans and
Revolving Loans maintained as Base Rate Loans, 2.50%, and (II) with
respect to Tranche B Term Loans maintained as Base Rate Loans, 3.00%;
provided that the Applicable Base Rate Margin with respect to all such
Loans on and after the December 2003 Quarterly Payment Date shall be
increased by an additional 1.00% (i.e., to 3.50% and 4.00%,
respectively) and (y) in the case of any period from and after the
occurrence of a De-Leveraging Event, (I) with respect to Swingline
Loans and Tranche A Term Loans and Revolving Loans maintained as Base
Rate Loans, 2.50%, and (II) with respect to Tranche B Term Loans
maintained as Base Rate Loans, 3.00% (it being understood and agreed
that the Applicable Base Rate Margin with respect to any period (A)
preceding the Third Amendment Effective Date shall be the Applicable
Base Rate Margin without giving effect to the amendments set forth in
the Third Amendment and (B) on and after the Third Amendment Effective
Date shall be the Applicable Base Rate Margin after giving effect to
the amendments set forth in the Third Amendment).
-3-
"Applicable Euro-Dollar Margin" means a percentage per annum
equal to, (x) in the case of any period preceding the occurrence of a
De-Leveraging Event, (I) with respect to Tranche A Term Loans and
Revolving Loans maintained as Euro-Dollar Loans, 3.50%, and (II) with
respect to Tranche B Term Loans maintained as Euro-Dollar Loans,
4.00%; provided that the Applicable Euro-Dollar Margin with respect to
all such Loans on and after the December 2003 Quarterly Payment Date
shall be increased by an additional 1.00% (i.e., to 4.50% and 5.00%,
respectively) and (y) in the case of any period from and after the
occurrence of a De-Leveraging Event, (I) with respect to Tranche A
Term Loans and Revolving Loans maintained as Euro-Dollar Loans, 3.50%,
and (II) with respect to Tranche B Term Loans maintained as
Euro-Dollar Loans, 4.00% (it being understood and agreed that the
Applicable Euro-Dollar Margin with respect to any period (A) preceding
the Third Amendment Effective Date shall be the Applicable Euro-Dollar
Margin without giving effect to the amendments set forth in the Third
Amendment and (B) on and after the Third Amendment Effective Date
shall be the Applicable Euro-Dollar Margin after giving effect to the
amendments set forth in the Third Amendment).
"Applicable Repayment Percentage" means (i) in respect of an
Asset Sale or Additional Debt Incurrence, 100%, (ii) in respect of an
Equity Issuance, 75% and (iii) in respect of Excess Cash Flow, 75%;
provided that so long as no Default or Event of Default is then in
existence, if on the last day of any Excess Cash Flow Period, the
Leverage Ratio for the Test Period then ended (as established pursuant
to the officer's certificate delivered (or required to be delivered)
pursuant to Section 5.01(c)) is less than (x) 4.75 to 1.00, then the
Applicable Repayment Percentage in respect of Excess Cash Flow shall
instead be 50% or (y) 4.00 to 1.00, then no mandatory repayment shall
be required from Excess Cash Flow for such Excess Cash Flow Period;
provided further that notwithstanding the foregoing and so long as no
Default or Event of Default then exists or would result therefrom, the
Applicable Repayment Percentage with respect to a De-Leveraging Event
shall be (I) 0%, with respect to the first $25,000,000 of
De-Leveraging Net Cash Proceeds therefrom and (II) 100%, with respect
to the De-Leveraging Net Cash Proceeds in excess of the first
$25,000,000 therefrom.
"Bank Leverage Ratio" means the Leverage Ratio, except that
references to "Consolidated Debt" therein shall instead by references
to "Consolidated Bank Debt."
"Consolidated Bank Debt" means, at any time, the sum of (i)
the aggregate outstanding principal amount of all Loans at such time
and (ii) the aggregate amount of all unpaid LC Reimbursement
Obligations in respect of all Letters of Credit at such time.
"De-Leveraging Event" means the first occurrence of (i) a
Qualified De-Leveraging Equity Issuance, (ii) any Qualified
De-Leveraging Additional Debt Incurrence and/or (iii) an Asset Sale,
the aggregate De-Leveraging Net Cash Proceeds of which, on and after
the Third Amendment Effective Date, are at least $142,500,000;
provided that the De-Leveraging Net Cash Proceeds from an Asset Sale
shall not be utilized in the determination of the occurrence of a
De-Leveraging Event if at the time of such determination the Bank
Leverage Ratio is greater than 2.25:1.00 after giving pro forma effect
to such De-Leveraging Event.
-4-
"De-Leveraging Net Cash Proceeds" means, with respect to any
Repayment Event in connection with a De-Leveraging Event, an amount
equal to the gross cash proceeds received by the Borrower or any of
its Domestic Subsidiaries from or in respect of any such Repayment
Event, less any fees, costs and expenses reasonably incurred by such
Person in respect of such Repayment Event; provided that in no event
shall the aggregate amount of such fees, costs and expenses exceed an
amount equal to 3% of the gross proceeds of such De-Leveraging Event.
"De-Leveraging Second Lien Note Documents" means the
De-Leveraging Second Lien Notes, the De-Leveraging Second Lien Notes
Indenture and all other documents executed and delivered with respect
to the De-Leveraging Second Lien Notes or the De-Leveraging Second
Lien Notes Indenture, each of which shall be in form and substance
reasonably satisfactory to the Agent (including, without limitation,
the maturity thereof, the interest rate applicable thereto and the
provisions with respect to amortization, defaults, remedies, voting
rights and intercreditor rights) and, in each case, as the same may be
amended, modified or supplemented from time to time in accordance with
the terms hereof and thereof.
"De-Leveraging Second Lien Notes" means the Borrower's senior
secured second priority lien notes due no earlier than June 22, 2009,
issued pursuant to the De-Leveraging Second Lien Notes Indenture, as
the same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof. As used herein, the term
"De-Leveraging Second Lien Notes" shall include any Exchange
De-Leveraging Second Lien Notes issued pursuant to the De-Leveraging
Second Lien Notes Indenture in exchange for theretofore outstanding
De-Leveraging Second Lien Notes, as contemplated by the definition of
Exchange De-Leveraging Second Lien Notes.
"De-Leveraging Second Lien Notes Indenture" means an
indenture to be entered into in connection with the issuance of the
De-Leveraging Second Lien Notes among the Borrower, the Guarantors and
the trustee thereunder, as the same may be amended, modified or
supplemented from time to time in accordance with the terms hereof and
thereof.
"De-Leveraging Second Lien Security Documents" means security
documents that create a second priority Lien on the Collateral (and no
other assets of the Borrower and its Subsidiaries) to secure the
obligations under the De-Leveraging Second Lien Notes and the other
De-Leveraging Second Lien Note Documents, the form and substance of
which shall be reasonably satisfactory to the Agent.
"De-Leveraging Senior Unsecured Note Documents" means the
De-Leveraging Senior Unsecured Notes, the De-Leveraging Senior
Unsecured Notes Indenture and all other documents executed and
delivered with respect to the De-Leveraging Senior Unsecured Notes or
the De-Leveraging Senior Unsecured Notes Indenture, each of which
shall be in form and substance reasonably satisfactory to the Agent
(including, without limitation, the maturity thereof, the interest
rate applicable thereto and the provisions with respect to
amortization, defaults, remedies, voting rights and intercreditor
rights) and, in
-5-
each case, as the same may be amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof.
"De-Leveraging Senior Unsecured Notes" means the Borrower's
senior unsecured notes due no earlier than June 22, 2009, issued
pursuant to the De-Leveraging Senior Unsecured Notes Indenture, as the
same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof. As used herein, the term
"De-Leveraging Senior Unsecured Notes" shall include any Exchange
De-Leveraging Senior Unsecured Notes issued pursuant to the
De-Leveraging Senior Unsecured Notes Indenture in exchange for
theretofore outstanding De-Leveraging Senior Unsecured Notes, as
contemplated by the definition of Exchange De-Leveraging Senior
Unsecured Notes.
"De-Leveraging Senior Unsecured Notes Indenture" means an
indenture to be entered into in connection with the issuance of the
De-Leveraging Senior Unsecured Notes among the Borrower, the
Guarantors and the trustee thereunder, as the same may be amended,
modified or supplemented from time to time in accordance with the
terms hereof and thereof.
"De-Leveraging Subordinated Note Documents" means the
De-Leveraging Subordinated Notes, the De-Leveraging Subordinated Notes
Indenture and all other documents executed and delivered with respect
to the De-Leveraging Subordinated Notes or the De-Leveraging
Subordinated Notes Indenture, each of which shall be in form and
substance reasonably satisfactory to the Agent (including, without
limitation, the maturity thereof, the interest rate applicable thereto
and the provisions with respect to amortization, defaults, remedies,
voting rights, subordination provisions and intercreditor rights) and,
in each case, as the same may be amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof;
provided that, in any event, unless the Required Lenders otherwise
expressly consent in writing prior to the issuance thereof, (i) the
De-Leveraging Subordinated Notes shall be guaranteed on a subordinated
basis by the Guarantors, (ii) the De-Leveraging Subordinated Notes
shall not be secured by any asset of the Borrower or any of its
Subsidiaries and (iii) the De-Leveraging Subordinated Notes shall have
substantially the same (or, from the perspective of the Lenders, more
favorable) subordination provisions as are contained in the New Senior
Subordinated Note Documents.
