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EXHIBIT 4.1
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REVOLVING CREDIT AGREEMENT,
dated as of July 19, 2001,
among
STERLING CHEMICALS, INC.
AND EACH OF ITS SUBSIDIARIES PARTIES HERETO FROM TIME TO TIME,
each a Debtor and Debtor-in-Possession,
as the Borrowers,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
and
THE CIT GROUP/BUSINESS CREDIT, INC.
as a Lender and as the Administrative Agent.
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TABLE OF CONTENTS
Section Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS........................................................................3
SECTION 1.1. Defined Terms...........................................................................44
SECTION 1.2. Use of Defined Terms....................................................................44
SECTION 1.3. Cross-References........................................................................44
SECTION 1.4. Accounting and Financial Determinations.................................................44
ARTICLE II COMMITMENTS; REDUCTIONS OF COMMITMENTS;
BORROWING AND ISSUANCE PROCEDURES; NOTES
AND LETTERS OF CREDIT.................................................................................45
SECTION 2.1. Commitments.............................................................................45
2.1.1. Loan Commitments........................................................................45
2.1.2. Letter of Credit Commitment.............................................................45
2.1.3. Lenders Not Permitted or Required to Make Loans.........................................45
SECTION 2.2. Reduction of the Commitment Amounts.....................................................46
2.2.1. Optional................................................................................46
2.2.2. Mandatory...............................................................................46
SECTION 2.3. Borrowing Procedures and Funding Maintenance............................................47
2.3.1. Borrowing Current Assets Loans and Fixed Assets Loans...................................47
2.3.2. Borrowing Swing Line Loans..............................................................49
SECTION 2.4. Continuation and Conversion Elections...................................................51
SECTION 2.5. Funding.................................................................................51
SECTION 2.6. Issuance Procedures.....................................................................51
2.6.1. Other Lenders' Participation............................................................52
2.6.2. Disbursements: Conversion to Current Assets Loans.......................................53
2.6.3. Reimbursement...........................................................................53
2.6.4. Deemed Disbursements....................................................................54
2.6.5. Nature of Reimbursement Obligations.....................................................54
SECTION 2.7. Register, Notes, Obligation Accounts, Reserves..........................................54
ARTICLE III REPAYMENTS; PREPAYMENTS; INTEREST AND FEES...........................................................57
SECTION 3.1. Payments; Application; Lockbox Accounts; Power of Attorney; Charges to
Obligation Accounts; No Discharge.......................................................57
3.1.1. Repayments and Prepayments..............................................................57
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3.1.2. Application.............................................................................59
3.1.3. Matters Relating to Lockbox Accounts....................................................60
3.1.4. Power of Attorney.......................................................................62
3.1.5. Charges to Obligation Accounts..........................................................63
3.1.6. No Discharge, Survival of Claims........................................................63
SECTION 3.2. Interest Provisions.....................................................................63
3.2.1. Rates...................................................................................63
3.2.2. Post-Maturity Rates.....................................................................64
3.2.3. Payment Dates...........................................................................64
SECTION 3.3. Fees....................................................................................64
3.3.1. Commitment Fees.........................................................................64
3.3.2. The Administrative Agents' Fees.........................................................65
3.3.3. Letter of Credit Fees...................................................................65
ARTICLE IV CERTAIN LIBO RATE AND GUARANTY PROVISIONS.............................................................66
SECTION 4.1. LIBO Rate Lending Unlawful..............................................................66
SECTION 4.2. Deposits Unavailable....................................................................66
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. ...................................................67
SECTION 4.4. Funding Losses..........................................................................67
SECTION 4.5. Increased Capital Costs.................................................................67
SECTION 4.6. Taxes...................................................................................68
SECTION 4.7. Payments; Computations, etc. ...........................................................72
SECTION 4.8. Sharing of Payments.....................................................................72
SECTION 4.9. Setoff..................................................................................73
SECTION 4.10. Guaranty Provisions.....................................................................73
4.10.1. Guaranty................................................................................73
4.10.2. Guaranty Absolute, etc. ................................................................73
4.10.3. Reinstatement, etc. ....................................................................74
4.10.4. Waiver, etc. ...........................................................................74
4.10.5. Postponement of Subrogation, etc. ......................................................74
ARTICLE V CONDITIONS TO CREDIT EXTENSIONS........................................................................75
SECTION 5.1. Initial Credit Extension................................................................75
5.1.1. Resolutions, etc. ......................................................................75
5.1.2. Interim Order...........................................................................75
5.1.3. Use of Proceeds.........................................................................76
5.1.4. Projections.............................................................................76
5.1.5. Revolver Intercreditor Agreement........................................................76
5.1.6. Closing Date Certificate................................................................76
5.1.7. Delivery of Notes.......................................................................76
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5.1.8. Intentionally Deleted...................................................................76
5.1.9. Closing, Fees, Expenses, etc. ..........................................................76
5.1.10. Financial Information, etc. ............................................................77
5.1.11. Borrowing Base Certificate..............................................................77
5.1.12. Opinions of Counsel.....................................................................77
5.1.13. Intercompany Loan to Sterling Canada, Inc. .............................................77
5.1.14. UCC and Other Searches..................................................................77
5.1.15. Appraisals..............................................................................78
5.1.16. Pledge Agreements.......................................................................78
5.1.17. Security Agreements, etc. ..............................................................78
5.1.18. Intellectual Property Security Agreements...............................................78
5.1.19. Insurance...............................................................................79
5.1.20. Mortgages...............................................................................79
5.1.21. Lockbox Accounts........................................................................79
5.1.22. Perfection Certificate..................................................................79
5.1.23. Solvency, etc. .........................................................................79
5.1.24. Required Consents and Approvals.........................................................79
5.1.25. Satisfactory Legal Form.................................................................79
SECTION 5.2. All Credit Extensions...................................................................79
5.2.1. Compliance With Warranties, No Default, etc. ...........................................79
5.2.2. Credit Extension Request, etc. .........................................................80
5.2.3. Financing Order.........................................................................80
5.2.4. Borrowing Base Certificate..............................................................81
5.2.5. Payment of Fees.........................................................................81
5.2.6. Post-Closing UCC and Other Searches.....................................................81
5.2.7. Satisfactory Legal Form.................................................................81
ARTICLE VI REPRESENTATIONS AND WARRANTIES........................................................................81
SECTION 6.1. Organization, etc. .....................................................................81
SECTION 6.2. Due Authorization, Non-Contravention, etc. .............................................82
SECTION 6.3. Government Approval, Regulation, etc. ..................................................83
SECTION 6.4. Validity, etc. .........................................................................83
SECTION 6.5. Financial Information...................................................................83
SECTION 6.6. No Material Adverse Change..............................................................83
SECTION 6.7. Litigation, Labor Controversies, etc. ..................................................84
SECTION 6.8. Subsidiaries and Unrestricted Subsidiaries..............................................84
SECTION 6.9. Ownership of Properties.................................................................84
SECTION 6.10. Taxes...................................................................................84
SECTION 6.11. Pension and Welfare Plans...............................................................84
SECTION 6.12. Environmental Warranties................................................................85
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SECTION 6.13. Accuracy of Information.................................................................86
SECTION 6.14. Regulations U and X.....................................................................87
SECTION 6.15. Intentionally Deleted...................................................................87
SECTION 6.16. Intentionally Deleted...................................................................87
SECTION 6.17. Fraudulent Conveyance...................................................................87
SECTION 6.18. Intellectual Property Collateral........................................................87
SECTION 6.19. Ownership of Stock......................................................................88
ARTICLE VII COVENANTS............................................................................................88
SECTION 7.1. Affirmative Covenants...................................................................88
7.1.1. Financial Information, Reports. Notices, etc. ..........................................88
7.1.2. Maintenance of Existence: Compliance With Laws, etc. ...................................91
7.1.3. Maintenance of Properties...............................................................91
7.1.4. Insurance...............................................................................92
7.1.5. Books and Records.......................................................................92
7.1.6. Foreign Employee Benefit Plan Compliance................................................92
7.1.7. Use of Proceeds.........................................................................92
7.1.8. Borrowers; Security; etc. ..............................................................93
7.1.9. Lockbox Accounts........................................................................94
7.1.10. Environmental Covenant..................................................................94
7.1.11. As to Intellectual Property Collateral..................................................95
7.1.12. Future Real Estate Properties...........................................................96
7.1.13. Non-Consolidation of Unrestricted Subsidiaries..........................................96
7.1.14. ANEXCO Receivables......................................................................97
SECTION 7.2. Negative Covenants......................................................................97
7.2.1. Business Activities.....................................................................97
7.2.2. Indebtedness............................................................................98
7.2.3. Liens and Reclamation Claims............................................................99
7.2.4. Excess Availability....................................................................101
7.2.5. Investments............................................................................101
7.2.6. Restricted Payments, etc. .............................................................103
7.2.7. Monthly Minimum EBITDA.................................................................103
7.2.8. No Prepayment of Subordinated Debt or the Senior Secured Notes.........................104
7.2.9. New Subsidiaries; Capital Securities of Subsidiaries...................................104
7.2.10. Consolidation, Merger, etc. ...........................................................104
7.2.11. Permitted Dispositions.................................................................104
7.2.12. Modification of Certain Agreements.....................................................104
7.2.13. Transactions With Affiliates...........................................................105
7.2.14. Restrictive Agreements, etc. ..........................................................105
7.2.15. Sale and Leaseback.....................................................................105
7.2.16. Transfer of the Fibers Business........................................................106
7.2.17. Canadian Facility......................................................................107
7.2.18. Attornment.............................................................................107
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7.2.19. Chapter 11 Claims......................................................................108
7.2.20. Financing Order; Payment of Claims.....................................................108
7.2.21. Loan Availability......................................................................109
ARTICLE VIII EVENTS OF DEFAULT..................................................................................109
SECTION 8.1. Listing of Events of Default...........................................................109
8.1.1. Non-Payment of Obligations.............................................................109
8.1.2. Breach of Warranty.....................................................................110
8.1.3. Non-Performance of Certain Covenants and Obligations...................................110
8.1.4. Non-Performance of Other Covenants and Obligations.....................................110
8.1.5. Default on Other Indebtedness..........................................................110
8.1.6. Judgments..............................................................................110
8.1.7. Pension Plans..........................................................................111
8.1.8. Change in Control......................................................................111
8.1.9. Bankruptcy, Insolvency, etc. ..........................................................111
8.1.10. Impairment of Security, etc. ..........................................................112
8.1.11. Intentionally Deleted..................................................................112
8.1.12. Dismissal or Conversion of Cases.......................................................112
8.1.13. Other Superpriority Claim..............................................................112
8.1.14. Compliance with Financing Order........................................................112
8.1.15. Compliance with Court Orders...........................................................112
8.1.16. Granting Liens on Collateral...........................................................112
8.1.17. Intentionally Deleted..................................................................113
8.1.18. Relief from Automatic Stay.............................................................113
8.1.19. Appointment of Examiner................................................................113
8.1.20. Modification of Financing Order........................................................113
8.1.21. Intentionally Deleted..................................................................113
8.1.22. No Termination of Total Commitment.....................................................113
8.1.23. Amendment of Final Financing Order; Superior Claims; New Liens.........................113
8.1.24. Application for Orders.................................................................114
SECTION 8.2. Action if Event of Default.............................................................114
SECTION 8.3. Other Action if Event of Default.......................................................114
ARTICLE IX THE ADMINISTRATIVE AGENT.............................................................................115
SECTION 9.1. Actions................................................................................115
SECTION 9.2. Funding Reliance, etc. ................................................................115
SECTION 9.3. Exculpation............................................................................116
SECTION 9.4. Successor..............................................................................116
SECTION 9.5. Credit Extensions by Administrative Agent and Issuer...................................117
SECTION 9.6. Credit Decisions.......................................................................117
SECTION 9.7. Copies, etc. ..........................................................................117
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SECTION 9.8. Reliance by Administrative Agent.......................................................118
SECTION 9.9. Defaults...............................................................................118
ARTICLE X MISCELLANEOUS PROVISIONS..............................................................................118
SECTION 10.1. Waivers, Amendments, etc. .............................................................118
SECTION 10.2. Notices: Time..........................................................................120
SECTION 10.3. Payment of Costs and Expenses..........................................................121
SECTION 10.4. Indemnification........................................................................122
SECTION 10.5. Survival...............................................................................123
SECTION 10.6. Severability...........................................................................123
SECTION 10.7. Headings...............................................................................123
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. ........................................123
SECTION 10.9. Governing Law; Entire Agreement........................................................124
SECTION 10.10. Successors and Assigns.................................................................124
SECTION 10.11. Sale and Transfer of Loans: Participations in Loans and Notes..........................124
10.11.1. Assignments............................................................................124
10.11.2. Participations.........................................................................126
SECTION 10.12. Confidentiality........................................................................127
SECTION 10.13. Other Transactions.....................................................................127
SECTION 10.14. Forum Selection and Consent to Jurisdiction............................................127
SECTION 10.15. Waiver of Jury Trial...................................................................128
SECTION 10.16. Certain Collateral Matters.............................................................129
SECTION 10.17. Waivers and Releases...................................................................129
SECTION 10.18. ANEXCO Information.....................................................................130
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages; LIBO Office; Domestic Office
SCHEDULE III - Account Obligor Schedule
SCHEDULE IV Approved Budget
EXHIBIT A-1 - Form of Current Assets Note
EXHIBIT A-2 - Form of Fixed Assets Note
EXHIBIT A-3 - Form of Swing Line Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Closing Date Certificate
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EXHIBIT E - Intentionally Deleted
EXHIBIT F - Form of Borrowing Base Certificate
EXHIBIT G-1 - Form of Current Assets Parent Pledge Agreement
EXHIBIT G-2 - Form of Current Assets Obligor Pledge Agreement
EXHIBIT G-3 Fixed Assets Parent Pledge Agreement
EXHIBIT G-4 Fixed Assets Obligator Pledge Agreement
EXHIBIT H-1 - Form of Current Assets Security Agreement
EXHIBIT H-2 - Form of Fixed Assets Security Agreement
EXHIBIT I-1 - Form of Current Assets Mortgage
EXHIBIT I-2 Form of Fixed Assets Mortgage
EXHIBIT J - Form of Joinder Agreement
EXHIBIT K - Form of Revolver Intercreditor Agreement
EXHIBIT L - Form of Lender Assignment Agreement
EXHIBIT M - Form of Perfection Certificate
EXHIBIT N - Form of Exemption Certificate
EXHIBIT O - Interim Order
EXHIBIT P - Form of Lockbox Agreement
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REVOLVING CREDIT AGREEMENT
THIS
REVOLVING CREDIT AGREEMENT, dated as of July 16, 2001, among
STERLING CHEMICALS, INC., a Delaware corporation (the "Company"), STERLING
CANADA, INC., a Delaware corporation, STERLING PULP CHEMICALS US, INC., a
Delaware corporation, STERLING PULP CHEMICALS, INC., a Georgia corporation,
STERLING FIBERS, INC., a Delaware corporation, STERLING CHEMICALS ENERGY, INC.,
a Delaware corporation, and STERLING CHEMICALS INTERNATIONAL, INC., a Delaware
corporation, and each other Person who becomes a party hereto pursuant to
Section 7.1.8 (each such Person, together with the Company, each individually a
"Borrower" and collectively the "Borrowers"), each of which is a debtor and
debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code
(the cases of the Borrowers, each a "Case" and, collectively, the "Cases"), the
various financial institutions as are or may become parties hereto from time to
time (collectively, the "Lenders"), and THE CIT GROUP/BUSINESS CREDIT, INC.
("CIT"), as the administrative agent and the collateral agent (in such capacity,
the "Administrative Agent") for the Lenders.
RECITALS:
A. The Borrowers are Wholly-Owned Subsidiaries (such capitalized term
and other capitalized terms used in the Introductory Statement and in the
Recitals without definition shall have the meanings provided for in Section 1.1)
of Sterling Chemicals Holdings, Inc., a Delaware corporation (the "Parent");
B. The Parent and the Borrowers have elected to file voluntary
petitions with the Bankruptcy Court initiating the Cases and have continued in
possession of their respective assets and in the management of their respective
businesses pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
C. The Borrowers have requested that the Lenders provide
debtor-in-possession financing in an aggregate principal amount not to exceed
$155,000,000; provided that in the event the Final Order is entered, including
the granting of and the Priming Lien, then such principal amount shall be
increased by $15,000,000 to $170,000,000 and provided further that if the
Borrowers fully comply with the proviso to clause (b) of Section 5.2.3, such
principal amount shall be increased by $25,000,000 to $195,000,000 (the "DIP
Financing"), the proceeds of which shall be used:
(i) to pay approximately $35,000,000 in principal of
Indebtedness outstanding under the Existing Credit Agreement which is
secured by the Current Assets (the "Existing Current Asset Loans"),
together with accrued interest, commitment fees and letter of credit
fees thereon;
(ii) to pay approximately $70,000,000 in principal of
Indebtedness outstanding under the Existing Credit Agreement which is
secured by the Fixed Assets and Capital Securities of the Borrowers
(the "Existing Fixed Asset Loans"), together with accrued interest and
fees thereon;
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(iii) to provide for the continuance of the letters of credit
which were issued under the Existing Credit Agreement and are still
outstanding;
(iv) to pay fees and expenses associated with the DIP
Financing; and
(v) to provide for the ongoing working capital and general
corporate needs of the Borrowers.
D. In connection with the DIP Financing and the ongoing working capital
and general corporate needs of the Borrowers, the Borrowers desire to obtain the
following Commitments from the Lenders:
(a) Current Assets Loan Commitments (to include availability
for Current Assets Loans, Swing Line Loans and Letters of Credit),
pursuant to which Borrowings of Current Assets Loans, in a maximum
aggregate principal amount outstanding at any time (together with all
outstanding Swing Line Loans and Letter of Credit Outstandings) may not
exceed the then applicable Maximum Loan Amount, will be made from time
to time on and subsequent to the Closing Date but prior to the Current
Assets Loan Commitment Termination Date;
(b) a Letter of Credit Commitment sub-facility pursuant to
which an Issuer will issue Letters of Credit from time to time on and
subsequent to the Closing Date but prior to the Current Assets Loan
Commitment Termination Date, in a maximum aggregate amount for all
Letter of Credit Outstandings not to exceed the Letter of Credit
Commitment Amount;
(c) a Swing Line Loan Commitment sub-facility pursuant to
which Borrowings of Swing Line Loans, in an aggregate outstanding
principal amount not to exceed the Swing Line Loan Commitment Amount
outstanding at any time, will be made from time to time on and
subsequent to the Closing Date but prior to the Current Assets Loan
Commitment Termination Date; and
(d) a Fixed Assets Loan Commitment pursuant to which
Borrowings of Fixed Assets Loans, in a maximum aggregate principal
amount not to exceed the Fixed Assets Loan Commitment Amount
outstanding at any time, will be made from time to time on and
subsequent to the Closing Date but prior to the Fixed Assets Loan
Commitment Termination Date.
E. To provide security for the repayment of the Credit Extensions to be
made hereunder and the payment of any other Obligations, the Borrowers will
provide to the Administrative Agent and the Lenders the following (each as more
fully described herein):
(a) with respect to all Obligations of the Borrowers hereunder
and under the other Loan Documents, an allowed administrative expense
claim in each of the Cases pursuant to Section 364(c) of the Bankruptcy
Code having priority over all administrative expenses including the
kinds specified in Sections 503(b), 507(b) and 546(c) of the Bankruptcy
Code;
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(b) with respect to the Current Assets Obligations, (i) prior
to the date of entry of the Final Order, including the granting of the
Priming Lien, (A) a first-priority, perfected security interest in and
Lien on all right, title and interest of the Borrowers in, to and under
all of the Current Assets, subject to no other prior security interests
or Liens and (B) a perfected security interest in and Lien on (1) 100%
of the Capital Securities of the Borrowers, (2) 100% of the Capital
Securities of the Subsidiaries (other than Unrestricted Subsidiaries),
and (3) all right, title and interest of the Borrowers in, to and under
all of the Fixed Assets, subject, in the case of the Collateral
described in clauses (B)(1), (B)(2) and (B)(3) hereinabove, only to the
then applicable Priority Liens and (ii) on and after the date of entry
of the Final Order, including the granting of the Priming Lien, the
Liens and priorities described in the foregoing clause (i), plus the
Priming Lien on the Fixed Assets Collateral (other than the Capital
Securities of the Company) to secure the repayment of up to $40,000,000
of Current Assets Obligations; and
(c) with respect to the Fixed Asset Obligations, (i) prior to
the date of entry of the Final Order, including the granting of the
Priming Lien, (A) a first-priority, perfected security interest in and
Lien on all right, title and interest of the Borrowers in, to and under
all of the Fixed Assets, 100% of the Capital Securities of the
Borrowers and 35% of the Capital Securities of the Subsidiaries (other
than Unrestricted Subsidiaries), subject to no other prior security
interests or Liens other than Existing Leases and (B) a perfected
security interest in and Lien on all right, title and interest of the
Borrowers in, to and under all of the Current Assets and 65% of the
Capital Securities of the Subsidiaries (other than Unrestricted
Subsidiaries), subject, in the case of the Collateral described in
clause (B), only to then applicable Priority Liens and (ii) on and
after the date of entry of the Final Order, including the granting of
the Priming Lien, the Liens and priorities described in the foregoing
clause (i), but in all cases subject to the Priming Lien of the Current
Assets Secured Parties.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acceptable Account" means any Foreign Account for which the Account
Debtor has long-term debt ratings, or is a Wholly-Owned Subsidiary of a Person
having long-term debt ratings, of at least A- and A3 or short-term debt ratings
of at least A2 and P2, in each case by S&P and Xxxxx'x, respectively.
"Account Debtor" means any Person obligated on any Account of any
Borrower.
"Account" means (i) any right of payment for goods sold or leased or
for services rendered by any Borrower which is not evidenced by an instrument or
chattel paper, (ii) the invoice or ledger amount of any receivable (including
royalties) arising out of the licensing of Sterling Canada, Inc.'s chlorine
dioxide generator technology and other technologies related
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thereto, (iii) any receivable arising out of the profit sharing component of
conversion or production contracts or cost reimbursement obligations or other
obligations to pay money under other contracts to the extent the parties thereto
have agreed in writing as to the amount thereof that is subject to no further
adjustment, or (iv) any "chattel paper" and/or "instrument" (as such terms are
defined in the U.C.C.) of the Borrowers (so long as such chattel paper and/or
instrument is delivered to the Administrative Agent and the Administrative Agent
has a first-priority, perfected Lien in any such "chattel paper" and/or
"instrument").
"Account Obligor Schedule" means the Account Obligor Schedule attached
hereto as Schedule III, as it may be supplemented or otherwise modified from
time to time by the Borrowers upon, in the case of Items A and C, the written
consent of the Administrative Agent and in the case of Item B, written notice to
the Administrative Agent of the name of such Account Debtors that meet all of
the requirements set forth in the definition of "Acceptable Account."
"Additional Senior Subordinated Notes" means the Company's 11-1/4%
Senior Subordinated Notes Due 2007 in an original principal amount of
$150,000,000.
"Additional Senior Subordinated Notes Indenture" means the Indenture
dated as of April 7, 1997 between the Company and Fleet National Bank (now known
as State Street Bank and Trust Company), as trustee, that governs the terms of
the Additional Senior Subordinated Notes, as in effect on the Effective Date.
"Administrative Agent" is defined in the Introductory Statement and
includes each other Person appointed as the successor Administrative Agent
pursuant to Section 9.4.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. As used in this definition "control" of a Person means:
(a) the power, directly or indirectly, to vote 10% or more of
the Capital Securities (on a fully diluted basis) having ordinary
voting power for the election of directors, managing members or general
partners (as applicable);
(b) beneficial ownership of 10% or more of any class of the
Voting Stock of such Person or 10% or more of all outstanding Capital
Securities of such Person; or
(c) the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person (whether by
contract or otherwise).
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated or otherwise modified from time to time and
in effect on such date.
"Alternate Base Rate" means, for any day and with respect to all Base
Rate Loans, the higher of (a) 0.50% per annum above the latest Federal Funds
Rate and (b) the rate of interest in effect for such day as most recently
publicly announced or established by The Chase Manhattan Bank in
New York,
New
York (the "Reference Bank"), as its "Base Rate". (The "Base Rate" is a
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rate set by the Reference Bank based upon various factors including the
Reference Bank's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above or below such announced rate.) Any change in the Alternate Base
Rate established or announced by the Reference Bank shall take effect at the
opening of business on the day of such establishment or announcement.
"Amount Drawn" is defined in the definition of Applicable Commitment
Fee.
"ANEXCO" means ANEXCO, LLC, a Delaware limited liability company.
"ANEXCO Account" is defined in the definition of Eligible Accounts.
"ANEXCO LLC Agreement" means the Limited Liability Company Agreement of
ANEXCO, as amended, supplemented, amended and restated or otherwise modified
from time to time pursuant to Section 7.1.15.
"Applicable Commitment Fee" means for (a) the Current Assets Loan
Commitment, 0.50%, and (b) the Fixed Assets Loan Commitment, the applicable
percentage set forth below opposite the corresponding average daily principal
amount of Fixed Assets Loans outstanding (the "Amount Drawn") during the
calendar month ending on the applicable Monthly Payment Date:
Amount Drawn Applicable Percentage
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Greater than $50,000,000 0.75%
Less than or equal to $50,000,000 and 1.00%
greater than $25,000,000
Less than or equal to $25,000,000 1.25%
"Applicable Margin" means for (a) Current Assets Loans maintained as
(i) LIBO Rate Loans, 3.50%, and (ii) Base Rate Loans, 2.00%, and (b) Fixed
Assets Loans maintained as (i) LIBO Rate Loans, 3.75%, and (ii) Base Rate Loans,
2.25%.
"Approved Budget" means the cash projections to be delivered pursuant
to clause (a) of Section 5.1.4, attached hereto as Schedule IV and approved by
the Administrative Agent, as updated from time to time with the consent of the
Administrative Agent.
"Approving Lenders" means, at any time, Lenders holding 66% (or
greater) of the Commitments (determined on a combined basis) comprising the
Fixed Assets Loan Commitment Amount, plus the Maximum Current Assets Loan
Commitment Amount, or if any of the Commitments have been terminated or are
otherwise no longer in effect, then Lenders holding 66% (or greater) of the
Obligations.
"Assignee Lender" is defined in Section 10.11.1.
"Assignor Lender" is defined in Section 10.11.1.
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"Authorized Officer" is defined in clause of Section 5.1.1.
"Availability Reserve" means the sum of (without duplication), at the
Administrative Agent's election, reserves: (a) for any matters affecting the
priority of the Liens securing the Obligations (other than Priority Liens),
including (i) rental payments or similar charges for any Borrower's leased
premises or other locations where Collateral which is a Current Asset is located
or deemed to be located and for which the Borrowers have not delivered to the
Administrative Agent a landlord's waiver or mortgagee's waiver or other similar
subordination agreement, as applicable, all in form and substance reasonably
satisfactory to the Administrative Agent, and (ii) estimated payments due by the
Borrowers to any applicable warehousemen or third party processor, for which the
Borrowers have not delivered to the Administrative Agent a waiver or some other
similar subordination agreement as determined by and in form and substance
satisfactory to the Administrative Agent; provided, that any of the foregoing
amounts shall be adjusted from time to time hereafter upon (A) delivery to the
Administrative Agent of any such acceptable waiver or subordination agreement,
(B) the opening or closing of a location where Collateral which is a Current
Asset is located or deemed to be located for which the Borrowers have not
delivered such an acceptable waiver or subordination agreement, and/or (C) any
change in the amount of rental, storage or processor payments or similar
charges; plus (b) an amount equal to the Carve-Out; plus (c) any amounts as
otherwise provided pursuant to the explicit terms of this Agreement; plus (d)
such other reserves as the Administrative Agent may require from time to time in
accordance with the Administrative Agent's customary practice; provided,
however, it is understood and agreed that no such reserves shall be taken with
respect to those items of Collateral already excluded from the definitions of
"Eligible Inventory" and "Eligible Accounts".
"Backed By Letter of Credit" means an Account (a) that is backed by a
letter of credit (payable in Dollars) in form and substance reasonably
acceptable to the Administrative Agent and that is issued or confirmed by an
issuer having ratings of at least A2 or P2 by S&P and Xxxxx'x, respectively, or
a rating of at least A2 by International Bank Credit Analysis, Ltd. or at least
LC-1 by Thomson Bank Watch or (b) for which a guaranty agreement guaranteeing
the payment of such Account has been executed by a U.S. corporation that is an
Affiliate of the Account Debtor both in form and substance and from a U.S.
corporation reasonably satisfactory to the Administrative Agent.
"Bankruptcy Code" means The Bankruptcy Reform Act of 1978, as amended,
and codified as 11 U.S.C. Sections 101 et seq.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of Texas, or any other court having jurisdiction over the
Cases from time to time, including, but not limited to, the United States
District Court for the Southern District of Texas if and to the extent it
withdraws the reference with respect to the Cases, any part thereof, or any
matter or proceeding therein.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Borrower" and "Borrowers" are as defined in the Introductory
Statement.
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"Borrowing" means a borrowing of Loans of the same Type and, in the
case of LIBO Rate Loans, having the same Interest Period, made by all Lenders
required to make such Loans on the same Business Day and pursuant to the same
Borrowing Request in accordance with Section 2.1 or a continuation or conversion
thereof pursuant to Section 2.4.
"Borrowing Base Amount" means, at any time, an amount equal to the sum
of (without duplication) (a) 85% of Eligible Accounts; plus (b) on and after the
date which is the later to occur of (i) the date of entry of the Final Order and
(ii) the date the Borrowers have fully complied with the proviso to clause (b)
of Section 5.2.3, the lesser of (x) $10,000,000 and (y) 33% of Generator
Receivables; plus (c) 65% of Eligible Inventory; provided, however, that the
amount available pursuant to clause (c) of this definition shall in no event
exceed (1) $42,500,000 during such period that the Current Assets Loan
Commitment Amount is equal to $85,000,000, (2) $50,000,000 during such period
that the Current Assets Loan Commitment Amount is equal to $100,000,000 and (3)
$62,500,000 during such period that the Current Assets Loan Commitment Amount is
equal to $125,000,000. The Administrative Agent shall have the right to review
computations of the Borrowing Base Amount and if, in its reasonable judgment,
such computations have not been computed in accordance with the terms of this
Agreement, the Administrative Agent shall have the right to correct such errors.
"Borrowing Base Certificate" means a certificate duly completed and
executed by the treasurer, assistant treasurer, chief accounting or financial
Authorized Officer of the Company, substantially in the form of Exhibit F
hereto, together with such changes thereto as the Administrative Agent may from
time to time reasonably request for the purpose of monitoring the Borrowers'
compliance with the limitations on the amount of Current Assets Loans that may
be outstanding at any time hereunder.
"Borrowing Request" means a Loan request and certificate duly executed
by an Authorized Officer of the applicable Borrower, substantially in the form
of Exhibit B-1 hereto.
"BP" means BP Chemicals Inc., an Ohio corporation.
"BP Joint Venture Agreement" means the Joint Venture Agreement, dated
March 31, 1999, between the Company and BP, as amended, supplemented, amended
and restated or otherwise modified from time to time pursuant to Section 7.1.14.
"BP Production Agreement" means the Amended and Restated Production
Agreement, dated as of March 31, 1998, between BP and the Company, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in
New
York,
New York; and
(b) relative to the making, continuing, prepaying or repaying
of any LIBO Rate Loans, any day which is a Business Day described in
clause (a) above and which is also a day on which dealings in Dollars
are carried on in the London interbank eurodollar market.
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"Canadian Facility" means the term loan, revolving loan and letter of
credit facility for loans and letters of credit for the account of Sterling Pulp
Chemicals, Ltd., in an amount not to exceed $35,000,000 U.S. Dollars or the
Canadian dollar equivalent thereof established in accordance with the terms of
this Agreement including Section 7.2.17.
"Capital Expenditures" means, for any period, the aggregate amount of
all expenditures of the Borrowers for fixed or capital assets made during such
period which, in accordance with GAAP, would be classified as capital
expenditures.
"Capital Securities" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's equity (including any instruments
convertible into equity), whether now outstanding or issued after the Effective
Date.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrowers under any leasing or similar arrangement which have been (or, in
accordance with GAAP, should be) classified as capitalized leases, and for
purposes of each Loan Document, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a premium or a penalty.
"Carve-Out" means, the payment of (a) unpaid professional fees and
disbursements of the professionals retained by the Borrowers and any statutory
committees appointed in the Cases that are incurred prior to the occurrence and
continuance of a Carve-Out Event and allowed by the Bankruptcy Court; (b) unpaid
professional fees and disbursements incurred after the occurrence and during the
pendency of a Carve-Out Event by professionals retained by the Borrowers and any
statutory committees appointed in the Cases that are (i) in an amount not to
exceed $2,000,000 and (ii) allowed by the Bankruptcy Court; (c) amounts payable
under retention and severance agreements or programs to the extent set forth in
the Approved Budget and approved by the Bankruptcy Court; and (d) fees pursuant
to 28 U.S.C. Section 1930 and any fees payable to the Clerk of the Bankruptcy
Court.
"Carve-Out Event" means (a) the occurrence of a Commitment Termination
Event or (b) any notice given by the Administrative Agent pursuant to Section
8.2.
"Cases" is defined in the Introductory Statement.
"Cash Collateralize" means, with respect to a Letter of Credit, the
deposit of immediately available funds into a cash collateral account maintained
with (or on behalf of) the Administrative Agent, on terms and conditions
satisfactory to the Administrative Agent, in an amount equal to the Stated
Amount of such Letter of Credit.
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed
by) the United States of America or a State (or any agency or
political subdivision thereof, to the extent
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17
such obligations are supported by the full faith and credit of the
United States of America or a State) maturing not more than one year
after such time;
(b) commercial paper maturing not more than 270 days from the
date of issue, which is issued by
(i) a corporation (other than an Affiliate of any
Obligor) organized under the laws of any State and rated A-1
or higher by S&P or P-1 or higher by Xxxxx'x, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers
acceptance, maturing not more than one year after its date of issuance,
which is issued by either
(i) any bank organized under the laws of the United
States (or any State) and which has (x) a credit rating of P-1
or higher from Xxxxx'x or A-1 or higher from S&P and (y) a
combined capital and surplus greater than $500,000,000, or
(ii) any Lender;
(d) any repurchase agreement having a term of 30 days or less
entered into with any Lender or any commercial banking institution
satisfying the criteria set forth in clause (c)(i) which
(i) is secured by a fully perfected security interest
in any obligation of the type described in clause (a), and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of such commercial banking institution
thereunder;
(e) any money market mutual fund with a daily right of
redemption and a net asset value of $1.00 per share substantially all
the assets of which are comprised of investments of the types
described in the preceding clauses (a) through (d); or
(f) participations in loans (for a tenor of not more than 90
days) to Persons having short term credit ratings of at least A-1 and
P-1 by S&P and Xxxxx'x, respectively.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
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(a) a "Change in Control", as defined in any Sub Debt
Document, the Senior Secured Discount Notes Indenture or the Senior
Secured Note Indenture;
(b) a change resulting when any Unrelated Person or any
Unrelated Persons, other than the designated shareholders listed on
Item 1.1 of the Disclosure Schedule ("Designated Shareholders"),
acting together, which would constitute a Group (as defined in Section
13(d) of the Exchange Act) together with any Affiliates or Related
Persons thereof (in each case also constituting Unrelated Persons)
shall at any time either (i) Beneficially Own (as defined in Rule 13d3
of the Exchange Act) more than 30% of the aggregate voting power of
all classes of Voting Stock of Parent or (ii) succeed in having a
sufficient number of its or their nominees elected to the Board of
Directors of Parent such that such nominees, when added to any
existing director remaining on the Board of Directors of Parent after
such election who is an Affiliate or Related Person of such Person or
Group (as defined in Section 13(d) of the Securities Exchange Act),
shall constitute a majority of the Board of Directors of Parent. As
used herein (a) "Unrelated Person" shall mean at any time any Person
other than Parent or any of its Subsidiaries and other than any trust
for any employee benefit plan of Parent or any of its Subsidiaries and
(b) "Related Person" of any Person shall mean any other Person owning
(i) 5% or more of the outstanding common stock of such Person or (ii)
5% or more of the Voting Stock of such Person;
(c) the failure of Parent at any time to directly own and
control beneficially and of record on a fully diluted basis 100% of
the outstanding Capital Securities of the Company, such Capital
Securities to be held free and clear of all Liens (other than Liens
granted under a Loan Document);
(d) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
of Parent or the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election
by the shareholders of Parent or the Company, as the case may be, was
approved by a majority of the directors of Parent or the Company, as
the case may be, 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 Parent or the Company, as the
case may be, then in office; or
(e) the failure of the Company at any time to directly or
indirectly own and control beneficially or of record on a fully
diluted basis 100% of the outstanding Capital Securities of each other
Borrower and each Subsidiary (other than Unrestricted Subsidiaries or
director's qualifying shares or investments by foreign nationals
mandated by applicable laws), such Capital Securities to be held free
and clear of all Liens (other than Liens securing the Obligations and
other Priority Liens); provided that a Transfer of the Fibers Business
in accordance with this Agreement, including Section 7.2.16, shall not
be deemed to be a "Change of Control."
"CIT" is defined in the Introductory Statement.