"De-Leveraging Subordinated Notes" means the Borrower's
subordinated notes due no earlier than June 22, 2009, issued pursuant
to the De-Leveraging Subordinated Notes Indenture, as the same may be
amended, modified or supplemented from time to time in accordance with
the terms hereof and thereof. As used herein, the term "De-Leveraging
Subordinated Notes" shall include any Exchange De-Leveraging
Subordinated Notes issued pursuant to the De-Leveraging Subordinated
Notes Indenture in exchange for theretofore outstanding De-Leveraging
Subordinated Notes, as contemplated by the definition of Exchange
De-Leveraging Subordinated Notes.
"De-Leveraging Subordinated Notes Indenture" means an
indenture to be entered into in connection with the issuance of the
De-Leveraging Subordinated Notes among the
-6-
Borrower, the Guarantors and the trustee thereunder, as the same may
be amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.
"Deposit Accounts" means all "deposit accounts" as such term
is defined in the UCC as in effect on the Third Amendment Effective
Date in the State of New York.
"Exchange De-Leveraging Second Lien Notes" means
De-Leveraging Second Lien Notes which are substantially identical
securities to the De-Leveraging Second Lien Notes initially issued in
accordance with this Agreement, which Exchange De-Leveraging Second
Lien Notes shall be issued pursuant to a registered exchange offer or
private exchange offer for the De-Leveraging Second Lien Notes and
pursuant to the De-Leveraging Second Lien Notes Indenture. In no event
will the issuance of any Exchange De-Leveraging Second Lien Notes
increase the aggregate principal amount of De-Leveraging Second Lien
Notes then outstanding or otherwise result in an increase in an
interest rate applicable to the De-Leveraging Second Lien Notes.
"Exchange De-Leveraging Senior Unsecured Notes" means
De-Leveraging Senior Unsecured Notes which are substantially identical
securities to the De-Leveraging Senior Unsecured Notes initially
issued in accordance with this Agreement, which Exchange De-Leveraging
Senior Unsecured Notes shall be issued pursuant to a registered
exchange offer or private exchange offer for the De-Leveraging Senior
Unsecured Notes and pursuant to the De-Leveraging Senior Unsecured
Notes Indenture. In no event will the issuance of any Exchange
De-Leveraging Senior Unsecured Notes increase the aggregate principal
amount of De-Leveraging Senior Unsecured Notes then outstanding or
otherwise result in an increase in an interest rate applicable to the
De-Leveraging Senior Unsecured Notes.
"Exchange De-Leveraging Subordinated Notes" means
De-Leveraging Subordinated Notes which are substantially identical
securities to the De-Leveraging Subordinated Notes initially issued in
accordance with this Agreement, which Exchange De-Leveraging
Subordinated Notes shall be issued pursuant to a registered exchange
offer or private exchange offer for the De-Leveraging Subordinated
Notes and pursuant to the De-Leveraging Subordinated Notes Indenture.
In no event will the issuance of any Exchange De-Leveraging
Subordinated Notes increase the aggregate principal amount of
De-Leveraging Subordinated Notes then outstanding or otherwise result
in an increase in an interest rate applicable to the De-Leveraging
Subordinated Notes.
"Qualified De-Leveraging Additional Debt Incurrence" means an
Additional Debt Incurrence pursuant to the issuance of either
De-Leveraging Second Lien Notes, De-Leveraging Senior Unsecured Notes
and/or De-Leveraging Subordinated Notes on or after the Third
Amendment Effective Date.
"Qualified De-Leveraging Equity Issuance" means an Equity
Issuance of Qualified Preferred Stock and/or non-redeemable common
stock of the Borrower on or after the Third Amendment Effective Date.
-7-
"Third Amendment" means the Third Amendment, Waiver and
Agreement to this Agreement and First Amendment to Security Agreement,
dated as of September 22, 2003.
"Third Amendment Effective Date" has the meaning set forth in
the Third Amendment.
"Total Additional Facility Commitment" means the Additional
Facility Commitments of each of the Additional Facility Lenders in an
initial aggregate principal amount equal to $25,000,000 (before giving
effect to (x) the reduction thereof pursuant to Section 2.01(f)(ii)(I)
and (y) the termination thereof pursuant to Sections 2.01(f)(ii)(G)
and 6.01).
10. Section 2.01 is hereby amended by (x) inserting the following new
sentence at the end of clause (c) thereof:
"Notwithstanding anything to the contrary contained in this
Section 2.01(c) or in any other provision of this Agreement, Revolving
Loans may not be incurred at any time on and after the date of the
initial Borrowing of the Additional Facility Loans and prior to the
termination of the Total Additional Facility Commitment and the
repayment of all outstanding Additional Facility Loans."
, and (y) inserting the following new clause (f) at the end thereof:
"(f) (i) Subject to and upon the terms and conditions set
forth herein, each Additional Facility Lender severally agrees to
make, on or after the Third Amendment Effective Date, a revolving loan
or revolving loans (each, an "Additional Facility Loan" and,
collectively, the "Additional Facility Loans") to the Borrower, which
Additional Facility Loans (A) shall be denominated in Dollars, (B)
shall be incurred and maintained as Base Rate Loans and (C) shall not
exceed (I) for any Additional Facility Lender, that amount which
equals the Additional Facility Commitment of such Additional Facility
Lender (before giving effect to (x) the reduction thereof pursuant to
Section 2.01(f)(ii)(I) and (y) the termination thereof pursuant to
Sections 2.01(f)(ii)(G) and 6.01) and (II) for all Additional Facility
Lenders, the Total Additional Facility Commitment (before giving
effect to (x) the reduction thereof pursuant to Section 2.01(f)(ii)(I)
and (y) the termination thereof pursuant to Sections 2.01(f)(ii)(G)
and 6.01).
(ii) Notwithstanding anything to the contrary contained in
this Agreement or in any other Loan Document the following terms and
conditions shall apply to the Additional Facility Loans:
(A) the obligation of each Additional Facility Lender to make
Additional Facility Loans shall be subject to (I) the conditions set
forth in Section 3.02 and (II) the additional condition that an
underwriting agreement shall have been executed in connection with a
Qualified De-Leveraging Additional Debt Incurrence;
(B) on the date the Borrower desires to make a Borrowing of
Additional Facility Loans hereunder, the Borrower (shall give the
Administrative Agent not later
-8-
than 11:00 A.M. (New York City time), written notice (or telephone
notice promptly confirmed in writing) of each Additional Facility
Loan to be made hereunder specifying (I) the date of Borrowing (which
shall be a Business Day) and (II) the aggregate principal amount of
the Additional Facility Loans to be made pursuant to such Borrowing;.
(C) the Borrower's obligation to pay the principal of, and
interest on, the Additional Facility Loans shall be evidenced (I) in
the Register maintained by the Administrative Agent pursuant to
Section 10.11 and, (II) at any time specifically requested by any
Additional Facility Lender, by a promissory note in form and detail
satisfactory to such Lender; provided that upon the issuance of such
promissory note by the Borrower, such promissory note shall constitute
a "Note" under, and as defined in, this Agreement and the other Loan
Documents;
(D) Additional Facility Loans may not be converted pursuant
to Section 2.06;
(E) the Borrower agrees to pay interest, at a rate per annum
equal to the sum of (x) the Applicable Base Rate Margin otherwise
applicable to Revolving Loans plus (y) the Base Rate in effect from
time to time, in respect of the unpaid principal amount of each
Additional Facility Loan from the date such Additional Facility Loan
is made until the maturity (whether by acceleration or otherwise) of
such Additional Facility Loan;
(F) principal and interest in respect of the Additional
Facility Loans shall be payable at maturity (whether by acceleration
or otherwise) of such Additional Facility Loan and, after such
maturity, on demand;
(G) the Total Additional Facility Commitment (and the
Additional Facility Commitment of each Lender) shall terminate in its
entirety on the earlier to occur of (I) the seventh Business Day
following the date of the initial Borrowing of Additional Facility
Loans and (II) the issuance of (x) De-Leveraging Second Lien Notes,
(y) De-Leveraging Senior Unsecured Notes or (z) De-Leveraging
Subordinated Notes;
(H) the proceeds of the Additional Facility Loans shall be
utilized for the general corporate and working capital purposes of the
Borrower;
(I) notwithstanding anything to the contrary contained in
Section 2.11 or elsewhere in this Agreement, on and after the Third
Amendment Effective Date, all optional prepayments pursuant to Section
2.11 shall be applied (I) first, to reduce the outstanding principal
amount of all Additional Facility Loans outstanding (with a
corresponding reduction to the Total Additional Facility Commitment)
and (ii) second, to the extent all outstanding Additional Facility
Loans have been repaid in full, to prepay Loans as set forth in
Section 2.11; and
(J) the Additional Facility Loans shall mature on the earlier
to occur of (I) the seventh Business Day following the date of the
initial Borrowing of Additional Facility Loans and (II) the issuance
of (x) De-Leveraging Second Lien Notes, (y) De-Leveraging Senior
Unsecured Notes or (z) De-Leveraging Subordinated Notes;
-9-
11. Section 2.10(d) of the Credit Agreement is hereby amended by restating
said Section in its entirety as follows:
"(d) In addition to any other mandatory repayments pursuant
to this Section 2.10, on each date on or after the Effective Date upon
which the Borrower or any of its Subsidiaries receives any cash
proceeds from any Repayment Event, an amount equal to the Applicable
Repayment Percentage of the Net Cash Proceeds therefrom shall be
applied as a mandatory repayment of principal of Term Loans in
accordance with the requirements of Sections 2.10(g) and (h); provided
that, so long as no Event of Default has occurred and is continuing at
the time of such sale or the receipt of such proceeds, the sale of any
Qualified Additional Equity (other than (i) a Qualified De-Leveraging
Equity Issuance or (ii) the sale of any Qualified Additional Equity on
and after the Third Amendment Effective Date and prior to a
De-Leveraging Event) shall be exempt from the repayment provisions of
this Section 2.10(d)."
12. Section 2.10(g) of the Credit Agreement is hereby amended by inserting
the following new sentence at the end thereof:
"Each amount required to be applied pursuant to Section
2.10(j) in accordance with this Section 2.10(g) shall be applied (i)
first, to reduce the outstanding principal amount of Swingline Loans
and (ii) second, to the extent in excess of the amounts required to be
applied pursuant to the preceding clause (i), to reduce the
outstanding principal amount of Revolving Loans (with no required
reduction to the Total Revolving Loan Commitment in the case of either
of the preceding clauses (i) or (ii))."
13. Section 2.10(h) of the Credit Agreement is hereby amended by (v)
inserting the text "and Section 2.10(j)" immediately following the text
"Sections 2.10(d) through 2.10(f), inclusive," appearing in the first sentence
thereof, (w) deleting the word "Term" in each place such word appears therein,
(x) inserting the text "and Section 2.10(j) below" immediately following the
text "Sections 2.10(d) through (f) above" appearing in the third sentence
thereof, (y) inserting the text "(I) with respect to Term Loans," immediately
following the words "with such cash collateral to be directly applied upon"
appearing in the fourth sentence thereof and (z) inserting the text "and (II)
with respect to Revolving Loans, the earlier to occur of (x) 30 days after the
deposit of the amounts in the Collateral Account and (y) the first occurrence
thereafter of the last day of an Interest Period applicable to the relevant
Revolving Loans that are Euro-Dollar Loans (or such earlier date or dates as
shall be requested by the Borrower), to repay an aggregate principal amount of
such Revolving Loans equal to the Affected Euro-Dollar Loans not initially
repaid pursuant to this sentence" at the end of the fourth sentence thereof.
14. Section 2.10 of the Credit Agreement is hereby further amended by
inserting the following new clause (j) at the end thereof:
"(j) In addition to any other mandatory repayments pursuant
to this Section 2.10, in the event that the Borrower and any of its
Domestic Subsidiaries (taken together) hold cash and Cash Equivalents
in an aggregate amount in excess of (I) $20,000,000 for any period of
three consecutive Business Days on and after the Third Amendment
Effective Date and prior to October 1, 2003, (II) $15,000,000 for any
period of three consecutive
-10-
Business Days on and after October 1, 2003 and prior to the
occurrence of a De-Leveraging Event or (III) $25,000,000 for any
period of three consecutive Business Days after the occurrence of a
De-Leveraging Event, the Borrower shall be required to make, on the
immediately succeeding Business Day, a mandatory repayment of
Revolving Loans and/or Swingline Loans, in accordance with Sections
2.10(g) and (h), in an amount equal to the lesser of (A) the amount
necessary to reduce the aggregate amount of cash and Cash Equivalents
held by the Borrower and its Domestic Subsidiaries to (i) on and
after the Third Amendment Effective Date and prior to October 1,
2003, no more than $20,000,000, (ii) on and after October 1, 2003 and
prior to the occurrence of a De-Leveraging Event, no more than
$15,000,000 or (iii) after the occurrence of a De-Leveraging Event,
no more than $25,000,000 and (B) the amount necessary to reduce the
outstanding principal amount of all Revolving Loans and Swingline
Loans to $0."
15. Section 3.02 of the Credit Agreement is hereby amended by (x) deleting
the word "and" at the end of clause (c) thereof, (y) deleting the period at the
end of clause (d) thereof and inserting the text "; and" in lieu thereof and
(z) inserting the following new clause (e) at the end thereof:
"(e) the obligation of each Lender with a Revolving Loan
Commitment to make Revolving Loans shall be subject to the
satisfaction of the additional condition that at the time of each such
making of a Revolving Loan and immediately after giving effect thereto
the Borrower and its Domestic Subsidiaries shall not hold cash and
Cash Equivalents in an aggregate amount (after giving effect to the
incurrence of such Credit Event and the application of the proceeds
therefrom and any other cash or Cash Equivalents on hand (to the
extent such proceeds and/or other cash or Cash Equivalents are
actually utilized by the Borrower and/or any of its Domestic
Subsidiaries on the respective date of incurrence of the respective
Credit Event for a permitted purpose other than an investment in Cash
Equivalents)) in excess of (x) $15,000,000 prior to the occurrence of
a De-Leveraging Event and (y) $25,000,000 after the occurrence of a
De-Leveraging Event."
16. Section 4.16 of the Credit Agreement is hereby amended by (x)
inserting the text "(a)" immediately prior to the words "All Obligations
hereunder" appearing at the beginning of the first sentence thereof and (y)
inserting the following new clause (b) at the end thereof:
"(b) All obligations of the Borrower under the De-Leveraging
Second Lien Note Documents and the De-Leveraging Senior Unsecured Note
Documents shall, upon the effectiveness thereof, be within the
definition of "Senior Debt" as defined in the New Senior Subordinated
Note Indenture."
17. Article IV of the Credit Agreement is hereby amended by inserting the
following new Section 4.17 at the end thereof:
"SECTION 4.17. Deposit Accounts. The only checking, savings,
deposit, securities and other accounts at any bank or other financial
institution where cash or Cash Equivalents are deposited or maintained
by the Borrower or any of its Domestic
-11-
Subsidiaries are the accounts set forth on Schedule 7 (other than any
xxxxx cash Deposit Account that maintains a balance of less than
$5,000 at all times) and such other Deposit Accounts as are opened in
accordance with Section 5.25. Schedule 7 hereto accurately sets
forth, as of the Third Amendment Effective Date, for each Obligor,
each such Deposit Account maintained by such Obligor (including a
description thereof and the respective account number) and the name
of the respective bank with which such Deposit Account is maintained.
Except as indicated on Schedule 7, no Obligor maintains any demand,
time, savings, passbook or similar account, except for such accounts
maintained with a bank (as defined in Section 9-102 of the New York
UCC) whose jurisdiction (determined in accordance with Section 9-304
of the New York UCC) is within a State of the United States (it being
understood that any such account indicated on said Schedule 7 to be
located in a jurisdiction outside of a State of the United States
shall be closed within 120 days following a request by the Collateral
Agent)."
18. Section 5.01(c) of the Credit Agreement is hereby amended by (x)
deleting the parenthetical "(or any certificate establishing the Leverage Ratio
as described in the definition of Applicable Period)," (y) inserting the text
", chief financial officer" immediately after the words "the Borrower's chief
executive officer" appearing therein and (z) inserting the text "and with
respect to any Fiscal Quarter ending on and after the Third Amendment Effective
Date and prior to the occurrence of a De-Leveraging Event, Sections 5.26 and
5.27, in each case" immediately after the text "5.09 through 5.15, inclusive,"
appearing in clause (i) thereof.
19. Section 5.01 of the Credit Agreement is hereby further amended by (x)
deleting the word "and" appearing at the end of clause (j) thereof, (y)
deleting the period at the end of clause (k) thereof and inserting a semicolon
in lieu thereof and (z) inserting the following new clauses (l) and (m) at the
end thereof:
"(l) within 45 days after the end of each Fiscal Quarter
(beginning with the Fiscal Quarter ending September 2003) prior to the
occurrence of a De-Leveraging Event, an oral report communicated
pursuant to a conference call with the Agent and the Lenders detailing
the progress of the consummation of a De-Leveraging Event, including
providing details with respect to actions taken, timing and outlook of
such De-Leveraging Event; and
"(m) within 45 days after the end of each Fiscal Quarter
(beginning with the Fiscal Quarter ending September 2003), the
consolidated statement of operations for such Fiscal Quarter, setting
forth comparative figures for the corresponding period set forth in
the projections provided to the Lenders prior to the Third Amendment
Effective Date, all certified (subject to normal year end adjustments)
as to fairness of presentation and consistency with GAAP by the
Borrower's chief executive officer, chief financial officer or chief
accounting officer."
20. Section 5.09 of the Credit Agreement is hereby amended by (x) deleting
the word "and" at the end of clause (l) thereof, (y) deleting the period at the
end of clause (m) thereof and inserting the text "; and" in lieu thereof and
(z) inserting the following new clause (n) at the end thereof:
-12-
"(n) Liens created pursuant to the De-Leveraging Second Lien
Security Documents to secure the obligations under the De-Leveraging
Second Lien Notes and the other De-Leveraging Second Lien Note
Documents as contemplated by Part I, Section 35 of the Third
Amendment."
21. Section 5.10(e) of the Credit Agreement is hereby amended by restating
said Section in its entirety as follows:
"(e) Debt of the Borrower, which may be guaranteed by any
Guarantor on a senior subordinated basis by one or more Guarantors to
the extent required by the terms of the New Senior Subordinated Notes
in an aggregate outstanding principal amount not to exceed, when
combined with the aggregate outstanding principal amount of the
Existing Senior Subordinated Notes pursuant to Section 5.10(d),
$280,000,000 (less the amount of principal repayments thereof after
the Initial Borrowing Date);".