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19
"Chem Systems Appraisal" is defined in clause (b) of Section 5.1.15.
"Closing, Date" means the date of the initial Credit Extensions, not to
be later than July 20, 2001.
"Closing Date Certificate" means the closing date certificate executed
and delivered by each Borrower pursuant to the terms of this Agreement,
substantially in the form of Exhibit D hereto.
"Code" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"Collateral" has the collective meaning provided for such term in each
of the Security Agreements, the Mortgages, the Pledge Agreements and in any
other Loan Document and shall include any and all other assets in which an
Obligor grants a Lien and/or security interest (including the Lockbox
Agreements) to secure the Obligations.
"Commitment" means, as the context may require, the then applicable
Current Assets Loan Commitment, the Fixed Assets Loan Commitment, the Letter of
Credit Commitment or the Swing Line Loan Commitment.
"Commitment Amount" means, as the context may require, the Maximum
Current Assets Loan Commitment Amount, the Fixed Assets Loan Commitment Amount,
the Letter of Credit Commitment Amount or the Swing Line Loan Commitment Amount.
"Commitment Termination Date" means, as the context may require, the
Current Assets Loan Commitment Termination Date or the Fixed Assets Loan
Commitment Termination Date.
"Commitment Termination Event" means the occurrence and continuance of
any Event of Default in respect of which all or any portion of the Loans are
accelerated or otherwise declared to be due and payable or the Commitments are
terminated, in each case pursuant to Section 8.2.
"Commodity Hedging Agreements" means with respect to any Person, all
liabilities of such Person under exchange agreements, swap agreements, cap
agreements, future agreements, forward agreements and all other agreements or
arrangements (of a strictly non-speculative nature) designed to protect such
Person against fluctuations in commodity prices.
"Company" is defined in the Introductory Statement.
"Concentration Account" is defined in clause (a) of Section 3.1.3.
"Consummation Date" means the date of the substantial consummation (as
defined in Section 1101 of the Bankruptcy Code) of a Reorganization Plan of any
of the Borrowers which is confirmed pursuant to an order of the Bankruptcy
Court.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or
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20
otherwise to invest in, a debtor, or otherwise, to assure a creditor against
loss) the Indebtedness of any other Person, or guarantees the payment of
dividends or other distributions upon the Capital Securities of any other
Person; provided that the term "Contingent Liability" shall not include
endorsements for collection or deposits in the ordinary course of the Borrowers'
businesses. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount of the debt, obligation or other liability
guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
applicable Borrower (or the Company on behalf of such Borrower), substantially
in the form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with Parent,
the Company or any Subsidiary, are treated as a single employer under Section
414 of the Code or Section 4001 of ERISA.
"Copyright Security Agreement" means any Copyright Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit C to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Credit Extension" means, as the context may require, (a) the making of
any Loan (including the Loans to be made pursuant to clause (c) of Section
2.3.1) by a Lender; or (b) the issuance of any Letter of Credit (including the
deemed issuance of any Letter of Credit pursuant to clause (c) of Section
2.3.1), or the extension of any Stated Expiry Date of any existing Letter of
Credit or the increase in the Stated Amount of any existing Letter of Credit, in
each case by the Issuer.
"Current Assets" means all of the assets of the Borrowers other than
the Fixed Assets Collateral.
"Current Assets Collateral" means all of the assets of the Borrowers
other than the Fixed Assets Collateral and the Capital Securities of
Unrestricted Subsidiaries.
"Current Assets Lender" is defined in clause (a) of Section 2.1.1.
"Current Assets Loan Commitment" means, relative to any Current Assets
Lender, such Current Assets Lender's obligation (if any) to make Current Assets
Loans pursuant to clause (a) of Section 2.1.1, in an amount not to exceed the
product of (i) such Current Asset Lender's Current Assets Loan Percentage,
multiplied by, (ii) the then applicable Current Assets Loan Commitment Amount.
"Current Assets Loan Commitment Amount" means, on any date, (a) prior
to the date of entry of the Final Order, including the granting of the Priming
Lien, a maximum aggregate amount of $85,000,000, and subject to the following
sentence, (b) prior to the date the Borrowers have fully complied with
conditions set forth in the proviso to clause (b) of Section 5.2.3, but after
the date of entry of the Final Order, including the granting of the Priming
Lien, a maximum aggregate amount of $100,000,000, and (c) on and after the date
which is the later to occur of (i)
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the date of entry of the Final Order, including the granting of the Priming Lien
and (ii) the date the Borrowers have fully complied with the conditions set
forth in the proviso to clause (b) of Section 5.2.3, a maximum aggregate amount
of $125,000,000, in each case as such amounts may be permanently reduced from
time to time pursuant to Section 2.2 and other provisions of this Agreement.
Prior to the date the Bankruptcy Court enters the Final Order, the Current
Assets Loan Commitment Amount (subject to reductions pursuant to Section 2.2 and
other provisions of this Agreement) shall be an amount equal to the aggregate
amount of Current Asset Loans, Swing Line Loans and Letter of Credit Obligations
that are authorized by the Interim Order, not to exceed $85,000,000.
"Current Assets Loan Commitment Termination Date" means the earliest of
(a) the Maturity Date; (b) the date on which the Current Assets Loan Commitment
Amount is terminated in full or permanently reduced to zero pursuant to the
terms of this Agreement; (c) the date on which any Commitment Termination Event
occurs; and (d) the Consummation Date. Upon the occurrence of any event
described in the preceding clauses, the Current Assets Loan Commitments shall
terminate automatically and without any further action.
"Current Assets Loan Percentage" means, relative to any Lender, the
applicable percentage set forth opposite its name on Schedule II hereto under
the Current Assets Loan Commitment column or set forth in a Lender Assignment
Agreement under the Current Assets Loan Commitment column, as such percentage
may be adjusted from time to time pursuant to Lender Assignment Agreements
executed by such Lender and its Assignee Lender and delivered pursuant to
Section 10.11.1. A Lender shall not have any Current Assets Loan Commitment if
its percentage under the Current Assets Loan Commitment column is zero.
"Current Assets Loans" is defined in clause (a) of Section 2.1.1.
"Current Assets Note" means a joint and several promissory note of each
Borrower payable to any Current Assets Lender, in the form of Exhibit A-1 hereto
(as such promissory note may be amended, endorsed or otherwise modified from
time to time), evidencing the joint and several aggregate Indebtedness of the
Borrowers to such Current Assets Lender resulting from outstanding Current
Assets Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"Current Assets Obligations" means all obligations (monetary or
otherwise, whether absolute or contingent, matured or unmatured) of each Obligor
arising under or in connection with the Current Assets Loans, Swing Line Loans,
Letter of Credit Outstandings, this Agreement and each other Loan Document which
secures or guarantees the Current Assets Obligations, including obligations
under a Rate Protection Agreement where the counterparty is a Current Assets
Lender (or its Affiliate).
"Current Assets Obligations Account" is defined in clause (c) of
Section 2.7.
"Current Assets Obligor Pledge Agreement" means the Pledge Agreement
executed and delivered by an Authorized Officer of each Borrower that owns a
Pledged Subsidiary, substantially in the form of Exhibit G-2 hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
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"Current Assets Parent Pledge Agreement" means the Pledge Agreement
executed and delivered by an Authorized Officer of Parent, substantially in the
form of Exhibit G-1 hereto, as amended and restated or otherwise modified from
time to time.
"Current Assets Required Lenders" means, (a) Current Assets Lenders
holding greater than 50% of the Maximum Current Assets Loan Commitment Amount,
or (b) at any time after the Current Assets Commitments have expired, been
reduced to zero or terminated, Current Assets Lenders holding greater than 50%
of the sum of (i) the aggregate principal amount of Current Assets Loans
outstandings, plus (ii) Swing Line Loans outstanding, plus (iii) Letter of
Credit Outstandings.
"Current Assets Secured Parties" means collectively, the Current Assets
Lenders, the Administrative Agent, each counterparty to a Rate Protection
Agreement that is (or at the time such Rate Protection Agreement was entered
into, was) a Current Assets Lender or an Affiliate thereof and (in each case),
each of their respective successors, transferees and assigns.
"Current Assets Security Agreement" means the Current Assets Security
Agreement executed and delivered by each Borrower pursuant to the terms of this
Agreement to secure the Current Assets Obligations, substantially in the form of
Exhibit H-1 hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"DIP Financing" is defined in Recital C.
"Disbursement" is defined in Section 2.6.2.
"Disbursement Date" is defined in Section 2.6.2.
"Disbursement Due Date" is defined in Section 2.6.2.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule 1, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrowers with the prior written
consent of the Administrative Agent.
"Disposition" (or similar words such as "Dispose") means any sale,
transfer, lease, contribution or other conveyance (including by way of
condemnation or merger) of, or the granting of options, warrants or other rights
to, any Borrower's or any Subsidiary's assets (other than any Unrestricted
Subsidiary's assets), including Accounts and Capital Securities of the Borrowers
and the Subsidiaries, (but excluding any Capital Securities owned by any
Unrestricted Subsidiary) to any other Person in a single transaction or series
of transactions.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Account" means any Account for which the Account Debtor is
subject to the personal jurisdiction of federal or state courts in the United
States of America (and is subject to service of process in the U.S.).
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"Domestic Office" means the office of a Lender designated as its
"Domestic Office" on Schedule II hereto or in a Lender Assignment Agreement, or
such other office within the United States as may be designated from time to
time by notice from such Lender to the Administrative Agent and the Company.
"EBITDA" shall mean, for any period and without duplication, all
earnings of the Borrowers before all (a) interest and tax obligations, (b)
depreciation, and (c) amortization, in each case for such period, all determined
in accordance with GAAP on a basis consistent with the latest audited financial
statements of the Borrowers, but in all cases excluding the effect of any
non-cash extraordinary and non-recurring gains or losses for such period.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 10.8, subject to the approval of the Bankruptcy Court.
"Eligible Account" means, at any time, the invoice or ledger amount
owing on each Account (other than Generator Receivables) of any Borrower, in
each case, net of any reserves reasonably required by the Administrative Agent
from time to time in accordance with the Administrative Agent's customary
practice, for which each of the following statements is accurate and complete to
the reasonable satisfaction of the Administrative Agent (and the Borrowers, by
including an Account in any computation of the Borrowing Base Amount, shall be
deemed to represent and warrant to the Administrative Agent, each Issuer and
each Lender the accuracy and completeness of such statements):
(a) Such Account is a binding and valid obligation of the
Account Debtor thereof and is in full force and effect and such Account
Debtor is not an Affiliate of any Borrower (other than Xxxx Industries,
Inc., ANEXCO or BP or any of their respective Affiliates);
(b) Such Account is bona fide;
(c) Payment of such Account is less than 30 days past due (or
60 days past due in the case of any Account Debtor listed in Item A of
the Account Obligor Schedule on payment terms consistent with past
practices of the Borrowers) as determined by the due date stated on the
invoice therefor (or if such Account is not paid by reference to any
invoice in the ordinary course of business but instead by reference to
the terms of the agreements creating such Account, such Account has not
remained unpaid beyond 30 days (or 60 days past due in the case of any
Account Debtor listed in Item A of the Account Obligor Schedule on
payment terms consistent with current practices) after the due date
therefor);
(d) Such Account is not subject to any dispute, setoff
(excluding any Account payable setoff supported by a letter of credit
but including (i) any Exchange Inventory Payable and (ii) any accounts
payable amounts owing by any of the Borrowers to the third party which
owes an Exchange Inventory Receivable to such Borrower), counterclaim
or other claim or defense including rescission, cancellation or
avoidance, whether by operation of law or otherwise, on the part of the
Account Debtor or any other Person denying liability under such
Account; provided, however, that any such Account
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shall constitute an Eligible Account to the extent it is not subject to
any such dispute, setoff, counterclaim or other claim or defense;
(e) In the case of an Account owing to any Borrower, the
Administrative Agent, on behalf of the Current Assets Lenders, has a
first priority, perfected Lien covering such account and, on behalf the
Fixed Assets Lenders, has a second priority, perfected Lien covering
such Account and such Account is, and at all times will be, free and
clear of all other Liens;
(f) Such Account arose in the ordinary course of business of
any of the Borrowers and such Borrower is the legal owner of such
account;
(g) Such Account is not payable by an Account Debtor who is
more than 30 days (or 60 days in the case of any Account Debtor listed
in Item A of the Account Obligors Schedule on payment terms consistent
with past practices of the Borrowers) past due with regard to 20% or
more of the total Accounts owed to the Borrowers by such Account Debtor
or any of its Affiliates;
(h) All consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority required
to be obtained, effected or given in connection with the execution,
delivery and performance of such Account by each party obligated
thereunder have been duly obtained, effected or given and are in full
force and effect;
(i) Such Account is not an Account as to which any United
States federal or State Governmental Authority is the Account Debtor,
except to the extent the applicable Borrower has complied with the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727;
41 U.S.C. Section 15), by delivering to the Administrative Agent a
notice of assignment in favor of the Administrative Agent under such
Act and in compliance with applicable provisions of 31 C.F.R. Section
7-103.8 and 41 C.F.R. Section 1-30.7, or with similar State law;
(j) The Account Debtor on such Account is not the subject of
any bankruptcy or insolvency proceeding, has not had a trustee or
receiver appointed for all or a substantial part of its property, has
not made an assignment for the benefit of creditors, nor admitted its
inability to pay its debts as they mature or suspended its business;
(k) With respect to any Foreign Account; such Account is
(without duplication), (i) a Foreign Account which is Backed By Letter
of Credit, (ii) an Acceptable Account that is listed on Item B of the
Account Obligor Schedule, provided, however, that any such Acceptable
Account shall be included in Eligible Accounts up to an aggregate
amount not to exceed, at any time, 10% of the total balance due on all
Accounts, (iii) a Foreign Account which is not Backed By Letter of
Credit, provided, however, that any such Foreign Account which is not
Backed By Letter of Credit shall be included in Eligible Accounts up to
an aggregate amount not to exceed, at any time, 15% of the total
balance due on all Accounts, or (iv) the Account Debtor has previously
been
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approved in writing by the Current Assets Required Lenders as an
eligible foreign Account Debtor for purposes of this Agreement;
(l) In the case of the sale of goods, such goods have been
sold to an obligor on a true sale basis or open account, or subject to
contract, and not on consignment, on approval or on a "sale or return"
basis or subject to any other repurchase or return agreement (other
than for failure to meet specifications), no material part of such
goods has been returned, rejected, lost or damaged, and such Account is
not evidenced by chattel paper or an instrument of any kind which has
not been endorsed and delivered to the Administrative Agent;
(m) Each of the representations and warranties set forth in
each Security Agreement with respect to such Account is true and
correct in all material respects on such date;
(n) Such Account otherwise meets the above qualifications and
is (i) due and owing from a Foreign Obligor to ANEXCO and (ii) owing
from ANEXCO to the Company pursuant to the ANEXCO LLC Agreement and the
BP Joint Venture Agreement, net of ANEXCO's operating costs, in each
case subject to the requirements of Section 7.1.14 (an "ANEXCO
Account"); and
(o) Such Account has such other characteristics or criteria as
the Administrative Agent, in its reasonable discretion may specify from
time to time in accordance with the Administrative Agent's customary
practice;
provided that, if any Eligible Account, when added to all other Accounts that
are obligations of the same Account Debtor and its Affiliates, results in a
total sum that exceeds 15% (or 25% in the case of any Account Debtor listed on
Item C of the Account Obligor Schedule) of the total balance then due on all
Eligible Accounts (without giving effect to any reduction in Eligible Accounts
pursuant to this clause), the amount of such Account in excess of 15% (or 25% in
the case of any Account Debtor listed on Item C of the Account Obligor Schedule)
of such total balance then due shall be excluded from Eligible Accounts.
"Eligible Assignee" is defined in clause (a) of Section 10.11.1.
"Eligible Inventory" means, at any time, all "inventory" (as such term
is defined in the U.C.C.) of the Borrowers, including Exchange Inventory
Receivables, net of any reserves reasonably required by the Administrative Agent
from time to time in accordance with the Administrative Agent's customary
practice and net of any accounts payable amounts owing by any Borrower to BP
provided that such amounts do not duplicate those included in clause (d) of the
definition of "Eligible Accounts", for which each of the following statements is
accurate and complete to the reasonable satisfaction of the Administrative Agent
and which at all times continue to be acceptable to the Administrative Agent in
the exercise of its reasonable judgment (and the Company, by including such
inventory in any computation of the Borrowing Base Amount, shall be deemed to
represent and warrant to the Administrative Agents, each Issuer and each Lender,
the accuracy and completeness of such statements):
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(a) Such inventory shall be valued in accordance with GAAP and
(i) shall include raw materials and finished goods but (ii) shall not
include goods that are classified as "work-in-progress", "parts and
supplies" or "stores inventories;"
(b) Such inventory is in good condition, meets all standards
imposed by any Governmental Authority having regulatory authority over
it, its use and/or sale and is either currently usable, undamaged or
currently salable in the normal course of business of the Borrowers;
(c) Such inventory (i) is an Exchange Inventory Receivable,
(ii) is in the possession of the Borrowers, (iii) is in transit in the
ordinary course of business but in respect of which title remains in
the Borrowers and which is fully insured (subject to deductibles
consistent with prudent industry standards for similarly situated
companies) and is not located outside the United States of America or
(iv) is in the possession or control of any warehouseman, bailee or any
agent or processor for or customer of the Borrowers and is not located
outside the United States of America, provided that, Borrowers shall
have notified (in a manner that effectively under applicable law
creates a valid and first-priority, perfected Lien in favor of the
Administrative Agent, on behalf of the Current Assets Lenders, in such
inventory) such warehouseman, bailee, agent, processor or customer of
the Administrative Agent's Lien and such warehouseman, bailee, agent,
processor or customer has subordinated or waived any Lien it may claim
therein and agreed to hold all such inventory for the Administrative
Agent's account subject to the Administrative Agent's instructions;
(d) Each of the representations and warranties set forth in
the applicable Security Agreement with respect to such inventory is
true and correct in all material respects on such date;
(e) The Administrative Agent, on behalf of the Current Assets
Lenders, has a first-priority, perfected Lien covering such inventory
and, on behalf of the Fixed Assets Lenders, has a second-priority
perfected Lien covering such inventory (in each case, subject to the
Lien granted to BP under the BP Production Agreement as in effect on
the Effective Date), and such inventory is, and at all time will be,
free and clear of all other Liens (other than inchoate Liens permitted
under Section 7.2.3 or with respect to which all rights of the holder
of such Liens have been waived or subordinated to the satisfaction of
the Administrative Agent);
(f) Such inventory does not include goods that are not owned
by the Borrowers or that are held by the Borrowers pursuant to any
consignment agreement;
(g) To the extent inventory includes any Exchange Inventory
Receivable (i) such Exchange Inventory Receivable shall be reduced by
any accounts payable amounts owing by any of the Borrowers to the third
party which owes such Exchange Inventory Receivable to such Borrower
and (ii) any such accounts payable amount shall be applied first to
clause (d)(ii) of the definition of Eligible Account and second to this
clause (g)(i), without duplication); and
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(h) Such inventory has such other characteristics or criteria
as the Administrative Agent, in its reasonable discretion, may specify
from time to time in accordance with the Administrative Agent's
customary practice.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"Equipment" is defined in the U.C.C.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to Sections of ERISA also refer to any successor Sections thereto.
"ERISA Affiliate" means any Person which is in the same Controlled
Group as any Borrower.
"ESOP" means the Sterling Chemicals ESOP as in existence on the Closing
Date.
"Event of Default" is defined in Section 8.1.
"Excess Availability" means, at any time of determination, the amount
which is (a) the lesser of (i) the then applicable Borrowing Base Amount and
(ii) the then applicable Current Assets Loan Commitment Amount, minus (b) the
aggregate outstanding principal amount of all Current Assets Loans and Swing
Line Loans, together with the aggregate amount of all Letter of Credit
Outstandings.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Inventory" means any inventory which is subject to a swap,
exchange or similar agreement or arrangement between any of the Borrowers and
any other Person which is not an Affiliate of a Borrower.
"Exchange Inventory Payable" means the net amount of Exchange Inventory
owing by any of the Borrowers to a third party.
"Exchange Inventory Receivable" means the net amount of Exchange
Inventory owed to any Borrower by any other Person which is not an Affiliate of
a Borrower.
"Exemption Certificate" is defined in clause (a) of Section 4.6.
"Existing Credit Agreement" means the $155,000,000
Revolving Credit
Agreement, dated as of July 23, 1999, among Sterling Chemicals, Inc., Sterling
Canada, Inc., Sterling Pulp Chemicals US, Inc., Sterling Pulp Chemicals, Inc.,
Sterling Fibers, Inc., Sterling Chemicals Energy, Inc., and Sterling
International, Inc., as the borrowers, various financial institution, as the
lenders, DLJ Capital Funding, Inc., as the syndication agent, Credit Suisse
First Boston, as
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the documentation agent, and The CIT Group/Business Credit, Inc., as the
administrative agent, as amended.
"Existing Current Asset Loans" is defined in Recital C.
"Existing Fixed Asset Loans" is defined in Recital C.
"Existing Leases" are the leases listed in clauses (e), (f), (g), (h)
and (i) of Part 2, Item 7.2.3(c) of the Disclosure Schedule.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to (a) the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of
New York; or (b) if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
"Fee Letter" means the confidential fee letter, dated as of the
Effective Date, among the Borrowers and CIT, as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Fibers Subsidiaries" means Sterling Fibers, Inc. and Sterling
Chemicals International, Inc., each of which is a Delaware corporation and a
Wholly-Owned Subsidiary of the Company.
"Filing Date" means the date the Cases are commenced in the Bankruptcy
Court, which shall be deemed to be the date (or the respective dates) on which
the Borrowers' voluntary petitions are filed with the Bankruptcy Court.
"Final Order" means an order or judgment of the Bankruptcy Court after
a final hearing pursuant to Section 364 of the Bankruptcy Code and Fed. R.
Bankr. P. 4001, approving the transactions contemplated by the Loan Documents in
form and substance acceptable to Lenders and the Administrative Agent, in their
sole discretion, including (i) a finding in favor of the Administrative Agent
and the Lenders pursuant to 11 U.S.C. Section 364(e), (ii) the grant of a
Superpriority Claim in favor of the Administrative Agent and the Lenders with
respect to all of the Obligations, (iii) granting Liens in the Current Assets
Collateral and the Fixed Assets Collateral securing the Obligations as set forth
in Section 7.1.8 and the other Loan Documents, and (iv) granting a senior and
first-priority, Priming Lien on all of the Fixed Assets Collateral (other than
the Capital Securities of the Company) to secure the repayment of up to
$40,000,000 of Current Assets Obligations; and which order or judgment of the
Bankruptcy Court has not been reversed, stayed or otherwise rendered ineffective
or modified in any manner, and if such order is the subject of a pending appeal
in any respect, neither the making of any Credit Extensions, nor the granting of
Superpriority Claim status with respect to the Obligations, nor the granting of
the Liens (including the Priming Lien) described hereinabove, nor the
performance by any of the Borrowers of any of their obligations under this
Agreement or any other Loan Document or under any other instrument or agreement
referred to in this Agreement shall be the subject of a presently effective stay
pending appeal.
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"Financing Order" means (a) prior to the date of entry of the Final
Order, the Interim Order, and (b) at all times after the date of entry of the
Final Order, the Final Order.
"Fiscal Quarter" means a quarter ending on the last day of March, June,
September or December.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on September 30; references to a Fiscal Year with a number corresponding
to any calendar year (e.g., the "2001 Fiscal Year") refer to the Fiscal Year
ending on September 30 of such calendar year.
"Fixed Assets" means (a) the real property, buildings, Equipment,
structures and other improvements to any of the foregoing, of the Borrowers and
to the extent any of the following items of property constitute fixtures and/or
Equipment under applicable laws, all fixtures, fittings, appliances, apparatus,
Equipment, machinery, building and construction materials and other articles of
every kind and nature whatsoever and all replacements thereof, now or hereafter
affixed or attached to, placed upon or used in any way in connection with the
complete and comfortable use, enjoyment, occupation, operation, development
and/or maintenance of such real property, buildings, Equipment, structures and
other improvements, (b) the Patent Collateral (but not any Accounts relating
thereto), (c) the Material Contracts (but not any Accounts relating thereto) and
(d) all products, offspring and proceeds of and from any Disposition of any and
all of the foregoing (including proceeds which constitute property of the types
described in clause (a) and, to the extent not otherwise included, all payments
under insurance (whether or not the Administrative Agent is the loss payee
thereof) or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing, but excluding in
all cases any Accounts arising under or with respect to any of the foregoing.
"Fixed Assets Collateral" means the Fixed Assets, and the Collateral
granted in or pledged to the Administrative Agent, for the ratable benefit of
the Fixed Assets Lenders, pursuant to the Pledge Agreements and the Mortgages.
"Fixed Assets Lender" is defined in clause (b) of Section 2.1.1.
"Fixed Assets Loans" is defined in clause (b) of Section 2.1.1.
"Fixed Assets Loan Commitment" means, relative to any Fixed Assets
Lender, such Fixed Assets Lender's obligation (if any) to make Fixed Assets
Loans pursuant to clause (b) of Section 2.1.1, in an amount not to exceed the
product of (i) such Fixed Assets Lender's Fixed Assets Loan Percentage,
multiplied by, (ii) the then Fixed Assets Loan Commitment Amount.
"Fixed Assets Loan Commitment Amount" means, on any date, a maximum
aggregate amount of $70,000,000, as such amount may be permanently reduced from
time to time pursuant to Section 2.2, and subject to the following sentence.
Prior to the date the Bankruptcy Court enters the Final Order, the Fixed Assets
Loan Commitment Amount (subject to reductions pursuant to Section 2.2 and other
provisions of this Agreement) shall be an amount equal to the aggregate amount
of Fixed Assets Loans under this Agreement that are authorized by the Interim
Order.
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"Fixed Assets Loan Commitment Termination Date" means the earliest of
(a) the Maturity Date; (b) the date on which the Fixed Assets Loan Commitment
Amount is terminated in full or reduced to zero pursuant to the terms of this
Agreement; (c) the date on which any Commitment Termination Event occurs; and
(d) the Consummation Date. Upon the occurrence of any event described in the
preceding clauses, the Fixed Assets Loan Commitments shall terminate
automatically and without any further action.
"Fixed Assets Loan Percentage" means, relative to any Lender, the
applicable percentage set forth opposite its name on Schedule II hereto under
the Fixed Assets Loan Commitment column or set forth in a Lender Assignment
Agreement under the Fixed Assets Loan Commitment column, as such percentage may
be adjusted from time to time pursuant to Lender Assignment Agreements executed
by such Lender and its Assignee Lender and delivered pursuant to Section
10.11.1. A Lender shall not have any Fixed Assets Loan Commitment if its
percentage under the Fixed Assets Loan Commitment column is zero.
"Fixed Assets Note" means a joint and several promissory note of each
Borrower payable to any Fixed Assets Lender, in the form of Exhibit A-2 hereto
(as such promissory note may be amended, endorsed or otherwise modified from
time to time), evidencing the joint and several aggregate Indebtedness of the
Borrowers to such Fixed Assets Lender resulting from outstanding Fixed Assets
Loans, and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Fixed Assets Obligations" means all obligations (monetary or
otherwise, whether absolute or contingent, matured or unmatured) of each Obligor
arising under or in connection with the Fixed Assets Loans, this Agreement and
each other Loan Document which secures or guarantees the Fixed Assets
Obligations, including obligations under a Rate Protection Agreement where the
counterparty is a Fixed Assets Lender (or its Affiliate).
"Fixed Assets Obligations Account" is defined in clause (c) of Section
2.7.
"Fixed Assets Required Lenders" means, at any time, Lenders holding
greater than 50% of the aggregate Fixed Assets Loan Commitments.
"Fixed Assets Obligor Pledge Agreement" means the Pledge Agreement
executed and delivered by an Authorized Officer of each Borrower that owns a
Pledged Subsidiary substantially in the form of Exhibit G-4 hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Fixed Assets Parent Pledge Agreement" means the Pledge Agreement
executed and delivered by an Authorized Officer of Parent, substantially in the
form of Exhibit G-3 hereto, as amended and restated or otherwise modified from
time to time.
"Fixed Assets Security Agreement" means the Fixed Assets Security
Agreement executed and delivered by each Borrower to secure the Fixed Assets
Obligations pursuant to the terms of this Agreement substantially in the form of
Exhibit H-2 hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
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"Fixed Assets Security Documents" means the Fixed Assets Security
Agreement, the Parent Pledge Agreement, the Obligor Pledge Agreement, each
Mortgage and each other Loan Document pursuant to which the Administrative Agent
is granted a Lien to secure the Fixed Assets Obligations.
"Fixed Assets Secured Parties" means, collectively, the Fixed Assets
Lenders, the Administrative Agent, each counterparty to a Rate Protection
Agreement that is (or at the time such Rate Protection Agreement was entered
into, was) a Fixed Assets Lender or an Affiliate thereof and (in each case),
each of their respective successors, transferees and assigns.
"Foreign Account" means any Account (a) for which the Account Debtor is
a Foreign Obligor or (b) due and payable by a Foreign Obligor to ANEXCO.
"Foreign Employee Benefit Plan" means any employee benefit plan as
defined in Section 3(3) of ERISA which is maintained or contributed to for the
benefit of the employees of the Borrowers, any of their Subsidiaries or any of
their ERISA Affiliates, but which is not covered by ERISA pursuant to ERISA
Section 4(b)(4).
"Foreign Obligor" means an Account Debtor that is not subject to the
jurisdiction of federal or state courts in the United States of America.
"Foreign Pension Plan" means any employee benefit plan as defined in
Section 3(3) of ERISA which (i) is maintained or contributed to for the benefit
of employees of the Borrowers, any of their Subsidiaries or any of their ERISA
Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA,
and (iii) under applicable local law, is required to be funded through a trust
or other funding vehicle.
"Foreign Restricted Subsidiary" means each Foreign Subsidiary listed on
Item 1.4 of the Disclosure Schedule 65% of whose Capital Securities are pledged
to the holders of the Senior Secured Notes.
"Foreign Subsidiary" means any Subsidiary that is not a Subsidiary
incorporated or organized in the United States or any State.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" means generally accepted United States accounting principles,
applied on a consistent basis (except for changes made due to the implementation
of new or revised standards issued by the Financial Accounting Standards Board),
and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the accounting
principles observed in a current period are comparable in all material respects
to those accounting principles applied in a preceding period.
"Generator License Agreement" means each license agreement between
Sterling Canada, Inc., as the licensor, and any other Person (other than an
Affiliate of any Borrower or any Subsidiary), as the licensee, for the use of
Sterling Canada, Inc.'s chlorine dioxide generator technology; provided that (a)
such license agreement is in full force and effect and is a valid and
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binding obligation of the licensee under such license agreement, (b) no default
or event or default exists under such license agreement (other than any default
or event of default arising solely as a result of the filing of the Cases), (c)
the Administrative Agent, on behalf of the Current Assets Lenders, has a first
priority, perfected Lien covering such license agreement and the royalty
payments to be made thereunder, free and clear of all other Liens, (d) Sterling
Canada, Inc. is the legal owner of the technology which is subject to such
license agreement and the royalty payments to be made under such license
agreement, (e) the licensee under such license agreement is not the subject of
any bankruptcy or insolvency proceeding, has not had a trustee or receiver
appointed for all or a substantial part of its property, has not made an
assignment for the benefit of creditors, nor admitted its inability to pay its
debts as they mature or suspended its business and (f) the licensee under such
license agreement is subject to the jurisdiction of the federal, provincial or
state courts of the United States or Canada; and the Borrowers, by including any
royalty payments in any computation of the Borrowing Base Amount, shall be
deemed to represent and warrant to the Administrative Agent, each Issuer and
each Lender the accuracy and completeness of each of the foregoing statements.
"Generator Receivables" means, at any time, the total amount of
estimated, future royalty payments to be made under all Generator License
Agreements in effect as of the date of computation (excluding, however, any such
royalty payments included in the definition of Eligible Account or otherwise
included in the Borrowing Base Amount calculation with respect thereto), as
determined and valued by Chem Systems pursuant to an appraisal of such
estimated, future royalty payments which is not more than 6 months old, net of
any reserves reasonably required by the Administrative Agent from time to time
in accordance with the Administrative Agent's customary practice; provided that
in no event may the 12% discount rate initially used by Chem Systems to value
such Generator Receivables change without the prior written consent of the
Required Lenders.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Government Guaranteed" means Eligible Accounts that are guaranteed by
the full faith and credit of a U.S. or Canadian Governmental Authority.
"Hazardous Material" means (a) any "hazardous substance", as defined by
CERCLA; (b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act, as amended; or (c) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance (including any petroleum
product) within the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material, all
as amended.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under currency exchange agreements, interest rate
swap agreements, interest rate cap agreements, Commodity Hedging Agreements and
interest rate collar agreements, and all other
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agreements or arrangements designed to protect such Person against fluctuations
in interest rates, currency exchange rates or commodity prices and not entered
into for purely speculative purposes.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in any Loan Document refer to such Loan Document as a whole and not to any
particular Section, paragraph or provision of such Loan Document.
"Impermissible Qualification" means any qualification or exception to
the opinion or certification of any independent public accountant as to any
financial statement of the Borrowers (a) which relates to the limited scope of
examinations of matters due to limitations imposed by the Borrowers relevant to
such financial statement; or (b) which relates to the treatment or
classification of any item in such financial statement and which, as a condition
to its removal, would require an adjustment to such item the effect of which
would be to cause the Borrowers to be in Default.
"including" and "include" means including, without limiting the
generality of any description preceding such term.
"Indebtedness" of any Person means (without duplication):
(a) all obligations of such Person for borrowed money or
advances and all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments and all Capital Securities
which have redemption provisions exercisable at the option of the
holder thereof at any time prior to the Termination Date (in the
absence of any contingency) in whole or in part in cash;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities of such Person;
(d) for purposes of Section 8.1.5 only, all other items which,
in accordance with GAAP, would be included as liabilities on the
liability side of the balance sheet of such Person as of the date at
which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services excluding trade accounts payable in the
ordinary course of business which are not overdue for a period of more
than 60 days or, if overdue for more than 60 days, as to which a
dispute exists and adequate reserves in conformity with GAAP have been
established on the books of such Person, and indebtedness of the types
otherwise referred to in this definition secured by (or for which the
holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) a Lien on property owned or being acquired
by such Person (including Indebtedness arising under conditional sales
or
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other title retention agreements), whether or not such Indebtedness
shall have been assumed by such Person or is limited in recourse;
(g) obligations arising under Synthetic Leases; and
(h) all Contingent Liabilities of such Person in respect of
any of the foregoing.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership or joint venture in which such Person is a
general partner) to the extent such Person is liable therefor as a result of
such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness, ownership interest or other
relationship provide that such Person is not liable therefor.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Independent Financial Advisor" means a reputable nationally recognized
accounting, appraisal or investment banking firm that, in the reasonable good
faith judgment of the Board of Directors of the Company, is qualified to perform
the task for which such firm has been engaged and is independent in all respects
with respect to the Company and its Affiliates.
"Intellectual Property Collateral" has the collective meaning provided
for such term in the Security Agreements.
"Intercompany Loan" is defined in Section 5.1.13.
"Interest Period" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Sections 2.3 or
2.4 and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three, six or nine months thereafter, or, if available in the
Administrative Agent's reasonable determination and available to all of the
Lenders, either twelve months thereafter or such other time period less than one
month as may be requested by the Borrowers (a "Non-Standard Period") (or, if
such month has no numerically corresponding day, on the last Business Day of
such month), as the applicable Borrower may select in its relevant notice
pursuant to Sections 2.3 or 2.4; provided, however that:
(a) such Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than ten different dates;
(b) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day); and
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(c) no Interest Period for any Loan may end later than the
Maturity Date for such Loan.
"Interim Order" is defined in Section 5.1.2.
"Investment" means, relative to any Person,
(a) any loan, advance, extension of credit or contribution
made by such Person to any other Person, including the purchase by such
Person of any bonds, notes, debentures or other debt securities of any
other Person;
(b) any Contingent Liability of such Person incurred in
connection with loans, advances or extensions of credit made by others
to any other Person; and
(c) any Capital Securities held by such Person in any other
Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
"ISP98 Rules" is defined in Section 10.9.
"Issuance Request" means a Letter of Credit request duly executed by an
Authorized Officer of the applicable Borrower, substantially in the form of
Exhibit B-2 hereto.
"Issuer" means, collectively, The Chase Manhattan Bank and/or any other
Person issuing Letters of Credit hereunder, as designated by the Administrative
Agent, in its capacity as Issuer of the Letters of Credit and any other Lender
designated by any Borrower that issues a Letter of Credit with the consent of
the Administrative Agent, which consent shall not be unreasonably withheld.
"Joinder Agreement" means a Joinder Agreement, substantially in the
form of Exhibit J hereto, executed and delivered by each Person who is required
to become (or otherwise becomes, pursuant to the terms of this Agreement) a
Borrower in accordance with Section 7.1.8.