22. Section 5.10 of the Credit Agreement is hereby further amended by (x)
deleting the word "and" at the end of clause (j) thereof, (y) deleting the
period at the end of clause (k) thereof and inserting a semicolon in lieu
thereof and (z) inserting the following new clauses (l) through (n) at the end
thereof:
"(l) Debt of the Borrower, which may be guaranteed by any
Guarantor, incurred under the De-Leveraging Second Lien Notes and the
other De-Leveraging Second Lien Note Documents, which Debt may be
secured by a second priority Lien on the Collateral owned by the
Borrower and the Guarantors pursuant to the De-Leveraging Second Lien
Security Documents, so long as (i) the Agent shall have received from
Xxxxx Xxxx & Xxxxxxxx (or other counsel satisfactory to the Agent) a
reliance letter addressed to the Agent, the Collateral Agent and each
of the Lenders with respect to the opinion delivered to the
underwriter or placement agents with respect to the issuance of the
De-Leveraging Second Lien Notes and (ii) the Net Cash Proceeds
therefrom are applied as, and to the extent, provided in Sections
2.10(d), (g) and (h);
(m) Debt of the Borrower, which may be guaranteed by any
Guarantor on a subordinated basis, incurred under the De-Leveraging
Subordinated Notes and the other De-Leveraging Subordinated Note
Documents, so long as (i) the Agent shall have received from Xxxxx
Xxxx & Xxxxxxxx (or other counsel satisfactory to the Agent) a
reliance letter addressed to the Agent, the Collateral Agent and each
of the Lenders with respect to the opinion delivered to the
underwriter or placement agents with respect to the issuance of the
De-Leveraging Subordinated Notes and (ii) the Net Cash Proceeds
therefrom are applied as, and to the extent, provided in Sections
2.10(d), (g) and (h); and
(n) Debt of the Borrower, which may be guaranteed by any
Guarantor, incurred under the De-Leveraging Senior Unsecured Notes and
the other De-Leveraging Senior Unsecured Note Documents, so long as
(i) the Agent shall have received from Xxxxx Xxxx & Xxxxxxxx (or other
counsel satisfactory to the Agent) a reliance letter addressed to the
Agent, the Collateral Agent and each of the Lenders with respect to
the opinion delivered to the underwriter or placement agents with
respect to the issuance of the De-Leveraging
-13-
Senior Unsecured Notes and (ii) the Net Cash Proceeds therefrom are
applied as, and to the extent, provided in Sections 2.10(d),(g) and
(h)."
23. Section 5.11 of the Credit Agreement is hereby amended by restating
said Section in its entirety as follows:
"SECTION 5.11. Fixed Charge Coverage Ratio. (a) Prior to the
occurrence of a De-Leveraging Event, for any Test Period, in each case
taken as one accounting period, ending on the last day of a Fiscal
Quarter set forth below, the Fixed Charge Coverage Ratio will not be
less than the ratio set forth below opposite such period below:
Fiscal Quarter Ending Closest to Ratio
-------------------------------- -----
September 2000 1.05:1
December 2000 1.05:1
March 2001 1.05:1
June 2001 1.05:1
September 2001 1.05:1
December 2001 1.05:1
March 2002 1.10:1
June 2002 1.10:1
September 2002 1.15:1
December 2002 1.15:1
March 2003 1.20:1
June 2003 1.00:1
September 2003 1.00:1
December 2003 1.00:1
March 2004 1.10:1
June 2004 1.30:1
September 2004 1.30:1
December 2004 1.30:1
March 2005 1.35:1
June 2005 1.40:1
September 2005 1.40:1
December 2005 1.40:1
March 2006 1.40:1
June 2006 1.40:1
September 2006 1.40:1
December 2006 1.40:1
March 2007 1.40:1
-14-
Fiscal Quarter Ending Closest to Ratio
-------------------------------- -----
June 2007 1.40:1
September 2007 1.40:1
December 2007 and each Fiscal Quarter 1.40:1
thereafter
(b) On and after the occurrence of a De-Leveraging Event, for
any Test Period, in each case taken as one accounting period, ending
on the last day of a Fiscal Quarter set forth below, the Fixed Charge
Coverage Ratio will not be less than the ratio set forth below
opposite such period below:
Fiscal Quarter Ending Closest to Ratio
-------------------------------- -----
September 2003 1.00:1
December 2003 1.00:1
March 2004 1.00:1
June 2004 1.10:1
September 2004 1.10:1
December 2004 1.10:1
March 2005 1.10:1
June 2005 1.10:1
September 2005 1.10:1
December 2005 1.10:1
March 2006 1.10:1
June 2006 1.10:1
September 2006 1.20:1
December 2006 1.20:1
March 2007 1.20:1
June 2007 1.20:1
September 2007 1.30:1
December 2007 and each Fiscal Quarter 1.30:1."
thereafter
24. Section 5.12 of the Credit Agreement is hereby amended by restating
said Section in its entirety:
"SECTION 5.12. Leverage Ratio(a) Prior to the occurrence of a
De-Leveraging Event, at no time during any period set forth below
shall the Leverage Ratio be greater than the ratio set forth opposite
such period below:
Fiscal Quarter Ending Closest to Ratio
-------------------------------- -----
September 2000 6.50:1
-15-
December 2000 6.50:1
March 2001 6.60:1
June 2001 6.25:1
September 2001 6.00:1
December 2001 6.00:1
March 2002 6.00:1
June 2002 5.75:1
September 2002 5.75:1
December 2002 5.75:1
March 2003 5.75:1
June 2003 6.00:1
September 2003 6.50:1
December 2003 6.50:1
March 2004 6.00:1
June 2004 5.00:1
September 2004 5.00:1
December 2004 5.00:1
March 2005 4.75:1
June 2005 4.50:1
September 2005 4.50:1
December 2005 4.50:1
March 2006 4.50:1
June 2006 4.50:1
September 2006 4.50:1
December 2006 4.50:1
March 2007 4.50:1
June 2007 4.50:1
September 2007 4.50:1
December 2007 and each Fiscal Quarter 4.50:1
thereafter
(b) On and after the occurrence of a De-Leveraging Event, at
no time during any period set forth below shall the Leverage Ratio be
greater than the ratio set forth opposite such period below:
Fiscal Quarter Ending Closest to Ratio
-------------------------------- -----
September 2003 6.75:1
December 2003 6.75:1
March 2004 6.75:1
-16-
June 2004 6.50:1
September 2004 6.25:1
December 2004 6.25:1
March 2005 6.25:1
June 2005 6.25:1
September 2005 5.75:1
December 2005 5.75:1
March 2006 5.75:1
June 2006 5.75:1
September 2006 5.50:1
December 2006 5.50:1
March 2007 5.50:1
June 2007 5.50:1
September 2007 5.00:1
December 2007 and each Fiscal Quarter
thereafter 5.00:1."
25. Section 5.13 of the Credit Agreement is hereby amended by replacing
said Section in its entirety:
"SECTION 5.13. Minimum Consolidated EBITDA(a) Prior to the
occurrence of a De-Leveraging Event, Consolidated EBITDA for any Test
Period ending on the last day of a Fiscal Quarter set forth below will
not be less than the amount set forth opposite such period below:
Fiscal Quarter Ending Closest to Amount
-------------------------------- ------
September 2000 $98,500,000
December 2000 $100,000,000
March 2001 $102,000,000
June 2001 $100,000,000
September 2001 $105,000,000
December 2001 $110,000,000
March 2002 $112,500,000
June 2002 $115,000,000
September 2002 $117,500,000
December 2002 $117,500,000
March 2003 $120,000,000
June 2003 $112,500,000
September 2003 $110,000,000
-17-
December 2003 $105,000,000
March 2004 $115,000,000
June 2004 $125,000,000
September 2004 $125,000,000
December 2004 $125,000,000
March 2005 $125,000,000
June 2005 $125,000,000
September 2005 $125,000,000
December 2005 $125,000,000
March 2006 $125,000,000
June 2006 $125,000,000
September 2006 $125,000,000
December 2006 $125,000,000
March 2007 $125,000,000
June 2007 $125,000,000
September 2007 $125,000,000
December 2007 and each Fiscal Quarter $125,000,000
thereafter
(b) On and after the occurrence of a De-Leveraging Event,
Consolidated EBITDA for any Test Period ending on the last day of a
Fiscal Quarter set forth below will not be less than the amount set
forth opposite such period below:
Fiscal Quarter Ending Closest to Amount
-------------------------------- ------
September 2003 $105,000,000
December 2003 $105,000,000
March 2004 $105,000,000
June 2004 $105,000,000
September 2004 $110,000,000
December 2004 $110,000,000
March 2005 $110,000,000
June 2005 $110,000,000
September 2005 $115,000,000
December 2005 $115,000,000
March 2006 $115,000,000
June 2006 $115,000,000
September 2006 $117,500,000
December 2006 $117,500,000
March 2007 $117,500,000
-18-
June 2007 $117,500,000
September 2007 $122,500,000
December 2007 and each Fiscal Quarter $122,500,000."
thereafter
26. Section 5.15(ii) of the Credit Agreement is hereby amended by
inserting the following new proviso at the end thereof:
", provided that, in the event that the aggregate amount of
cash and Cash Equivalents held by the Borrower and its Domestic
Subsidiaries (taken together) for any period of three consecutive
Business Days exceeds (I) $20,000,000 on and after the Third Amendment
Effective Date and prior to October 1, 2003, (II) $15,000,000 on and
after October 1, 2003 and prior to the occurrence of a De-Leveraging
Event or (III) $25,000,000 after the occurrence of a De-Leveraging
Event, such excess shall be applied as a mandatory repayment of
Revolving Loans and/or Swingline Loans in accordance with Section
2.10(j)."