"Joint Venture Contribution" means any Disposition of all of the
Capital Securities of the Fibers Subsidiaries or all or substantially all of the
assets of the Fibers Subsidiaries to a Person (other than an Affiliate of any
Borrower) in which the Company or any other Borrower will, immediately after
giving effect to such Disposition, beneficially own or hold any Capital
Securities in such Person to which such Disposition is made, including any such
Disposition made through any Merger or any agreement to operate all or
substantially all of the assets of the Fibers Subsidiaries, in each case, made
in accordance with the terms of this Agreement including Section 7.2.16;
provided that both before and after giving effect to any such Disposition (a)
neither any Borrower nor any Subsidiary (other than an Unrestricted Subsidiary)
is directly or indirectly liable pursuant to the terms of any Indebtedness of
such Person to which such Disposition is being made, (b) no default with respect
to any Indebtedness of such Person to which such Disposition is being made could
permit (upon notice, lapse of time or otherwise) any
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holder of any Indebtedness of any Borrower or any Subsidiary (other than any
holder of any Indebtedness of an Unrestricted Subsidiary) to declare a default
on any Indebtedness of any Borrower or any Subsidiary (other than Indebtedness
of any Unrestricted Subsidiary) or cause the payment thereof to be accelerated
or payable prior to its stated maturity, (c) no Default or Event of Default
shall have occurred and be continuing, and (d) such Disposition shall not result
in the creation or imposition of any Lien on any of the properties or assets of
any Borrower or any Subsidiary (other than Liens on any of the properties or
assets of an Unrestricted Subsidiary) except the Capital Securities or assets of
the Fibers Subsidiaries which are the subject of such Disposition.
"Lender Assignment Agreement" means an assignment agreement
substantially in the form of Exhibit L hereto.
"Lenders" is defined in the Introductory Statement and includes any
Person that becomes a Lender pursuant to Section 10.11.1.
"Lender's Environmental Liability" means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages),
disbursements or expenses of any kind or nature whatsoever (including reasonable
attorneys' fees at trial and appellate levels and experts' fees and
disbursements and expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against the Administrative
Agent, any Lender or the Issuer or any of such Person's Affiliates,
shareholders, directors, officers, employees, and agents in connection with or
arising from:
(a) any Hazardous Material on, in, under or affecting all or
any portion of any property of the Company or any of its Subsidiaries,
the groundwater thereunder, or any surrounding areas thereof to the
extent caused by Releases from the Company's or any of its
Subsidiaries' or any of their respective predecessors' properties;
(b) any misrepresentation, inaccuracy or breach of any
warranty, contained or referred to in Section 6.12;
(c) any violation or claim of violation by the Company or any
of its Subsidiaries of any Environmental Laws; or
(d) the imposition of any Lien for damages caused by or the
recovery of any costs for the cleanup, release or threatened release of
Hazardous Material by the Company or any of its Subsidiaries, or in
connection with any property owned or formerly owned by the Company or
any of its Subsidiaries.
"Letter of Credit" is defined in clause (a) of Section 2.1.2.
"Letter of Credit Commitment" means, with respect to the Issuer, the
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1.2 and,
with respect to each Current Assets Lender, the obligations of each such Current
Assets Lender to participate in such Letters of Credit pursuant to Section
2.6.1.
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"Letter of Credit Commitment Amount" means, on any date, the lesser of
(a) the then applicable Maximum Loan Amount on such date and (b) $20,000,000, as
such amount may be permanently reduced from time to time pursuant to Section 2.2
and other provisions of this Agreement, and subject to the following sentence.
Prior to the date the Bankruptcy Court enters the Final Order, the Letter of
Credit Commitment Amount (subject to reductions pursuant to Section 2.2 and
other provisions of this Agreement) shall be an amount equal to the aggregate
amount of Letters of Credit under this Agreement that are authorized by the
Interim Order.
"Letter of Credit Outstandings" means, on any date, an amount equal to
the sum of (a) the then aggregate amount of all Stated Amounts of all issued and
outstanding Letters of Credit, plus (b) the then aggregate amount of all unpaid
and outstanding Reimbursement Obligations.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans,
the rate per annum equal to the rate at which Dollar deposits are offered for
such Interest Period as set forth on the Telerate Screen LIBO Page, at or about
12:00 noon,
New York City time, two Business Days prior to the beginning of such
Interest Period for delivery on the first day of such Interest Period, and in an
amount approximately equal to the amount of the LIBO Rate Loan and for a period
approximately equal to such Interest Period; provided, however, that if there
shall at any time no longer exist a Telerate Screen LIBO Page, "LIBO Rate" shall
mean, with respect to each day during each Interest Period pertaining to a LIBO
Rate Loan, the rate per annum equal to the rate at which the Administrative
Agent or its designee is offered Dollar deposits at or about 12:00 noon,
New
York City time, two Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of LIBO Rate Loans are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the LIBO Rate
Loan to be outstanding for a period approximately equal to such Interest Period.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded, if necessary, to the nearest 1/16 of 1%)
determined pursuant to the following formula:
LIBO Rate LIBO Rate
---------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.
"LIBOR Office" means the office of a Lender designated as its "LIBOR
Office" on Schedule II hereto or in a Lender Assignment Agreement, or such other
office designated from time to time by notice from such Lender to the Company
and the Administrative Agent, whether
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or not outside the United States, which shall be making or maintaining the LIBO
Rate Loans of such Lender.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of or including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment for security purposes, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property, or other
priority or preferential arrangement of any kind or nature whatsoever, to secure
payment of a debt or performance of an obligation and including, without
limitation, the definition stated in Section 101(37) of the Bankruptcy Code.
"Loan Documents" means collectively this Agreement, each Letter of
Credit, each Rate Protection Agreement, each Note, each Security Agreement, each
Joinder Agreement, each Mortgage, each Copyright Security Agreement, each Patent
Security Agreement, each Trademark Security Agreement, each Pledge Agreement,
the Revolver Intercreditor Agreement, each Lockbox Agreement, each agreement
pursuant to which the Administrative Agent is granted a Lien to secure the
Obligations and each other agreement, certificate, document or instrument
delivered in connection with any Loan Document (including the agreements
executed from time to time pursuant to Section 7.1.8 and the agreements executed
from time to time by the Borrowers pursuant to Section 7.1.12), whether or not
specifically mentioned herein or therein.
"Loans" means, as the context may require, a Current Assets Loan, a
Fixed Assets Loan, or a Swing Line Loan of any Type.
"Lockbox" means any lockbox established at a Lockbox Bank for
collection of proceeds of Collateral or payments in respect of Accounts or other
Collateral.
"Lockbox Account" is defined in clause (a) of Section 3.1.3.
"Lockbox Agreements" means the deposit account agreements, blocked
account agreements, restricted account agreements, lockbox agreements or similar
agreements, executed by and among the Borrowers, the Administrative Agent and
the financial institutions at which the Lockbox Accounts are being maintained,
as required pursuant to clause (b) of Section 3.1.3, each in form and substance
substantially similar to Exhibit P or otherwise reasonably satisfactory to the
Administrative Agent, as such agreements may be amended, supplemented, amended
and restated or otherwise modified from time to time.
"Lockbox Bank" means each bank identified as such in the Perfection
Certificate that has executed a Lockbox Agreement and has been confirmed by the
Administrative Agent not to be in
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uncertain financial condition, at which the Borrowers, deposit proceeds of
Collateral or payments in respect of Accounts or other Collateral.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Company or the Company and its Subsidiaries taken
as a whole, (b) the rights and remedies of any Secured Party under any Loan
Document or (c) the ability of the Company or the Company and the other
Obligors, taken as a whole, to perform their Obligations under the Loan
Documents.
"Material Contracts" means all service contracts, supply contracts and
contract rights, but only to the extent necessary or appropriate for the
continued operation of the plants of the Borrowers, as the business thereupon is
now conducted.
"Maturity Date" means the earliest to occur of (a) the thirtieth (30th)
day after the date of the entry of the Interim Order if the Final Order has not
been entered prior to such date (unless the Maturity Date has been extended
pursuant to Section 10.1(e)(i) below), (b) the date on which the Bankruptcy
Court enters a final order denying approval of the transactions contemplated in
this Agreement, and (c) the second anniversary of the Effective Date of this
Agreement (unless the Maturity Date has been extended pursuant to Section
10.1(e)(i) below).
"Maximum Current Assets Loan Commitment Amount" means $125,000,000.
"Maximum Loan Amount" means, at any time, the lesser of (a) the then
applicable Borrowing Base Amount, minus the then applicable Minimum Excess
Availability and (b) the then applicable Current Assets Loan Commitment Amount.
"Merge" is defined in Section 7.2.10.
"Minimum Excess Availability" means, at any time, (a) prior to the date
which is the date of entry of the Final Order, $12,000,000, plus the amount of
any Availability Reserve (as adjusted from time to time pursuant to the terms of
the definition thereof and/or clause (e) of Section 2.7) and (b) on and after
the date of entry of the Final Order, including the granting of the Priority
Lien, the amount of any Availability Reserve (as adjusted from time to time
pursuant to the terms of the definition thereof and/or clause (e) of Section
2.7).
"Monthly Payment Date" means the last day of each calendar month, or,
if any such day is not a Business Day, the next succeeding Business Day.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means each mortgage, deed of trust or agreement executed and
delivered by any Borrower in favor of the Administrative Agent for the ratable
benefit of the Secured Parties pursuant to the requirements of this Agreement in
substantially the form of Exhibit I hereto, as applicable, under which a Lien is
granted on the real property and fixtures, or the Obligor's leasehold interest
in the real property and fixtures, described therein, in each case as amended,
supplemented, amended and restated or otherwise modified from time to time.
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40
"Net Debt Proceeds" means, with respect to the incurrence, sale or
issuance by Parent, the Borrowers or any Subsidiary (other than an Unrestricted
Subsidiary) of any Indebtedness after the Effective Date (other than
Indebtedness permitted by Section 7.2.2), the excess of (a) the gross cash
proceeds received by Parent, the Borrowers or any such Subsidiary from such
incurrence, sale or issuance, minus (b) the sum (without duplication) of all
reasonable and customary underwriting commissions and legal, investment banking,
brokerage and accounting and other professional fees, sales commissions and
disbursements and all other reasonable fees, expenses (including any State
filing taxes) and charges, in each case actually incurred in connection with
such incurrence, sale or issuance.
"Net Disposition Proceeds" means, with respect to any casualty,
condemnation and/or Disposition after the Filing Date, other than the
Dispositions permitted in clauses (a), (b), (c), (d), (e) and (g) of the
definition of "Permitted Disposition" or an issuance or sale of such Person's
own Capital Securities or warrants or options thereon (which Dispositions shall
be covered by the definition of Net Equity Proceeds), the excess of (a) the
gross cash proceeds received by Parent, the Borrowers or any Subsidiary (other
than an Unrestricted Subsidiary) from any such casualty, condemnation and/or
Disposition and any cash payments received in respect of promissory notes or
other non-cash consideration delivered to Parent, the Borrowers or any
Subsidiary (other than an Unrestricted Subsidiary) in respect thereof, minus (b)
the sum (without duplication) of (i) all reasonable and customary fees and
expenses with respect to legal, investment banking, brokerage, accounting and
other professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually incurred in
connection with such Disposition, (ii) all Taxes and other governmental costs
and expenses actually paid or estimated by Parent, the Borrowers or any such
Subsidiary (in good faith) to be payable in cash in connection with such
Disposition; provided, that if, after the payment of all Taxes with respect to
such Disposition, the amount of estimated Taxes, if any, pursuant to this clause
(b)(ii) exceeded the Tax amount actually paid in cash in respect of such
Disposition, the aggregate amount of such excess shall be immediately payable,
pursuant to clause (d) of Section 3.1.1, as Net Disposition Proceeds, and (iii)
payments made by Parent, the Borrowers or any such Subsidiary to retire
Indebtedness of Parent, the Borrowers or any such Subsidiary permitted by
Section 7.2.2, provided that such Indebtedness is secured by a Priority Lien,
and provided further that such payments are limited to the amount of those gross
cash proceeds from such Disposition that are in excess of the amounts secured by
the Priming Lien.
"Net Equity Proceeds" means with respect to the (a) sale or issuance by
Parent, any Borrower or any of their Subsidiaries (other than an Unrestricted
Subsidiary) to any Person of its own Capital Securities, warrants or options or
the exercise of any such warrants or options, the excess of (i) the gross cash
proceeds received by such Person from such sale, exercise or issuance, minus
(ii) all reasonable and customary underwriting commissions and legal, investment
banking, brokerage and accounting and other professional fees, sales commissions
and disbursements actually incurred (including any State filing Taxes) in
connection with such sale or issuance which have not been paid to Affiliates of
Parent, any Borrower or any of their Subsidiaries in connection therewith, or
(b) receipt by Parent, any Borrower or any Subsidiary (other than an
Unrestricted Subsidiary) of any equity or other capital contributions or any
dividends from any Capital Securities owned by any of them, the amount of such
contributions or dividends, minus the amount of any dividends which are paid to
Sterling Pulp Chemicals Ltd. that are required to be paid to the lenders under
the Canadian Facility.
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"No Less Favorable Terms and Conditions" means, with respect to any
refinancing of any Indebtedness permitted hereunder, terms and conditions which
are no less favorable to the Lenders and evidenced by documentation which shall
not (a) increase the principal amount of (as the same may have been permanently
reduced subsequent to the Effective Date) or interest rate on such outstanding
Indebtedness, (b) reduce either the tenor or the average life of such
Indebtedness, (c) change the respective primary obligor(s) on the refinancing
Indebtedness (other than a change from any Borrower to Parent, any other
Borrower or any Subsidiary, or a change from any Subsidiary (other than a change
from an Unrestricted Subsidiary) to Parent or any other Subsidiary), (d) change
the security, if any, for the refinancing Indebtedness (except to the extent
that less security is granted to holders of such refinancing Indebtedness), (e)
afford the holders of such refinancing Indebtedness other covenants, defaults,
rights or remedies, taken as a whole, more burdensome to the obligor(s) than
those contained in the Indebtedness being refinanced (and in the case of
Subordinated Debt, none of the subordination provisions contained in the
refinancing Indebtedness shall be less favorable to the Lenders, any Issuer or
the Administrative Agent than the Indebtedness being refinanced), or (f) if such
Indebtedness being refinanced is secured by Liens, afford the holders of such
refinancing Indebtedness any Liens which are prior to any of the Liens securing
the Obligations, provided that, subject to the Priming Lien, the holders of the
Senior Secured Notes may retain their first priority Lien on 65% of the Capital
Securities of the Foreign Restricted Subsidiaries.
"Non-Debtor Subsidiary" is defined in Section 8.1.9.
"Non-Excluded Taxes" means any Taxes other than net income and
franchise taxes imposed with respect to any Secured Party by (a) any
jurisdiction (or political subdivision thereof) of which such Secured Party is a
citizen or resident, (b) any jurisdiction (or political subdivision thereof) in
which such Secured Party is presently engaged in the active conduct of its
banking business through an office, branch or other permanent establishment, or
(c) the jurisdiction (or any political subdivision thereof) under the laws of
which such Secured Party is organized or in which it maintains its applicable
lending office.
"Non-Standard Period" is defined in the definition of "Interest
Period."
"Non-U.S. Lender" means any Lender that is not a "United States
person", as defined under Section 7701(a)(30) of the Code.
"Note" means, as the context may require, a Current Assets Note, a
Fixed Assets Note, or a Swing Line Note.
"Obligation Accounts" is defined in clause (c) of Section 2.7.
"Obligations" means all Current Assets Obligations, all Fixed Assets
Obligations and all other obligations (monetary or otherwise, whether absolute
or contingent, matured or unmatured) of each Obligor arising under or in
connection with this Agreement, each Note and each other Loan Document.
"Obligor" means, as the context may require, Parent, each Subsidiary
(other than an Unrestricted Subsidiary), each Borrower and each other Person
(other than a Secured Party) obligated under any Loan Document.
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"Obligor Pledge Agreement" means, as the context may require, the
Current Assets Obligor Pledge Agreement and/or the Fixed Assets Obligor Pledge
Agreement.
"Organic Document" means, with respect to any Obligor, as applicable,
its certificate of incorporation, by-laws, certificate of partnership,
partnership agreement, certificate of formation, limited liability company
agreement and all shareholder agreements, voting trusts and similar arrangements
applicable to any of such Obligor's partnership interests, limited liability
company interests or authorized shares of Capital Securities.
"Other Taxes" means any and all stamp, documentary or similar taxes, or
any other excise or property taxes or similar levies that arise on account of
any payment made or required to be made under any Loan Document or from the
execution, delivery, registration, recording or enforcement of any Loan
Document.
"Parent" is defined in Recital A.
"Parent Pledge Agreement" means, as the context may require, the
Current Assets Parent Pledge Agreement and/or the Fixed Assets Parent Pledge
Agreement.
"Participant" is defined in Section 10.11.2.
"Patent Collateral" means all of each Borrower's right, title and
interest in and to (a) all letters patent and applications for letters patent in
the United States, including all patent applications in preparation for filing
in the United States; (b) all reissues, division, continuations,
continuations-in-part, extensions, renewals and reexaminations of any of the
items described in clause(a); (c) all patent licenses in the United States; and
(d) all proceeds of, and rights associated with, the foregoing (including
license royalties and proceeds of infringement suits), the right to xxx third
parties for past, present or future infringements of any patent application,
referred to in clauses (a) or (b) above, and for breach or enforcement of any
patent license referred to in clause (c) above; but only to the extent any of
the foregoing is necessary or appropriate for the continued operation of the
plants of the Borrowers, as the business thereupon is now conducted.
"Patent Security Agreement" means any Patent Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit A to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which
Parent or the Company or any corporation, trade or business that is, along with
Parent or the Company, a member of a Controlled Group, may have liability,
including any liability by reason of having been a substantial employer within
the meaning of Section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under Section
4069 of ERISA.
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"Percentage" means, as the context may require, any Lender's Current
Assets Loan Percentage or Fixed Assets Loan Percentage.
"Perfection Certificate" means the Perfection Certificate executed and
delivered by an Authorized Officer of each Obligor that is a party to a Security
Agreement pursuant to the terms of this Agreement, substantially in the form of
Exhibit M hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Permitted Consideration" means (a) the express assumption of
Indebtedness of any Borrower and the release of such Borrower from all liability
on such Indebtedness solely in connection with the Transfer of the Fibers
Business and (b) securities received by any Borrower that are converted by such
Borrower into cash within 90 days of the receipt of such securities.
"Permitted Disposition" means any Disposition that is:
(a) a Disposition of inventory in the ordinary course of
business or, to the extent the same do not exceed $500,000 individually
or in the aggregate, any other assets Disposed of in the ordinary
course of business;
(b) the Disposition of personal property (including pipe,
equipment, machinery and vehicles) in the ordinary course of business
or when, in the reasonable judgment of the Company, such property is
worn out or obsolete or no longer used or useful in the conduct of its
business or the business of its Subsidiaries not to exceed $500,000
individually or in the aggregate;
(c) a Disposition from a Borrower or a Subsidiary to another
Borrower;
(d) a Disposition of assets in the ordinary course of business
in exchange for or in connection with the purchase of replacement
assets or assets (which are of equal or greater value) useful in the
ordinary course of any business meeting all the requirements of Section
7.2.1; provided, that if the Disposition is by a Borrower, such
Disposition shall only be a Permitted Disposition if the replacement
assets are acquired by a Borrower;
(e) Subject to the prior consent of the Administrative Agent,
the granting of leases (including subleases) and grounds leases of any
underutilized or vacant properties of any Borrower or any Subsidiary to
third parties with which such Borrower or Subsidiary has a production,
co-production, co-generation, operating or other agreement or to third
party providers of energy or raw materials in the ordinary course of
business, provided such leases do not materially interfere with the
operation of the business of any Borrower or any Subsidiary or
materially diminish the value of any of the Collateral;
(f) sales of the Capital Securities of any Unrestricted
Subsidiary; and
(g) a Disposition of all or substantially all of the assets of
any Borrower or any Subsidiary expressly permitted under Section 7.2.10
(other than a Disposition permitted under clause (b) of Section
7.2.10).
"Permitted Investment" is defined in Section 7.2.5.
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"Permitted Liens" is defined in Section 7.2.3.
"Permitted Real Estate Liens" means:
(a) minor irregularities in title, boundaries or other survey
defects, easements, rights-of-way, restrictions, servitudes, permits,
reservations, exceptions, zoning regulations, conditions, covenants,
mineral or royalty rights or reservations of oil, gas or mineral
leases, rights of others in any property of any Borrower or any
Subsidiary for streets, roads, bridges, pipes, pipelines, railroads,
electric transmission and distribution lines, telegraph and telephone
lines, the removal of oil, gas or other minerals or other similar
purposes, flood control, water rights, rights of others with respect to
navigable waters, sewage and drainage rights and other similar charges
or encumbrances existing as of the Effective Date and disclosed in a
Mortgage or shown in the survey (or granted by any Borrower or any
Subsidiary in the ordinary course of business) that do not, in the
aggregate, materially impair the value or ability to sell of the
property of any Borrower and the occupation, use and enjoyment by any
Borrower or any Subsidiary of any of their respective properties in the
normal course of business;
(b) Liens securing Indebtedness neither created, assumed nor
guaranteed by any Borrower or any of their Subsidiaries upon lands over
which easements or similar rights are acquired by any Borrower or any
of their Subsidiaries in the ordinary course of business of any
Borrower or any of their Foreign Restricted Subsidiaries;
(c) terminable or short term leases or permits for occupancy,
which leases or permits expressly grant to any Borrower or any
Subsidiary the right to terminate them at any time on not more than six
months' notice and which occupancy does not interfere with the
operation of the business of any Borrower or any of their Subsidiaries;
(d) any obligations or duties affecting any of the property of
any Borrower or any of their Subsidiaries to any municipal or public
authority with respect to any franchise, grant, license or permit that
do not materially impair the use of such property for the purpose for
which it is held;
(e) Liens on any property in favor of any Governmental
Authority to secure partial, progress, advance or other payments
pursuant to any contract or statute, not yet due and payable;
(f) Liens with respect to the so-called "greenbelt" or "buffer
zone" properties, for as long as those properties are used solely for
"greenbelt" or "buffer zone" purposes;
(g) subject to the consent of the Administrative Agent, leases
and ground leases of underutilized or vacant properties of any Borrower
or any Subsidiary to third parties with which such Borrower or such
Subsidiary has a production, co-production, co-generation, operating or
other arrangement or to third party providers of energy or raw
materials in the ordinary course of business of such Borrower or such
Subsidiary, provided such leases do not materially interfere with the
operations of any Borrower or any Subsidiary, or materially diminish
the value of any Collateral;
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(h) easements, rights-of-way, restrictions and other similar
charges or encumbrances granted to others, in each case incidental to,
and not interfering with, the ordinary conduct of the business of any
Borrower or any Subsidiary, provided that such Liens are not violated
by the existing property and do not, in the aggregate, materially
diminish the value or ability to sell the Collateral;
(i) the burdens of any law or governmental regulation or
permit requiring any Borrower or any Subsidiary to maintain certain
facilities or perform certain acts as a condition of its occupancy of
or interference with any public lands or any river or stream or
navigable waters;
(j) with respect to property located in Canada, reservations,
limitations, provisos and conditions in any original grant from the
Crown or any freehold lessor of any of the properties of any Borrowers
or any Subsidiaries; and
(k) and any extensions, renewals, modifications or
replacements thereof.
Notwithstanding the foregoing, no such Permitted Real Estate Liens
shall in any way materially impair the value of or ability to sell any
Collateral or materially impact the occupation, right or enjoyment of the
relevant property by the Borrowers or any Subsidiary.
"Person" means any natural person, corporation, limited liability
company, partnership, joint venture, association, trust or unincorporated
organization, Governmental Authority or any other legal entity, whether acting
in an individual, fiduciary or other capacity.
"Pledge Agreement" means, as the context may require, the Current
Assets Parent Pledge Agreement, the Fixed Assets Pledge Agreement, the Current
Assets Obligor Pledge Agreement or the Fixed Assets Obligor Pledge Agreement.
"Pledged Subsidiary" means each Borrower and each Subsidiary in
respect of which the Administrative Agent has been granted a security interest
in, or a pledge of any of, the Capital Securities of such Borrower or
Subsidiary, as security for the Obligations.
"Pre-Petition Payment" means a payment (by way of adequate protection
or otherwise) of principal or interest or otherwise on account of any
pre-petition Indebtedness or trade payables; provided that (i) the return to
vendors of defective, damaged or non-conforming Inventory or negotiated returns
for credit and (ii) refunds or credits in the ordinary course of business shall
not constitute Pre-Petition Payments.
"Pre-Petition Secured Obligations" means any and all loans and other
obligations outstanding under (a) the Existing Credit Agreement, including any
reimbursement obligations with respect to letters of credit issued thereunder,
and (b) the other loan documents relating thereto, in each case as of the Filing
Date.
"Priming Lien" means the security interest in and Lien on the Fixed
Assets Collateral (other than the Capital Securities of the Company) granted, or
to be granted, to the Current Assets Secured Parties pursuant to the Final Order
to secure up to $40,000,000 of the Current Assets Obligations and which Lien and
security interest is (or will be upon entry of the Final
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Order) a first-priority security interest in and Lien on the Fixed Assets
Collateral (other than the Capital Securities of the Company), subject to no
other prior security interests or Liens other than Existing Leases and the
Priority Lien described in clause (c) of the definition thereof.
"Priority Liens" means (a) with respect to Fixed Assets Obligations,
the Liens on the Current Assets Collateral securing the Current Assets
Obligations and, after the date of entry of the Final Order, the Priming Lien on
the Fixed Assets Collateral (other than the Capital Securities of the Company);
(b) with respect to Current Assets Obligations, (i) for the period prior to (but
not on or after) the date of entry of the Final Order, the Liens on (A) the
Fixed Assets and the Capital Securities of the Borrowers (other than the
Company) and the Subsidiaries (other than Unrestricted Subsidiaries) securing
the Fixed Assets Obligations and the Senior Secured Notes, and (B) the Capital
Securities of the Company securing the Fixed Assets Obligations and the Senior
Secured Discount Notes, and (ii) on and after the date of entry of the Final
Order, (A) with respect to any Current Assets Obligations in excess of the
amount of Current Assets Obligations secured by the Priming Lien (but in all
cases excluding the amount of Current Assets Obligations secured by the Priming
Lien), the Liens on (x) Fixed Assets and Capital Securities of the Borrowers
(other than the Company) and the Subsidiaries (other than Unrestricted
Subsidiaries) securing the Fixed Assets Obligations and the Senior Secured Notes
and (y) the Capital Securities of the Company securing the Fixed Assets
Obligations and the Senior Secured Discount Notes and (B) with respect to any
Current Assets Obligations secured by the Priming Lien, the Liens on the Capital
Securities of the Company secured by the Fixed Assets Obligations and the Senior
Secured Discount Notes; and (c) with respect to the Obligations, the Lien
granted under the agreement with BP Chemicals, Inc. described in clause (b),
Part 2, Item 7.2.3(c) of the Disclosure Schedule.
"Projections" is defined in Section 5.1.4.
"Rate Protection Agreement" means, collectively, any interest rate
swap, cap, collar or similar agreement entered into by a Borrower under which
the counterparty of such agreement is (or at the time such agreement was entered
into, was) a Lender or an Affiliate of a Lender.
"Refunded Swing Line Loans" is defined in clause (b) of Section 2.3.2.
"Register" is defined in clause (b) of Section 2.7.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of July 23, 1999, among the Borrowers, Credit Suisse First
Boston Corporation and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, as
the same may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"Reimbursement Obligation" is defined in Section 2.6.3.
"Release" means a "release", as such term is defined in CERCLA.
"Reorganization Plan" means a plan of reorganization in the Cases which
requires, among other things, the termination of the Total Commitment and the
payment in full in cash of all Obligations on or before the effective date of
such plan.
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"Required Lenders" means, at any time, Lenders holding greater than 50%
of the Commitments (determined on a combined basis) comprising the Fixed Assets
Loan Commitment Amount, plus the Maximum Current Assets Loan Commitment Amount,
or if any of the Commitments have been terminated or are otherwise no longer in
effect, then Lenders holding greater than 50% of the Obligations.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq, as amended.
"Restricted Payment" means the declaration or payment of any dividend
(other than dividends payable solely in Capital Securities of the Company) on,
or the making of any payment or distribution on account of, or setting apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of any class of Capital Securities
of the Borrowers or any Subsidiary or any warrants or options to purchase any
such Capital Securities, whether now or hereafter outstanding, or the making of
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property, obligations of the Borrowers or any Subsidiary or
otherwise other than any such dividends, payments or distributions that are
payable to any Borrower or any Subsidiary (so long as such dividend, payment or
distribution payable to a Subsidiary is not payable from a Borrower).
"Revolver Intercreditor Agreement" means the Intercreditor Agreement
executed and delivered pursuant to the terms of this Agreement by the
Administrative Agent and each Lender, and acknowledged by the Company,
substantially in the form of Exhibit K hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.
"S&P" means Standard & Poor's Rating Services, a division of
XxXxxx-Xxxx, Inc.
"Sale of the Fibers Business" means any Disposition of all of the
Capital Securities of the Fibers Subsidiaries or all or substantially all of the
assets of the Fibers Subsidiaries (other than pursuant to a Joint Venture
Contribution) to a Person (other than an Affiliate of any Borrower), including,
in either case, any such Disposition made through any Merger.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" means, collectively, the Lenders, each Issuer, the
Administrative Agent, each counterparty to a Rate Protection Agreement that is
(or at the time such Rate Protection Agreement was entered into, was) a Lender
or an Affiliate thereof and (in each case) each of their respective successors,
transferees and assigns to the extent permitted by this Agreement.
"Security Agreement" means, as the context may require, the Current
Assets Security Agreement and the Fixed Assets Security Agreement.
"Senior Secured Discount Notes" means Parent's 13-1/2% Senior Secured
Discount Notes Due 2008 in an original stated amount of $191,751,000.
"Senior Secured Discount Notes Indenture" means the Indenture dated as
of August 15, 1996 between Parent and Fleet National Bank (now known as State
Street Bank and Trust
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Company), as trustee, that governs the terms of the Senior Secured Discount
Notes, as in effect on the Effective Date.
"Senior Secured Note Documents" means, collectively, the Senior Secured
Note Indenture, the Senior Secured Notes and each of the other loan agreements,
indentures, note purchase agreements, promissory notes, guarantees, and other
instruments and agreements executed and delivered in connection with the
issuance of the Senior Secured Notes other than the Registration Rights
Agreement and the Senior Secured Note Purchase Agreement, and evidencing the
terms thereof, as in effect on the Effective Date.
"Senior Secured Note Indenture" means the Indenture, dated as of July
23, 1999, among the Borrowers and the Trustee, as in effect on the Effective
Date.
"Senior Secured Note Purchase Agreement" means the Purchase Agreement,
dated as of July 19, 1999, among the Borrowers, Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation and Credit Suisse First Boston Corporation, as amended,
supplemented, amended, restated and otherwise modified from time to time.
"Senior Secured Notes" means the Company's Series A 12 3/8% Senior
Secured Notes Due 2006 in the original principal amount of $295,000,000.
"Senior Subordinated Notes" means the Company's 11 3/4% Senior
Subordinated Notes Due 2006 in an original principal amount of $275,000,000.
"Senior Subordinated Notes Indenture" means the Indenture dated as of
August 15, 1996 between the Company and Fleet National Bank (now known as State
Street Bank and Trust Company), as trustee, that governs the terms of the Senior
Subordinated Notes, as in effect on the Effective Date.
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person and its
Subsidiaries on a consolidated basis is greater than the total amount of
liabilities, including Contingent Liabilities, of such Person and its
Subsidiaries on a consolidated basis, (b) the present fair salable value of the
assets of such Person and its Subsidiaries on a consolidated basis, is not less
than the amount that will be required to pay the probable liability of such
Person and its Subsidiaries on a consolidated basis on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not believe
that it or its Subsidiaries will, on a consolidated basis, incur debts or
liabilities beyond the ability of such Person and its Subsidiaries on a
consolidated basis to pay as such debts and liabilities mature, and (d) such
Person and its Subsidiaries on a consolidated basis are not engaged in business
or a transaction, and such Persons and its Subsidiaries on a consolidated basis
are not about to engage in business or a transaction, for which the property of
such Person and its Subsidiaries would constitute an unreasonably small capital.
The amount of Contingent Liabilities at any time shall be computed as the amount
that, in light of all the facts and circumstances existing at such time, can
reasonably be expected to become an actual or matured liability.
"State" means the several states of the United States of America,
including the District of Columbia, and their political subdivisions.
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"Stated Amount" means, on any date and with respect to a particular
Letter of Credit, the total amount then available to be drawn under such Letter
of Credit.
"Stated Expiry Date" is defined in Section 2.6.
"Sub Debt Documents" means, collectively, the Additional Senior
Subordinated Notes Indenture, the Additional Senior Subordinated Notes, the
Senior Subordinated Notes Indenture, the Senior Subordinated Notes, each other
document executed in connection therewith and any other loan agreements,
indentures, note purchase agreements, promissory notes, guarantees, and other
instruments and agreements evidencing the terms of Subordinated Debt, as in
effect on the Effective Date.
"Subordinated Debt" means the Indebtedness evidenced by the Additional
Senior Subordinated Notes, the Senior Subordinated Notes and any other
Indebtedness of any Borrower or any Subsidiary subordinated in right of payment
to the Obligations pursuant to documentation containing redemption and other
prepayment events, maturities, amortization schedules, covenants, events of
default, remedies, acceleration rights, subordination provisions and other
material terms satisfactory to the Administrative Agent.
"Subsidiary" means, with respect to any Person, (a) any corporation,
limited liability company, partnership or other entity of which more than 50% of
the Voting Stock is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more other Subsidiaries of such Person,
or by one or more other Subsidiaries of such Person or (b) any partnership,
joint venture or other entity as to which such Person, such Person and one or
more of its Subsidiaries or one or more Subsidiaries of such Person owns more
than a 50% ownership, equity or similar interest or has power to direct or cause
the direction of management and policies (directly or indirectly), or the power
to elect the managing partner (or the equivalent), of such partnership, joint
venture or other entity, as the case may be. Unless the context otherwise
specifically requires, the term "Subsidiary" or "Subsidiaries" shall be a
reference to a Subsidiary or the Subsidiaries, as applicable, of the Company,
other than the Borrowers.
"Superpriority Claim" means, in relation to any Borrower, a claim
against such Borrower in such Borrower's Case which is a superpriority
administrative expense claim authorized and established by the Bankruptcy Court
pursuant to, and having the status prescribed by, Sections 364(c) and 507(b) of
the Bankruptcy Code and any and all statutory provisions cited therein and
having priority over any or all administrative expenses of the kind specified in
Sections 503(b), 507(b) and 546(c) of the Bankruptcy Code.
"Swing Line Lender" means the Administrative Agent (or another Lender
designated by the Administrative Agent with the consent of the Company (such
consent not to be unreasonably withheld), if such Lender agrees to be the Swing
Line Lender hereunder), in such Person's capacity as the maker of Swing Line
Loans.
"Swing Line Loans" is defined in clause (c) of Section 2.1.1.
"Swing Line Loan Commitment" is defined in clause (c) of Section 2.1.1.
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"Swing Line Loan Commitment Amount" means, on any date, the lesser of
(a) the then applicable Maximum Loan Amount and (b) $10,000,000, as such amount
may be permanently reduced from time to time pursuant to Section 2.2 and other
provisions of this Agreement, and subject to the following sentence. Prior to
the date the Bankruptcy Court enters the Final Order, the Swing Line Loan
Commitment Amount (subject to reductions to Section 2.2 and other provisions of
this Agreement) shall be an amount equal to the aggregate amount of Swing Line
Loans under this Agreement that are authorized by the Interim Order.
"Swing Line Note" means a joint and several promissory note of each
Borrower payable to the Swing Line Lender, in the form of Exhibit A-3 hereto (as
such promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the joint and several aggregate Indebtedness of the Borrowers
to the Swing Line Lender resulting from outstanding Swing Line Loans, and also
means all other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"Synthetic Lease" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (a) that is not a capital lease in accordance
with GAAP and (b) in respect of which the lessee retains or obtains ownership of
the property so leased for federal income tax purposes, other than any such
lease under which that Person is the lessor.
"Tax Sharing Agreement" means the tax sharing agreement among Parent,
the Company and certain Subsidiaries of the Company, effective as of the first
day of the consolidated return year ending September 30, 1996, as amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with Section 7.2.12.
"Taxes" means any and all income, stamp or other taxes, duties, levies,
imposts, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, and all
interest, penalties or similar liabilities with respect thereto.
"Telerate Screen LIBO Page" means the display designated as "Page 3750"
on the Telerate System Incorporated Service (or such other page as may replace
Page 3750 on the service or such other service as may be nominated by the
British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association interest settlement rates for Dollar
deposits).
"Termination Date" means the date on which all Obligations have been
paid in full in cash, all Letters of Credit have been terminated, expired or
Cash Collateralized, all Rate Protection Agreements have been terminated and all
Commitments have been permanently terminated.
"Trademark Security Agreement" means any Trademark Security Agreement
executed and delivered by any Obligor substantially in the form of Exhibit B to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
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"Transfer of the Fibers Business" means any Joint Venture Contribution
or any Sale of the Fibers Business or any combination thereof consummated in
accordance with the terms of this Agreement, including Section 7.2.16.
"Trustee" means Xxxxxx Trust Company of
New York, as trustee under the
Senior Secured Note Indenture.
"Type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"U.C.C." means the Uniform Commercial Code as may be amended and in
effect from time to time in the State of
New York; provided that if, with
respect to any U.C.C. financing statement or by reason of any provision of law,
the perfection or the effect of perfection or non-perfection of the security
interests granted to the Administrative Agent pursuant to the applicable Loan
Document is governed by the Uniform Commercial Code as in effect in a
jurisdiction of the United States other than
New York, U.C.C. means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions of each Loan Document and any U.C.C. financing
statement relating to such perfection or effect of perfection or non-perfection.
"United States" or "U.S." means the United States of America and all
States.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Company that,
at the time of determination, meets the requirements set forth in clauses (i)
through (vi) of this definition and (x) is listed on Item 1.2 of the Disclosure
Schedule or (y) has been designated as an "Unrestricted Subsidiary" by the Board
of Directors of the Company as provided hereinbelow and (b) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors of the Company may designate any
Subsidiary of the Company as an Unrestricted Subsidiary so long as (i) neither
any Borrower nor any such Subsidiary (other than a Subsidiary which is an
Unrestricted Subsidiary at such time pursuant to this definition), is directly
or indirectly liable pursuant to the terms of any Indebtedness of such
Subsidiary being so designated; (ii) no default with respect to any Indebtedness
of such Subsidiary being so designated could permit (upon notice, lapse of time
or otherwise) any holder of any Indebtedness of any Borrower or any such other
Subsidiary (other than a Subsidiary which is an Unrestricted Subsidiary at such
time pursuant to this definition), to declare a default on any Indebtedness of
any Borrower or any such Subsidiary (other than the Obligations) or cause the
payment thereof to be accelerated or payable prior to its stated maturity, (iii)
both before and after giving effect to such designation on a pro forma basis, no
Default or Event of Default shall have occurred and be continuing; (iv) such
designation shall not result in the creation or imposition of any Lien on any of
the properties or assets of any Borrower or any other Subsidiary (other than a
Subsidiary which is an Unrestricted Subsidiary at such time pursuant to this
definition), (v) such Subsidiary being so designated has not acquired any
property of any Borrower or any other Subsidiary (other than a then existing
Unrestricted Subsidiary) in excess of $10,000 in the aggregate since the
Effective Date; and (vi) such Subsidiary being so designated does not own any
Capital Securities of any Borrower or any other Subsidiary (other than a then
existing Unrestricted Subsidiary). Notice of any designation of an "Unrestricted
Subsidiary" shall be delivered to the Administrative Agent by the Company
promptly filing with the Administrative Agent a copy of the resolutions of the
Board of Directors
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of the Company approving such designation and a certificate of an Authorized
Officer certifying that such designation complies with each of the requirements
of this definition. Such designation shall become effective upon receipt by the
Administrative Agent of each of the foregoing. Each Unrestricted Subsidiary
shall continue as such until the Company delivers a copy of the resolutions of
the Board of Directors of the Company redesignating such Unrestricted Subsidiary
as no longer being an Unrestricted Subsidiary and the Company, such Borrower
and/or such Subsidiary shall comply with the requirements of Section 7.1.8;
provided that at the time of such redesignation no Default has occurred and is
continuing or would result therefrom. Notwithstanding anything to the contrary
contained in this Agreement, the transfer of all of the Capital Securities of
Sterling Pulp Chemicals (Australia) PTY Limited from Sterling Australia
Holdings, Inc. to Sterling Pulp Chemicals, Ltd. shall not affect Sterling Pulp
Chemicals (Australia) PTY Limited's status as an Unrestricted Subsidiary solely
by reason of such transfer; provided that both before and after such transfer
Sterling Pulp Chemicals Australia PTY Limited continues to meet all the
requirements set forth in clauses (i) through (vi) of this definition.
"Voting Stock" means, with respect to any Person, Capital Securities of
any class or kind ordinarily having the power to vote (directly or indirectly)
for the election of directors, managers, representatives or other voting members
of the governing body of such Person.
"Welfare Plan" means a "welfare plan", as such term is defined in
Section 3(1) of ERISA.
"Wholly-Owned Subsidiary" means, as to any Person, (a) any corporation
100% of whose Capital Securities (other than any director's qualifying shares or
investments by foreign nationals mandated by applicable laws) is at the time
owned by such Person and/or one or more direct or indirect Wholly-Owned
Subsidiaries of such Person and (b) any partnership, limited liability company,
association or other entity in which such Person and/or one or more direct or
indirect Wholly-Owned Subsidiaries of such Person has a 100% equity interest at
such time.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document and the
Disclosure Schedule.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in a Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used in each Loan Document shall be interpreted,
and all accounting determinations and computations hereunder or thereunder shall
be made, in accordance with GAAP. Unless otherwise expressly provided, all
financial covenants and defined financial terms shall be computed on a
consolidated basis for the Borrowers, in each case without duplication.
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ARTICLE II
COMMITMENTS; REDUCTIONS OF COMMITMENTS; BORROWING
AND ISSUANCE PROCEDURES; NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments. On the terms and subject to the conditions of
this Agreement (including Article V), the Lenders and each Issuer severally
agree to make Credit Extensions as set forth below in this Section 2.1.
2.1.1. Loan Commitments. From time to time on any Business Day
occurring from and after the Effective Date but prior to the applicable
Commitment Termination Date,
(a) each Lender that has a Current Assets Loan Commitment
(referred to as a "Current Assets Lender"), agrees that it will make
loans (relative to such Lender, its "Current Assets Loans") to each
Borrower requesting Current Assets Loans equal to such Lender's Current
Assets Loan Percentage of the aggregate amount of each Borrowing of
Current Assets Loans requested by such Borrower to be made on such day,
subject to the limits set forth in Section 2.1.3;
(b) each Lender that has a Fixed Assets Loan Commitment
(referred to as a "Fixed Assets Lender") agrees that it will make loans
(relative to such Lender, its "Fixed Assets Loans") to each Borrower
requesting Fixed Assets Loans equal to such Lender's Fixed Assets Loan
Percentage of the aggregate amount of each Borrowing of Fixed Assets
Loans requested by such Borrower on such day, subject to the limits set
forth in Section 2.1.3; and
(c) the Swing Line Lender agrees that it will make loans (its
"Swing Line Loans") to each Borrower requesting Swing Line Loans equal
to the principal amount of the Swing Line Loan requested by such
Borrower to be made on such day, subject to the limits set forth in
Section 2.1.3. The Commitment of the Swing Line Lender described in
this clause is herein referred to as its "Swing Line Loan Commitment".
On the terms and subject to the conditions hereof, each Borrower may from time
to time borrow, repay and reborrow Loans.
2.1.2. Letter of Credit Commitment. From time to time on any
Business Day occurring from and after the Effective Date but prior to the
Current Assets Loan Commitment Termination Date, each Issuer agrees that it will
(a) issue one or more documentary or standby letters of credit (each, a "Letter
of Credit") for the account of any Borrower in the Stated Amount requested by
such Borrower on such day; or (b) extend the Stated Expiry Date of an existing
standby Letter of Credit previously issued hereunder. No Stated Expiry Date
shall extend beyond the earlier of (i) the Current Assets Loan Commitment
Termination Date and (ii) unless otherwise agreed to by the relevant Issuer in
its sole discretion, one year from the date of such extension. No Issuer shall
be permitted or required to issue any Letter of Credit if, after giving effect
thereto, (A) the aggregate amount of all Letter of Credit Outstandings would
exceed the Letter of Credit Commitment Amount or (B) the sum of the aggregate
amount of all Letter of Credit Outstandings, plus the aggregate principal amount
of all Current Assets Loans and Swing Line Loans then outstanding, would exceed
the then applicable Maximum Loan Amount.
2.1.3. Lenders Not Permitted or Required to Make Loans.
(a) No Current Assets Lender shall be required to, and no
Borrower shall request any Current Assets Lender to, make any Current
Assets Loan if, after giving effect
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thereto, the aggregate outstanding principal amount of all the Current
Assets Loans and Swing Line Loans (i) of all the Current Assets
Lenders, together with the aggregate amount of all Letter of Credit
Outstandings, would exceed the then applicable Maximum Loan Amount; or
(ii) of such Current Assets Lender, together with such Current Assets
Lender's Percentage of the aggregate amount of all Swing Line Loans and
Letter of Credit Outstandings, would exceed such Current Assets
Lender's Percentage of the then applicable Maximum Loan Amount.
(b) The Swing Line Lender shall not be permitted or required
to, and no Borrower shall be permitted to request the Swing Line Lender
to, make any Swing Line Loan if after giving effect thereto, (i) the
aggregate outstanding principal amount of all the Swing Line Loans
would exceed the then existing Swing Line Loan Commitment Amount or
(ii) the aggregate outstanding principal amount of all the Current
Assets Loans and Swing Line Loans, together with the aggregate amount
of all Letter of Credit Outstandings, would exceed the then applicable
Maximum Loan Amount.
(c) No Fixed Assets Lender shall be permitted or required to,
and no Borrower shall be permitted to request any Fixed Assets Lender
to, make any Fixed Assets Loan if, after giving effect thereto, the
aggregate outstanding principal amount of all the Fixed Assets Loans
(i) of all the Fixed Assets Lenders would exceed the Fixed Assets Loan
Commitment Amount; or (ii) of such Fixed Assets Lender would exceed
such Fixed Assets Lender's Percentage of the Fixed Assets Loan
Commitment Amount.
SECTION 2.2. Reduction of the Commitment Amounts. The Commitment
Amounts are subject to reduction from time to time pursuant to this Section 2.2.
2.2.1. Optional. The Company may, from time to time on any
Business Day occurring after the Closing Date, voluntarily reduce the amount of
any Commitment Amount on the Business Day so specified by the Company, provided,
however that all such reductions shall require at least one Business Day's prior
notice to the Administrative Agent and be permanent, and any partial reduction
of any Commitment Amount shall be in a minimum amount of $1,000,000 and in an
integral multiple of $500,000. Any optional reduction of the then applicable
Current Assets Loan Commitment Amount pursuant to the terms of this Agreement
which reduces the then applicable Current Assets Loan Commitment Amount below
the sum of (i) the Swing Line Loan Commitment Amount and (ii) the Letter of
Credit Commitment Amount shall result in an automatic and corresponding
reduction of the Swing Line Loan Commitment Amount and/or Letter of Credit
Commitment Amount (as directed by the Company in a notice to the Administrative
Agent delivered together with the notice of such voluntary reduction in the
Current Assets Loan Commitment Amount) to an aggregate amount not in excess of
the then applicable Current Assets Loan Commitment Amount, as so reduced,
without any further action on the part of the Swing Line Lender or the Issuer.
2.2.2. Mandatory. The Commitment Amounts shall be reduced as
set forth below.
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(a) Upon the receipt of mandatory prepayments made pursuant to
clauses (d), (e) and (f) of Section 3.1.1, the Fixed Assets Loan
Commitment Amount will be reduced as specified in clauses (b) and (c)
of Section 3.1.2.
(b) Intentionally Deleted.
(c) Each Commitment Amount shall, without any further action,
automatically and permanently be reduced on the applicable Commitment
Termination Date so that the applicable reduced Commitment Amount
equals $0.
(d) Prior to the applicable Commitment Termination Date, any
mandatory reduction of the Current Assets Loan Commitment Amount which
reduces the then applicable Current Assets Loan Commitment Amount below
the sum of (i) the Letter of Credit Commitment Amount and (ii) the
Swing Line Loan Commitment Amount shall result in an automatic and
corresponding reduction of the Letter of Credit Commitment Amount
and/or the Swing Line Loan Commitment Amount (as specified by the
Company) to an aggregate amount not in excess of the then applicable
Current Assets Loan Commitment Amount, as so reduced, without any
further action on the part of the Issuer or the Swing Line Lender.
SECTION 2.3. Borrowing Procedures and Funding Maintenance. Current
Assets Loans and Fixed Assets Loans shall be made by the applicable Lenders in
accordance with Section 2.3.1. and Swing Line Loans shall be made by the Swing
Line Lender in accordance with Section 2.3.2.
2.3.1. Borrowing Current Assets Loans and Fixed Assets Loans.
(a) In the case of Loans (other than Swing Line Loans), by
delivering a Borrowing Request to the Administrative Agent on or before
12:00 noon (and following such Borrowing Request, the Administrative
Agent shall promptly notify each applicable Lender of such Borrowing
Request), New York City time, on a Business Day, any Borrower may from
time to time irrevocably request, on the same Business Day's notice (in
the case of Base Rate Loans) or three Business Days' notice (in the
case of LIBO Rate Loans with an Interest Period of one, two, three, six
or nine months) nor more than five Business Days' notice (in the case
of any Loans) and on five Business Day's notice (in the case of LIBO
Rate Loans with an Interest Period of twelve months, subject to the
definition of "Interest Period"), that a Borrowing be made in an
aggregate amount of $500,000 or any larger integral multiple of
$100,000 or in the unused amount of the applicable Loan Commitment
Amount; provided, that all initial Loans on the Closing Date will be
made as Base Rate Loans. No Borrowing Request shall be required, and
the minimum aggregate amounts specified under this Section 2.3.1 shall
not apply, in the case of Current Assets Loans deemed made under
Section 2.6.2 in respect of unreimbursed Disbursements or made under
clause (b) of Section 2.3.2 to refund Refunded Swing Line Loans. On the
terms and subject to the conditions of this Agreement, each Borrowing
shall be comprised of the Type of Loans, and shall be made on the
Business Day, specified in such Borrowing Request.
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(b) On or before 1:00 p.m., New York City time, on such
Business Day each Lender with a Commitment to lend the Loans requested
shall deposit with the Administrative Agent same day funds in an amount
equal to such Lender's Percentage of the requested Borrowing. Such
deposit will be made to an account which the Administrative Agent shall
specify from time to time by notice to the Lenders. To the extent funds
are received from the Lenders, the Administrative Agent shall promptly
and in any event prior to 3:00 p.m., New York City time, make such
funds available to such Borrower by wire transfer to the accounts such
Borrower shall have specified in its Borrowing Request. In the event
that only one Lender fails to fund its Percentage of Loans as required
above prior to 3:00 p.m., New York City time, the Administrative Agent
shall advance such Loans required to be funded by such Lender and such
Loan shall be deemed to be a Swing Line Loan in the amount of such
advance. No Lender's obligation to make any Loan shall be affected by
any other Lender's failure to make any Loan.
(c) In order to provide for the payment of all expenses
described in clauses (a), (b) and (c) of Section 10.3 and fees payable
pursuant to Section 3.3 and Article V (for distribution by
Administrative Agent as applicable) on the Closing Date and all
obligations of the Borrowers under the Pre-Petition Secured Obligations
(including any letters of credit thereunder) outstanding on the Filing
Date, the Borrowers hereby agree to make Borrowings and Issuance
Requests from the Lenders (consisting of Credit Extensions in amounts
determined in accordance with their respective Commitment Percentages)
on the Closing Date, in such amount as is necessary to (i) effect the
payment of such expenses and fees and (ii) pay such obligations under
the Pre-Petition Secured Obligations. The Borrowers further agree that
such Borrowings and Issuance Requests shall be made (x) under the Fixed
Assets Loan Commitment Amount with respect to the payment of the
outstanding principal amount of that portion of the Pre-Petition
Secured Obligations consisting of Existing Fixed Asset Loans and (y)
under the then applicable Current Assets Loan Commitment Amount with
respect to the payment of such expenses, fees and all other obligations
of the Borrowers under the Pre-Petition Secured Obligations; provided
that to the extent there are any letters of credit outstanding under
the Existing Credit Agreement, the same shall not be replaced but shall
be automatically deemed to have been issued under this Agreement (and
to have reduced the amount available to be borrowed under the then
applicable Current Assets Loan Commitment Amount by an amount equal to
the aggregate undrawn and/or unreimbursed amounts of or relating to
such outstanding letters of credit) effective as of the Closing Date.
The Borrowers hereby irrevocably instruct and authorize the
Administrative Agent, on behalf of the Lenders, to make such Credit
Extensions available to the Borrowers on the Closing Date by applying
the proceeds of such Credit Extensions to the payment of such expenses,
fees and obligations (in accordance with the preceding sentence), and
the Lenders hereby agree, on the terms and subject to the conditions of
this Agreement, to make such Credit Extensions to the Borrowers on such
date for such purposes and, to deem such letters of credit outstanding
under the Existing Credit Agreement to have been issued under this
Agreement for all purposes, without need for delivery by the Company of
a Borrowing Request or Issuance Request. The Borrowers acknowledge that
(i) no Issuer shall be required to issue any Letters of Credit on
account of the deemed issuance of Letters of Credit described hereunder
and (ii) the Borrowers shall have no right to
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receive any funds from the Lenders on account of any Loans to be made
by them under this provision otherwise than through application of the
proceeds of such Loans (and deemed reduction of the amount available to
be borrowed under the then applicable Current Assets Loan Commitment
Amounts) as expressly provided for in this clause (c), and the Lenders
will be deemed to have made such Credit Extensions to the Borrowers by
applying the proceeds thereof in accordance with this provision.
(d) Each of the Borrowers, jointly and severally, will be
obligated in respect of the aggregate principal amount of all Credit
Extensions and other Obligations (including Letter of Credit
Obligations), and the aggregate amount of credit available hereunder to
any of the Borrowers at any time shall be determined by taking into
account all Letters of Credit Outstandings and all Loans outstanding,
regardless of which of the Borrowers may have requested Letters of
Credit or received the proceeds of any of the Borrowings. By executing
this Agreement each of the Borrowers confirms to the other parties to
this Agreement that the Company shall (and is hereby duly appointed by
each of the Borrowers to) act as agent for the Borrowers for all
purposes of requesting Loans and Letters of Credit, for purposes of
allocation (to the extent permitted herein) of Letters of Credit and
the proceeds of Loans, and for all other purposes of this Agreement
pursuant to any provision identifying any Borrower to take any action
or receive any communication (regarding uses and the availability of
credit hereunder, and otherwise). Each of the Borrowers further agrees
that each of the Lenders and the Administrative Agent shall be entitled
to deal as to these matters only with the Company and (to the extent
contemplated herein) to act as to these matters in accordance with
instructions or other communications from the Company. Neither the
Lenders nor the Administrative Agent shall have any responsibility to
any Borrower for acting as provided in this provision, and the
Obligations of each of the Borrowers to the Lenders shall not be
affected by any matter relating to acts or omissions of the Company
relating to Credit Extensions or otherwise as agent for the Borrowers
hereunder.
2.3.2. Borrowing Swing Line Loans.
(a) By telephonic notice, promptly followed (within one
Business Day) by the delivery of a confirming Borrowing Request, to the
Swing Line Lender and the Administrative Agent on or before 12:00 noon,
New York City time, on the Business Day the proposed Swing Line Loan is
to be made, any Borrower may from time to time irrevocably request that
a Swing Line Loan be made by the Swing Line Lender in a minimum
principal amount of $100,000 or any larger integral multiple of
$10,000. All Swing Line Loans shall be made as Base Rate Loans and
shall not be entitled to be converted into LIBO Rate Loans. The
proceeds of each Swing Line Loan shall be made available by the Swing
Line Lender, by 3:00 p.m., New York City time, on the Business Day
telephonic notice is received by it as provided in this clause (a) , to
such Borrower by wire transfer to the account such Borrower shall have
specified in its notice therefor.
(b) If (i) any Swing Line Loan, (A) shall be outstanding for
more than four Business' Days or (B) is or will be outstanding on a
date when any Borrower requests that a Current Assets Loan be made or
(ii) any Default shall occur and be continuing, each Current Assets
Lender (other than the Swing Line Lender) irrevocably agrees that it
will,
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at the request of the Swing Line Lender (and at the discretion of the
Swing Line Lender) and upon notice from the Administrative Agent, make
a Current Assets Loan (which shall initially be funded as a Base Rate
Loan) in an amount equal to such Current Assets Lender's Percentage of
the aggregate principal amount of all such Swing Line Loans then
outstanding (such outstanding Swing Line Loans hereinafter referred to
as the "Refunded Swing Line Loans"). On or before 12:00 noon, New York
City time on the first Business Day following receipt by each Current
Assets Lender of a request to make Current Assets Loans as provided in
the preceding sentence, each such Current Assets Lender shall deposit
in an account specified by the Swing Line Lender the amount so
requested in same day funds and such funds shall be applied by the
Swing Line Lender to repay the Refunded Swing Line Loans. At the time
the Current Assets Lenders make the above referenced Current Assets
Loans, the Swing Line Lender shall be deemed to have made, in
consideration of the making of the Refunded Swing Line Loans, a Current
Assets Loan in an amount equal to the Swing Line Lender's Percentage of
the aggregate principal amount of the Refunded Swing Line Loans. Upon
the making (or deemed making, in the case of the Swing Line Lender) of
any Current Assets Loans pursuant to this clause (b), the amount so
funded shall become outstanding under such Lender's Current Assets
Loans and shall no longer be owed under the Swing Line Lender's Swing
Line Loans. All interest payable with respect to any Current Assets
Loans made (or deemed made, in the case of the Swing Line Lender)
pursuant to this clause (b) shall be appropriately adjusted to reflect
the period of time during which the Swing Line Lender had outstanding
Swing Line Loans in respect of which such Current Assets Loans were
made.
(c) If, at any time prior to the making of Current Assets
Loans to replace any outstanding Swing Line Loans pursuant to clause
(b) of this Section 2.3.2, any Lender is stayed or otherwise prohibited
by any Bankruptcy Court from making such a Current Assets Loan, each
Current Assets Lender with a Current Assets Loan Commitment (other than
the Swing Line Lender) irrevocably agrees that it will, at the request
of the Swing Line Lender and upon notice from the Administrative Agent,
purchase an undivided participation interest in all such Swing Line
Loans in an amount equal to its Percentage of the aggregate outstanding
amount of such Swing Line Loans and transfer immediately to an account
identified by the Swing Line Lender, in immediately available funds,
the amount of its participation. The Swing Line Lender will deliver to
each such Current Assets Lender, promptly following receipt of such
funds, a participation certificate, dated the date of receipt of such
funds and in the amount of such Current Assets Lender's participation
if requested to do so by such Current Assets Lender.
(d) Each Borrower expressly agrees that, in respect of each
Current Assets Lender's funded participation interest in any Swing Line
Loan, such Current Assets Lender shall be deemed to be in privity of
contract with each Borrower and have the same rights and remedies
against each Borrower under the Loan Documents as if such funded
participation interest in such Swing Line Loan were a Current Assets
Loan.
(e) Each Current Assets Lender's obligation to make Current
Assets Loans or purchase participation interests in Swing Line Loans,
as contemplated by clause (b) or (c) of this Section 2.3.2, shall be
absolute and unconditional and without recourse to the Swing Line
Lender and shall not be affected by any circumstance, including (i) any
set-
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off, counterclaim, recoupment, defense or other right which such
Current Assets Lender may have against the Swing Line Lender, any
Borrower or any other Person for any reason whatsoever, (ii) the
occurrence or continuance of a Default, an Event of Default or a
Material Adverse Effect, (iii) the acceleration or maturity of any
Loans or the termination of any Commitment after the making of any
Swing Line Loan, (iv) any breach of this Agreement or any other Loan
Document by any Person, or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 12:00
noon, New York City time, on a Business Day, the Company may from time to time
irrevocably elect, on not less than one Business Day's notice (in the case of a
conversion of LIBO Rate Loans to Base Rate Loans) or three Business Days' notice
(in the case of a continuation of LIBO Rate Loans or a conversion of Base Rate
Loans into LIBO Rate Loans) nor more than five Business Days' notice (in the
case of any Loans) that all, or any portion in a minimum amount of $500,000 or
an integral multiple of $100,000, of any Loans be, in the case of Base Rate
Loans, converted into LIBO Rate Loans or, in the case of LIBO Rate Loans, be
converted into Base Rate Loans or continued as LIBO Rate Loans (in the absence
of delivery of a Continuation/Conversion Notice with respect to any LIBO Rate
Loan at least three Business Days (but not more than five Business Days) before
the last day of the then current Interest Period with respect thereto, such LIBO
Rate Loan shall, on such last day, automatically be continued as a LIBO Rate
Loan having a one month Interest Period); provided, however, that (a) each such
conversion or continuation shall be pro rated among the applicable outstanding
Loans of all Current Assets Lenders or Fixed Assets Lenders, as applicable, and
(b) no portion of the outstanding principal amount of any Loans may be continued
as, or be converted into, LIBO Rate Loans when any Default has occurred and is
continuing.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the joint and several obligation of the
Borrowers to repay such LIBO Rate Loan shall nevertheless be to such Lender for
the account of such foreign branch, Affiliate or international banking facility.
SECTION 2.6. Issuance Procedures. By delivering to an Issuer (if
applicable) and the Administrative Agent an Issuance Request on or before 12:00
noon, New York City time, on a Business Day, the Company may, from time to time
irrevocably request, on not less than three nor more than ten Business Days'
notice (or such shorter or longer notice as may be acceptable to such Issuer),
in the case of an initial issuance of a Letter of Credit, and not less than
three nor more than ten Business Days' notice (unless a shorter or longer notice
period is acceptable to such Issuer) prior to the then existing Stated Expiry
Date of a Letter of Credit, in the case of a request for the extension of the
Stated Expiry Date of a Letter of Credit, that such Issuer issue, or extend the
Stated Expiry Date of, as the case may be, an irrevocable Letter of Credit on
behalf of any Borrower in such form as may be requested by the Company and
approved by such Issuer; provided, however, that no extension of the Stated
Expiry Date of an outstanding Letter of Credit
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may provide for a Stated Expiry Date subsequent to the earlier of (a) the
Current Assets Loan Commitment Termination Date and (b) one year from the date
of such extension. Notwithstanding anything to the contrary contained herein or
in any separate application for any Letter of Credit, each Borrower hereby
jointly and severally acknowledges and agrees that it shall be obligated to
reimburse the applicable Issuer upon each Disbursement paid under a Letter of
Credit, and it shall be deemed to be the obligor for purposes of each such
Letter of Credit issued hereunder (whether the account party on such Letter of
Credit is the Company or any other Borrower). Upon receipt of an Issuance
Request, the Administrative Agent shall promptly notify the relevant Issuer and
each Lender thereof and shall cause: (i) the Letter of Credit requested by the
Issuance Request to be issued and (ii) the relevant Issuer to (A) comply with
the terms and conditions of this Agreement relating to the Letter of Credit and
(B) to fulfill the duties and obligations of an Issuer hereunder. Each Letter of
Credit shall by its terms be stated to expire on a date (each, a "Stated Expiry
Date") no later than one year from the date of its issuance.
2.6.1. Other Lenders' Participation.
(a) Upon the issuance of each Letter of Credit issued by the
Issuer pursuant hereto, and without further action, each Lender (other
than the Issuer) that has a Current Assets Loan Commitment shall be
deemed to have irrevocably purchased from the Issuer, to the extent of
its Current Assets Loan Percentage in respect of Current Assets Loans,
and the Issuer shall be deemed to have irrevocably granted and sold to
such Current Assets Lender a participation interest in such Letter of
Credit (including the Contingent Liability and any Reimbursement
Obligation and all rights with respect thereto), and such Current
Assets Lender shall, to the extent of its Current Assets Loan
Percentage, be responsible for reimbursing promptly (and in any event
within one Business Day) the Issuer for Reimbursement Obligations which
have not been reimbursed by the Borrowers in accordance with Section
2.6.3. In addition, such Lender shall, to the extent of its Current
Assets Loan Percentage, be entitled to promptly receive a ratable
portion of the Letter of Credit fees payable pursuant to Section 3.3.3
with respect to each Letter of Credit and of interest payable pursuant
to Section 3.2 with respect to any Reimbursement Obligation. To the
extent that any Current Assets Lender has reimbursed the Issuer for a
Disbursement as required by this Section 2.6, such Lender shall be
entitled to receive its ratable portion of any amounts subsequently
received (from the Borrowers or otherwise) in respect of such
Disbursement.
(b) Each Current Asset Lender's obligation to reimburse the
Issuer or purchase participation interests in Letters of Credit, as
contemplated by this Section 2.6.1 and Section 2.6.3, shall be absolute
and unconditional and without recourse to the Issuer and shall not be
affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Current Assets Lender may
have against the Issuer, any Borrower or any other Person for any
reason whatsoever, (ii) the occurrence or continuance of a Default, an
Event of Default or a Material Adverse Effect, (iii) the acceleration
or maturity of any Loans or the termination of any Commitment after the
issuance of a Letter of Credit, (iv) any breach of this Agreement or
any other Loan Document by any Person, or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing.
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2.6.2. Disbursements: Conversion to Current Assets Loans. The
Issuer will notify the Company and the Administrative Agent promptly (but in any
event on the same Business Day) of the presentment for payment of any drawing
under any Letter of Credit issued by the Issuer, together with notice of the
date (the "Disbursement Date") such payment shall be made (each such payment, a
"Disbursement"). Subject to the terms and provisions of such Letter of Credit
and this Agreement, the Issuer shall make such payment to the beneficiary (or
its designee) of such Letter of Credit. Prior to 12:00 noon, New York City time,
on the Business Day following the Disbursement Date (the "Disbursement Due
Date"), the Borrowers will jointly and severally reimburse the Administrative
Agent, for the account of the Issuer, for all amounts which the Issuer has
disbursed under such Letter of Credit, together with interest thereon at the
rate per annum otherwise applicable to Current Assets Loans (made as Base Rate
Loans) from and including the Disbursement Date to, but excluding, the
Disbursement Due Date and, thereafter (unless such Disbursement is converted
into a Base Rate Loan on the Disbursement Due Date), at a rate per annum equal
to the rate per annum then in effect with respect to overdue Current Assets
Loans (made as Base Rate Loans) pursuant to Section 3.2.2 for the period from
the Disbursement Due Date to, but excluding, the date of such reimbursement;
provided, however, that if no Default shall have then occurred and be continuing
and the Borrowers are able to represent and warrant to the Current Assets
Lenders that the statements set forth in Section 5.2.1 are true and correct,
unless such Borrower has notified the Administrative Agent no later than one
Business Day prior to the Disbursement Due Date that it will reimburse the
Issuer for the applicable Disbursement, then the amount of the Disbursement
shall be deemed to be a Borrowing of Current Assets Loans constituting Base Rate
Loans and following the giving of notice thereof by the Administrative Agent to
the Lenders, each Lender with a Current Assets Loan Commitment (other than the
Issuer) will deliver to the Issuer on the Disbursement Due Date immediately
available funds in an amount equal to such Lender's Current Assets Loan
Percentage of such Borrowing. Each conversion of Disbursement amounts into
Current Assets Loans shall constitute a representation and warranty by each
Borrower that on the date of the making of such Current Assets Loans all of the
statements set forth in Section 5.2.1 are true and correct.
2.6.3. Reimbursement. The joint and several obligation (a
"Reimbursement Obligation") of the Borrowers under Section 2.6.2 to reimburse
the Issuer with respect to each Disbursement (including interest thereon) not
converted into Current Assets Loans constituting a Base Rate Loan pursuant to
Section 2.6.2, and, upon such Borrower failing or electing not to reimburse the
Issuer and the giving of notice thereof by the Administrative Agent to the
Current Assets Lenders, each Current Assets Lender's obligation under Section
2.6.1 to reimburse the Issuer or fund its Percentage of any Disbursement
converted into a Base Rate Loan, shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or defense to
payment which any Borrower or such Current Assets Lender, as the case may be,
may have or have had against the Issuer or any such Current Assets Lender,
including any defense based upon the failure of any Disbursement to conform to
the terms of the applicable Letter of Credit (if, in the Issuer's good faith
opinion, such Disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the proceeds of such
Letter of Credit; provided, however, that after paying in full its Reimbursement
Obligation hereunder, nothing herein shall adversely affect the right of any
Borrower or such Current Assets Lender, as the case may be, to commence any
proceeding against the Issuer for
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any wrongful Disbursement made by the Issuer under a Letter of Credit as a
result of acts or omissions constituting gross negligence or willful misconduct
on the part of the Issuer.
2.6.4. Deemed Disbursements. Upon the occurrence and during
the continuation of any Event of Default, after notice from the Administrative
Agent, (a) an amount equal to all Letter of Credit Outstandings shall, without
demand upon or notice to any Borrower or any other Person, be deemed to be due
and payable to the Issuer (notwithstanding that such amount may not in fact have
been so paid or disbursed); and (b) each Borrower shall be immediately jointly
and severally obligated to Cash Collateralize all Letter of Credit Outstandings.
At such time as the Event of Default giving rise to the deemed disbursements
hereunder shall have been cured or waived, the Administrative Agent shall return
all amounts then on deposit with the Administrative Agent pursuant to this
Section 2.6.4 to the Company, together with accrued interest at the Federal
Funds Rate, which have not been applied to the satisfaction of such
Reimbursement Obligations.
2.6.5. Nature of Reimbursement Obligations. Each Borrower and,
to the extent set forth in Section 2.6.1, each Lender with a Current Assets Loan
Commitment, shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuer (except to the extent of
its own gross negligence or willful misconduct) shall not be responsible for (a)
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
Letter of Credit or any document submitted by any party in connection with the
application for and issuance of a Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged, (b) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or the proceeds
thereof in whole or in part, which may prove to be invalid or ineffective for
any reason, (c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit, (d) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex, facsimile or otherwise, or (e) any loss or
delay in the transmission or otherwise of any document or draft required in
order to make a Disbursement under a Letter of Credit. None of the foregoing
shall affect, impair or prevent the vesting of any of the rights or powers
granted to the Issuer or any Current Assets Lender. In furtherance and extension
and not in limitation or derogation of any of the foregoing, any action taken or
omitted to be taken by the Issuer in good faith (and not constituting gross
negligence or willful misconduct) shall be binding upon each Borrower and each
Current Assets Lender, and shall not put the Issuer under any resulting
liability to any Borrower or any Current Assets Lender, as the case may be.
SECTION 2.7. Register, Notes, Obligation Accounts, Reserves.
(a) Each Lender may maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the
Borrowers to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder. In the case of a Lender that
does not request, pursuant to clause (b)(ii) of this Section 2.7,
execution and delivery of a Note
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evidencing the Loans made by such Lender to the Borrowers, such account
or accounts shall, to the extent not inconsistent with the notations
made by the Administrative Agent in the Register, be conclusive and
binding on each Borrower absent manifest error; provided, however, that
the failure of any Lender to maintain such account or accounts shall
not limit or otherwise affect any Obligations of any Borrower.
(b) (i) Each Borrower hereby designates the Administrative
Agent to serve as such Borrower's agent, solely for the purpose of this
clause (b) , to maintain a register (the "Register") on which the
Administrative Agent will record each Lender's Commitment, the Loans
made by each Lender and each repayment in respect of the principal
amount of the Loans of each Lender and annexed to which the
Administrative Agent shall retain a copy of each Lender Assignment
Agreement delivered to the Administrative Agent pursuant to Section
10.11.1. Failure to make any recordation, or any error in such
recordation, shall not affect any Borrower's obligation in respect of
such Loans. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrowers, the Administrative Agent
and the Lenders shall treat each Person in whose name a Loan (and as
provided in clause (b)(ii) of this Section 2.7, the Note evidencing
such Loan, if any) is registered as the owner thereof for all purposes
of this Agreement, notwithstanding notice or any provision herein to
the contrary. A Lender's Commitment and the Loans made pursuant thereto
may be assigned or otherwise transferred in whole or in part only by
registration of such assignment or transfer in the Register. Any
assignment or transfer of a Lender's Commitment or the Loans made
pursuant thereto shall be registered in the Register only upon delivery
to the Administrative Agent of a Lender Assignment Agreement duly
executed by the Assignor thereof. No assignment or transfer of a
Lender's Commitment or the Loans made pursuant thereto shall be
effective unless such assignment or transfer shall have been recorded
in the Register by the Administrative Agent as provided in this Section
2.7.
(ii) Each Borrower agrees that, upon written request to the
Administrative Agent by any Lender, each Borrower will execute and
deliver to such Lender, as applicable, a Note evidencing the Loans made
by such Lender. Each Borrower hereby irrevocably authorizes each Lender
to make (or cause to be made) appropriate notations on the grid
attached to such Lender's Notes (or on any continuation of such grid),
which notations, if made, shall evidence, inter alia, the date of, the
outstanding principal amount of, and the interest rate and Interest
Period applicable to the Loans evidenced thereby. Such notations shall,
to the extent not inconsistent with the notations made by the
Administrative Agent in the Register, be conclusive and binding on the
Borrowers absent manifest error; provided, however, that the failure of
any Lender to make any such notations shall not limit or otherwise
affect any Obligations of any Borrower. The Loans evidenced by any such
Note and interest thereon shall at all times (including after
assignment pursuant to Section 10.11.1) be payable to the order of the
payee named therein and its registered assigns. Subject to the
provisions of Section 10.11.1, a Note and the obligation evidenced
thereby may be assigned or otherwise transferred in whole or in part
only by registration of such assignment or transfer of such Note and
the obligation evidenced thereby in the Register (and each Note shall
expressly so provide). Any assignment or transfer of all or part of an
obligation evidenced by a Note shall be registered in the Register only
upon surrender for registration of assignment or transfer of
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the Note evidencing such obligation, accompanied by a Lender Assignment
Agreement duly executed by the assignor thereof and the compliance by
the parties thereto with the other requirements of Section 10.11.1, and
thereupon, if requested by the assignee, one or more new Notes shall be
issued to the designated assignee and the old Note shall be returned by
the Administrative Agent to the Company marked "exchanged". No
assignment of a Note and the obligation evidenced thereby shall be
effective unless it shall have been recorded in the Register by the
Administrative Agent as provided in this Section 2.7.