27. Section 5.15(ix) of the Credit Agreement is hereby amended by (x)
inserting the following new proviso at the end of clause (a) thereof:
"; provided that, on and after the Third Amendment Effective
Date, no Permitted Acquisitions (other than any Permitted Acquisition
pursuant to which (I) 100% of the consideration in respect thereof
consists of the net cash proceeds from the issuance of common stock or
Qualified Preferred Stock of the Borrower and (II) no more than
$2,500,000 of Debt is assumed by the Borrower or any of its
Subsidiaries in connection therewith) shall be permitted if the
Leverage Ratio is greater than 4.50:1.00 after giving effect on a pro
forma basis to any proposed Permitted Acquisition,"
(y) inserting the text "and the Leverage Ratio test set forth in the proviso in
Section 5.15(ix)(a)" immediately following the text "Sections 5.11 through
5.13, inclusive," appearing in clause (b)(D) thereof and (z) inserting the text
"and the Leverage Ratio test set forth in the proviso in Section 5.15(ix)(a)"
immediately following the text "Sections 5.11 through 5.13, inclusive" in each
place such text appears in the last paragraph thereof.
28. Section 5.17(iv) of the Credit Agreement is hereby amended by (x)
inserting the text "(A)" immediately following the words "restrictions in
effect on the date of" appearing therein and (y) inserting the text "or (B) any
De-Leveraging Additional Debt Incurrence contained in either the De-Leveraging
Second Lien Notes Indenture, the De-Leveraging Senior Unsecured Notes Indenture
or the De-Leveraging Subordinated Notes Indenture, as the case may be,"
immediately following the words "any other Debt existing on the Effective Date"
appearing therein.
29. Section 5.19 of the Credit Agreement is hereby amended by
(x) restating clause (i) thereof in its entirety as follows:
"(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption, repurchase or
acquisition for value of (including, without
-19-
limitation, by way of depositing with the trustee with respect
thereto or any other Person money or securities before due for the
purpose of paying when due) any New Senior Subordinated Note (it
being understood that such notes may be exchanged for new New Senior
Subordinated Notes in accordance with the exchange provisions of the
New Senior Subordinated Notes Documents), any De-Leveraging Second
Lien Note (except, in the case of the De-Leveraging Second Lien
Notes, through the issuance of Exchange De-Leveraging Second Lien
Notes as contemplated in the definition of De-Leveraging Second Lien
Notes and consistent with the requirements of the definition of
Exchange De-Leveraging Second Lien Notes), any De-Leveraging Senior
Unsecured Note (except, in the case of the De-Leveraging Senior
Unsecured Notes, through the issuance of Exchange De-Leveraging
Senior Unsecured Notes as contemplated in the definition of
De-Leveraging Senior Unsecured Notes and consistent with the
requirements of the definition of Exchange De-Leveraging Senior
Unsecured Notes), or any De-Leveraging Subordinated Note (except, in
the case of the De-Leveraging Subordinated Notes, through the
issuance of Exchange De-Leveraging Subordinated Notes as contemplated
in the definition of De-Leveraging Subordinated Notes and consistent
with the requirements of the definition of Exchange De-Leveraging
Subordinated Notes);"
(y) inserting the text ", De-Leveraging Second Lien Notes, De-Leveraging Senior
Unsecured Notes, De-Leveraging Subordinated Notes" immediately after the words
"Bridge Financing" in each place such words appear in clause (ii) thereof, and
(z) inserting the text "De-Leveraging Second Lien Note Document, De-Leveraging
Senior Unsecured Note Document and De-Leveraging Subordinated Note Document,"
immediately after the text "Bridge Financing Document," appearing in clause
(iii) thereof.
30. Article V of the Credit Agreement is hereby further amended by
inserting the following new Sections 5.24 through 5.28 at the end thereof:
"SECTION 5.24 Designated Senior Debt. The Borrower shall not
designate any Debt (other than the Obligations) as "Designated Senior
Debt" (or any similar term) (as defined in the New Senior Subordinated
Notes Indenture); it being understood and agreed, however, to the
extent that the Debt incurred under the De-Leveraging Second Lien Note
Documents or the De-Leveraging Senior Unsecured Note Documents is
deemed to have been incurred under the "Credit Agreement" for purposes
of the New Senior Subordinated Note Indenture, the De-Leveraging
Second Lien Note Documents or the De-Leveraging Senior Unsecured Note
Documents, as the case may be, also may constitute "Designated Senior
Debt" as defined in the New Senior Subordinated Note Indenture,
provided that at all times prior to such time as when the Total
Commitment and all Letters of Credit have been terminated and all
Notes and outstanding Loans, together with interest, fees and other
Obligations incurred hereunder have been paid in full in cash in
accordance with the terms hereof, no holder of a De-Leveraging Second
Lien Note or a De-Leveraging Senior Unsecured Note nor the respective
trustee in respect thereof may exercise any rights as a holder of
Designated Senior Debt under the New Senior Subordinated Note
Indenture, including, without limitation, giving (and the terms of the
De-Leveraging Second Lien Note Indenture and the De-Leveraging Senior
Unsecured Note Indenture shall expressly provide that no such Person
may give) any
-20-
"Payment Blockage Notice" pursuant to Section 8.02(a) or 12.02(a) of
the New Senior Subordinated Note Indenture commencing, a "Payment
Blockage Period" thereunder."
SECTION 5.25. Deposit Accounts. (a) For each Deposit Account,
the Borrower shall, and shall cause the other Obligors to, cause the
bank with which the Deposit Account is maintained to execute and
deliver to the Collateral Agent, on or before 30 days after the Third
Amendment Effective Date or, if later, at the time of the
establishment of the respective Deposit Account, a "control agreement"
in the form of Exhibit H hereto (appropriately completed), with such
changes thereto as may be acceptable to the Collateral Agent, or such
other control agreement in form and substance reasonably satisfactory
to the Collateral Agent. If any bank with which such a Deposit Account
is maintained refuses to, or does not, enter into such a "control
agreement", then the Borrower shall, and shall cause the other
Obligors to, promptly (and in any event prior to December 31, 2003 or,
if later, 30 days after the establishment of such account) close the
respective Deposit Account and transfer all balances therein to a
Deposit Account maintained by the Collateral Agent or another Deposit
Account meeting the requirements of the immediately preceding
sentence; provided, however, that the Obligors shall be permitted to
maintain Deposit Accounts not subject to such "control agreements" so
long as the aggregate amount maintained by all Obligors in Deposit
Accounts not subject to such "control agreements" does not exceed
$2,500,000 at any time.
(b) After the Third Amendment Effective Date, the Borrower
will not, and will not permit any other Obligor to, establish any new
demand, time, savings, passbook or similar account, except for Deposit
Accounts established and maintained with banks and meeting the
requirements of preceding clause (a). At the time any such Deposit
Account is established, the appropriate "control agreement" shall be
entered into in accordance with the requirements of preceding clause
(a) and the respective Obligor shall furnish to the Collateral Agent a
supplement to Schedule 7 hereto containing the relevant information
with respect to the respective Deposit Account and the bank with which
same is established.
SECTION 5.26. Capital Expenditures Prior to the Occurrence of
a De-Leveraging Event. On and after the Third Amendment Effective Date
and prior to the occurrence of a De-Leveraging Event, the Borrower
will not, and will not permit any of its Subsidiaries to, make Capital
Expenditures, except that the Borrower and its Subsidiaries may make
Capital Expenditures so long as such Capital Expenditures do not
exceed in the aggregate that amount which is set forth opposite such
period below:
Period Amount
------ ------
Fiscal Quarter Ended Closest to September 2003
through Fiscal Quarter Ended Closest to March
2004 $20,000,000
Fiscal Quarter Ended Closest to September 2003
$25,000,000
-21-
through Fiscal Quarter Ended Closest to June 2004
SECTION 5.27. Minimum Liquidity. Prior to the occurrence of a
De-Leveraging Event, at no time during any period set forth below
shall the unrestricted cash and Cash Equivalents held by the Borrower
and its Subsidiaries plus the Total Unutilized Revolving Loan
Commitment be less than the amount set forth opposite such period
below:
Period Amount
------ ------
On and after the Third Amendment Effective Date
and prior to the last day of the Fiscal Quarter
ending closest to March 2004 $ 5,000,0000
On and after the last day of the Fiscal Quarter
ending closest to March 2004 and prior to the
occurrence of a De-Leveraging Event $25,000,000
SECTION 5.28. Foreign Subsidiary Restrictions.
Notwithstanding the foregoing provisions of this Article V or anything
else in this Agreement to the contrary, on and after the Third
Amendment Effective Date, the Borrower will not, and will not permit
any of its Subsidiaries (other than its Foreign Subsidiaries) to (v)
convey, lease, license, sell or otherwise transfer all or any part of
its business, properties and assets to any Foreign Subsidiary (other
than in the ordinary course of business and consistent with past
practices of the Borrower and its Subsidiaries), (w) merge with and
into, or be dissolved or liquidated into, any Foreign Subsidiary, (x)
guarantee any Debt of any Foreign Subsidiary which, when added to the
aggregate amount of Investments, loans and advances made as referred
to in clause (y) of this Section 5.28, would exceed (i) prior to the
occurrence of a De-Leveraging Event, $2,500,000 or (ii) on and after
the occurrence of a De-Leveraging Event, $5,000,000, (y) make any
Investments in, or loans and advances to, any Foreign Subsidiary
which, when added to the aggregate amount of guaranteed Debt referred
to in clause (x) of this Section 5.28, would exceed (i) prior to the
occurrence of a De-Leveraging Event, $2,500,000 or (ii) on and after
the occurrence of a De-Leveraging Event, $5,000,000 or (z) enter into
any other transaction or series of related transactions with any
Foreign Subsidiary that is not in the ordinary course of business and
consistent with past practices of the Borrower and its Subsidiaries."
31. Section 6.01 of the Credit Agreement is hereby amended by (w)
inserting the text ", the De-Leveraging Second Lien Notes Indenture, the
De-Leveraging Senior Unsecured Notes Indenture, the De-Leveraging Subordinated
Notes Indenture" immediately after the words "New Senior Subordinated Notes
Indenture" appearing in clause (m)(6) thereof, (x) deleting the word "or"
appearing at the end of clause (m) thereof, (y) inserting the word "or" at the
end of clause (n) thereof and (z) inserting the following new clause (o)
immediately following clause (n) thereof:
-23-
"(o) a De-Leveraging Event shall not have occurred prior to July 1,
2004."
32. Section 10.09 of the Credit Agreement is hereby amended by (x)
inserting the text "(a)" immediately prior to the words "Each Lender Party
agrees" appearing at the beginning of the first sentence thereof and (y)
inserting the following new clause (b) at the end thereof:
"(b) "Neither the Agent, the Lenders or any of their
respective affiliates nor any Obligor provide accounting, tax or legal
advice. Notwithstanding anything provided herein, in the other Loan
Documents or in any other document or agreement relating to the
transactions contemplated herein and in the other Loan Documents, and
any express or implied claims of exclusivity or proprietary rights,
the Agent, the Lenders and the Borrower hereby agree and acknowledge
that each Obligor, the Agent, the Lenders and any of their respective
affiliates (and each of their respective employees, representatives or
other agents) are authorized to disclose to any and all persons,
beginning immediately upon commencement of their discussions regarding
such transactions and without limitation of any kind, the tax
treatment and tax structure of such transactions, and all materials of
any kind (including opinions or other tax analyses) that are provided
by either any Obligor, the Agent, any Lender or any of their
respective affiliates (and any of their respective employees,
representatives or other agents) to any other such party relating to
such tax treatment and tax structure, except to the extent that such
disclosure is subject to restrictions reasonably necessary to comply
with securities laws. For purposes of this authorization, "tax
treatment" and "tax structure" have the meanings provided,
respectively, in Treasury Regulations sections 1.6011-4(c)(8) and (9).
Nothing herein is intended to imply that any oral or written statement
as to any potential U.S. federal tax consequences that are related to,
or may result from, the transactions contemplated by this Agreement
and the other Loan Documents have been made or provided to, or for the
benefit of, the Agent, any Lender, any Obligor or any of their
respective affiliates by any other such party."
33. The Credit Agreement is hereby further amended by inserting new
Schedule 7 and new Exhibit H thereto in the form of Schedule 7 and Exhibit H
attached hereto.
34. The Lenders, the Borrower and the Guarantors hereby agree that
notwithstanding anything to the contrary contained in the Credit Agreement or
any other Loan Document, on and after the Third Amendment Effective Date and
prior to the occurrence of a De-Leveraging Event, the Borrower and its
Subsidiaries shall not be permitted to take any of the actions as set forth on
Annex I hereto.
35. The Lenders hereby agree that the Borrower, the Guarantors and the
Collateral Agent shall be permitted to (and are hereby authorized to) enter
into (x) amendments to (or amend and restate) the respective Collateral
Documents to make technical modifications thereto to reflect the revisions made
to Article 9 of the New York UCC since the Initial Borrowing Date, and with
such amendments (or amendment and restatements), in each case to be in form and
substance satisfactory to the Administrative Agent and (y) the De-Leveraging
Second Lien Security Documents to provide for a "silent" second priority
security interest to be granted in favor of the holders of the De-Leveraging
Second Lien Notes in that portion of the
-23-
Collateral otherwise permitted by Sections 5.10(l) of the Credit Agreement (as
amended hereby), such "silent" second priority security interest shall be
junior-ranking to the Liens securing Indebtedness and other obligations
(including Derivatives Obligations) owing to the Lenders (or their affiliates),
the Agent or the Collateral Agent under or in respect of the Loan Documents
(the terms of which will (A) include appropriate waivers with respect to the
Collateral in a bankruptcy proceeding and (B) provide that, for so long as any
such Indebtedness or obligations are outstanding, the holders of Indebtedness
secured by such "silent" second priority security interest (or their trustee)
shall not be permitted to enforce such junior-ranking security interests even
if an event of default in respect of such Indebtedness has occurred and the
maturity of such Indebtedness has been accelerated, except (i) in any
insolvency or liquidation proceeding, as necessary to file a claim for such
Indebtedness or (ii) as necessary to take any action not adverse to the
interests of the Liens under the Collateral Documents in order to preserve or
protect the rights of the holders of such junior-ranking security interests).
36. The Lenders hereby waive any Default or Event of Default which may
exist solely as a result of the Borrower's failure to comply with the
requirements of Sections 5.11 through 5.13, inclusive, of the Credit Agreement
for the Test Period ended June 30, 2003 as such Sections were in effect
immediately prior to, but not after, giving effect to this Amendment (it being
understood that this waiver shall not constitute a waiver of any such provision
of the Credit Agreement as in effect after giving effect to this Amendment).
37. The Borrower and the Lenders hereby confirm that, as provided in
Section 2.10(h) of the Credit Agreement (as amended by this Amendment), the
proceeds of any De-Leveraging Event required to be utilized to repay Affected
Euro-Dollar Loans may be deposited in the Collateral Account pursuant to the
last two sentences of Section 2.01(h) of the Credit Agreement.
II. Amendments to Security Agreement.
1. Section 3(A) of the Security Agreement is hereby amended by (x)
deleting the word "and" appearing at the end of clause (10) thereof, (y)
deleting clause (11) thereof in its entirety and inserting the following new
clauses (11) and (12) in lieu thereof:
"(11) All Deposit Accounts; and
(12) All Proceeds of all or any of the Collateral described
in Clauses 1 through 11 hereof."
III. Acknowledgment with respect to Various Credit Documents.
1. For the avoidance of doubt, each Obligor hereby acknowledges and
confirms its due authorization, execution and delivery of all Loan Documents
(each Loan Document as amended, restated, modified and/or supplemented through
and including the date hereof) to which it is a party, including all
instruments, financing statements, agreements, certificates and documents
executed and delivered in connection therewith, and hereby ratifies all actions
heretofore taken in connection therewith.
-24-
2. Each Obligor further acknowledges and agrees to the provisions of this
Amendment and hereby agrees for the benefit of the Secured Creditors that all
extensions of credit pursuant to the Credit Agreement (including, without
limitation, as modified by this Amendment, and as same may be further amended,
restated, modified and/or supplemented from time to time) shall be fully
entitled to all benefits of, and shall be fully guaranteed and secured pursuant
to and in accordance with the terms of, each of the Loan Documents, as
applicable.
IV. Miscellaneous.
1. In order to induce the Lenders to enter into this Amendment and grant
the waivers and amendments contemplated hereby, and in exchange for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower hereby (x) represents and warrants that no Default
or Event of Default exists on the Third Amendment Effective Date after giving
effect to this Amendment (other than the failure to deliver the financial
statements for Fiscal Year 2003 within 90 days after the end of such Fiscal
Year pursuant to Section 5.01(a)), (y) makes each of the representations,
warranties and agreements contained in the Credit Agreement and the other Loan
Documents on and as of the Third Amendment Effective Date, after giving effect
to this Amendment (it being understood that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects as of such date) and (z) agrees to pay to
each qualifying Lender, the fee described below in Section 5 of this Part IV.
2. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement (or of any provision beyond the specific amendments and waivers
granted hereby) or any other Loan Document.
3. This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original (including by way of facsimile
transmission), but all of which together shall constitute one and the same
instrument. A complete set of counterparts shall be lodged with the Borrower
and the Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
5. This Amendment shall become effective as of the date set forth above on
the date (the "Third Amendment Effective Date") when (i) the Borrower, the
Guarantors, the Swingline Lender and the Required Lenders shall have signed a
counterpart hereof (whether the same or different counterparts) and shall have
delivered (including by way of facsimile transmission) the same to the Agent;
(ii) the Agent shall have received from Xxxxx Xxxx & Xxxxxxxx, special counsel
to the Obligors, an opinion addressed to the Agent, the Collateral Agent and
each of the Lenders and dated the Third Amendment Effective Date, covering the
matters incident to this Amendment and the transactions contemplated herein,
and otherwise in form and substance reasonably satisfactory to the Agent; (iii)
the Borrower shall have (x)
-25-
provided to the Agent the information, documentation and Collateral requested
pursuant to the letter from White & Case LLP to the Borrower dated August 29,
2003 and (y) taken all actions requested by the Agent in order to perfect (or
maintain the perfection of) the security interests in the Collateral; (iv) the
Borrower shall have paid to the Agent all fees, costs and expenses (including,
without limitation, the reasonable legal fees and expenses of White & Case LLP)
payable to the Agent to the extent then due; and (v) the Borrower shall have
paid to each Lender which shall have executed and delivered a counterpart
hereof (including by way of facsimile transmission) to the Agent on or prior to
5:00 P.M. (New York time) on September 22, 2003 (or, if the Required Lenders
had not executed this Amendment by such time and date, on the Third Amendment
Effective Date), an amendment fee equal to the product of (x) 0.25% multiplied
by (y) the sum of such Lender's outstanding Term Loans and Revolving Loan
Commitment on such date (in each case as in effect immediately prior to giving
effect to this Amendment).