(c) In order to utilize the collective borrowing powers of the
Borrowers in the most efficient and economical manner, and in order to
facilitate the handling of the accounts of the Borrowers on the
Administrative Agent's books, the Borrowers have requested, and the
Administrative Agent has agreed to handle accounts of the Borrowers on
the Administrative Agent's books on a combined basis, all in accordance
with the following provisions: (i) In lieu of maintaining separate
accounts on the Administrative Agent's books in the name of each of the
Borrowers, the Administrative Agent shall maintain (A) one account
under the name of the Company (the "Fixed Assets Obligations Account")
and (B) one other account under the name of the Company (the "Current
Assets Obligations Account", together with the Fixed Assets Obligations
Account, the "Obligation Accounts"). Credit Extensions made by the
Lenders or any Issuer to any of the Borrowers will be charged to the
applicable Obligation Account, along with any and all fees, charges,
expenses, indemnities or any other monies due under any Loan Document.
The applicable Obligation Account will be credited with all amounts
received by the Administrative Agent from any of the Borrowers or from
others for their account, including all amounts received by the
Administrative Agent in payment of the applicable Obligations. (ii)
Each month the Administrative Agent will render to the Borrowers one
extract of each Obligation Account, which shall be deemed to be an
account stated as to each of the Borrowers and which will be deemed
correct and accepted by all of the Borrowers unless the Administrative
Agent receives a written statement of exceptions from them within 30
days after such extract has been rendered by the Administrative Agent.
Each of the Borrowers agrees that the Administrative Agent, and the
Lenders as applicable, shall have no obligation to account separately
to any of the Borrowers. (iii) Requests for Loans may be made by the
Company as agent for the Borrowers and the Administrative Agent is
hereby authorized and directed to accept, honor and rely on such
instructions and requests, subject to the limitation and provisions set
forth in this Agreement. Each of the Borrowers agrees that the
Administrative Agent shall have no responsibility to inquire into the
correctness of the apportionment, allocation or disposition of (A) any
Credit Extensions made to any of the Borrowers or (B) any of the
Administrative Agent's or Lender's expenses and charges relating
thereto. All Credit Extensions are made for the applicable Obligation
Account. (iv) It is understood that the handling of the accounts of the
Borrowers in a combined fashion is done solely as an accommodation to
the Borrowers and at their request, and that the Administrative Agent
shall incur no liability to the Borrowers as a result hereof. (v) The
foregoing request was made because the Borrowers are engaged in an
integrated operation that requires financing on a basis permitting the
availability of credit from time to time to each of the Borrowers as
required for the continued successful operation of each of the
Borrowers. Each of the Borrowers expects to derive benefit, directly or
indirectly, from such
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availability since the successful operation of each of the Borrowers is
dependent on the continued successful performance of the functions of
the integrated group.
(d) Each of the Borrowers hereby authorizes the Administrative
Agent to charge the applicable Obligation Account with the amount of
any and all payments, fees and/or expenses due hereunder as such
payments, fees and/or expenses become due. Each Borrower confirms that
any charges which the Administrative Agent may so make to such
Obligation Account will be made as an accommodation to the Borrowers
and solely at the Administrative Agent's discretion.
(e) Without limiting any other rights or remedies of the
Administrative Agent or any of the Secured Parties under any Loan
Document, all Current Assets Loans and Letters of Credit otherwise
available to the Borrowers shall be subject to the Administrative
Agent's continuing right, in its sole discretion, to establish an
Availability Reserve.
ARTICLE III
REPAYMENTS; PREPAYMENTS; INTEREST AND FEES
SECTION 3.1. Payments; Application; Lockbox Accounts; Power of
Attorney; Charges to Obligation Accounts; No Discharge. Each Borrower agrees
that the Loans shall be repaid and prepaid pursuant to the following terms.
3.1.1. Repayments and Prepayments. The Borrowers shall jointly
and severally repay in full the unpaid principal amount of each Loan on the
applicable Commitment Termination Date for each such Loan. Prior thereto,
payments and prepayments of Loans shall or may be made as set forth below.
(a) From time to time on any Business Day, any Borrower may
make a voluntary prepayment, in whole or in part, of the outstanding
principal amount of any Loans on the same Business Day, subject to
advance notice received by the Administrative Agent on or before 1:00
p.m., New York City, time, on the date of such prepayment; provided,
however, that except to the extent the Obligations are paid pursuant to
Section 3.1.3, each such partial prepayment shall be, in the case of
LIBO Rate Loans, in an aggregate minimum amount of $500,000 and an
integral multiple of $100,000 and, in the case of Base Rate Loans, in
an aggregate minimum amount of $100,000 and an integral multiple of
$10,000. Each notice of intent to make a prepayment shall specify the
prepayment date, which Loans are being prepaid, the principal amount of
the Loans to be prepaid and shall be irrevocable and shall commit the
Borrowers to prepay such Loans by the amount and on the date stated
therein. The Administrative Agent shall, promptly after receiving any
notice given by the Company hereunder, notify each Lender of the
principal amount of the Loans held by such Lender which are to be
prepaid, the prepayment date and the manner of application of the
prepayment. In the event the Borrowers fail to prepay any Loan on the
date specified in any prepayment notice delivered pursuant to clause
(a) of Section 3.1.1, the Borrowers on demand by any Lender shall pay
to the Administrative Agent for the account of such Lender any amounts
required to compensate such Lender for any loss incurred by such Lender
as a result of such failure to prepay, including,
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without limitation, any loss, cost or expenses incurred by reason of
the acquisition of deposits or other funds by such Lender to fulfill
deposit obligations incurred in anticipation of such prepayment. Each
Lender shall deliver to the Borrowers from time to time one or more
certificates setting forth the amount of such loss as determined by
such Lender
(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Current Assets Loans and Swing Line Loans and
(ii) the aggregate amount of all Letter of Credit Outstandings exceeds
the then applicable Maximum Loan Amount, the Borrowers shall make a
mandatory prepayment of Current Assets Loans or Swing Line Loans or, if
necessary, Cash Collateralize all Letter of Credit Outstandings, as
specified by the Company, in an aggregate amount equal to such excess.
(c) On each date when the aggregate outstanding principal
amount of all Fixed Assets Loans exceeds the Fixed Assets Loan
Commitment Amount (as it may be reduced from time to time pursuant to
this Agreement), the Borrowers shall make a mandatory prepayment of
Fixed Assets Loans in an aggregate amount equal to such excess.
(d) Concurrently with the receipt of any Net Disposition
Proceeds by Parent, any Borrower or any Subsidiary, the Company shall
deliver to the Administrative Agent a calculation of the amount of such
Net Disposition Proceeds and make a mandatory prepayment of the
Obligations in an amount equal to 100% of such Net Disposition
Proceeds, to be applied as set forth in clause (b) of Section 3.1.2.
(e) Concurrently with the receipt of any Net Debt Proceeds
(other than Net Debt Proceeds from the Intercompany Loan) by Parent,
any Borrower or any Subsidiary, the Company shall deliver to the
Administrative Agent a calculation of the amount of such Net Debt
Proceeds and make a mandatory prepayment of the Obligations in an
amount equal to 100% of such Net Debt Proceeds, to be applied as set
forth in clause (c) of Section 3.1.2.
(f) Concurrently with the receipt of any Net Equity Proceeds
by Parent, any Borrower or any Subsidiary, the Company shall deliver to
the Administrative Agent a calculation of the amount of such Net Equity
Proceeds (satisfactory to the Administrative Agent) and Parent, such
Borrower or such Subsidiary shall make a mandatory prepayment of the
Obligations in an amount equal to 100% of such Net Equity Proceeds, to
be applied as set forth in (i) clause (c) of Section 3.1.2, with
respect to Net Equity Proceeds of the type described in clause (a) of
the definition thereof or (ii) clause (b)(iii) of Section 3.1.2, with
respect to Net Equity Proceeds of the type described in clause (b) of
the definition thereof.
(g) Concurrently with the receipt of the Net Debt Proceeds
from the Intercompany Loan, the Company shall make a mandatory
prepayment of the Obligations in an amount equal to 100% of such Net
Equity Proceeds, to be applied as set forth in clause (d) of Section
3.1.2.
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(h) Immediately upon any acceleration of the Obligations
pursuant to Section 8.2, the Borrowers shall jointly and severally
repay all the Loans and Cash Collateralize all Letter of Credit
Outstandings, unless, pursuant to Section 8.2, only a portion of all
the Obligations is so accelerated (in which case the portion so
accelerated shall be so repaid and/or Cash Collateralized).
(i) The Borrowers shall pay, together with each payment and/or
prepayment of Loans made as set forth herein, accrued interest on the
amount paid and/or prepaid and any amounts required pursuant to Section
4.4.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4.
3.1.2. Application. Amounts prepaid pursuant to Section 3.1.1
shall be applied as set forth in this Section.
(a) Subject to clause (b) of this Section 3.1.2, each
prepayment or repayment of the principal of the Loans shall be applied,
to the extent of such prepayment or repayment, first, to the principal
amount thereof being maintained as Base Rate Loans, and second, subject
to the terms of Section 4.4, to the principal amount thereof being
maintained as LIBO Rate Loans.
(b) Each prepayment of Obligations pursuant to clause (d) and
clause (f)(ii) of Section 3.1.1 shall be applied (i) in the case of a
Disposition of Fixed Assets Collateral (A) prior to the date of entry
of the Final Order, to a mandatory prepayment of the outstanding Fixed
Assets Obligations until all outstanding Fixed Assets Obligations have
been repaid in full and (B) on and after the date of entry of the Final
Order, (1) first, to a mandatory prepayment of outstanding Current
Assets Obligations secured by the Priming Lien until such outstanding
Current Assets Obligations secured by the Priming Lien have been repaid
in full (or, with respect to Letters of Credit, Cash Collateralized)
and, (2) second, to a mandatory prepayment of the outstanding Fixed
Assets Obligations until all outstanding Fixed Assets Obligations have
been repaid in full and, in each of the foregoing cases set forth in
clauses (A) and (B), immediately upon the Administrative Agent's
receipt of such Net Disposition Proceeds, (x) the Fixed Assets Loan
Commitment Amount shall be automatically and permanently reduced by the
aggregate amount of Net Disposition Proceeds used to prepay the
outstanding principal amount of such Fixed Assets Obligations, plus any
additional amount of Net Disposition Proceeds relating to Fixed Assets
Collateral which remain after the outstanding amount of Fixed Assets
Obligations have been reduced to zero (provided that so long as no
Default or Event of Default then exists, the Fixed Assets Loan
Commitment Amount shall not be reduced by the amount of any Net
Disposition Proceeds from a casualty or condemnation of Fixed Assets
which are permitted to be used by the Borrowers in connection with the
restoration or replacement of the affected assets in accordance with
Section 2.3 of the Mortgages), and (y) after the date of entry of the
Final Order, the Availability Reserve shall automatically be increased
by the amount of Net Disposition Proceeds (not to exceed $40,000,000)
relating to Fixed Assets Collateral which remain after the outstanding
amount of Fixed Assets Obligations have been reduced to zero; and (ii)
in the
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case of a Disposition of Current Assets (other than Dispositions of
Capital Securities of Unrestricted Subsidiaries), (A) first, to a
mandatory prepayment of the outstanding Current Assets Obligations
until all outstanding Current Assets Obligations have been repaid in
full (or, with respect to Letters of Credit, Cash Collateralized) and,
(B) second, to a mandatory prepayment of the outstanding Fixed Assets
Obligations until all outstanding Fixed Assets Obligations have been
repaid in full; and (iii) in the case of a Disposition of Capital
Securities of Unrestricted Subsidiaries or the receipt of Net Equity
Proceeds of the type described in clause (b) of the definition thereof,
to the Fixed Assets Obligations and the Current Assets Obligations in
the order designated by the Company upon receipt of same by any
Obligor, or if no such designation is received by the Administrative
Agent prior to or upon receipt of such proceeds, then to the
Obligations as determined by the Administrative Agent.
(c) Each prepayment of Obligations made pursuant to clauses
(e) and (f)(i) of Section 3.1.1 shall be applied (i) if there are
outstanding amounts of both Fixed Assets Obligations and Current Assets
Obligations, pro rata (based on the then applicable Current Assets Loan
Commitment Amount and the Fixed Assets Loan Commitment Amount) to a
mandatory prepayment of the outstanding amount of all Current Assets
Obligations and all Fixed Assets Obligations until the outstanding
amount of all Fixed Assets Obligations is equal to zero, (ii) when the
outstanding amount of all Fixed Assets Obligations is equal to zero,
then to a mandatory prepayment of the outstanding amount of all Current
Assets Obligations, with an automatic and permanent reduction in the
Fixed Assets Loan Commitment Amount by the amount of such Net Equity
Proceeds or Net Debt Proceeds which would have otherwise been applied
pro rata (based on the then applicable Current Assets Loan Commitment
Amount and the Fixed Assets Loan Commitment Amount) to the prepayment
of Fixed Assets Obligations under clause (i) above (had Fixed Assets
Obligations been outstanding) until the outstanding amount of all
Current Assets Obligations has been reduced to zero and all Letters of
Credit have been Cash Collateralized, and (iii) when the outstanding
principal amount of all Current Assets Obligations is equal to zero and
all Letters of Credit have been Cash Collateralized, to a mandatory
prepayment of the outstanding amount of all Fixed Assets Obligations
until the outstanding amount of all Fixed Assets Obligations is equal
to zero; provided that once the outstanding amount of all Current
Assets Obligations has been reduced to zero, the Fixed Assets Loan
Commitment Amount shall be automatically and permanently reduced by the
aggregate amount of Fixed Assets Obligations prepaid pursuant to
clauses (i) and (iii) above and the amount of such Net Equity Proceeds
or Net Debt Proceeds remaining unapplied.
(d) The prepayment of the Obligations made pursuant to clause
(g) of Section 3.1.1 shall be applied (i) first, to a mandatory
prepayment of outstanding Current Assets Obligations (outstanding
immediately after the initial Credit Extension) until all such
outstanding Current Asset Obligations have been paid in full and (ii)
second, to a mandatory prepayment of outstanding Fixed Assets
Obligations.
3.1.3. Matters Relating to Lockbox Accounts. All collections
from Accounts or other Collateral and proceeds from dispositions of Collateral
shall be managed as provided in this Section 3.1.3, except as otherwise
expressly provided in this Agreement
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(a) The Borrowers shall establish and maintain at their
expense with banks acceptable to the Administrative Agent deposit
accounts (the "Lockbox Accounts"), styled with names acceptable to the
Administrative Agent to indicate the interests therein of the
Administrative Agent and the Lenders, and subject to such changes of
depositories as the Administrative Agent may, in its sole discretion,
approve in advance. The Borrowers shall ensure that all collections
and/or payments in respect of Accounts or other Collateral and all
other proceeds whatsoever of or from any Collateral are either (i) paid
directly from the relevant Account Debtors or purchasers, as
applicable, into the Lockbox Accounts or (ii) following receipt by a
Borrower, immediately deposited into a Lockbox Account, in each case in
accordance with procedures and arrangements acceptable to the
Administrative Agent and subject only to such changes as may be
approved in advance by the Administrative Agent. The Borrowers shall
also ensure that all collections, payments, proceeds and/or funds
deposited and/or paid into the Lockbox Accounts are transferred
directly or indirectly (in accordance with the aforementioned
procedures and arrangements), on each Business Day, in immediately
available funds, into a deposit account maintained by the
Administrative Agent at a commercial bank selected by the
Administrative Agent in its sole discretion and communicated to the
Borrowers (the "Concentration Account"). The Borrowers acknowledge that
they waive and shall have no right to object to or seek to delay any
such transfer or to cause any other application of any such
collections, payments, proceeds and/or funds. The Borrowers shall
accurately report on a weekly basis to the Administrative Agent all
amounts deposited in the Lockbox Accounts to ensure the proper transfer
of funds as set forth above.
(b) Prior to the initial Credit Extensions, the Borrowers
shall cause the banks at which the Lockbox Accounts are maintained to
enter into Lockbox Agreements providing for these daily transfers,
acknowledging that the items paid into, received or deposited in the
Lockbox Accounts maintained with them are subject to the Lien of the
Administrative Agent, for the benefit of the Administrative Agent and
the Lenders, that such bank has no Lien upon or right of setoff against
any Collection Account maintained with it or any of the items received
for deposit therein or the funds deposited from time to time therein,
and that, upon the request of the Administrative Agent, such bank will
wire or otherwise transfer, in immediately available funds, on each
Business Day, all collections, payments, proceeds and/or funds paid
into, received or deposited in all Lockbox Accounts maintained with it
to the Concentration Account.
(c) The Borrowers acknowledge that the Administrative Agent at
all times will maintain the Concentration Account in its own name and
that the Concentration Account and the Lockbox Accounts will be subject
to the sole dominion and control of the Administrative Agent pursuant
to this Agreement and the Lockbox Agreements, and the Borrowers agree
(and agree to confirm to all Persons) that the Borrowers shall at no
time have any right to make any withdrawal from or give any
instructions to the depositary with respect to the Lockbox Accounts or
the Concentration Account.
(d) At all times when no Credit Extensions are outstanding and
no Default or Event of Default is continuing, the Administrative Agent
shall automatically cause the funds transferred to the Concentration
Account pursuant to this Section 3.1.3 and the
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Lockbox Agreements to be released as promptly as practicable to the
Borrowers, to such account as may be designated by notice from the
Company to the Administrative Agent. At all times when any Credit
Extensions are outstanding or a Default or an Event of Default is
continuing, the Administrative Agent shall apply, on a daily basis, all
funds transferred into the Concentration Account pursuant to this
Section 3.1.3 and the Lockbox Agreements (i) in the case of
Dispositions, to reduce the outstanding Loans as provided in Section
3.1.2(b), (ii) in the case of Net Debt Proceeds or Net Equity Proceeds,
to reduce outstanding Loans as provided in Section 3.1.2(c), and (iii)
in all other cases, subject to clause (e) below, first to reduce the
outstanding principal amount of all Current Assets Loans until all
outstanding Current Assets Loans have been paid in full, and second to
reduce the outstanding principal amount of all Fixed Assets Loans and
to satisfy the Borrowers' other Obligations under this Agreement and,
when a Default or Event of Default is continuing, for so long as any of
the Obligations then due and payable are outstanding, any remaining
funds shall continue to be held by the Administrative Agent as security
for the Obligations pursuant to the terms hereof and the other Loan
Documents. To the extent that any collections and/or payments with
respect to Accounts or other Collateral or any other proceeds
whatsoever of or from any Collateral are not sent directly to the
appropriate Lockbox Account but are received by any Borrower, such
collections, payments and/or proceeds shall be held in trust for the
benefit of the Administrative Agent and the Lenders and immediately
remitted by the Borrower who received the relevant funds, in the form
received, to the appropriate Lockbox Account for transfer to the
Concentration Account. Each Borrower acknowledges and agrees that its
compliance with the terms of this Section 3.1.3 is essential.
(e) All funds transferred from the Concentration Account for
application to amounts owing by the Borrowers under this Agreement will
be credited against the relevant Obligation Account of the Borrowers on
the next Business Day after the Administrative Agent's receipt of
"collected funds" at the Concentration Account, if received no later
than 12:00 noon (New York City time), or on the second succeeding
Business Day, if received after 12:00 noon (New York City time). No
checks, drafts or other instrument received in either a Lockbox Account
or the Concentration Account shall be treated as received unless and
until such instruments have actually been collected. Except as
otherwise expressly provided in this Agreement (including Section 3.1),
the Administrative Agent shall, for value at the time specified above
in this provision, apply the funds credited to the Concentration
Account, first, to any expenses, indemnifications or fees owing
pursuant to this Agreement or any other Loan Document, second, to
interest on the Loans being repaid and, third, to reduce the
outstanding balance of the Loans being repaid.
3.1.4. Power of Attorney. Each of the Borrowers hereby
irrevocably appoints and makes each of the officers of the Administrative Agent
the true and lawful attorney for such Borrower (without requiring any of them to
act as such) with full power of substitution to do the following: (i) endorse
the name of such Borrower upon any and all checks, drafts, money orders, and
other instruments for the payment of money that are payable to such Borrower and
constitute collections and/or payments with respect to Accounts or other
Collateral of such Borrower or any other proceeds whatsoever of or from
Collateral of such Borrower; (ii) execute in the name of such Borrower any
financing statements, schedules, assignments, instruments, documents, and
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statements that such Borrower is obligated to give to the Administrative Agent
or any Lender under this Agreement or any other Loan Document; and (iii) do such
other and further acts and deeds in the name of such Borrower as the
Administrative Agent may deem necessary or desirable to enforce any Account or
other Collateral or perfect the security interest or Lien in any Collateral that
is granted pursuant to any Loan Document or any Financing Order to the
Administrative Agent for the benefit of the Administrative Agent and the
Lenders. In addition, if any Borrower breaches its obligation hereunder to
direct payments from collections and/or payments with respect to Accounts or
other Collateral or any other proceeds whatsoever of or from Collateral to the
appropriate Lockbox Account, the Administrative Agent, as the true and lawful
attorney for such Borrower pursuant to this Section and subject to any
applicable law or regulation, may, by the signature or other act of any of the
Administrative Agent's officers (without requiring any of them to do so), direct
any Account Debtor to make payments with respect to Accounts or other Collateral
or any other proceeds of or from Collateral to such Borrower by directing
payment to the appropriate Lockbox Account.
3.1.5. Charges to Obligation Accounts. Each of the Borrowers
hereby authorizes the Administrative Agent to charge the Obligation Accounts
with the amount of any and all payments due under this Agreement as such
payments become due, including payments due under Sections 2.6, 3.1, 3.2, 3.3,
4.4, 4.5, 4.6, and 10.3. The Borrowers hereby confirm that any charges which the
Administrative Agent may so make to the Obligation Accounts as herein provided
may be made by the Administrative Agent whether or not a Default or Event of
Default has occurred and without compliance with any of the other conditions
precedent set forth in Article V and will be made as an accommodation to the
Borrowers' and solely at the Administrative Agent's discretion.
3.1.6. No Discharge, Survival of Claims. Each of the Borrowers
agrees that (i) its Obligations hereunder shall not be discharged by the entry
of an order confirming any Reorganization Plan (and each of the Borrowers
pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such
discharge) and (ii) the Superpriority Claim granted to the Administrative Agent
and the Lenders pursuant to the Financing Order and as described in Section
7.1.8 shall not be affected in any manner by the entry of an order confirming
any Reorganization Plan or the appointment of a trustee by the Bankruptcy Court.
SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with the terms set
forth below.
3.2.1. Rates. Subject to Section 2.3.2, pursuant to an
appropriately delivered Borrowing Request or Continuation/Conversion Notice, the
Company may elect that Loans comprising a Borrowing accrue interest at a rate
per annum:
(a) on that portion maintained from time to time as a Base
Rate Loan, equal to the sum of the Alternate Base Rate from time to
time in effect, plus the Applicable Margin; provided that all Swing
Line Loans shall always accrue interest at the then effective
Applicable Margin for Current Assets Loans maintained as Base Rate
Loans; and
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(b) on that portion maintained as a LIBO Rate Loan, during
each Interest Period applicable thereto, equal to the sum of the LIBO
Rate (Reserve Adjusted) for such Interest Period, plus the Applicable
Margin.
All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate applicable to such LIBO Rate Loan.
3.2.2. Post-Maturity Rates. After the date any principal
amount of any Loan or Reimbursement Obligation is due and payable (whether on
the Maturity Date, upon acceleration or otherwise), or after any other monetary
Obligation of the Borrowers shall have become due and payable, the Borrowers
shall jointly and severally pay, but only to the extent permitted by law,
interest (after as well as before judgment) on such amounts at a rate per annum
equal to the Alternate Base Rate from time to time in effect, plus the
Applicable Margin for Fixed Assets Revolving Loans, plus, a margin of 2%.
3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan on the principal amount so
paid or prepaid;
(c) with respect to Base Rate Loans, on each Monthly Payment
Date occurring after the Closing Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
one month, on the date occurring on each one month interval occurring
after the first day of such Interest Period);
(e) with respect to any Base Rate Loans converted into LIBO
Rate Loans on a day when interest would not otherwise have been payable
pursuant to clause (c) on the date of such conversion; and
(f) on that portion of any Loans the Maturity Date of which is
accelerated pursuant to Section 8.2, immediately upon such
acceleration.
Interest accrued on Loans or other monetary Obligations after the date such
amount is due and payable (whether on the Maturity Date, upon acceleration or
otherwise) shall be payable upon demand.
SECTION 3.3. Fees. Each Borrower agrees to pay the fees set forth
below. All such fees shall be non-refundable.
3.3.1. Commitment Fees. The Borrowers agree to pay, jointly
and severally, to the Administrative Agent for the account of each Lender, for
the period (including any portion thereof when any of its Commitments are
suspended by reason of the Borrowers' inability to
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satisfy any condition of Article V commencing on the Effective Date and
continuing through the applicable Commitment Termination Date, a commitment fee
in an aggregate amount equal to the Applicable Commitment Fee, in each case on
such Lender's Percentage of the sum of the average daily unused portion of the
applicable Commitment Amount (less Letter of Credit Outstandings, in the case of
the Maximum Current Assets Loan Commitment Amount). All commitment fees payable
pursuant to this Section 3.3.1 shall be calculated on a year comprised of 360
days and payable by the Borrowers in arrears on the Effective Date and
thereafter on each Monthly Payment Date, commencing with the first Monthly
Payment Date following the Effective Date, and (a) with respect to the Current
Assets Loan Commitment, on the Current Assets Loan Commitment Termination Date,
and (b) with respect to the Fixed Assets Loan Commitment, on the Fixed Assets
Loan Commitment Termination Date. The making of Swing Line Loans shall not
constitute usage of the Current Assets Loan Commitment with respect to the
calculation of commitment fees to be paid by the Borrowers to the Lenders.
3.3.2. The Administrative Agents' Fees. The Borrowers agree to
pay, jointly and severally, to the Administrative Agent, for its own account, an
aggregate amount equal to the fees set forth in the Fee Letter in accordance
with its own terms.
3.3.3. Letter of Credit Fees. The Borrowers agree to pay,
jointly and severally, to the Administrative Agent, for the pro rata account of
each Current Assets Loan Lender, an aggregate Letter of Credit fee on the daily
average Stated Amount of each Letter of Credit, in each case for the period from
and including the date of issuance of such Letter of Credit to and excluding the
date expiration or termination of such Letter of Credit computed at a per annum
rate for each day equal to the then effective Applicable Margin for Current
Assets Loans maintained as LIBO Rate Loans in effect on such day, such fees
being payable monthly in arrears on each Monthly Payment Date and on the Current
Assets Loan Commitment Termination Date. The Borrowers further agree to pay,
jointly and severally, to each Issuer monthly in arrears on each Monthly Payment
Date following the date of issuance of a Letter of Credit until the earlier of
the expiration of such Letter of Credit and the Current Assets Loan Commitment
Termination Date, an issuance fee as specified in the Fee Letter or as otherwise
agreed to by the Borrowers and the Issuer.
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ARTICLE IV
CERTAIN LIBO RATE AND GUARANTY PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall reasonably
determine (which determination shall, in the absence of manifest error and upon
notice thereof to the Company and the Administrative Agent, be conclusive and
binding on each Borrower) that the introduction of or any change in or in the
interpretation of any law makes it unlawful, or any Governmental Authority
asserts that it is unlawful, for such Lender to make or continue any Loan as, or
to convert any Loan into, a LIBO Rate Loan, the obligations of such Lender to
make, continue or convert any such LIBO Rate Loan shall, upon such
determination, forthwith be suspended until such Lender shall notify the
Administrative Agent that the circumstances causing such suspension no longer
exist, and all outstanding LIBO Rate Loans payable to such Lender shall
automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.
SECTION 4.2. Deposits Unavailable. If the Administrative Agent shall
have determined that
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to it in its relevant
market; or
(b) by reason of circumstances affecting its relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans;
then, upon notice from the Administrative Agent to the Company and the Lenders,
the obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the Company
and the Lenders that the circumstances causing such suspension no longer exist;
provided that, in such case, the Lenders shall use their reasonable efforts to
obtain funding of the Loans at a rate comparable with the LIBO Rate (Reserve
Adjusted) in other Eurodollar markets.
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SECTION 4.3. Increased LIBO Rate Loan Costs, etc. Each Borrower agrees,
jointly and severally, to reimburse each Lender and Issuer for any increase in
the cost to such Lender or Issuer of, or any reduction in the amount of any sum
receivable by such Secured Party in respect of, such Secured Party's Commitments
and the making of Credit Extensions hereunder (including the making, continuing
or maintaining (or of its obligation to make or continue) any Loans as, or of
converting (or of its obligation to convert) any Loans into, LIBO Rate Loans)
that arise in connection with any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in after the date
hereof of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority, except
for such changes with respect to increased capital costs and Taxes which are
governed by Sections 4.5 and 4.6, respectively. Each affected Secured Party
shall promptly notify the Administrative Agent and the Company in writing of the
occurrence of any such event, stating the reasons therefor and the additional
amount required fully to compensate such Secured Party for such increased cost
or reduced amount. Such additional amounts shall be payable by the Borrowers
directly to such Secured Party within five days of its receipt of such notice,
and such notice shall, in the absence of manifest error, be conclusive and
binding on the Borrowers.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make or continue any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
not recovered in connection with the redeployment of such funds (and excluding
any loss of anticipated profits) as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to
Article III or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor (unless due to the responsibility
of the Lender or inability of the Lender to fund in accordance with the
terms hereof); or
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/Conversion Notice
therefor (unless due to the responsibility of the Lender or inability
of the Lender to fund in accordance with the terms hereof);
then, upon the written notice of such Lender to the Company (with a copy to the
Administrative Agent), the Borrowers shall, jointly and severally, within five
days of its receipt thereof, pay directly to such Lender such amount as will (in
the reasonable determination of such Lender) reimburse such Lender for such loss
or expense. Such written notice shall set forth the basis for requesting such
amounts and shall, in the absence of manifest error, be conclusive and binding
on each Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(having the force of law) of any Governmental Authority affects or
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would affect the amount of capital required or expected to be maintained by any
Secured Party or any Person controlling such Secured Party, and such Secured
Party determines (in good faith but in its sole and absolute discretion) that
the rate of return on its or such controlling Person's capital as a consequence
of the Commitments or the Credit Extensions made, or the Letters of Credit
participated in, by such Secured Party is reduced to a level below that which
such Secured Party or such controlling Person could have achieved but for the
occurrence of any such circumstance, then upon notice from time to time by such
Secured Party to the Company, the Borrowers shall, within five days following
receipt of such notice (which notice shall be sent to the Company promptly (but
in no event later than 180 days) after obtaining actual knowledge by such Lender
of any such amounts owed by the Borrowers and the amount shall be conclusively
determined by such Lender), jointly and severally, pay directly to such Secured
Party additional amounts sufficient to compensate such Secured Party or such
controlling Person for such reduction in rate of return to the extent allocable
to such Lender's Commitments or the Credit Extensions made, or the Letters of
Credit participated in by such Lender. A statement of such Secured Party as to
any such additional amount or amounts shall, in the absence of manifest error,
be conclusive and binding on each Borrower. In determining such amount, such
Secured Party may use any method of averaging and attribution that it (in its
sole and absolute discretion) shall deem applicable, provided that the
determination of such amount is made in good faith and in a manner generally
consistent with such Secured Party's standard practice therefor.
SECTION 4.6. Taxes. Each Borrower covenants and agrees as follows with
respect to Taxes.
(a) Any and all payments by the Borrowers under each Loan
Document shall be made without setoff, counterclaim or other defense,
and free and clear of, and without deduction or withholding for or on
account of, any Taxes. In the event that any Taxes are required by law
to be deducted or withheld from any payment required to be made by the
Borrowers to or on behalf of any Secured Party under any Loan Document,
then:
(i) subject to clause (f) of this Section 4.6, if
such Taxes are Non-Excluded Taxes, the amount of such payment
shall be increased as may be necessary such that such payment
is made, after withholding or deduction for or on account of
such Taxes, in an amount that is not less than the amount
provided for in such Loan Document; and
(ii) the Borrowers shall withhold the full amount of
such Taxes from such payment (as increased pursuant to clause
(a)(i) of this Section 4.6) and shall pay such amount to the
Governmental Authority imposing such Taxes in accordance with
applicable law.
(b) In addition, the Borrowers shall pay any and all Other
Taxes imposed to the relevant Governmental Authority imposing such
Other Taxes in accordance with applicable law.
(c) As promptly as practicable after the payment of any Taxes
or Other Taxes, and in any event within 45 days of any such payment
being due, the Borrowers shall furnish to the Administrative Agent a
copy of an official receipt (or a certified copy
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thereof) evidencing the payment of such Taxes or Other Taxes. The
Administrative Agent shall make copies thereof available to any Lender
upon request therefor.
(d) Subject to clause (f) of this Section 4.6, each Borrower,
on a joint and several basis, shall indemnify each Secured Party for
any Non-Excluded Taxes and Other Taxes levied, imposed or assessed on
(and whether or not paid directly by) such Secured Party. Promptly upon
having knowledge that any such Non-Excluded Taxes or Other Taxes have
been levied, imposed or assessed, and promptly upon notice thereof by
any Secured Party, the Borrowers shall pay such Non-Excluded Taxes or
Other Taxes directly to the relevant Governmental Authority. If a
Secured Party receives a refund in respect of any Non-Excluded Taxes or
Other Taxes with respect to which any Borrower has paid additional
amounts pursuant to this Section 4.6, it shall within 30 days from the
date of such receipt pay over to the Borrowers (but only to the extent
of indemnity payments made, or additional amounts paid, by the
Borrowers under this Section 4.6 with respect to the Non-Excluded Taxes
or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of such Secured Party and without interest (other than
interest paid by the relevant jurisdiction or taxing authority with
respect to such refund) the portion of such refund which, in the good
faith judgment of such Secured Party, is attributable to the payment of
such additional amounts by the Borrowers and in an amount as will leave
such Secured Party in no better or worse position than it would have
been in if the payment of such additional amounts had not been
required; provided, however, that the Borrowers, upon the request of
such Secured Party, agree to repay the amount paid over to the
Borrowers (plus penalties, interest or other charges payable to the
relevant jurisdiction or taxing authority) to such Secured Party in the
event such Secured Party is required to repay such refund to such
jurisdiction or taxing authority. In addition, each Borrower, on a
joint and several basis, shall indemnify each Secured Party for any
incremental Taxes that may become payable by such Secured Party as a
result of any failure of the Borrowers to pay any Taxes when due to the
appropriate Governmental Authority or to deliver to the Administrative
Agent, pursuant to clause (c) of this Section 4.6, documentation
evidencing the payment of Taxes or Other Taxes. With respect to
indemnification for Non-Excluded Taxes and Other Taxes actually paid by
any Secured Party or the indemnification provided in the immediately
preceding sentence, such indemnification shall be made within 30 days
after the date such Secured Party makes written demand therefor. Each
Borrower acknowledges that any payment made to any Secured Party or to
any Governmental Authority in respect of the indemnification
obligations of the Borrowers provided in this clause shall constitute a
payment in respect of which the provisions of clause (a) of this
Section 4.6, and this clause shall apply.
(e) As of the date on which any Lender becomes a party hereto,
such Lender represents that it is either (i) a corporation organized
under the laws of the United States or any State or is otherwise a
"United States-person" within the meaning of Section 7701(a)(30) of the
Code, (ii) entitled to complete exemption from United States
withholding tax imposed on or with respect to any payments, including
fees, to be made to it pursuant to this Agreement or (iii) entitled to
complete exemption from United States withholding tax on interest
imposed on or with respect to any payments of interest to be made
pursuant to this Agreement (A) under an applicable provision of a tax
convention to which the United States of America is a party (B) because
such payments to be received
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by it hereunder is effectively connected with a trade or business in
the United States or (C) because it is a recipient of portfolio
interest within the meaning of Section 871(h) or 881(c) of the Code.
Each Non-U.S. Lender, on or prior to the date on which such non-U.S.
Lender becomes a Lender hereunder shall deliver to the Company and the
Administrative Agent either:
(i) two duly completed copies of either (x) Internal
Revenue Service Form W-8BEN or (B) Internal Revenue Service
Form W-8ECI, or in either case an applicable successor form;
or
(ii) in the case of a Non-U.S. Lender that is not
legally entitled to deliver either form listed in clause
(e)(i) of this Section 4.6, (x) a certificate of a duly
authorized officer of such Non-U.S. Lender in substantially
the form of Exhibit N attached hereto to the effect that such
Non-U.S. Lender is not (A) a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of any Borrower within the meaning of Section
881(c)(3)(B) of the Code, or (C) a controlled foreign
corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code (such
certificate, an "Exemption Certificate") and (y) two duly
completed copies of Internal Revenue Service Form W-8BEN or
applicable successor form.
In addition, each Non-U.S. Lender shall redeliver to the Company and
the Administrative Agent the forms prescribed by this clause (e) of this Section
4.6 from time to time thereafter upon the request of the Company or the
Administrative Agent or as required by applicable law or regulation and prior to
the date of expiration of the most recently delivered form, but only for so long
as such Non-U.S. Lender is legally entitled to do so.
(f) The Borrowers shall not be obligated to gross up any
payments to any Lender pursuant to clause (a)(i) of this Section 4.6,
or to indemnify any Lender pursuant to clause (d) of this Section 4.6,
in respect of United States federal withholding taxes to the extent
imposed as a result of (i) the failure of such Lender to deliver to the
Company the form or forms and/or an Exemption Certificate, as
applicable to such Lender, pursuant to clause (e) of this Section 4.6,
(ii) such form or forms and/or Exemption Certificate not establishing a
complete exemption from U.S. federal withholding tax or the information
or certifications made therein by the Lender being untrue or inaccurate
on the date delivered in any material respect, or (iii) the Lender
designating a successor lending office at which it maintains its Loans
which has the effect of causing such Lender to become obligated for tax
payments in excess of those in effect immediately prior to such
designation; provided, however, that the Borrowers shall be jointly and
severally obligated to gross up any payments to any such Lender
pursuant to clause (a)(i) of this Section 4.6, and to indemnify any
such Lender pursuant to clause (d) of this Section 4.6, in respect of
United States federal withholding taxes if (i) any such failure to
deliver a form or forms or an Exemption Certificate or the failure of
such form or forms or Exemption Certificate to establish a complete
exemption from U.S. federal withholding tax or inaccuracy or untruth
contained therein resulted from a change in any applicable statute,
treaty, regulation or other applicable law or any interpretation of any
of the foregoing occurring after the date hereof, which change rendered
such Lender no longer
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legally entitled to deliver such form or forms or Exemption Certificate
or otherwise ineligible for a complete exemption from U.S. federal
withholding tax, or rendered the information or certifications made in
such form or forms or Exemption Certificate untrue or inaccurate in a
material respect, (ii) the redesignation of the Lender's lending office
was made at the request of the Borrowers or (iii) the obligation to
gross up payments to any such Lender pursuant to clause (a)(i) of this
Section 4.6, or to indemnify any such Lender pursuant to clause (d) of
this Section 4.6, is with respect to an Assignee Lender that becomes an
Assignee Lender as a result of an assignment made at the request of the
Borrowers.
(g) Each Lender also agrees at the reasonable request of the
Borrowers to deliver to the Borrowers and the Administrative Agent such
other or supplemental forms as may at any time be required as a result
of changes in applicable law or regulation in order to confirm or
maintain in effect its entitlement to exemption from United States
withholding tax on any payments hereunder; provided that the
circumstances of the Lender at the relevant time and applicable laws
make it legally entitled to do so. Each Person that shall become a
Lender or a Participant pursuant to Section 10.11.1 or Section 10.11.2
shall, upon the effectiveness of the related transfer, be required to
provide all of the forms, certifications and statements required
pursuant to this Section; provided that in the case of a Participant,
such Participant shall furnish all such required forms, certifications
and statements to the Lender from which the related participation shall
have been purchased.
(h) Each Lender agrees that it will use reasonable efforts to
designate an alternate lending office with respect to its LIBO Rate
Loans affected by any of the matters or circumstances described in this
Section 4.6 to reduce the obligation of the Borrowers to gross up any
payments to any Lenders pursuant to clause (a)(i) of this Section 4.6,
or to indemnify any Lenders pursuant to clause (d) of this Section 4.6,
so long as such designation is not disadvantageous to such Lender as
determined by such Lender in its sole discretion; provided that such
Lender shall have no obligation to so designate an alternate lending
office located in the United States. Any Lender claiming any additional
amounts payable pursuant to this Section 4.6 shall use reasonable
efforts (consistent with legal and regulatory restrictions) to deliver
to the Borrowers or the Administrative Agent any certificate or
document reasonably requested by any Borrower or the Administrative
Agent if the delivery of such certificate or document would avoid the
need for or reduce the amount of any such additional amounts that may
thereafter accrue and would not, in the sole determination of such
Lender, be otherwise disadvantageous to such Lender.
(i) If any Lender that does not make a LIBO Rate Loan pursuant
to Section 4.1 or Section 4.2, is subject to increased costs pursuant
to Section 4.3, or is owed or reasonably anticipates being owed
additional amounts pursuant to this Section 4.6 and fails to take
action required under clause (h) of this Section 4.6 any Borrower shall
have the right, if no Default then exists, to replace such Lender with
another bank or financial institution with the written consent of the
Administrative Agent, which consent shall not be unreasonably withheld,
provided that (i) the obligations of any Borrower owing to the Lender
being replaced (including such increased costs) that are not being
assigned to the replacement Lender shall be paid in full to the Lender
being replaced concurrently with such replacement, (ii) the replacement
lender shall execute a Lender Assignment
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Agreement and Acceptance pursuant to which it shall become a party
hereto as provided in Section 10.11.1, and (iii) upon compliance with
the provisions for assignment provided in Section 10.11.1 and the
payment of amounts referred to in clause (i) of this Section 4.6, the
replacement lender shall constitute a "Lender" hereunder and the Lender
being so replaced shall no longer constitute a "Lender" hereunder.
SECTION 4.7. Payments; Computations, etc. Unless otherwise expressly
provided in any applicable Loan Document, all payments by the Borrowers pursuant
to each Loan Document shall be made by such Borrower to the Administrative Agent
for the pro rata account of the Secured Parties entitled to receive such
payment. All payments shall be made without setoff, deduction or counterclaim
not later than 12:00 noon New York City time on the date due in same day or
immediately available funds to such account as the Administrative Agent shall
specify from time to time by notice to the Company. Funds received after that
time shall be deemed to have been received by the Administrative Agent on the
next succeeding Business Day. The Administrative Agent shall promptly remit in
same day funds to each Secured Party its share, if any, of such payments
received by the Administrative Agent for the account of such Secured Party. All
interest (including interest on LIBO Rate Loans) and fees shall be computed on
the basis of the actual number of days (including the first day but excluding
the last day) occurring during the period for which such interest or fee is
payable over a year comprised of 360 days (or, in the case of interest on a Base
Rate Loan (calculated at other than the Federal Funds Rate), 365 days or, if
appropriate, 366 days). Payments due on other than a Business Day shall (except
as otherwise required by clause (c) of the definition of the term "Interest
Period") be made on the next succeeding Business Day and such extension of time
shall be included in computing interest and fees in connection with that
payment.
SECTION 4.8. Sharing of Payments. If any Secured Party shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Credit Extension or Reimbursement
Obligation (other than pursuant to the terms of Sections 4.3, 4.4, 4.5, or 4.6)
in excess of its pro rata share of payments obtained by all Secured Parties
entitled to receive such payment, such Secured Party shall purchase from the
other Secured Parties such participations in Credit Extensions made by them as
shall be necessary to cause such purchasing Secured Party to share the excess
payment or other recovery ratably (to the extent such other Secured Parties were
entitled to receive a portion of such payment or recovery) with each of them;
provided, however, that if all or any portion of the excess payment or other
recovery is thereafter recovered from such purchasing Secured Party, the
purchase shall be rescinded and each Secured Party which has sold a
participation to the purchasing Secured Party shall repay to the purchasing
Secured Party the purchase price to the ratable extent of such recovery together
with an amount equal to such selling Secured Party's ratable share (according to
the proportion of (a) the amount of such selling Secured Party's required
repayment to the purchasing Secured Party to (b) total amount so recovered from
the purchasing Secured Party) of any interest or other amount paid or payable by
the purchasing Secured Party in respect of the total amount so recovered. The
Borrowers agree that any Secured Party purchasing a participation from another
Secured Party pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment (including pursuant to Section 4.9) with
respect to such participation as fully as if such Secured Party were the direct
creditor of the Borrowers in the amount of such participation. If under any
applicable bankruptcy, insolvency or other similar law any Secured Party
receives a secured claim in lieu of a setoff to which this
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Section applies, such Secured Party shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Secured Parties entitled under this Section to share in the
benefits of any recovery on such secured claim.
SECTION 4.9. Setoff. Each Secured Party shall, upon the occurrence and
during the continuance of any Event of Default and following the giving of
notice described in Section 8.2, have the right to appropriate and apply to the
payment of the Obligations owing to it (whether or not then due), and (as
security for such Obligations) each Borrower hereby grants to each Secured Party
a continuing security interest in, any and all balances, credits, deposits,
accounts or moneys of such Borrower then or thereafter maintained with such
Secured Party; provided, however, that any such appropriation and application
shall be subject to the provisions of Section 4.8. Each Secured Party agrees
promptly to notify such Borrower and the Administrative Agent after any such
setoff and application made by such Secured Party; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Secured Party under this Section are in addition
to any other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Secured Party may have under the Loan
Documents, at law or in equity. SECTION 4.10. Guaranty Provisions. Each Borrower
acknowledges and agrees that, whether or not specifically indicated as such in a
Loan Document, all Obligations shall be joint and several Obligations of each
individual Borrower, and in furtherance of such joint and several Obligations,
each Borrower hereby irrevocably guarantees the payment of all Obligations of
each other Borrower as set forth below.
4.10.1. Guaranty. Each Borrower hereby jointly and severally,
absolutely, unconditionally and irrevocably guarantees the full and punctual
payment when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise, of all Obligations; provided,
however, that each Borrower shall only be liable under this Agreement for the
maximum amount of such liability that can be hereby incurred without rendering
this Agreement, as it relates to such Borrower, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount. This guaranty constitutes a guaranty of payment when due and not
of collection, and each Borrower specifically agrees that it shall not be
necessary or required that any Secured Party exercise any right, assert any
claim or demand or enforce any remedy whatsoever against any Obligor or any
other Person before or as a condition to the obligations of such Borrower
hereunder.
4.10.2. Guaranty Absolute, etc. The guaranty agreed to above
shall in all respects be a continuing, absolute, unconditional and irrevocable
guaranty of payment, and shall remain in full force and effect until the
Termination Date. Each Borrower jointly and severally guarantees that the
Obligations will be paid strictly in accordance with the terms of each Loan
Document under which such Obligations arise, regardless of any law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of any Secured Party with respect thereto. The liability of
each Borrower under this Agreement shall be joint and several, absolute,
unconditional and irrevocable irrespective of (a) any lack of validity, legality
or enforceability of any Loan Document; (b) the failure of any Secured Party (i)
to assert any claim or demand or to enforce any right or remedy against any
Obligor or any other Person (including any other guarantor) under the provisions
of any Loan Document or otherwise, or (ii)
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to exercise any right or remedy against any other guarantor (including any
Obligor) of, or collateral securing, any Obligations; (c) any change in the
time, manner or place of payment of, or in any other term of, all or any part of
the Obligations, or any other extension, compromise or renewal of any
Obligation; (d) any reduction, limitation, impairment or termination of any
Obligations for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and each Borrower hereby
waives any right to or claim of) any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality, irregularity,
compromise, unenforceability of, or any other event or occurrence affecting, any
Obligations or otherwise; (e) any amendment to, rescission, waiver, or other
modification of, or any consent to or departure from, any of the terms of any
Loan Document; (f) any addition, exchange, release, surrender or non-perfection
of any collateral, or any amendment to or waiver or release or addition of, or
consent to or departure from, any other guaranty held by any Secured Party
securing any of the Obligations; or (g) any other circumstance which might
otherwise constitute a defense available to, or a legal or equitable discharge
of, any Obligor, any surety or any guarantor.
4.10.3. Reinstatement, etc. Each Borrower agrees that its
guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment (in whole or in part) of any of the Obligations is
rescinded or must otherwise be restored by any Secured Party, upon the
insolvency, bankruptcy or reorganization of any other Borrower, any other
Obligor or otherwise, all as though such payment had not been made.
4.10.4. Waiver, etc. Each Borrower hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Agreement and any requirement that any Secured Party
protect, secure, perfect or insure any Lien, or any property subject thereto, or
exhaust any right or take any action against any other Obligor or any other
Person (including any other guarantor) or entity or any collateral securing the
Obligations, as the case may be.
4.10.5. Postponement of Subrogation. etc. Each Borrower agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under any Loan Document to which it is a party, nor shall any
Borrower seek or be entitled to seek any contribution or reimbursement from any
Obligor, in respect of any payment made hereunder, under any other Loan Document
or otherwise, until following the Termination Date. Any amount paid to any
Borrower on account of any such subrogation rights prior to the Termination Date
shall be held in trust for the benefit of the Secured Parties and shall
immediately be paid and turned over to the Administrative Agent for the benefit
of the Secured Parties in the exact form received by such Borrower (duly
endorsed in favor of the Administrative Agent, if required), to be credited and
applied against the Obligations, whether matured or unmatured, in accordance
with Section 4.8; provided, however, that if (a) any Borrower has made payment
to the Secured Parties of all or any part of the Obligations; and (b) the
Termination Date has occurred; then at such Borrower's request, the
Administrative Agent, (on behalf of the Secured Parties) will, at the expense of
such Borrower, execute and deliver to such Borrower appropriate documents
(without recourse and without representation or warranty) necessary to evidence
the transfer by subrogation to such Borrower of an interest in the Obligations
resulting from such payment. In furtherance of the foregoing, at all times prior
to the Termination Date, each Borrower shall refrain from taking any action or
commencing any proceeding against any Obligor (or its
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successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in the respect of payments made under any Loan
Document to any Secured Party.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension. The obligations of the Lenders
and, if applicable, any Issuer to make the initial Credit Extensions shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 5.1 to the satisfaction of the Lenders.
5.1.1. Resolutions, etc. The Administrative Agent shall have
received from Parent and each Borrower, as applicable, (a) a copy of a good
standing certificate, dated a date reasonably close to the Effective Date, for
each such Person and (b) a certificate, dated the Closing Date and with
counterparts for each Lender, duly executed and delivered by such Person's
secretary or assistant secretary as to:
(i) resolutions of each such Person's Board of
Directors then in full force and effect authorizing, to the
extent relevant, all aspects of the transactions contemplated
hereby applicable to such Person and the execution, delivery
and performance of each Loan Document to be executed by such
Person and the transactions contemplated hereby and thereby;
(ii) the incumbency and signatures of those of its
officers authorized to act with respect to each Loan Document
to be executed by such Person (each an "Authorized Officer");
and
(iii) the full force and validity of each Organic
Document of such Person and copies thereof;
upon which certificates each Secured Party may conclusively rely until it shall
have received a further certificate of the secretary or assistant secretary of
any such Person canceling or amending the prior certificate of such Person.
5.1.2. Interim Order. At the time of the making of the initial
Credit Extensions, the Administrative Agent and the Lenders shall have received
a copy (or such other evidence satisfactory to Administrative Agent) of an order
of the Bankruptcy Court substantially in the form of Exhibit O, which (a) as
entered, shall be acceptable in form and substance to the Administrative Agent
(the "Interim Order"), (b) shall have been entered not later than July 20, 2001,
authorizing, on an interim basis, the Borrowers to execute, deliver and to
perform their respective obligations under the Loan Documents, and granting the
Superpriority Claim status and the Liens described in Section 7.1.8 and granted
pursuant to the other Loan Documents, (c) shall have been entered upon a motion
of the Borrowers satisfactory in form and substance to the Administrative Agent,
(d) shall be in full force and effect, and (e) shall not have been stayed,
reversed, modified or amended in any respect and, if the Interim Order is the
subject of a pending appeal in any respect, neither the making of any Credit
Extension, nor the granting of the Superpriority Claim status and the Liens
described in Section 7.1.8 and granted pursuant to
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the other Loan Documents, nor the performance by any of the Borrowers of any of
their respective obligations hereunder or under any other Loan Document or under
any other instrument or agreement referred to herein shall be the subject of a
presently effective stay pending appeal.
5.1.3. Use of Proceeds. The Administrative Agent shall have
received evidence satisfactory to it that the Pre-Petition Secured Obligations
shall be paid in full concurrently with the making of the initial Credit
Extensions pursuant to Section 2.3.1, plus associated costs and expenses payable
pursuant to the agreements evidencing the Pre-Petition Secured Obligations.
5.1.4. Projections. The Administrative Agent shall have
received (a) financial projections for each of the Borrowers (including balance
sheets, income statements and statements of cash flows) for each month occurring
for the next succeeding twelve month period reflecting the effect of the
pendency of the Cases and (b) cash projections for each of the Borrowers for
each month occurring for the next succeeding twenty-four month period which cash
projections are in sufficient detail (i.e., contain line item categories for
expenditures) to serve as a budget for the application of the proceeds of the
Intercompany Loan to be made to Sterling Canada, Inc. pursuant to Section
5.1.13, the Borrowers' projected working capital/cash flow for such period and
the proceeds of the Credit Extensions to be made hereunder for each such
succeeding twenty-four months, all in form and substance satisfactory to the
Administrative Agent (collectively the "Projections"), and such other
information (financial or otherwise) as may be reasonably requested by the
Administrative Agent.
5.1.5. Revolver Intercreditor Agreement. The Administrative
Agent shall have received executed counterparts of the Revolver Intercreditor
Agreement, dated as of the Closing Date, in each case, duly executed and
delivered by all parties thereto and in form and substance reasonably
satisfactory to the Administrative Agent.
5.1.6. Closing Date Certificate. The Administrative Agent
shall have received, with counterparts for each Lender, the Closing Date
Certificate, dated the Closing Date and duly executed and delivered by an
Authorized Officer of each Borrower, in which certificate each Borrower shall
agree and acknowledge that the statements made therein shall be deemed to be
representations and warranties of such Borrower as of such date, and, at the
time the certificate is delivered, such statements shall in fact be true and
correct in all material respects. All documents and agreements required to be
appended to the Closing Date Certificate shall be in form and substance
satisfactory to the Administrative Agent.
5.1.7. Delivery of Notes. The Administrative Agent shall have
received, for the account of each Lender that has requested a Note, such
Lender's Notes duly executed and delivered by an Authorized Officer of each
Borrower.
5.1.8. Intentionally Deleted.
5.1.9. Closing, Fees, Expenses, etc. The Administrative Agent
shall have received for its own account, or for the account of each Lender, as
the case may be, all fees, costs and expenses due and payable pursuant to
Section 3.3 and Section 10.3, if then invoiced.
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5.1.10. Financial Information, etc. The Administrative Agent
shall have received, with counterparts for each Lender, (a) audited consolidated
financial statements of Parent, the Borrowers and the Subsidiaries as at
September 30, 2000; (b) unaudited monthly and quarterly consolidated financial
statements of Parent, the Borrowers and the Subsidiaries for each fiscal month
and Fiscal Quarter ending after September 30, 2000 (including June 30, 2001, if
available); and (c) a pro forma consolidated balance sheet of Parent, the
Borrowers and the Subsidiaries (other than Unrestricted Subsidiaries), as of the
Closing Date, certified by the chief financial or accounting Authorized Officer
of the Company or the Treasurer or any Assistant Treasurer of the Company,
giving effect to the consummation of the DIP Financing and all other
transactions contemplated by this Agreement, including the Intercompany Loan to
be made by Sterling NRO, Ltd. to Sterling Canada, Inc. pursuant to Section
5.1.13.
5.1.11. Borrowing Base Certificate. The Administrative Agent
shall have received, with copies for each Lender, an initial Borrowing Base
Certificate, dated the Closing Date, in respect of the Borrowers' Eligible
Accounts and Eligible Inventory as of June 30, 2001, duly executed by the chief
financial or accounting Authorized Officer, or the Treasurer or Assistant
Treasurer of the Company (and showing that the then applicable Borrowing Base
Amount as of June 30, 2001, minus the then applicable Minimum Excess
Availability exceeds the initial Credit Extensions under the Current Assets Loan
Commitment Amount to be made on the Closing Date by no less than $20,000,000).
5.1.12. Opinions of Counsel. The Administrative Agent shall
have received opinions, dated the Closing Date and addressed to the
Administrative Agent and all Lenders, from
(a) Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP, New York
counsel to Parent and the Borrowers, in form and substance reasonably
satisfactory to the Administrative Agent; and
(b) Xxxxxxx X. Xxxx, general counsel to Parent and the
Company, in form and substance reasonably satisfactory to the
Administrative Agent.
5.1.13. Intercompany Loan to Sterling Canada, Inc. The
Administrative Agent shall have received evidence satisfactory to it that
concurrently with the making of the initial Credit Extensions (a) Sterling Pulp
Chemicals, Ltd. shall have entered into the Canadian Facility, (b) Sterling Pulp
Chemicals, Ltd. shall have repaid $20,000,000 in outstanding Indebtedness owed
by it to Sterling NRO, Ltd., and (c) Sterling NRO, Ltd. shall have loaned
$20,000,000 to Sterling Canada, Inc. on terms and conditions satisfactory to the
Administrative Agent (the "Intercompany Loan").
5.1.14. UCC and Other Searches. (a) On or before the date of
the entry of the Interim Order, the Administrative Agent shall have received the
results of UCC-1 searches conducted in State and county levels designated by the
Administrative Agent in jurisdictions in which the Borrowers or any Subsidiary
(other than an Unrestricted Subsidiary) is organized, conducts business or has
assets, which searches shall reflect (i) the absence of Liens (other than
Permitted Liens and Liens granted to secure the Existing Credit Agreement) on
the assets of the Borrowers and the Subsidiaries satisfactory to the
Administrative Agent and (ii) that the Liens
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granted to secure the Existing Credit Agreement are Liens senior to all other
Liens, other than Permitted Liens (as defined in the Existing Credit Agreement)
that are valid and existing and which were perfected prior to the perfection of
the Liens securing the Existing Credit Agreement, in each case dated as of a
date reasonably satisfactory to the Administrative Agent; and
(b) copies of searches conducted with respect to all patents,
trademarks and copyrights of the Borrowers at the applicable United
States filing office.
5.1.15. Appraisals. The Administrative Agent shall have
received an appraisal by Chem Systems of the Borrowers' manufacturing facilities
(the "Chem Systems Appraisal") which shall indicate that such facilities have an
aggregate orderly liquidation value in use of no less than $600,000,000, and
which shall be reasonably satisfactory to the Administrative Agent.
5.1.16. Pledge Agreements. The Administrative Agent shall have
received, with counterparts for each Lender:
(a) the Parent Pledge Agreements, dated as of the date hereof,
duly executed and delivered by an Authorized Officer of Parent,
together with certificates evidencing all of the issued and outstanding
Capital Securities of the Company, which certificates in each case
shall be accompanied by undated instruments of transfer duly executed
in blank; and
(b) the Obligor Pledge Agreements, dated as of the date
hereof, duly executed and delivered by an Authorized Officer of each
Borrower party thereto, together with certificates evidencing all of
the issued and outstanding Capital Securities owned by each Borrower in
any other Borrower or any Subsidiary (other than Unrestricted
Subsidiaries and the Capital Securities of the Foreign Restricted
Subsidiaries which are subject to the Lien securing the Senior Secured
Notes), which certificates, in each case, shall be accompanied by
undated instruments of transfer duly executed in blank; and
(c) the Administrative Agent and its counsel shall be
satisfied that (i) the Lien and security interest granted to the
Administrative Agent, for the ratable benefit of the Secured Parties in
the Capital Securities described above is a first priority (or local
equivalent thereof) Lien and security interest, subject only to then
applicable Priority Liens and (ii) no Lien exists on any of the Capital
Securities described above other than the Liens created in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties,
pursuant to the Parent Pledge Agreements and the Obligor Pledge
Agreements and then applicable Priority Liens.
5.1.17. Security Agreements, etc. The Administrative Agent
shall have received, with counterparts for each Lender, executed counterparts of
each Security Agreement, each dated as of the date hereof, duly executed by each
Borrower, together with all Pledged Notes (as defined in each Security
Agreement), if any, evidencing Indebtedness payable to any Borrower by any
Subsidiary, duly endorsed to the order of the Administrative Agent.
5.1.18. Intellectual Property Security Agreements. The
Administrative Agent shall have received the Patent Security Agreement, the
Trademark Security Agreement and the
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Copyright Security Agreement, as applicable, each dated as of the Closing Date,
duly executed and delivered by each Borrower that owns such Collateral.
5.1.19. Insurance. The Administrative Agent shall have
received, with copies for each Lender, certificates of the insurance policies,
evidencing coverage required to be maintained pursuant to each Loan Document.
5.1.20. Mortgages. The Administrative Agent shall have
received counterparts of each Mortgage, dated as of the date hereof, duly
executed by the applicable Borrower, together with such approvals or documents
as the Administrative Agent may request.
5.1.21. Lockbox Accounts. The Borrowers shall have established
the Lockbox Accounts with the Lockbox Banks and/or any other banks satisfactory
to the Administrative Agent and each such bank shall have entered into a Lockbox
Agreement with the Administrative Agent and each relevant Borrower.
5.1.22. Perfection Certificate. The Administrative Agent shall
have received the Perfection Certificate, dated as of the Closing Date, duly
executed and delivered by an Authorized Officer of each Borrower.
5.1.23. Solvency, etc. The Administrative Agent shall have
received evidence satisfactory to it that (a) Sterling Pulp Chemicals, Ltd. is
Solvent both before and after giving effect to the extensions of credit to be
made under the Canadian Facility, the other transactions contemplated therein
and the repayment of $20,000,000 of Indebtedness owed by it to Sterling NRO,
Ltd. and (b) Sterling NRO, Ltd. is Solvent, both before and after giving effect
to the Intercompany Loan to be made by it to Sterling Canada, Inc., pursuant to
Section 5.1.13.
5.1.24. Required Consents and Approvals. All required consents
and approvals shall have been obtained and be in full force and effect with
respect to the DIP Financing and the other transactions contemplated hereby from
(a) all relevant Governmental Authorities and (b) any other Person whose consent
or approval the Administrative Agent reasonably deem necessary or appropriate to
effect the transactions contemplated hereby.
5.1.25. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of any Obligor shall be satisfactory
in form and substance to the Administrative Agent and its counsel and the
Administrative Agent and its counsel shall have received all information,
approvals, opinions, documents or instruments as the Administrative Agent or its
counsel may reasonably request.
SECTION 5.2. All Credit Extensions. The obligation of each Lender and
any Issuer to make any Credit Extension (including the initial Credit
Extensions) shall be subject to the satisfaction of each of the conditions
precedent set forth below.
5.2.1. Compliance With Warranties. No Default, etc. Both
before and after giving effect to any Credit Extension (but, if any Default of
the nature referred to in Section 8.1.5 shall have occurred with respect to any
other Indebtedness; without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true and
correct:
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(a) the representations and warranties set forth in this
Agreement and each other Loan Document shall, in each case, be true and
correct in all material respects with the same effect as if then made
(unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date);
(b) the sum of the aggregate outstanding principal amount of
all Current Assets Loans and Swing Line Loans, together with the
aggregate amount of all Letter of Credit Outstandings, does not exceed
the then applicable Maximum Loan Amount; and
(c) no Default shall have then occurred and be continuing.
5.2.2. Credit Extension Request, etc. Subject to Section 2.3.1
and Section 2.3.2, the Administrative Agent shall have received a Borrowing
Request if Loans are being requested, or an Issuance Request if a Letter of
Credit is being requested or extended. Each of the delivery of a Borrowing
Request or Issuance Request and the acceptance by any Borrower of the proceeds
of such Credit Extension shall constitute a representation and warranty by each
Borrower that on the date of such Credit Extension (both immediately before and
after giving effect to such Credit Extension and the application of the proceeds
thereof) the statements made in Section 5.2.1 are true and correct in all
material respects.
5.2.3. Financing Order. The Interim Order shall be in full
force and effect and shall not have been stayed, reversed, modified or amended
in any respect (other than by the Final Order as provided hereinbelow); provided
that no Lender shall have any obligation to make any Credit Extension if making
such Credit Extension would cause the aggregate amount of all Credit Extensions
then outstanding, either separately or together, to exceed the lesser of (x)
$155,000,000 and (y) the amount thereof which was authorized by the Bankruptcy
Court in the Interim Order unless:
(a) the Administrative Agent and each of the Lenders shall
have received a certified copy (or other evidence satisfactory to the
Administrative Agent) of the Final Order which (i) as entered, shall be
acceptable in form and substance to the Administrative Agent and (ii)
shall have been entered into no later than the thirtieth (30th) day
after the date of the entry of the Interim Order; and
(b) such Final Order shall then be in full force and effect,
and shall not have been stayed, reversed, modified or amended in any
respect; provided that no Lender shall have any obligation to make any
Credit Extension if the making of any such Credit Extension would cause
the aggregate amount of all Credit Extensions then outstanding, either
separately or together, to exceed $170,000,000 unless (x) Approving
Lenders have previously approved and consented to a business plan
submitted by the Borrowers that is acceptable to them in their sole
discretion and (y) if such business plan contemplates the operation of
the Company's acrylonitrile facility, the minimum EBITDA amounts set
forth in Section 7.2.7 have been modified to amounts which take into
account the acrylonitrile operations during applicable periods and
which amounts and periods are acceptable to the Required Lenders. In
addition, the Borrowers agree that the
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Administrative Agent may engage professionals, at the sole cost of the
Borrowers, to assist the Lenders in the evaluation of the Borrowers'
business plan.
5.2.4. Borrowing Base Certificate. The Administrative Agent
shall have received the timely delivery of the most recent Borrowing Base
Certificate required to be delivered hereunder and Administrative Agent shall
have received such further information regarding changes since the date of such
Borrowing Base Certificate or matters not referred to therein as Administrative
Agent shall deem necessary (including, but not limited to, updated appraisals as
required under Section 7.1.1(k) or as otherwise deemed necessary by the
Administrative Agent) to determine whether the then applicable Borrowing Base
Amount is sufficient to support the requested Borrowing.
5.2.5. Payment of Fees. The Borrowers shall have paid to
Administrative Agent the then unpaid balance of all fees then due and payable
under and pursuant to this Agreement.
5.2.6. Post-Closing UCC and Other Searches. After the date of
the entry of the Interim Order but on or before the date of the entry of the
Final Order, the Administrative Agent shall have received the results of UCC-1
searches conducted in State and county levels designated by the Administrative
Agent in jurisdictions in which the Borrowers or the Subsidiaries (other than
Unrestricted Subsidiaries) are organized, conduct business or have assets, which
searches shall reflect (a) the absence of Liens, other than Permitted Liens and
Liens granted to secure the Existing Credit Agreement and (b) that the Liens
granted to secure the Existing Credit Agreement are Liens senior to all other
Liens other than Permitted Liens and applicable Priority Liens.
5.2.7. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of any Obligor shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel
and the Administrative Agent and its counsel shall have received all
information, approvals, opinions, documents or instruments as the Administrative
Agent or its counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into this Agreement
and to make Credit Extensions hereunder, each Borrower represents and warrants
to each Secured Party as set forth in this Article VI.
SECTION 6.1. Organization, etc. Each of the Borrowers and each of their
respective Subsidiaries is validly organized and existing and in good standing
under the laws of the state or jurisdiction of its incorporation or
organization, is duly qualified to do business and is in good standing as a
foreign entity in each jurisdiction where the nature of its business requires
such qualification (except where the failure to be so qualified and in good
standing could not reasonably be expected to have a Material Adverse Effect),
and subject to the entry by the Bankruptcy Court of the Interim Order (or the
Final Order, when applicable) has full power and authority and holds all
requisite governmental licenses, permits and other approvals to enter into and
perform its Obligations under each Loan Document to which it is a party (except
for failures
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to hold such governmental licenses, permits and other approvals which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect) and to own and hold under lease its material property
and subject to the entry by the Bankruptcy Court of the Interim Order (or the
Final Order, when applicable) to conduct its business substantially as currently
conducted by it.
SECTION 6.2. Due Authorization. Non-Contravention, etc. Upon entry by
the Bankruptcy Court of the Interim Order (or the Final Order, when applicable)
the execution, delivery and performance by each Borrower of this Agreement and
each Borrower and Parent of each other Loan Document executed or to be executed
by it, each Borrower's and Parent's participation in the consummation of all
aspects of the DIP Financing and the execution, delivery and performance by any
Borrower or Parent of the agreements executed and delivered in connection with
the DIP Financing are in each case within each such Person's powers, have been
duly authorized by all necessary corporate (or other equivalent) action, and do
not:
(a) contravene any (i) Obligor's Organic Documents, (ii)
material contract or indenture entered into or assumed after the Filing
Date binding on or affecting any Obligor, (iii) court decree or order
binding on or affecting any Obligor or (iv) law or governmental
regulation binding on or affecting any Obligor; or
(b) result in, or require the creation or imposition of, any
Lien on any Obligor's properties (except as contemplated by the Loan
Documents or as otherwise permitted by this Agreement).
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SECTION 6.3. Government Approval. Regulation, etc. No material
authorization or material approval or other action by, and no material notice to
or material filing with, any Governmental Authority or regulatory body or other
Person (other than the entry of the Interim Order and the Final Order and those
that have been, or on the Effective Date will be, duly obtained or made and
which are, or on the Effective Date will be, in full force and effect) is
required for the consummation of the DIP Financing or the due execution,
delivery or performance by any Obligor of any Loan Document to which it is a
party. No Obligor nor any of its Subsidiaries is an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. Each Loan Document has been duly executed
and delivered by the applicable Obligor party thereto. Each Loan Document
executed by any Obligor will, upon entry by the Bankruptcy Court of the Interim
Order (or the Final Order, when applicable) and on the due execution and
delivery thereof, constitute, assuming the due authorization, execution and
delivery of each Loan Document by the parties thereto other than the Obligors,
the legal, valid and binding obligations of such Obligor, enforceable against
such Obligor in accordance with their respective terms (except, in any case, as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally and by
principles of equity).
SECTION 6.5. Financial Information. The financial statements of Parent,
the Company and its Subsidiaries furnished to the Administrative Agent and each
Lender pursuant to Section 5.1.10 have been prepared in accordance with GAAP
consistently applied (except as may be indicated in the notes thereto), and
present fairly subject, in the case of unqualified financial statements and
other unaudited financial information, to normal recurring audit adjustments,
the consolidated financial condition of the Persons covered thereby as at the
dates thereof and the results of their operations for the periods then ended.
All balance sheets, all statements of operations, shareholders' equity and cash
flow and all other financial information of each of Parent, the Company and its
Subsidiaries furnished pursuant to Section 7.1.1 have been and will for periods
following the Effective Date be prepared in accordance with GAAP consistently
applied (except as may be indicated in the notes thereto), and do or will
present fairly subject, in the case of unqualified financial statements and
other unaudited financial information, to normal recurring audit adjustments,
the consolidated financial condition of the Persons covered thereby as at the
dates thereof and the results of their operations for the periods then ended.
SECTION 6.6. No Material Adverse Change. Since the Filing Date, there
has been no material adverse change in the financial condition, results of
operations, assets, business, properties or prospects of the Company or the
Borrowers or the Subsidiaries, taken as a whole, other than those which
customarily occur as a result of events leading up to and following the
commencement of a proceeding under Chapter 11 of the Bankruptcy Code, including
the deterioration in results of operations and the occurrence of defaults under
various agreements; provided that any such events which occur after the Filing
Date are contemplated and/or reflected in the Approved Budget.
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SECTION 6.7. Litigation, Labor Controversies, etc. There is no pending
or, to the knowledge of the Borrowers, threatened litigation, action, proceeding
or labor controversy
(a) except as disclosed in Item 6.7 of the Disclosure
Schedule, affecting any Subsidiary (other than Unrestricted
Subsidiaries), or any of their respective properties, businesses,
assets or revenues, which could reasonably be expected to have a
Material Adverse Effect, and no adverse development has occurred in any
labor controversy, litigation, arbitration or governmental
investigation or proceeding disclosed in Item 6.7 which could
reasonably be expected to have a Material Adverse Effect; or
(b) which purports to affect the legality, validity or
enforceability of any Loan Document.
SECTION 6.8. Subsidiaries and Unrestricted Subsidiaries. Parent has no
Subsidiaries except those Subsidiaries (a) which are identified in Item 6.8 of
the Disclosure Schedule or (b) which are permitted to have been organized or
acquired in accordance with Sections 7.1.8 or 7.2.5. Sterling Chemicals
Acquisitions, Inc. and its direct and indirect Subsidiaries meet, and are
otherwise in compliance with all of the requirements for the designation of an
Unrestricted Subsidiary as set forth in clauses (i) through (vi) of the
definition thereof.
SECTION 6.9. Ownership of Properties. Each Borrower and each Subsidiary
(other than Unrestricted Subsidiaries) owns (a) in the case of owned real
property, good and indefeasible fee title to, and (b) in the case of owned
personal property, good and valid title to, or, in the case of leased real or
personal property, valid and enforceable leasehold interests (as the case may
be) in, all of its properties and assets, real and personal, tangible and
intangible, of any nature whatsoever, free and clear in each case of all Liens
or claims, except for Permitted Liens.
SECTION 6.10. Taxes. Each Borrower and each Subsidiary (other than
Unrestricted Subsidiaries) has filed all tax returns and reports required by
U.S., Canadian or Barbados law to have been filed by it and has paid all Taxes
and governmental charges thereby shown to be due and owing, except any such
Taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books or which the failure to file or pay,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
SECTION 6.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Credit Extension hereunder, no
steps have been taken to terminate any Pension Plan other than a standard
termination under Section 4041(b) of ERISA, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which could reasonably be expected to
result in the incurrence by the Borrowers or any member of the Controlled Group
of any liability, fine or penalty which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Each Foreign Employee
Benefit Plan maintained or contributed to by the Borrowers or any ERISA
Affiliate is in compliance with all laws, regulations and rules applicable
thereto and the respective requirements of the governing documents for such Plan
except for such failures which,
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individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. The aggregate of the liabilities to provide all of the
accrued benefits under any Foreign Pension Plan maintained or contributed to by
the Borrowers or any ERISA Affiliate does not exceed the current fair market
value of the assets held in the trust or other funding vehicle for such Plan in
a manner that could reasonably be expected to have a Material Adverse Effect.