6. In consideration of the Agent's and each Lender's execution of this
Amendment, each Obligor unconditionally and irrevocably acquits and fully
forever releases and discharges each Lender and the Agent and all affiliates,
partners, subsidiaries, officers, employees, agents, attorneys, principals,
directors and shareholders of such Persons, and their respective heirs, legal
representatives, successors and assigns (collectively, the "Releasees") from
any and all claims, demands, causes of action, obligations, remedies, suits,
damages and liabilities of any nature whatsoever, whether now known, suspected
or claimed, whether arising under common law, in equity or under statute, which
such Obligor ever had or now has against any of the Releasees and which may
have arisen at any time prior to the date hereof and which were in any manner
related to this Amendment, the Credit Agreement, any other Loan Document or
related documents, instruments or agreements or the enforcement or attempted or
threatened enforcement by any of the Releasees of any of their respective
rights, remedies or recourse related thereto (collectively, the "Released
Claims"). Each Obligor covenants and agrees never to commence, voluntarily aid
in any way, prosecute or cause to be commenced or prosecuted against any of the
Releasees any action or other proceeding based upon any of the Released Claims.
7. At all times on and after the Third Amendment Effective Date, all
references in the Credit Agreement and each of the Loan Documents to the Credit
Agreement shall be deemed to be references to the Credit Agreement after giving
effect to this Amendment.
* * *
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first written
above.
TEKNI-PLEX, INC., as the Borrower and a Grantor
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: CFO
JPMORGAN CHASE BANK, Individually,
as Swingline Lender, as Agent and as
Collateral Agent
By: /s/ Xxxxxxxx X. Turny
-------------------------------------------
Name: Xxxxxxxx X. Turny
Title: Vice President
-28-
PURETEC CORPORATION
XXXXXX HOLDINGS, INC.
TRI-SEAL HOLDINGS, INC.
PLASTIC SPECIALITIES AND
TECHNOLOGIES, INC.
BURLINGTON RESINS, INC.
PLASTIC SPECIALTIES AND TECHNOLOGIES
INVESTMENTS, INC.
PURE TECH APR, INC.
COAST RECYCLING NORTH, INC.
DISTRIBUTORS RECYCLING, INC.
REI DISTRIBUTORS, INC.
PURE TECH RECYCLING OF CALIFORNIA
ALUMET SMELTING CORPORATION
TPI ACQUISITION SUBSIDIARY, INC.
TP/ELM ACQUISITION SUBSIDIARY, INC.,
as Guarantors and Grantors
By: /s/ Xxxxxxx X.X. Xxxxx
-------------------------------------------
Name: Xxxxxxx X.X. Xxxxx
Title: President and COO
-29-
ANNEX I
RESTRICTED ACTIONS
On and after the Third Amendment Effective Date and prior to a De-Leveraging
Event, the Borrower and its Subsidiaries, as applicable, may not:
1. accumulate Net Cash Proceeds before a repayment is required pursuant
to Section 2.10(g) of the Credit Agreement;
2. enter into additional operating leases pursuant to Section 5.07(b)(ii)
of the Credit Agreement;
3. make additional Restricted Payments pursuant to Section 5.07(b)(v) of
the Credit Agreement and the provisos to the definition of "Restricted
Payments" appearing in Section 1.01 of the Credit Agreement;
4. make additional Asset Sales (other than pursuant to a De-Leveraging
Event) pursuant to Section 5.07(b)(vii) of the Credit Agreement;
5. create, assume or suffer to exist any additional Liens pursuant to
Sections 5.09(b), (e), (l) or (m) of the Credit Agreement;
6. incur additional Debt pursuant to Sections 5.10(b), (f), (g) or (k) of
the Credit Agreement;
7. make additional Investments or consummate or agree to consummate any
Restricted Acquisition pursuant to Sections 5.15(viii), (xi), (xii) or
(xiii) or Section 5.23 of the Credit Agreement; or
8. make additional payments pursuant to Section 5.16(vi) of the Credit
Agreement.
-30-
SCHEDULE 7
SCHEDULE OF DEPOSIT ACCOUNTS
Name of Bank,
Name of Description Address and Contact
Obligor of Deposit Account Account Number Information
------- ------------------ -------------- -------------------
Tekni-Plex, Inc. 5590006358 LaSalle Bank
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
Tel: (000) 000-0000
Tekni-Plex, Inc. Payroll Account 8163092817 Fleet Bank
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxx Xxxxxx
Tel: (000) 000-0000
Xxxxxx Holdings, Inc. 002372776275 First Citizens Bank
10702 XX 00 Xxxx
XX Xxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
Tel: (000) 000-0000
Exhibit H
Form of Control Agreement Regarding Deposit Accounts
AGREEMENT (as amended, modified or supplemented from time to time, this
"Agreement"), dated as of _______ __, ____, among the undersigned grantor (the
"Grantor") JPMorgan Chase Bank, not in its individual capacity but solely as
Collateral Agent (the "Collateral Agent"), and __________ (the "Deposit Account
Bank"), as the bank (as defined in Section 9-102 of the Uniform Commercial Code
as in effect on the date hereof in the State of New York (the "UCC")) with
which one or more deposit accounts (as defined in Section 9-102 of the UCC) are
maintained by the Grantor (with all such deposit accounts now or at any time in
the future maintained by the Grantor with the Deposit Account Bank being herein
called the "Deposit Accounts").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Grantor, various other Grantors and the Collateral Agent have
entered into a Security Agreement, dated as of June 21, 2000 (as amended,
amended and restated, modified or supplemented from time to time, the "Security
Agreement"), under which, among other things, in order to secure the payment of
the Secured Obligations (as defined in the Security Agreement), the Grantor has
granted a security interest to the Collateral Agent for the benefit of the
Secured Creditors (as defined in the Security Agreement) in all of the right,
title and interest of the Grantor in and into any and all deposit accounts (as
defined in Section 9-102 of the UCC) and in all monies, securities, instruments
and other investments deposited therein from time to time (collectively, herein
called the "Collateral"); and
WHEREAS, the Grantor desires that the Deposit Account Bank enter into this
Agreement in order to establish "control" (as defined in Section 9-104 of the
UCC) in each Deposit Account at any time or from time to time maintained with
the Deposit Account Bank, and to provide for the rights of the parties under
this Agreement with respect to such Deposit Accounts;
NOW THEREFORE, in consideration of the premises and the mutual promises
and agreements contained herein, and for other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Grantor's Dealings with Deposit Accounts; Notice of Exclusive Control.
Until the Deposit Account Bank shall have received from the Collateral Agent a
Notice of Exclusive Control (as defined below), the Grantor shall be entitled
to present items drawn on and otherwise to withdraw or direct the disposition
of funds from the Deposit Accounts and give instructions in respect of the
Deposit Accounts; provided, however, that, if a Default or an Event of Default
(each as defined in the Credit Agreement (as defined in the Security
Agreement)) then exists, the Grantor may not, and the Deposit Account Bank
agrees that it shall not permit the Grantor to, without the Collateral Agent's
prior written consent, close any Deposit Account. If the Collateral Agent shall
give to the Deposit Account Bank a notice of the Collateral Agent's exclusive
control of the Deposit Accounts, which notice states that it is a "Notice of
Exclusive
Exhibit H
Page 2
Control" (a "Notice of Exclusive Control"), only the Collateral Agent
shall be entitled to withdraw funds from the Deposit Accounts, to give any
instructions in respect of the Deposit Accounts and any funds held therein or
credited thereto or otherwise to deal with the Deposit Accounts.
2. Collateral Agent's Right to Give Instructions as to Deposit Accounts.
(a) Notwithstanding the foregoing or any separate agreement that the Grantor
may have with the Deposit Account Bank, after the Collateral Agent has given
the Deposit Account Bank a Notice of Exclusive Control the Collateral Agent
shall be entitled, for purposes of this Agreement, at any time after such
Notice of Exclusive Control has been given to give the Deposit Account Bank
instructions as to the withdrawal or disposition of any funds from time to time
credited to any Deposit Account, or as to any other matters relating to any
Deposit Account or any other Collateral, without further consent from the
Grantor; provided that the Collateral Agent shall notify the Grantor that such
instructions have been given within ten Business Days after such instructions
are given (it being understood that the failure by the Collateral Agent to
notify the Grantor that such instructions have been given shall not impair in
any way the right of the Collateral Agent to give such instructions or the
Deposit Account Bank to comply with such instructions). The Grantor hereby
irrevocably authorizes and instructs the Deposit Account Bank, and the Deposit
Account Bank hereby agrees, to comply with any such instructions from the
Collateral Agent without any further consent from the Grantor. Such
instructions may include the giving of stop payment orders for any items being
presented to any Deposit Account for payment. The Deposit Account Bank shall be
fully entitled to rely on, and shall comply with, such instructions from the
Collateral Agent even if such instructions are contrary to any instructions or
demands that the Grantor may give to the Deposit Account Bank. In case of any
conflict between instructions received by the Deposit Account Bank from the
Collateral Agent and the Grantor, the instructions from the Collateral Agent
shall prevail.
(b) It is understood and agreed that the Deposit Account Bank's duty to
comply with instructions from the Collateral Agent regarding the Deposit
Accounts is absolute, and the Deposit Account Bank shall be under no duty or
obligation, nor shall it have the authority, to inquire or determine whether or
not such instructions are in accordance with the Security Agreement or any
other Loan Document (as defined in the Credit Agreement), nor seek confirmation
thereof from the Grantor or any other Person (as defined in the Credit
Agreement).
3. Grantor's Exculpation and Indemnification of Depository Bank. The
Grantor hereby irrevocably authorizes and instructs the Deposit Account Bank to
follow instructions from the Collateral Agent regarding the Deposit Accounts
even if the result of following such instructions from the Collateral Agent is
that the Deposit Account Bank dishonors items presented for payment from any
Deposit Account. The Grantor further confirms that the Deposit Account Bank
shall have no liability to the Grantor for wrongful dishonor of such items in
following such instructions from the Collateral Agent. The Deposit Account Bank
shall have no duty to inquire or determine whether the Grantor's obligations to
the Collateral Agent are in default or whether the Collateral Agent is
entitled, under any separate agreement between the Grantor and the Collateral
Agent, to give any such instructions. The Grantor further agrees to be
responsible for the Deposit Account Bank's customary charges and to indemnify
the Deposit Account Bank from and to hold the Deposit Account Bank harmless
against any loss, cost or
Exhibit H
Page 3
expense that the Deposit Account Bank may sustain or incur in acting upon
instructions which the Deposit Account Bank believes in good faith to be
instructions from the Collateral Agent.
4. Subordination of Security Interests; Deposit Account Bank's Recourse to
Deposit Accounts. The Deposit Account Bank hereby subordinates any claims and
security interests it may have against, or with respect to, any Deposit Account
at any time established or maintained with it by the Grantor (including any
amounts, investments, instruments or other Collateral from time to time on
deposit therein) to the security interests of the Collateral Agent (for the
benefit of the Secured Creditors) therein, and agrees that no amounts shall be
charged by it to, or withheld or set-off or otherwise recouped by it from, any
Deposit Account of the Grantor or any amounts, investments, instruments or
other Collateral from time to time on deposit therein; provided that the
Deposit Account Bank may, however, from time to time debit the Deposit Accounts
for any of its customary charges in maintaining the Deposit Accounts or for
reimbursement for the reversal of any provisional credits granted by the
Deposit Account Bank to any Deposit Account, to the extent, in each case, that
the Grantor has not separately paid or reimbursed the Deposit Account Bank
therefor.
5. Representations, Warranties and Covenants of Deposit Account Bank. The
Deposit Account Bank represents and warrants to the Collateral Agent that:
(a) The Deposit Account Bank constitutes a "bank" (as defined in Section
9-102 of the UCC).
(b) The Deposit Account Bank shall not permit any Grantor to establish any
demand, time, savings, passbook or other account with it which does not
constitute a "deposit account" (as defined in Section 9-102 of the UCC).
(c) The Deposit Account Bank will not, without the Collateral Agent's
prior written consent, amend any account agreement between the Deposit Account
Bank and the Grantor relating to the establishment and general operation of the
Deposit Accounts (an "Existing Account Agreement") so that the Deposit Account
Bank's jurisdiction for purposes of Section 9-304 of the UCC is other than New
York (after giving effect to Section 6 hereof). All Existing Account Agreements
in respect of each Deposit Account in existence on the date hereof are listed
on Annex A hereto and copies of all Existing Account Agreements have been
furnished to the Collateral Agent. The Deposit Account Bank will promptly
furnish to the Collateral Agent a copy of the account agreement for each
Deposit Account hereafter established by the Deposit Account Bank for the
Grantor.
(d) The Deposit Account Bank has not entered and will not enter, into any
agreement with any other Person by which the Deposit Account Bank is obligated
to comply with instructions from such other Person as to the disposition of
funds from any Deposit Account or other dealings with any Deposit Account or
other of the Collateral.
(e) On the date hereof the Deposit Account Bank maintains no Deposit
Accounts for the Grantor other than the Deposit Accounts specifically
identified in Annex A hereto.
Exhibit H
Page 4
(f) Any items or funds received by the Deposit Account Bank for the
Grantor's account will be credited to said Deposit Accounts specified in
paragraph (e) above or to any other Deposit Accounts hereafter established by
the Deposit Account Bank for the Grantor in accordance with this Agreement.
(g) The Deposit Account Bank will promptly notify the Collateral Agent of
each Deposit Account hereafter established by the Deposit Account Bank for the
Grantor (which notice shall specify the account number of such Deposit Account
and the location at which the Deposit Account is maintained), and each such new
Deposit Account shall be subject to the terms of this Agreement in all
respects.
6. Jurisdiction of Deposit Account Bank and Existing Account Agreements.
The Deposit Account Bank and the Grantor hereby agree that the State of New
York shall be deemed to be the Deposit Account Bank's "jurisdiction" (as
defined in Section 9-304 of the UCC) with respect to the Deposit Accounts and
if any Existing Account Agreement does not specify that it is governed by the
laws of the State of New York, such Existing Account Agreement is hereby
amended to specify that it is governed by the State of New York.
7. Deposit Account Statements and Information. The Deposit Account Bank
agrees, and is hereby authorized and instructed by the Grantor, to furnish to
the Collateral Agent, at its address indicated below, copies of all account
statements and other information relating to each Deposit Account that the
Deposit Account Bank sends to the Grantor and to disclose to the Collateral
Agent all information requested by the Collateral Agent regarding any Deposit
Account.
8. Conflicting Agreements. This Agreement shall have control over any
conflicting agreement between the Deposit Account Bank and the Grantor.
9. Merger or Consolidation of Deposit Account Bank. Without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, any bank into which the Deposit Account Bank may be merged or with
which it may be consolidated, or any bank resulting from any merger to which
the Deposit Account Bank shall be a party, shall be the successor of the
Deposit Account Bank hereunder and shall be bound by all provisions hereof
which are binding upon the Deposit Account Bank and shall be deemed to affirm
as to itself all representations and warranties of the Deposit Account Bank
contained herein.
10. Notices. (a) All notices and other communications provided for in this
Agreement shall be in writing (including facsimile) and sent to the intended
recipient at its address or telex or facsimile number set forth below:
If to the Collateral Agent, at:
------------------------------
JPMorgan Chase Bank
[Address]
Attention:
Telephone No.:
Facsimile No.:
Exhibit H
Page 5
If to the Grantor:
-----------------
[Name of Grantor]
[Address]
Attention: ___________________
Telephone No.:_________________
Facsimile No.:_________________
If to the Deposit Account Bank, at:
-----------------------------------
[Address]
Attention: _____________________
Telephone No.: _________________
Facsimile No. __________________
or, as to any party, to such other address or telex or facsimile number as
such party may designate from time to time by notice to the other parties.
(b) Except as otherwise provided herein, all notices and other
communications hereunder shall be delivered by hand or by commercial overnight
courier (delivery charges prepaid), or mailed, postage prepaid, or telexed or
faxed, addressed as aforesaid, and shall be effective (i) three business days
after being deposited in the mail (if mailed), (ii) when delivered (if
delivered by hand or courier) and (iii) or when transmitted with receipt
confirmed (if telexed or faxed); provided that notices to the Collateral Agent
shall not be effective until actually received by it.
11. Amendment. This Agreement may not be amended, modified or supplemented
except in writing executed and delivered by all the parties hereto.
12. Binding Agreement. This Agreement shall bind the parties hereto and
their successors and assign and shall inure to the benefit of the parties
hereto and their successors and assigns. Without limiting the provisions of the
immediately preceding sentence, the Collateral Agent at any time or from time
to time may designate in writing to the Deposit Account Bank a successor
Collateral Agent (at such time, if any, as such entity becomes the Collateral
Agent under the Security Agreement, or at any time thereafter) who shall
thereafter succeed to the rights of the existing Collateral Agent hereunder and
shall be entitled to all of the rights and benefits provided hereunder.
13. Continuing Obligations. The rights and powers granted herein to the
Collateral Agent have been granted in order to protect and further perfect its
security interests in the Deposit Accounts and other Collateral and are powers
coupled with an interest and will be affected neither by any purported
revocation by the Grantor of this Agreement or the rights granted to the
Collateral Agent hereunder or by the bankruptcy, insolvency, conservatorship or
receivership of the Grantor or the Deposit Account Bank or by the lapse of
time. The rights of the Collateral Agent hereunder and in respect of the
Deposit Accounts and the other Collateral, and the obligations of the Grantor
and Deposit Account Bank hereunder, shall continue in effect
Exhibit H
Page 6
until the security interests of Collateral Agent in the Deposit Accounts and
such other Collateral have been terminated and the Collateral Agent has
notified the Deposit Account Bank of such termination in writing.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts.
[Remainder of this page intentionally left blank; signature page follows]
Exhibit H
Page 7
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
Grantor:
-------
[NAME OF GRANTOR]
By:
---------------------------
Name:
Title:
Collateral Agent:
----------------
JPMORGAN CHASE BANK
By:
---------------------------
Name:
Title:
Deposit Account Bank:
--------------------
[NAME OF DEPOSIT ACCOUNT BANK]
By:
---------------------------
Name:
Title:
Annex A to
Exhibit H
---------
1. Account Number ______________/Account Agreement dated __________________.