With respect to any Foreign Employee Benefit Plan maintained by the Borrowers or
any ERISA Affiliate (other than a Foreign Pension Plan), reasonable reserves
have been established in accordance with prudent business practice or where
required by ordinary accounting practices in the jurisdiction in which such Plan
is maintained. The aggregate unfunded liabilities, after giving effect to any
reserves for such liabilities, with respect to such Plans are not reasonably
expected to have a Material Adverse Effect. There are no actions, suits or
claims (other than routine claims for benefits) pending or threatened against
the Borrowers, any Subsidiary or any ERISA Affiliate with respect to any Foreign
Employee Benefit Plan.
SECTION 6.12. Environmental Warranties. Except as set forth in Item
6.12 of the Disclosure Schedule:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrowers or any Subsidiary has
been, and continues to be, owned or leased by the Borrowers and the
Subsidiaries in compliance with all Environmental Laws except where the
failure to do so could not reasonably be expected to have a Material
Adverse Effect;
(b) there have been no past, and there are no pending or
threatened (i) claims, complaints, notices or requests for information
received by any Borrower or any Subsidiary with respect to any alleged
violation of any Environmental Law, or (ii) complaints, notices or
inquiries to the Borrowers or any Subsidiary regarding potential
liability under any Environmental Law which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect;
(c) there have been no Releases of Hazardous Materials at, on
or under any property now or previously owned or leased by the
Borrowers or any Subsidiary that have had, or could reasonably be
expected to have, a Material Adverse Effect;
(d) the Borrowers and each Subsidiary has been issued and are
in compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters except where the
failure to do so could not reasonably be expected to have a Material
Adverse Effect;
(e) no property now or previously owned or leased by the
Borrowers or any Subsidiary is listed or proposed for listing (with
respect to owned property only) on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar State list of
sites requiring investigation or clean-up which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by
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the Borrowers or any Subsidiary that, singly or in the aggregate, have
had, or could reasonably be expected to have, a Material Adverse
Effect;
(g) neither the Borrowers nor any Subsidiary has directly
transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar State list or which is the subject of
federal, State or local enforcement actions or other investigations
which may lead to material claims against the Borrowers or such
Subsidiary for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA which individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the
Borrowers or any Subsidiary that, singly or in the aggregate, have had,
or could reasonably be expected to have, a Material Adverse Effect; and
(i) no conditions exist at, on or under any property now or
previously owned or leased by the Borrowers or any Subsidiary which,
with the passage of time, or the giving of notice or both, would give
rise to material or contingent liability under any Environmental Law
which individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
SECTION 6.13. Accuracy of Information.
(a) None of the factual information heretofore or
contemporaneously furnished in writing to any Secured Party by or on
behalf of any Obligor in connection with any Loan Document or any
transaction contemplated hereby contains any untrue statement of a
material fact, or omits to state any material fact necessary to make
any information not misleading, and no other factual information
hereafter furnished in connection with any Loan Document by or on
behalf of any Obligor to any Secured Party will contain any untrue
statement of a material fact or will omit to state any material fact
necessary to make any information not misleading on the date as of
which such information is dated or certified.
(b) All written information prepared by any consultant or
professional advisor on behalf of any Borrower or any Subsidiary which
was furnished to the Administrative Agent or any Lender in connection
with the preparation, execution and delivery of this Agreement has been
reviewed by the Borrowers, and nothing has come to the attention of the
Borrowers in the context of such review which would lead them to
believe that such information (or the assumptions on which such
information is based) is not, taken as a whole, true and correct in all
material respects or that such information, taken as a whole, omits to
state any material fact necessary to make such information not
misleading in any material respect.
(c) Insofar as the Projections, the Budget or any of the
information described above includes assumptions, estimates,
projections or opinions, the Borrowers have
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reviewed such matters and nothing has come to the attention of the
Borrowers in the context of such review which would lead them to
believe that such assumptions, estimates, projections or opinions, omit
to state any material fact necessary to make such assumptions,
estimates, projections or opinions not reasonable or not misleading in
any material respect. All projections and estimates have been prepared
in good faith on the basis of reasonable assumptions.
SECTION 6.14. Regulations U and X. No Obligor is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Credit Extensions will be used to purchase or
carry margin stock or otherwise for a purpose which violates, or would be
inconsistent with, I.R.S. Board Regulation U or Regulation X. Terms for which
meanings are provided in F.R.S. Board Regulation U or Regulation X or any
regulations substituted therefor, as from time to time in effect, are used in
this Section with such meanings.
SECTION 6.15. Intentionally Deleted.
SECTION 6.16. Intentionally Deleted.
SECTION 6.17. Fraudulent Conveyance. The Intercompany Loan to be made
by Sterling NRO, Ltd. to Sterling Canada, Inc. as required under Section 5.1.13,
will not involve or result in any fraudulent transfer or fraudulent conveyance
under the provisions of Section 548 of the Bankruptcy Code (11 U.S.C. Section
101 et seq. as from time to time hereafter amended, and any successor or similar
statute) or any applicable State or Canadian law respecting fraudulent transfers
or fraudulent conveyances.
SECTION 6.18. Intellectual Property Collateral. With respect to any
Intellectual Properly Collateral owned by the Borrowers, the loss, impairment or
infringement of which might have a Material Adverse Effect, except as set forth
in Item 6.18 of the Disclosure Schedule:
(a) such Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and
enforceable;
(c) the Borrowers have made all necessary filings and
recordations to protect their respective interests in such Intellectual
Property Collateral, including (if permissible) recordations of all
such interests in the Intellectual Property Collateral in the United
States Patent and Trademark Office and/or the United States Copyright
Office;
(d) the Borrowers are the owners of their respective
unencumbered right, title and interest in and to such Intellectual
Property Collateral (except for (i) Liens created under the Loan
Documents, (ii) the Lien (subject to the Liens of the Lenders) on such
Intellectual Property Collateral in favor of the Trustee to secure the
obligations of the Borrowers related to the Senior Secured Notes (if
any) and (iii) Permitted Liens and except for rights of licensees under
licenses of such Intellectual Property Collateral in the ordinary
course of business) and, to the knowledge of the Borrowers, no claim
has been
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made that the use of such Intellectual Property Collateral does or may
violate the asserted rights of any third party except for claims that
could not reasonably be expected to have a Material Adverse Effect; and
(e) the Borrowers have performed all acts and have paid all
required fees and taxes required to maintain any Intellectual Property
Collateral that is material or necessary to any Borrower's business.
SECTION 6.19. Ownership of Stock. Parent owns free and clear of all
Liens (other than the Liens securing the Obligations and the Senior Secured
Discount Notes), 100% of the outstanding shares of common stock (whether voting
or non-voting) of the Company on a fully diluted basis. The Company owns
(directly or indirectly) free and clear of all Liens (other than the Liens
securing the Obligations and, with respect to the other Borrowers and the
Foreign Restricted Subsidiaries, the Liens securing the Senior Secured Notes)
100% of the outstanding Capital Securities (whether voting or non-voting) of
each other Borrower and each Subsidiary (other than Unrestricted Subsidiaries)
on a fully diluted basis. There are no outstanding options, warrants or
convertible securities with respect to the Capital Securities of any Borrower or
any Subsidiary (other than Unrestricted Subsidiaries).
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. Each Borrower agrees with each
Lender, each Issuer and the Administrative Agent that until the Termination Date
has occurred, each Borrower will, and will cause its Subsidiaries to, perform or
cause to be performed the obligations set forth below.
7.1.1. Financial Information, Reports, Notices, etc. The
Company will furnish or cause to be furnished to the Administrative Agent and
each Lender copies of the following financial statements, reports, notices and
information:
(a) (i) as soon as available and in any event within 50 days
after the end of each of the first three Fiscal Quarters of each Fiscal
Year, an unaudited consolidated and consolidating balance sheet of the
Borrowers and the Subsidiaries as of the end of such Fiscal Quarter and
consolidated and consolidating statements of income and cash flow of
the Borrowers and the Subsidiaries for such Fiscal Quarter and for the
period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter, and including (in each case), in
comparative form the figures for the corresponding Fiscal Quarter in,
and year to date portion of, the immediately preceding Fiscal Year,
certified as complete and correct by the chief financial or accounting
Authorized Officer of the Company or the Treasurer or any Assistant
Treasurer of the Company and (ii) as soon as available and in any event
within 30 days after the end of each calendar month (starting with the
calendar month ending August 31, 2001), a copy of the consolidated and
consolidating balance sheet of the Borrowers and the Subsidiaries as of
the end of such calendar month, and the related consolidated and
consolidating statements of income and cash flow of the Borrowers and
the Subsidiaries for such calendar month and for the period commencing
at the end of the previous Fiscal Year and
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ending with the end of such calendar month, and, in each case, setting
forth in comparative form (x) the figures for the same period from the
Approved Budget and (y) the figures for the same monthly accounting
periods ending in the immediately preceding Fiscal Year (to the extent
available) and certified by the chief financial or chief accounting
Authorized Officer of the Company or the Treasurer or any Assistant
Treasurer of the Company;
(b) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a copy of the consolidated and unaudited
consolidating balance sheet of the Borrowers and the Subsidiaries, and
the related consolidated and consolidating statements of income and
cash flow of the Borrowers and such Subsidiaries for such Fiscal Year,
setting forth in comparative form the figures for the immediately
preceding Fiscal Year, audited (without any Impermissible
Qualification) by independent public accountants of recognized national
standing and stating that such consolidated financial statements
present fairly the consolidated financial condition as of the end of
such Fiscal Year, and the consolidated results of operations and cash
flows for such Fiscal Year, of the Borrowers and such Subsidiaries in
accordance with GAAP, applied on a consistent basis; provided, however
that any consolidating statements delivered pursuant to this clause
shall be unaudited;
(c) as soon as available and in any event (i) no less
frequently than the last Business Day of each calendar week, a
Borrowing Base Certificate dated and reflecting amounts as of the close
of business on the last day of the preceding calendar week (provided
that such weekly Borrowing Base Certificate shall be calculated based
on a methodology agreed upon between the Company and the Administrative
Agent), and (ii) within 20 days after (A) the Closing Date, (B) August
31, 2001 and (C) the end of each calendar month thereafter, a Borrowing
Base Certificate dated and reflecting amounts as of the close of
business on the last day of the most recently ended calendar month;
(d) as soon as possible and in any event within three Business
Days (i) after any Borrower obtains knowledge of the occurrence of a
Default, a statement of an Authorized Officer of the Company setting
forth details of such Default and the action which the Company and/or
such Borrower has taken and proposes to take with respect thereto and
(ii) after the occurrence thereof, notify the Administrative Agent of
the failure or inability to meet or comply with the Approved Budget
other than immaterial failures to meet or comply with Approved Budget;
(e) as soon as possible and in any event within three Business
Days after the Borrowers obtains knowledge of (i) the occurrence of any
material adverse development with respect to any litigation, action,
proceeding or labor controversy described in Item 6.7 of the Disclosure
Schedule or (ii) the commencement of any litigation, action, proceeding
or labor controversy of the type and materiality described in Section
6.7 notice thereof and, to the extent the Administrative Agent
requests, copies of all documentation relating thereto;
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(f) promptly after the sending or filing thereof, copies of
all reports, notices, prospectuses and registration statements which
any Obligor files with the SEC or any national securities exchange;
(g) immediately upon becoming aware of (i) the institution of
any steps by any Person to terminate any Pension Plan other than a
standard termination under 4041(b) of ERISA, (ii) the failure to make a
required contribution to any Pension Plan if such failure is sufficient
to give rise to a Lien under Section 302(f) of ERISA, (iii) the taking
of any action with respect to a Pension Plan which could result in the
requirement that any Obligor furnish a bond or other security to the
PBGC or such Pension Plan, or (iv) the occurrence of any event with
respect to any Pension Plan which could result in the incurrence by any
Obligor of any material liability, fine or penalty, notice thereof and
copies of all documentation relating thereto;
(h) promptly upon receipt thereof, copies of all "management
letters" submitted to the Borrowers or any other Obligor by the
independent public accountants referred to in clause (b) of this
Section 7.1.1 in connection with each audit made by such accountants;
(i) promptly following the mailing or receipt of any notice or
report delivered under the terms of any Subordinated Debt, the Senior
Secured Discount Notes Indenture or the Senior Secured Note Documents,
copies of such notice or report;
(j) at the cost of the Borrowers, a report or reports of an
independent (or an employee of the Administrative Agent) collateral
field examiner approved (i) by the Company, whose approval shall not be
unreasonably withheld, and (ii) by the Administrative Agent (and which
collateral field examiner may be the Administrative Agent or an
Affiliate thereof) with respect to the Eligible Accounts, Generator
Receivables and Eligible Inventory components included in Borrowing
Base Certificates. The Administrative Agent may (and, at the direction
of the Required Lenders, shall) request such reports or additional
reports as it (or the Required Lenders) shall reasonably deem
necessary;
(k) commencing on the date which is the sixth month
anniversary of the Effective Date and on or before each of January 1,
2002, July 1, 2002 and January 1, 2003, deliver to the Administrative
Agent, (i) a desktop update of the Chem System Appraisal which shall
confirm that the Company's manufacturing facilities have an aggregate
orderly liquidation value in use of no less than $500,000,000, such
update to be reasonably satisfactory in all other material respects to
the Administrative Agent and (ii) an updated appraisal by Chem Systems
of the value of the chlorine dioxide generator technology and the
Generator Receivables, provided that after the occurrence and during
the continuance of a Default or Event of Default the Administrative
Agent shall have the right to request additional updated appraisals as
deemed necessary by the Administrative Agent;
(l) such other financial and other information as any Lender
or Issuer through the Administrative Agent may from time to time
reasonably request;
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(m) promptly, and in any event within five (5) Business Days
after the same is available, copies of all pleadings, motions,
applications, judicial information, financial information and other
documents filed by or on behalf of any of the Borrowers with the
Bankruptcy Court in the Cases, or distributed by or on behalf of any of
the Borrowers to any official committee appointed in the Cases;
(n) as soon as available and in any event within thirty (30)
days after the end of each calendar month period, the unaudited monthly
cash flow reports of the Company and its Subsidiaries (other than
Unrestricted Subsidiaries) on a consolidated basis as of the close of
such budget period and the results of their respective operations
during such budget period and the then elapsed portion of the Fiscal
Year, all certified by a Financial Officer as fairly presenting the
results of operations of the Company and its Subsidiaries (other than
Unrestricted Subsidiaries) on a consolidated basis, subject to normal
year-end audit adjustments, together with management analysis and
actual versus Approved Budget variance reports; and
(o) on or before the date which is thirty (30) days prior to
the commencement of each fiscal quarter of the Company, updated
Projections (including balance sheets, income statements and statements
of cash flows) for each month occurring during the succeeding twelve
month period, provided that in no event shall such updated Projections
be deemed to modify the Approved Budget, except to the extent otherwise
consented to by the Administrative Agent in its discretion.
7.1.2. Maintenance of Existence: Compliance With Laws, etc.
The Borrowers' will, and will cause each of their Subsidiaries (other than
Unrestricted Subsidiaries) to,
(a) except as otherwise permitted by Section 7.2.10, preserve
and maintain its legal existence; and
(b) comply in all material respects with all applicable laws,
rules, regulations and orders, including the payment (before the same
become delinquent), of all Taxes, assessments and governmental charges
imposed upon the Borrowers or such Subsidiaries or upon their property
except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP have been set aside on the books of the applicable Borrower
or Subsidiary.
7.1.3. Maintenance of Properties. The Borrowers will, and will
cause each of their Subsidiaries (other than Unrestricted Subsidiaries) to,
maintain, preserve, protect and keep its and their respective properties in good
repair, working order and condition (ordinary wear and tear excepted), and make
necessary repairs, renewals and replacements so that the business carried on by
the Borrowers and the Subsidiaries (other than Unrestricted Subsidiaries) may be
properly conducted at all times, unless the applicable Borrowers or Subsidiary
determines in good faith that the continued maintenance of such property is no
longer economically desirable (provided that any such determination with respect
to any property material to the operations of the Borrowers or any Subsidiary,
other than Unrestricted Subsidiaries, shall be made only after consultation with
the Administrative Agent).
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7.1.4. Insurance. The Borrowers will, and will cause each of
their Subsidiaries (other than Unrestricted Subsidiaries) to:
(a) maintain insurance on its property with financially sound
and reputable insurance companies against loss and damage in at least
the amounts (and with only those deductibles) customarily maintained,
and against such risks as are typically insured against in the same
general area, by Persons of comparable size engaged in the same or
similar business as the Borrowers and such Subsidiaries; and
(b) all worker's compensation, employer's liability insurance
or similar insurance as may be required under the laws of any state or
jurisdiction in which it may be engaged in business.
Without limiting the foregoing, all insurance policies required pursuant to this
Section for each Borrower and Subsidiary (other than Unrestricted Subsidiaries)
shall (i) list the Administrative Agent on behalf of the applicable Secured
Parties as mortgagee (in the case of property insurance) or additional insured
(in the case of liability insurance), as applicable, and provide that no
cancellation or modification of the policies will be made without 30 days' prior
written notice to the Administrative Agent and (ii) be in addition to any
requirements to maintain specific types of insurance contained in the other Loan
Documents.
7.1.5. Books and Records. The Borrowers will, and will cause
each of their Subsidiaries (other than Unrestricted Subsidiaries) to, keep books
and records in accordance with GAAP which accurately reflect all of its business
affairs and transactions and permit each Secured Party or any of their
respective representatives, at reasonable times and intervals upon reasonable
notice to the Company, to visit each Borrower's offices, to discuss such
Borrower's financial matters with its officers and employees, and its
independent public accountants (and each Borrower hereby authorizes such
independent public accountant to discuss the Borrowers' and each Obligor's
financial matters with each Secured Party or their representatives whether or
not any representative of the Company or such Borrower is present) and to
examine (and photocopy extracts from) any of its books and records. The
Borrowers shall jointly and severally pay any fees of such independent public
accountant incurred in connection with the Administrative Agent's exercise of
its rights pursuant to this Section at any time and any other Secured Party's
exercise of their rights pursuant to this Section if a Default has occurred and
is continuing.
7.1.6. Foreign Employee Benefit Plan Compliance. The Borrowers
will, and will cause each of their ERISA Affiliates to establish, maintain and
operate all Foreign Employee Benefit Plans (other than government-sponsored
plans) in compliance in all material respects with all laws, regulations and
rules applicable thereto and the respective requirements of the governing
documents for such plans.
7.1.7. Use of Proceeds. Each Borrower will apply the proceeds
of the Credit Extensions as follows:
(a) for the purposes described in Section 2.3.1;
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(b) for working capital and general corporate purposes of the
Borrowers including payment of the Carve-Out and other expenses
necessary for the operation of the business of the Borrowers, provided
that such proceeds are used to pay items which (i) were incurred after
the Filing Date or are not otherwise prohibited from being paid
pursuant to the terms of this Agreement, including Section 7.2.20, and
(ii) are consistent with the Approved Budget; and
(c) for issuing Letters of Credit for the account of the
Borrowers.
7.1.8. Borrowers; Security; etc.
(a) Each Borrower will execute any documents, financing
statements, agreements and/or instruments and take all further action
that may be required under applicable law, or that the Administrative
Agent may reasonably request to grant, assign and pledge to the
Administrative Agent: (i) for its benefit and for the ratable benefit
of the Current Assets Lenders, (A) a first priority, perfected security
interest in and Lien on all of the Borrowers' right, title and interest
in and to the Current Assets, senior to all other Liens and (B) a
perfected security interest in and Lien on (x) 100% of the Capital
Securities of the Borrowers, 65% of the Capital Securities of the
Subsidiaries (other than Unrestricted Subsidiaries) and, subject to the
absence of any adverse tax consequences in respect thereof (in which
case upon notification thereof by any Borrower to the Administrative
Agent, the Lenders agree that such Liens shall be immediately released
provided no other security interests in or Liens on 35% of such Capital
Securities then exists) 35% of the Capital Securities of the
Subsidiaries (other than Unrestricted Subsidiaries) and (y) all of the
Borrowers' right, title and interest in and to the Fixed Assets, in
each case of clauses (i)(B)(x) and (i)(B)(y), senior to all other Liens
other than the then applicable Priority Liens; and (ii) for its benefit
and for the ratable benefit of the Fixed Assets Lenders, (A) a first
priority, perfected security interest in and Lien on (x) 100% of the
Capital Securities of the Borrowers, (y) subject to the absence of any
adverse tax consequences in respect thereof (in which case upon
notification thereof by any Borrower to the Administrative Agent, the
Lenders agree that such Liens shall be immediately released provided no
other security interests in or Liens on 35% of such Capital Securities
then exists) 35% of the Capital Securities of the Subsidiaries (other
than Unrestricted Subsidiaries) and (z) all of the Borrowers' right,
title and interest in and to the Fixed Assets, in each case senior to
all other Liens other than, after the date of entry of the Final Order,
the then applicable Priority Liens, and (B) a senior, perfected
security interest in and Lien on all of the Borrowers' right, title and
interest in and to the Current Assets and 65% of the Capital Securities
of the Subsidiaries (other than Unrestricted Subsidiaries), senior to
all other Liens other than the then applicable Priority Liens; and the
Borrowers hereby covenant, represent, and warrant that, upon entry of
the Interim Order, pursuant to Bankruptcy Code Sections 364(c), the
Obligations shall at all times be secured by the Current Assets and the
Fixed Assets Collateral as aforesaid, whether now owned or hereafter
existing or in which any Borrower now has or hereafter acquires an
interest.
(b) It is understood that upon entry of the Interim Order and
upon payment of the Borrowers' obligations under the Pre-Petition
Secured Obligations with the proceeds of the Borrowing provided for in
clause (c) of Section 2.3.1, the security interests in and
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Liens on the Collateral created under this Section 7.1.8 and the other
Loan Documents in favor of the Administrative Agent (for its benefit
and the ratable benefit of the Lenders) shall constitute perfected
security interests in and Liens on all of the Collateral, senior to all
other Liens (other than the then applicable Priority Liens).
(c) The Liens referred to in clause (a) of this Section 7.1.8
shall be subject in each case to the payment of the Carve-Out.
(d) The Borrowers will execute any documents, financing
statements, agreements and/or instruments, and take all further action
(including filing financing statements and/or Mortgages) that may be
required under applicable law, or that the Administrative Agent may
reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve,
protect and perfect the validity and priority of the security interests
created or intended to be created by the Loan Documents. In addition,
from time to time, the Borrowers will, at their cost and expense,
promptly secure the appropriate Obligations by pledging or creating, or
causing to be pledged or created, perfected security interests with
respect to such of its assets and properties as the Administrative
Agent or the relevant Required Lenders shall designate, it being
understood that it is the intent of the parties that the Obligations
shall be secured by, among other things, substantially all the assets
of the Borrowers (including real and other properties acquired
subsequent to the Effective Date owned by such Borrower). Such security
interests and Liens will be created under the Loan Documents in form
and substance satisfactory to the Administrative Agent, and each
Borrower shall deliver or cause to be delivered to the Lenders all such
instruments and/or documents (including legal opinions, and lien
searches) as the Administrative Agent shall reasonably request to
evidence compliance with this Section 7.1.8.
(e) Each Borrower will seek to obtain a Financing Order
allowing the Administrative Agent and the Lenders, with respect to the
Obligations, an allowed Superpriority Claim.
7.1.9. Lockbox Accounts. The applicable Borrower shall provide
instructions to the appropriate Person as often as necessary to ensure that any
and all amounts deposited in the Lockbox Accounts are transferred, either
directly or indirectly, to the Administrative Agent, to be applied against any
outstanding Loans as provided in clause (e) of Section 3.1.3, so long as no
Default is occurring; and no Borrower shall close or transfer any Lockbox
Account, or open any new deposit account, in any case without the prior written
consent of the Administrative Agent and without causing the bank where such new
deposit account has been opened to be subject to a Lockbox Agreement similar to
those controlling the Collection Accounts.
7.1.10. Environmental Covenant. Each Borrower will, and will
cause each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in
compliance in all material respects with all Environmental Laws, keep
(and, when applicable, obtain in a timely manner) all necessary
material permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain
in compliance in all
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material respects therewith, and handle all Hazardous Materials
(including the disposition and storing thereof) in compliance with all
applicable Environmental Laws which in the good faith judgment of the
Company are of a material nature, except in each case where the failure
to do so could not reasonably be expected to have a Material Adverse
Effect;
(b) promptly notify the Administrative Agent and provide
copies upon receipt of all written claims, complaints, notices or
inquiries from third parties relating to Releases of Hazardous
Materials from its facilities and properties or compliance with
Environmental Laws which in the good faith judgment of the Company are
of a material nature and which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; and
(c) provide such information and certifications which the
Administrative Agent may reasonably request from time to time to
evidence compliance with this Section.
7.1.11. As to Intellectual Property Collateral. The Borrowers
shall not, except in the exercise of their reasonable business judgment, do any
act, or omit to do any act, whereby any item of material Intellectual Property
Collateral may lapse or become abandoned or dedicated to the public or
unenforceable other than upon the natural expiration of protective periods under
applicable law.
(a) The Borrowers shall notify the Administrative Agent as
soon as practicable if it knows, or has reason to know, that any
application or registration relating to any material item of the
Intellectual Property Collateral may become abandoned or dedicated to
the public or placed in the public domain or invalid or unenforceable
other than upon the natural expiration of protective periods under
applicable law, or of any adverse determination or development
(including the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark Office or
the United States Copyright Office) regarding the ownership by the
Borrowers of any material item of the Intellectual Properly Collateral
or the Borrowers' right to register the same or to keep and maintain
and enforce the same.
(b) In no event shall the Borrowers, or any of their
respective agents, employees, designees or licensees, file an
application for the registration of any Intellectual Property
Collateral with the United States Patent and Trademark Office or the
United States Copyright Office, unless it promptly informs the
Administrative Agent, and upon request of the Administrative Agent,
executes and delivers any and all agreements, instruments, documents
and papers as the Administrative Agent may reasonably request to
evidence the Administrative Agent's security interest in such
Intellectual Property Collateral and the goodwill and general
intangibles of the Borrowers relating thereto or represented thereby.
(c) Unless the Borrowers shall otherwise determine in the
exercise of their reasonable business judgment, the Borrowers shall
take all necessary steps, including in any proceeding before the United
States Patent and Trademark Office or the United States Copyright
Office, to maintain and pursue any application (and to obtain the
relevant registration) filed with respect to, and to maintain any
registration of, any
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material item of the Intellectual Property Collateral, including the
filing of applications for renewal, affidavits of use, affidavits of
incontestability and opposition, interference and cancellation
proceedings and the payment of fees and taxes (except to the extent
that dedication, abandonment or invalidation is permitted under the
foregoing clause (a), (b) and (c)).
7.1.12. Future Real Estate Properties. Within 30 days after
the acquisition by the Borrowers of any real property owned in fee with a value
in excess of $150,000, the Borrowers shall take all steps necessary, at their
own cost and expense, to grant the Administrative Agent a first priority,
perfected mortgage Lien on such real property, fixtures and buildings and
improvements thereon.
7.1.13. Non-Consolidation of Unrestricted Subsidiaries. The
Borrowers will be, and shall cause each of their Subsidiaries to be, operated at
all times in such a manner so that the assets and liabilities of the Borrowers
and those Subsidiaries which are not Sterling Pulp Chemicals, Ltd. or an
Unrestricted Subsidiary may not be substantively consolidated with those of
Sterling Pulp Chemicals, Ltd. or any Unrestricted Subsidiary in the event of the
bankruptcy or insolvency of any of Sterling Pulp Chemicals, Ltd. or any
Unrestricted Subsidiary. In addition, the Borrowers shall, and shall cause each
of their Subsidiaries to:
(a) not (i) consolidate or merge with or into Sterling Pulp
Chemicals, Ltd. or any Unrestricted Subsidiary or (ii) sell, lease or
otherwise transfer, directly or indirectly, all or substantially all of
its assets to Sterling Pulp Chemicals, Ltd. or any Unrestricted
Subsidiary;
(b) maintain separate financial statements to the extent done
in the ordinary course of business, corporate records and books of
account separate from Sterling Pulp Chemicals, Ltd. and each
Unrestricted Subsidiary;
(c) maintain its assets separately from the assets of Sterling
Pulp Chemicals, Ltd. and each Unrestricted Subsidiary (including
through maintenance of separate bank accounts);
(d) not (i) guarantee the obligations of Sterling Pulp
Chemicals, Ltd. or any Unrestricted Subsidiary, or (ii) advance funds
for the payment of expenses or otherwise, to Sterling Pulp Chemicals,
Ltd. or any Unrestricted Subsidiary, other than the advancement of
funds for reasonable overhead items, tax sharing and similar items
included in the Approved Budget and which do not to exceed $250,000 in
aggregate amount in any Fiscal Year;
(e) conduct all of its business correspondence and other
communications in its own name and on its own stationery;
(f) maintain a board of directors that is separate from the
boards of directors of Sterling Pulp Chemicals, Ltd. and each
Unrestricted Subsidiary;
(g) maintain the requisite legal formalities in order that the
Borrowers and the Subsidiaries (other than Sterling Pulp Chemicals,
Ltd. and each Unrestricted Subsidiary)
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may each be treated as a legally separate entity from Sterling Pulp
Chemicals, Ltd. and each Unrestricted Subsidiary; and
(h) cause Sterling Pulp Chemicals, Ltd. and each Unrestricted
Subsidiary, both before and after the incurrence of any Indebtedness
and the advance of any loans to the Borrowers, to be Solvent.
7.1.14. ANEXCO Receivables. Receivables owing by ANEXCO to the
Company shall not be counted in the definition of Eligible Account unless the
Company (i) causes all amounts received by ANEXCO by the applicable Account
Debtors to be transferred to the Company at the times required by the ANEXCO LLC
Agreement, (ii) causes all amounts received by the Company from ANEXCO to be
immediately transferred to a Lockbox Account as soon as such amounts are paid to
the Company by ANEXCO, (iii) promptly remits notice to the Administrative Agent
with respect to any legal action commenced against ANEXCO or any Lien that is
imposed on the assets of ANEXCO, in either case, of which the Company becomes
aware, (iv) to the extent that audited financial statements are prepared for
ANEXCO, promptly provides the Administrative Agent with a copy of such financial
statements (subject to the execution by the Administrative Agent of an
appropriate confidentiality agreement in form and substance reasonably
satisfactory to the Administrative Agent, the Company and BP), (v) provides
notice to the Administrative Agent with respect to the occurrence of any event
with respect to ANEXCO that could reasonably be expected to have a Material
Adverse Effect with respect to ANEXCO and (vi) provides a detailed list of all
Account Debtors with respect to the ANEXCO Accounts and provides such other
information regularly provided by the Borrowers to the Administrative Agent with
respect to all other Accounts included in Eligible Accounts. In addition, unless
the Administrative Agent otherwise consents in writing, in the event that the
Company (i) consents to the granting of any Lien by ANEXCO on any of its
Accounts, (ii) transfers any of its rights or obligations under the ANEXCO, LLC
Agreement or the BP Joint Venture Agreement, including any membership interest
in ANEXCO, in a manner which will result in the Board of Managers of ANEXCO
being able to authorize the granting of any Lien on the ANEXCO Accounts without
the consent of the Company or (iii) amends the ANEXCO LLC Agreement or the BP
Joint Venture Agreement in any manner which extends the period of time during
which ANEXCO must make any payment to the Company on account of sales of
acrylonitrile to or through ANEXCO or permits the granting of any Lien on the
ANEXCO Accounts without the consent of the Company, then all Accounts owing to
the Company by ANEXCO shall immediately cease to be Eligible Accounts.
SECTION 7.2. Negative Covenants. Each Borrower covenants and agrees
with each Lender, each Issuer and the Administrative Agent that, until the
Termination Date has occurred, each Borrower will, and will cause each of its
Subsidiaries (other than Unrestricted Subsidiaries) to, perform or cause to be
performed the obligations set forth below. Solely for the purposes of this
Section 7.2, the term "Subsidiary" shall be deemed not to include Unrestricted
Subsidiaries.
7.2.1. Business Activities. No Borrower will, nor will any
Borrower permit any of its Subsidiaries to, engage in any business activity
except those business activities engaged in on the Effective Date and business
activities reasonably related or incidental thereto.
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7.2.2. Indebtedness. The Borrowers will not, and will not
permit any of their Subsidiaries to, create, incur, assume or permit to exist
(or apply to the Bankruptcy Court for authority to create, incur, assume or
permit to exist) any Indebtedness, other than (without duplication):
(a) Indebtedness in respect of the Obligations;
(b) until the Closing Date, the Pre-Petition Secured
Obligations;
(c) Indebtedness existing as of the Effective Date which (i)
is unsecured and the principal amount of each individual item of which
does not exceed $50,000 or $250,000 in the aggregate for all such
items, or (ii) is identified in Item 7.2.2(c) of the Disclosure
Schedule and, provided that no Default or Event of Default then exists
or would result therefrom, Indebtedness incurred for the purpose of
refinancing the Indebtedness identified in Item 7.2.2(c) of the
Disclosure Schedule on No Less Favorable Terms and Conditions;
(d) unsecured Indebtedness (i) incurred in the ordinary course
of business of the Borrowers and their Subsidiaries (including open
accounts extended by suppliers on normal trade terms in connection with
purchases of goods and services which are not overdue for a period of
more than sixty (60) days or, if overdue for more than sixty (60) days,
as to which a good faith dispute exists and adequate reserves in
conformity with GAAP have been established on the books of such
Borrower or such Subsidiary) and (ii) in respect of performance, surety
or appeal bonds provided in the ordinary course of business, but
excluding (in each case), Indebtedness incurred through the borrowing
of money or Contingent Liabilities in respect thereof;
(e) Capitalized Lease Liabilities; provided, that the
aggregate amount of all Indebtedness outstanding pursuant to this
clause (e) shall not at any time exceed $2,000,000 in the aggregate in
any Fiscal Year;
(f) unsecured Indebtedness owing by any Borrower to another
Borrower;
(g) Indebtedness of the Company evidenced by the Senior
Secured Notes, and Indebtedness of any other Borrower in respect of its
guaranty of such Senior Secured Notes and, provided that no Default or
Event of Default then exists or would result therefrom, Indebtedness
incurred for the purpose of refinancing the Senior Secured Notes on No
Less Favorable Terms and Conditions;
(h) unsecured Subordinated Debt of the Company incurred
pursuant to the terms of the Sub Debt Documents in a principal amount
not to exceed $425,000,000 and, provided that no Default or Event of
Default then exists or would result therefrom, Indebtedness incurred
for the purpose of refinancing such unsecured Subordinated Debt of the
Company on No Less Favorable Terms and Conditions;
(i) Indebtedness in respect of Hedging Obligations entered
into in the ordinary course of business;
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(j) Indebtedness evidencing the deferred purchase price of
newly acquired property or incurred to finance the acquisition of
equipment or construction by the Borrowers and their Subsidiaries
(pursuant to purchase money mortgages or otherwise, whether owed to the
seller or a third party) used in the ordinary course of business of the
Borrowers and their Subsidiaries (provided, that such Indebtedness is
incurred within 60 days of the acquisition or construction of such
property) in an amount not to exceed $2,000,000 in any Fiscal Year;
(k) Indebtedness of Sterling Pulp Chemicals, Ltd. arising
under the Canadian Facility and other Indebtedness of Sterling Pulp
Chemicals, Ltd. which is permitted under the terms and conditions of
the Canadian Facility;
(l) Indebtedness of Sterling Canada, Inc. arising under the
Intercompany Loan; and
(m) other unsecured Indebtedness incurred after the Filing
Date and in the ordinary course of business in an aggregate amount at
any time outstanding not to exceed $2,500,000, provided that principal
and/or interest with respect to such Indebtedness may be paid only to
the extent that such payments are set forth in the Approved Budget;
provided, however, that no Indebtedness otherwise permitted by clauses (d), (e),
(i), (j), (k) or (m) shall be assumed or otherwise incurred if a Default has
occurred and is then continuing or would result therefrom.
7.2.3. Liens and Reclamation Claims. No Borrower will, nor
will any Borrower permit any of its Subsidiaries to, create, incur, assume or
permit to exist (or apply to the Bankruptcy Court for authority to create,
incur, assume or permit to exist) any Lien upon any of its property (including
Capital Securities of any Person), revenues or assets, whether now owned or
hereafter acquired, except the following (collectively, "Permitted Liens"):
(a) Liens securing payment of the Obligations;
(b) until the Closing Date, Liens securing payment of the
Pre-Petition Secured Obligations;
(c) Liens existing as of the Effective Date and disclosed in
Item 7.2.3(c) of the Disclosure Schedule, which Item 7.2.3(c) shall
include all Liens securing Indebtedness described in clause (c) of
Section 7.2.2 or, provided no Default or Event of Default then exists
or would result therefrom, extensions, re-grants or renewals thereof in
connection with any permitted refinancing in accordance with clause (c)
of Section 7.2.2;
(d) Liens securing Indebtedness of the type permitted under
clauses (e), and (j) of Section 7.2.2; provided, that (i) such Liens
are granted within 60 days after such Indebtedness is incurred, (ii)
the Indebtedness secured thereby does not exceed 80% of the lesser of
the cost or the fair market value of the applicable property,
improvements or equipment at the time of such lease, acquisition or
construction and (iii) such Lien secures only the assets that are the
subject of the Indebtedness referred to in such clause;
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(e) (i) a second priority and subordinated Lien on the Capital
Securities of the Borrowers (other than the Company) and the Fixed
Assets of the Borrowers and a first priority Lien on 65% of the Capital
Securities of the Foreign Restricted Subsidiaries, in each case,
securing the Senior Secured Notes or, provided no Default or Event of
Default then exists or would result therefrom, extensions, re-grants or
renewals thereof in connection with any permitted refinancing of the
Senior Secured Notes in accordance with clause (g) of Section 7.2.2;
and (ii) a second priority Lien on the Capital Securities of the
Company to secure the Indebtedness of Parent under the Senior Secured
Discount Notes or, provided no Default or Event of Default then exists
or would result therefrom, extensions, re-grants or renewals thereof in
connection with any refinancing of the Senior Secured Discount Notes on
No Less Favorable Terms and Conditions;
(f) Liens in favor of carriers, warehousemen, mechanics,
repairmen, workmen, crews, materialmen and landlords, maritime Liens
and other Liens imposed by law granted or imposed in the ordinary
course of business for amounts not overdue more than 60 days (other
than any such Liens securing amounts overdue for any period that can,
with the filing of any document or any other action, "prime" any Liens
securing the Obligations) or being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on the Borrowers' books;
(g) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits, or to
secure performance of tenders, statutory obligations, surety and appeal
bonds, government contracts, performance bonds, bids, leases or other
similar obligations (other than for borrowed money) entered into in the
ordinary course of business or to secure obligations on surety and
appeal bonds or performance bonds;
(h) judgment Liens in existence for less than 45 days after
the entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies and which do not otherwise result in an Event of Default
under Section 8.1.6;
(i) Permitted Real Estate Liens;
(j) Liens for Taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on the Borrowers' books;
(k) Liens securing the assets of Sterling Pulp Chemicals, Ltd.
to secure the obligations of Sterling Pulp Chemicals, Ltd. under the
Canadian Facility and any other Liens on the assets of Sterling Pulp
Chemicals, Ltd. which are expressly permitted under the terms and
conditions of the Canadian Facility;
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(l) Ordinary course of business Liens not described above or
in the definition of Permitted Real Estate Liens that in any case do
not secure any Indebtedness and could not, in any event, be prior to
any Liens created pursuant to the Loan Documents or the Financing Order
in an amount not to exceed $2,000,000 in the aggregate;
(m) Liens securing pre-petition obligations of any Borrower
which are identified in Schedule 7.2.3(m) and are not permitted to be
paid by order of the Bankruptcy Court, provided that, except with
respect to any then applicable Priority Liens listed in such Schedule,
such Liens are junior and subordinate to the rights and Liens of the
Administrative Agent and the Lenders granted in the Financing Order and
the Loan Documents; and
(n) Other Liens consented to by Required Lenders.
In addition, (x) no Borrower will, nor will any Borrower permit any of its
Subsidiaries (or apply to the Bankruptcy Court for authority to) make any
payments or transfer any property on account of claims asserted by any vendor of
any Borrower or Subsidiary for reclamation rights in accordance with Section
2-702 of the UCC and Section 546(c) of the Bankruptcy Code, except as set forth
in the Approved Budget, and (y) notwithstanding anything to the contrary
contained in the Loan Documents, no Borrower will, nor will any Borrower permit
any of its Subsidiaries to grant, create, incur, assume or otherwise permit to
exist any Liens on any Capital Securities of any Unrestricted Subsidiary owned
by a Borrower or on any dividends or other proceeds therefrom.
7.2.4. Excess Availability. The Borrowers will not permit
Excess Availability at any time to be less than the then applicable Minimum
Excess Availability.
7.2.5. Investments. The Borrowers will not, and will not
permit any of their Subsidiaries (or apply to the Bankruptcy Court for authority
for any of them) to, purchase, make, incur, assume or permit to exist any
Investment in any other Person, other than the following (collectively,
"Permitted Investments"):
(a) Investments existing on the Effective Date and identified
in Item 7.2.5(a) of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(d) Investments which are Capital Expenditures and which are
included in the Approved Budget;
(e) Investments (i) by way of contributions to capital or
purchases of Capital Securities by any Borrower in any other Borrower;
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(f) Investments in Persons (other than the Borrowers or any
Affiliate of a Borrower) constituting (i) accounts receivable arising,
(ii) trade debt granted, or (iii) deposits made in connection with the
purchase price of goods or services, in each case, in the ordinary
course of business;
(g) Investments consisting of routine loans or advances to
employees (including payroll, travel and related expenses) in the
ordinary course of business not to exceed $25,000 at any time
outstanding to any one employee and $500,000 in the aggregate;
(h) Investments consisting of loans or advances by any
Borrower or any Subsidiary to any employee stock ownership plan of
Parent, any Borrower or any Subsidiary; provided, that (i) the
aggregate amount of any such loan or advance does not exceed 5% of the
cash received by the Borrowers or any Subsidiary (either directly or
through a capital contribution from Parent) after the date hereof from
any contemporaneous issuance or sale of any Capital Securities of
Parent made in connection with or to provide part of the consideration
for a direct or indirect acquisition by any Borrower or any Subsidiary
of the Capital Securities of a third party that is not an Affiliate of
the Borrower or the all or substantially all of the assets of a third
party or any business or division of a third party that is not an
Affiliate of the Borrower, (ii) immediately after giving effect to such
acquisition, the entity whose Capital Securities are acquired is a
Borrower or a Subsidiary or the assets acquired are held by a Borrower
or a Subsidiary, as applicable, and (iii) any individuals that become
employees of a Borrower or a Subsidiary in connection with such
acquisition, to the extent eligible, are permitted to participate in
the ESOP;
(i) Investments resulting from purchases of shares of the
Capital Securities of Parent pursuant to put options arising under any
employee stock ownership plan of Parent, any Borrower or any
Subsidiary, but only to the extent such purchases are expressly
required by (i) the provisions of such employee stock ownership plan as
in effect on the date hereof; or (ii) Section 409(h)(1)(B) of the Code
and the regulations thereunder;
(j) Investments consisting of any deferred portion of the
sales price or any non-cash portion of the consideration received by
any Borrower in connection with any Disposition permitted under Section
7.2.11;
(k) Joint Venture Contributions permitted under Section
7.2.16;
(l) Investments of Sterling Pulp Chemicals, Ltd. which are
expressly permitted under the terms and conditions of the Canadian
Facility; and
(m) Other Investments which are included in the Approved
Budget and which do not exceed $2,500,000 in the aggregate at any time
outstanding;
provided, however, that (x) any Investment which when made complies with the
requirements of clause (a) of the definition of the term "Cash Equivalent
Investment" may continue to be held notwithstanding that such Investment if made
thereafter would not comply with such requirements and (y) no Investment
otherwise permitted by clauses (d), (e)(ii), (f), (g), (h), (i), (j),
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(k), or (m), shall be permitted to be made if any Default has occurred and is
continuing or would result therefrom.
7.2.6. Restricted Payments. etc. The Borrowers will not, and
will not permit any of their Subsidiaries other than Unrestricted Subsidiaries
(or apply to the Bankruptcy Court for authority for any of them) to, declare or
make a Restricted Payment, or make any deposit for any Restricted Payment, other
than Restricted Payments made by Subsidiaries to the Borrowers, except that (a)
so long as no Default or Event of Default has occurred and is continuing or
would occur as a result hereof, the Company may declare and deliver dividends
payable solely in shares of its Capital Securities or in options, warrants or
rights to purchase shares of its Capital Securities, (b) the Company may make
contributions to any employee stock ownership plan of Parent, the Company or any
other Borrower on behalf of the employees of the Borrowers and their
Subsidiaries in the aggregate amount in any Fiscal Year not to exceed 8% of
payroll expense during such Fiscal Year attributable to employees of the
Borrowers and their Subsidiaries who are eligible to participate in such
employee stock ownership plan, and (c) any Subsidiary and any Borrower may
declare and deliver dividends to any Borrower.
7.2.7. Monthly Minimum EBITDA. The Borrowers will not permit
EBITDA for the Borrowers to be less than (i.e., be a greater negative number
than those set forth below) the following amounts at the end of each of the
calendar month set forth below opposite such amounts:
Calendar Month Minimum EBITDA
-------------- --------------
Filing Date through and including August 31, 2001 (7,600,000)
September 2001 (3,300,000)
October 2001 (3,900,000)
November 2001 (3,000,000)
December 2001 (3,400,000)
January 2002 (2,500,000)
February 2002 (4,200,000)
March 2002 (8,300,000)
April 2002 (1,000,000)
May 2002 1,600,000
June 2002 2,800,000
Each calendar month thereafter 5,000,000
provided, however, that for each calendar month set forth above that the
Borrowers' EBITDA is less than (i.e., a lower negative number) than the minimum
EBITDA amount set forth above opposite such calendar month, the difference may
be carried forward on a cumulative basis to the next calendar month's
calculation of minimum EBITDA of the Borrowers. In addition, the Borrowers
acknowledge and agree that the minimum EBITDA amounts set forth above will be
changed and reset to amounts and periods acceptable to the Required Lenders in
their sole discretion to reflect the operation of the Company's acrylonitrile
facility when the Borrower's have fully complied with the conditions set forth
in the proviso to clause (b) of Section 5.2.3.
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7.2.8. No Prepayment of Subordinated Debt or the Senior
Secured Notes. The Borrowers will not, and will not permit any of their
Subsidiaries (or, except in connection with a Reorganization Plan, apply to
Bankruptcy Court for authority for any of them) to make any payment or
prepayment of principal of, or premium or interest on, any Subordinated Debt,
the Senior Secured Discount Notes or the Senior Secured Notes; or redeem,
retire, purchase, defease or otherwise acquire any Subordinated Debt, the Senior
Secured Discount Notes or the Senior Secured Notes; or make any deposit
(including the payment of amounts into a sinking fund or other similar fund) for
any of the foregoing purposes. Furthermore, neither the Borrowers nor any
Subsidiary will designate any Indebtedness other than the Obligations and the
obligations under the Senior Secured Note Documents as "Senior Debt" (or any
analogous term) in any Sub Debt Document.
7.2.9. New Subsidiaries; Capital Securities of Subsidiaries.
The Borrowers will not, and will not permit any of their Subsidiaries (or,
except in connection with a Reorganization Plan, apply to the Bankruptcy Court
for authority for any of them) to, (a) issue any Capital Securities (whether for
value or otherwise) to any Person other than the Borrowers, except that the
Fibers Subsidiaries may issue Capital Securities to any Person solely in
connection with the consummation of a Joint Venture Contribution in accordance
with Section 7.2.16, (b) become liable in respect of any obligation (contingent
or otherwise) to purchase, redeem, retire, acquire or make any other payment in
respect of any Capital Securities of the Borrowers or any Subsidiary or any
option, warrant or other right to acquire any such Capital Securities; or (c)
create or acquire any new Subsidiaries of any of them, other than Unrestricted
Subsidiaries.
7.2.10. Consolidation, Merger, etc. The Borrowers will not,
and will not permit any of their Subsidiaries (other than Unrestricted
Subsidiaries) (or, except in connection with a Reorganization Plan, apply to the
Bankruptcy Court for authority for any of them) to, liquidate or dissolve,
consolidate with, or merge into or with (collectively, to "Merge") any other
Person, or purchase or otherwise acquire all or substantially all of the assets
of any Person, (a) except any Borrower may Merge with and into another Borrower,
and the assets or Capital Securities of any Borrower may be purchased or
otherwise acquired by any other Borrower; and (b) the Fiber Subsidiaries may
Merge in connection with a Transfer of the Fibers Business consummated in
accordance with Section 7.2.16.
7.2.11. Permitted Dispositions. The Borrowers will not, and
will not permit any of their Subsidiaries (or, except in connection with a
Reorganization Plan, apply to the Bankruptcy Court for authority for any of
them) to, Dispose of any of the Borrowers' or such Subsidiaries' assets
(including Accounts, inventory and Capital Securities) to any Person in one
transaction or series of transactions unless such Disposition is (a) a Permitted
Disposition, (b) permitted by Section 7.2.10 or Section 7.2.16, (c) a
Disposition of (i) the vacant, unimproved and unutilized real property located
at the Santa Xxxx acrylic fibers plant and (ii) other property (real, mixed or
personal, other than Capital Securities of any Borrower or any Subsidiary), in
an aggregate amount not to exceed $1,000,000 in the aggregate in any Fiscal Year
and so long as no Default has occurred and is continuing or (d) Dispositions
permitted under Section 7.2.15.
7.2.12. Modification of Certain Agreements. The Borrowers will
not, and will not permit any of their Subsidiaries (or, except in connection
with a Reorganization Plan, apply to the Bankruptcy Court for authority for any
of them) to, consent to any amendment, supplement,
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waiver or other modification of, or enter into any forbearance from exercising
any rights with respect to the terms or provisions contained in,
(a) the Sub Debt Documents, the Senior Note Documents, the
Senior Secured Discount Notes, the Senior Secured Discount Notes
Indenture or the Canadian Facility; or
(b) the Tax Sharing Agreement or the terms of any preferred
stock, if any, in any manner that is adverse to the Lenders.
7.2.13. Transactions With Affiliates. The Borrowers will not,
and will not permit any of their Subsidiaries (or, except in connection with a
Reorganization Plan, apply to the Bankruptcy Court for authority for any of
them) to, enter into or cause or permit to exist any arrangement, transaction or
contract (including for the purchase, lease or exchange of properly or the
rendering of services) with any Affiliate of any of them (other than between
Borrowers or as listed on Schedule 7.2.13) unless such arrangement, transaction
or contract (a) is on fair and reasonable terms no less favorable to the
Borrowers or such Subsidiary than they could obtain in an arm's-length
transaction with a Person that is not an Affiliate and (b) is of the kind which
would be entered into by a prudent Person in the position of the Borrowers or
such Subsidiary with a Person that is not one of their Affiliates.
7.2.14. Restrictive Agreements, etc. The Borrowers will not,
and will not permit any of their Subsidiaries (or, except in connection with a
Reorganization Plan, apply to the Bankruptcy Court for authority for any of
them) to, enter into any agreement prohibiting
(a) the creation or assumption of any Lien upon their
properties, revenues or assets, whether now owned or hereafter
acquired;
(b) the ability of any Obligor to amend or otherwise modify
any Loan Document; or
(c) the ability of any Subsidiary to make any payments,
directly or indirectly, to the Borrowers, or the ability of the
Borrowers to make any payments, directly or indirectly, to other
Borrowers, including by way of dividends, advances, repayments of
loans, reimbursements of management and other intercompany charges,
expenses and accruals or other returns on investments.
The foregoing prohibitions shall not apply to restrictions contained (i) in any
Loan Document, (ii) in the case of clause (a), any agreement governing any
Indebtedness permitted by clause (e) of Section 7.2.2 as to the assets financed
with the proceeds of such Indebtedness or (iii) in the case of clauses (a) and
(c) above, in the Canadian Facility entered into by Sterling Pulp Chemicals,
Ltd. in accordance with Section 7.2.17. The Administrative Agent is hereby
authorized to release Sterling Pulp Chemicals, Ltd. from its obligations under
this Section in connection with a transaction permitted under Section 7.2.17.
7.2.15. Sale and Leaseback. The Borrowers will not, and will
not permit any of their Subsidiaries (or, except in connection with a
Reorganization Plan, apply to the Bankruptcy Court for authority for any of
them) to, directly or indirectly enter into any agreement or
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arrangement providing for the sale or transfer by it of any property (now owned
or hereafter acquired) to a Person and the subsequent lease or rental of such
property or other similar property from such Person in an aggregate amount not
in excess of (a) $2,000,000 in the case of the Borrowers and (b) $10,000,000 in
the case of Subsidiaries.
7.2.16. Transfer of the Fibers Business.
(a) The Borrowers can in a single transaction or series of
related transactions make a Transfer of the Fibers Business if each of
the following conditions is satisfied:
(i) no Default or Event of Default shall have
occurred and be continuing both before and after giving effect
to the Transfer of the Fibers Business;
(ii) the Transfer of the Fibers Business shall be in
the best interests of the Borrowers and the consideration
received by the Borrowers from such Transfer of the Fibers
Business shall be at least equal to the fair market value of
such transaction, in each case, as determined by a written
resolution adopted in good faith by the Board of Directors of
the Company;
(iii) if less than 85% of the consideration received
in a Transfer of the Fibers Business is in the form of cash or
Permitted Consideration, the Company must deliver an opinion
to the Administrative Agent, in form and substance reasonably
satisfactory to the Administrative Agent, as to the fairness
of the transaction to the Company from a financial point of
view, issued by an Independent Financial Advisor;
(iv) in the case of any Joint Venture Contribution,
immediately after giving effect to such transaction, the
Company will be a beneficial owner of Capital Securities of
the entity to which such Joint Venture Contribution is made;
(v) in the case of any Sale of the Fibers Business,
the transferee of such Transfer of the Fibers Business shall
be a Person other than an Affiliate of any Borrower;
(vi) the Company (or, if applicable, the Fibers
Subsidiaries) shall legally and effectively grant to the
Administrative Agent, for the ratable benefit of the Secured
Parties, security interests in and Liens on all proceeds
received by the Company (or, if applicable, the Fibers
Subsidiaries) in such Transfer of the Fibers Business,
including all cash and any Capital Securities, as additional
security for the repayment of the Obligations with such
priorities among such Secured Parties as is held by such
Secured Parties in the other Collateral (based on whether such
proceeds are Fixed Assets Collateral or Current Assets) and
deliver an opinion of counsel as to the validity of the
creation and perfection of such security interest in form and
substance satisfactory to the Administrative Agent;
(vii) the Company or the Fibers Subsidiaries shall
have Cash Collateralized all Letters of Credit issued for the
account of any Fibers Subsidiary
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and shall have submitted a Borrowing Base Certificate,
prepared on a pro forma basis, to the Administrative Agent
demonstrating that the outstanding Current Assets Loans, Swing
Line Loans and Letter of Outstandings do not exceed the then
applicable Maximum Loan Amount;
(viii) all Net Disposition Proceeds received in
connection with such Transfer of the Fibers Business shall be
paid into a Lockbox Account or Accounts and applied as
provided in clause (d) of Section 3.1.1 and clause (b) of
Section 3.1.2; and
(ix) the Borrowers shall have obtained the approval
of the Bankruptcy Court for the Transfer of the Fibers
Business; and
(b) Upon any Transfer of the Fibers Business, (i) any Lien
created under any Loan Document with respect to the assets of the
Fibers Subsidiaries which is the subject of such Transfer of the Fibers
Business, and (ii) any Lien in the Capital Securities of the Fibers
Subsidiaries which is the subject of such Transfer of the Fibers
Business, and (iii) the obligations of the Fibers Subsidiaries which
are the subject of such Transfer of the Fibers Business as a "Borrower"
under this Agreement shall immediately cease and terminate. Upon the
receipt of written notice from the Company of a proposed Transfer of
the Fibers Business and a certificate from an Authorized Office of the
Company certifying to the Administrative Agent and the Lenders that the
Transfer of the Fibers Business is in complete compliance with the
provisions of this Section 7.2.16 and that no Default or Event of
Default then exists or will result from such Transfer of the Fibers
Business, the Administrative Agent is authorized and directed to
execute and deliver to the Company, concurrently with the closing of
such Transfer of the Fibers Business, at the Company's expense, such
documents as the Company shall reasonably request to evidence such
release of Liens and, if applicable, the termination of the Fibers
Subsidiaries which are the subject of such Transfer of the Fibers
Business as a "Borrower" under this Agreement.
7.2.17. Canadian Facility. The Borrowers will not, and will
not permit any of their Subsidiaries to, enter into or be legally bound by the
Canadian Facility; provided that Sterling Pulp Chemicals, Ltd. may enter into
the Canadian Facility if (i) the Administrative Agent has reviewed and approved
the terms and conditions of the Canadian Facility, (ii) the proceeds of the
Canadian Facility are used by Sterling Pulp Chemicals, Ltd. to repay $20,000,000
of certain loans from Sterling NRO, Ltd. and for the working capital
requirements and general corporate purposes of Sterling Pulp Chemicals, Ltd.,
and (iii) Sterling Pulp Chemicals, Ltd. is Solvent both before and after giving
effect to the transactions contemplated by the Canadian Facility, including
repayment of $20,000,000 of certain loans from Sterling NRO, Ltd.
7.2.18. Attornment. To the extent expressly required under the
leases set forth in Item 7.2.18 of the Disclosure Schedule, the Administrative
Agent and each Lender hereby acknowledge and agree that the Liens granted
pursuant to the Loan Documents are subject to the rights of certain lessees
under the leases disclosed in Item 7.2.3(c) of the Disclosure Schedule and will
be subject to the rights of lessees under any leases entered into by any
Borrower after
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the date hereof which are permitted pursuant to this Agreement (collectively,
the "Leases") subject to the express rights contained in the applicable Lease.
The rights of the tenants under the Leases to the leased premises shall not be
adversely affected by the exercise by the Administrative Agent or any Lender of
any of their rights under any Loan Document, nor shall any such tenant be in any
other way deprived of its rights under the applicable Lease except in accordance
with the terms of such Lease. In the event that the Administrative Agent or any
Lender succeeds to the interest of any Borrower under a Lease, such Lease shall
not be terminated or affected thereby except as set forth therein, and any sale
of the applicable leased premises by the Administrative Agent or any Lender or
pursuant to the judgment of any court in an action to enforce the remedies
provided for in the Loan Documents shall be made subject to such Lease and the
rights of such tenant expressly set forth thereunder. If the Administrative
Agent or any Lender succeeds to the interests of any Borrower in and to the
applicable leased premises or under such Lease or enters into possession of such
leased premises, the Administrative Agent and Lenders, and such tenants, shall
be bound to each other under all of the express terms, covenants and conditions
of such Lease, as if the Administrative Agent or Lender were originally the
applicable Borrower as lessor thereunder.
7.2.19. Chapter 11 Claims. The Borrowers will not, and will
not permit any of their Subsidiaries (or apply to the Bankruptcy Court for
authority for any of them) to incur, create, assume, suffer to exist or permit
any administrative expense, unsecured claim, or other Superpriority Claim (other
than the Carve-Out) or Lien which is pari passu with or senior to the claims, as
the case may be, of the Administrative Agent and the Lenders against the
Borrowers hereunder, or except in connection with a Reorganization Plan, apply
to the Bankruptcy Code for authority so to do.
7.2.20. Financing Order; Payment of Claims. The Borrowers will
not, and will not permit any of their Subsidiaries (and will not apply to the
Bankruptcy Court for authority for any of them) to:
(a) At any time seek, consent to or suffer to exist any
modification, stay, vacation or amendment of the Financing Order,
except for any modifications and amendments agreed to by Administrative
Agent.
(b) Prior to the date on which the Obligations have been paid
in full in cash and this Agreement has been terminated, pay any
administrative expense or other claims or any Pre-Petition Payments
(including any principal or interest on any pre-petition Indebtedness)
except, to the extent that such payments are set forth in the Approved
Budget, (i) pursuant to the Carve-Out, (ii) provided no Default or
Event of Default has occurred and is continuing, other administrative
expense claims incurred in the ordinary course of the business of the
Borrower, (iii) the Pre-Petition Payments contemplated in Section
2.3.1, (iv) provided no Default or Event of Default has occurred and is
continuing, reasonable and customary fees and expenses incurred in
connection with Dispositions permitted under Section 7.2.11, (v)
pre-petition claims authorized by the Bankruptcy Court pursuant to the
motions to the Bankruptcy Court filed on the Filing Date and approved
on the date of the Interim Order, and (vi) provided no Default or Event
of Default has occurred and is continuing, the payment of pre-petition
Indebtedness secured by Liens on assets which are the subject of
Dispositions made in
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compliance with Section 7.2.11, solely with the Net Proceeds from such
Asset Dispositions, none of which payments, expenses or other amounts
in the foregoing clauses (i), (ii), (iii), (iv), (v), and (vi) may or
shall exceed the amounts set forth for the same in the Approved Budget.
7.2.21. Loan Availability. On and after the date of entry of
the Final Order, including the granting of the Priming Lien, the Borrowers will
not permit the difference between the Maximum Loan Amount and the then
outstanding Current Assets Obligations (such difference being herein referred to
as the "Loan Availability") to be less than (a) $10,000,000, at any time when
the Current Assets Obligations are equal to or greater than $100,000,000, or (b)
10% of the then outstanding Current Assets Obligations at any time when the then
outstanding Current Asset Obligations are less than $100,000,000, in either case
for more than 20 consecutive Business Days; provided that, notwithstanding the
foregoing, the Borrowers shall not be deemed in default of this Section 7.2.21
if, (a) on or before the date which is 10 days after such failure of the
Borrowers to so maintain such Loan Availability, the Company presents the
Administrative Agent with a business plan designed to improve the liquidity of
the Borrowers which is consented to by Approving Lenders within 20 days after
such failure, or (b) on or before the date which is 10 days after such failure
of the Borrowers to so maintain such Loan Availability, engages (or confirms its
prior engagement of) a third party professional to actively market for sale the
assets of the Borrowers and/or any Subsidiary and to continuously and diligently
pursue such sale of assets (including, for these purposes, any Unrestricted
Subsidiary) with values sufficient to pay down outstanding Current Assets Loans
(in accordance with Section 3.1.1 and Section 3.1.2) to an amount which will be
in compliance with the foregoing Loan Availability requirement. Notwithstanding
anything to the contrary contained in this Section 7.2.21, it is specifically
acknowledged and agreed that (i) the foregoing proviso is not intended to, and
shall not be deemed to, require the Company to pursue any particular plan of
reorganization in order to receive the benefit thereof, which shall and continue
to be the Company's sole determination, and (ii) nothing in this Section 7.2.21
shall obligate the Borrowers, or any of them, to take, or cause to be taken, any
action which is prohibited by or contrary to their fiduciary duties to the
Debtors' estates or any applicable law or court order.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following events
or occurrences described in this Article shall constitute an "Event of Default".
8.1.1. Non-Payment of Obligations. The Borrowers shall default
in the payment or prepayment when due of
(a) any payment or prepayment when due of any principal on any
Loan or any Reimbursement Obligation or any deposit of cash for
collateral purposes, including pursuant to Section 2.6.4, Section 3.1.3
and any other term or provision of any Loan Document;
(b) any interest on any Loan or any Reimbursement Obligation
and such default shall remain unremedied for a period of 3 days after
such amount was due; or
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(c) any fee described in Article III or any other monetary
Obligation, and such default shall continue unremedied for a period of
five days after such amount was due.
8.1.2. Breach of Warranty. Any representation or warranty of
any Obligor made or deemed to be made in any Loan Document (including any
certificates delivered pursuant to Article V) is or shall be incorrect when made
or deemed to have been made in any material respect.
8.1.3. Non-Performance of Certain Covenants and Obligations.
Any Borrower shall default in the due performance or observance of any of its
obligations under clause (d) of Section 7.1.1, Section 7.1.7, Section 7.1.10,
Section 7.1.12, Section 7.1.13 or Section 7.2, or any Obligor shall default in
the due performance or observance of its obligations in respect of such Sections
as such Sections are incorporated by reference, or otherwise, in any Loan
Document to which such Obligor is a party. Any Borrower shall default in the due
performance or observance of any of its obligations under clauses (c), (e) or
(g) of Section 7.1.1 or Section 7.1.6, and such default shall continue
unremedied for a period of five Business Days.
8.1.4. Non-Performance of Other Covenants and Obligations. Any
Obligor shall default in the due performance and observance of any other
agreement contained in any Loan Document executed by it, and such default shall
continue unremedied for a period of 30 days after written notice thereof shall
have been given to the Company by the Administrative Agent or any Lender.
8.1.5. Default on Other Indebtedness. (a) A default shall
occur in the payment of any amount when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any post-petition Indebtedness
(other than Indebtedness described in Section 8.1.1) of Parent or the Borrowers
or any Indebtedness of any of Subsidiary (other than an Unrestricted Subsidiary)
(i) under the Canadian Facility or (ii) having a principal amount, individually,
or in the aggregate, in excess of $5,000,000; or (b) a default shall occur in
the performance or observance of any obligation or condition under the Canadian
Facility or other such Indebtedness if the effect of such default is to
accelerate the maturity of any such Indebtedness or such default shall continue
unremedied for any applicable period of time sufficient to permit the holder or
holders of any of such foregoing Indebtedness, or any trustee or agent for such
holders, to cause or declare any of such foregoing Indebtedness to become due
and payable or to require any of such foregoing Indebtedness to be prepaid,
redeemed, purchased or defeased, or require an offer to purchase or defease any
of such foregoing Indebtedness to be made, prior to its expressed maturity, or
which such default shall continue unremedied for at least 30 days.
8.1.6. Judgments. Any judgment or order for the payment of
money individually, or in the aggregate, in excess of $2,000,000, exclusive of
(a) any amounts covered by insurance (less any applicable deductible) and as to
which the insurer has acknowledged its responsibility to cover such judgment or
order, and (b) any amounts covered by an indemnitor (with a long-term senior
unsecured debt rating greater than BBB and Baa2 by S&P and Xxxxx'x) where such
indemnitor has acknowledged, in writing, in form and substance reasonably
satisfactory to the Administrative Agent, that it will indemnify such judgment
or order, shall be rendered against one or more of Parent, the Borrowers or any
of their Subsidiaries (other than Unrestricted Subsidiaries) and such judgment
shall not have been vacated or discharged or
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stayed or bonded pending appeal within 30 days after the entry thereof or
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order.
8.1.7. Pension Plans. Any of the following events shall occur
with respect to any Pension Plan:
(a) the institution of any steps by any Borrower, any member
of its Controlled Group or any other Person to terminate a Pension Plan
other than a standard termination under Section 4041(b) of ERISA if, as
a result of such termination, any such Borrower or any such member
could be required to make a contribution to such Pension Plan, or could
reasonably expect to incur a liability or obligation to such Pension
Plan, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA.
8.1.8. Change in Control. Any Change in Control shall occur.
8.1.9. Bankruptcy, Insolvency, etc. Any Subsidiary (excluding
Unrestricted Subsidiaries) that is not a Borrower (a "Non-Debtor Subsidiary")
shall:
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness generally to pay, debts as they
become due;
(b) apply for, consent to, or acquiesce in the appointment of
a trustee, receiver, sequestrator or other custodian for any
substantial part of the property of any thereof, or make a general
assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence in or permit or suffer to exist the appointment of a
trustee, receiver, sequestrator or other custodian for a substantial
part of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60 days;
(d) (i) Commence any case, proceeding or other action (A)
under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or any Non-Debtor Subsidiary shall make
a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against any such Non-Debtor Subsidiary any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against any such Non-Debtor Subsidiary any case, proceeding or other
action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an
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order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any such Non-Debtor Subsidiary
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) any such Non-Debtor Subsidiary shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due;
(e) take any action authorizing, or in furtherance of, any of
the foregoing.
8.1.10. Impairment of Security, etc. Any Loan Document or any
Lien granted thereunder shall (except in accordance with its terms), in whole or
in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; any Obligor or
any other party shall, directly or indirectly, assert in any pleading filed in
any court or contest in any manner such effectiveness, validity, binding nature
or enforceability; or, except as permitted under any Loan Document, any Lien (i)
securing any Fixed Assets Obligation or securing any Current Assets Obligation
shall, in whole or in part, cease to be a perfected senior Lien on all
Collateral senior to all other Liens, other than applicable Priority Liens.
8.1.11. Intentionally Deleted.
8.1.12. Dismissal or Conversion of Cases. Any of the Cases
shall be dismissed or converted to a case under Chapter 7 of the Bankruptcy
Code; or any Obligor shall file an application for an order converting a Case to
a case under Chapter 7 of the Bankruptcy Code; a trustee under Chapter 7 or
Chapter 11 of the Bankruptcy Code shall be appointed in any of the Cases and the
order appointing such trustee shall not be reversed or vacated within thirty
(30) days after the entry thereof; provided that the Cases solely relating to
the Fibers Subsidiaries may be dismissed or converted to a case under Chapter 7
of the Bankruptcy Code with the prior consent of the Administrative Agent.
8.1.13. Other Superpriority Claim. An application shall be
filed by any Borrower for the approval of any Superpriority Claim in any of the
Chapter 11 Cases which is pari passu with or senior to the claims of the
Administrative Agent and the Lenders with respect to the Obligations (except for
the Carve-Out) or there shall arise any such pari passu or Superpriority Claims;
or
8.1.14. Compliance with Financing Order. The failure of the
Borrowers to comply with any of the terms of the Financing Order or the
occurrence of any condition or event which permits the Lenders to exercise any
of the remedies set forth in the Loan Documents or the Financing Order; or
8.1.15. Compliance with Court Orders. Any failure by the
Borrowers to observe or perform any of the material terms or conditions of any
order, (including the Financing Order) stipulation or other arrangements entered
by the Bankruptcy Court in Chapter 11 Cases which has a Material Adverse Effect;
or
8.1.16. Granting Liens on Collateral. The granting of (a) a
Lien on or other interest in any asset of any Borrower or Subsidiary (other than
an Unrestricted Subsidiary)
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including the Capital Securities of any Borrower or any such Subsidiary or (b)
any Superpriority Claim, by any Bankruptcy or District Court Judge which in
either case is superior to or ranks in parity with the Liens (other than the
then applicable Priority Liens) or Superpriority Claim of the Administrative
Agent and the Lenders granted in this Agreement and in the Financing Order,
except for the Carve-Out.
8.1.17. Intentionally Deleted.
8.1.18. Relief from Automatic Stay. The Bankruptcy Court shall
enter an order or orders granting relief from the automatic stay applicable
under Section 362 of the Bankruptcy Code to the holder or holders of any Lien to
permit foreclosure against (or the granting of a deed in lieu of foreclosure),
on any assets of any Obligor, individually or collectively, having an aggregate
net book value (as determined in accordance with GAAP) in excess of $2,000,000;
or an order shall be entered granting relief from the automatic stay which has a
Material Adverse Effect; provided, however, that it shall not be an Event of
Default if relief from the automatic stay is lifted solely for the purpose of
(i) allowing such creditor to determine the liquidated amount of its claim
against any Obligor; or (ii) seeking payment from a collateral source other than
any of the Obligors.
8.1.19. Appointment of Examiner. An order of the Bankruptcy
Court shall be entered in any of the Cases appointing an examiner with enlarged
powers relating to the operation of the business (powers beyond those set forth
in Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of
the Bankruptcy Code and such order shall not be reversed or vacated within
thirty (30) days after the entry thereof.
8.1.20. Modification of Financing Order. Except as otherwise
approved by the Administrative Agent in writing, an order of the Bankruptcy
Court shall be entered reversing, amending, supplementing, staying for a period
in excess of ten (10) days, vacating or otherwise modifying the Financing Order.
8.1.21. Intentionally Deleted.
8.1.22. No Termination of Total Commitment. Entry of an order
by the Bankruptcy Court or Parent, any Borrower or any Subsidiary shall file an
application for an order, (a) confirming a plan of reorganization in any of the
Cases which does not require a provision for termination of the Total Commitment
and payment in full in cash of all Obligations on or before the effective date
of such plan, or (b) dismissing any of the Cases which does not require a
provision for termination of the Total Commitment and payment in full in cash of
all Obligations; provided that such an order or application for an order with
respect to the Cases solely relating to the Fibers Subsidiaries may be entered
in connection with a Transfer of the Fibers Business in accordance with the
terms of this Agreement, including Section 7.2.16, with the prior consent of the
Administrative Agent.
8.1.23. Amendment of Final Financing Order; Superior Claims;
New Liens. Entry of an order by the Bankruptcy Court with respect to any of the
Cases or Parent or an application by or on behalf of any Borrower or any
Subsidiary for an order, in each case without the express prior written consent
of Administrative Agent, (i) to revoke, reverse, stay, modify,
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supplement or amend the Financing Order or (ii) to permit any administrative
expense or any claim (now existing or hereafter arising, of any kind or nature
whatsoever) to have an administrative priority as to the Parent, any Borrower or
any Subsidiary (other than an Unrestricted Subsidiary) equal or superior to the
priority of the claims of the Administrative Agent and the Lenders in respect of
the Obligations, or (iii) to grant or permit the grant of a Lien on the
Collateral except as otherwise expressly permitted by Section 7.2.3 of this
Agreement.
8.1.24. Application for Orders. An application for any of the
orders described in Sections 8.1.12, 8.1.18, 8.1.19, 8.1.20, 8.1.22 or 8.1.23
above shall be made by a Person, other than any of the Borrowers, and such
application is not contested by the Obligors in good faith and the relief
requested is granted.
SECTION 8.2. Action if Event of Default. If any Event of Default shall
occur for any reason, whether voluntary or involuntary, and be continuing,
without further order of or application to the Bankruptcy Court, the
Administrative Agent may, and the Administrative Agent shall, upon the direction
of the Required Lenders, by five (5) Business Days' notice to the Company with a
copy to counsel of record for any statutory committee of unsecured creditors
appointed in the Cases and to the United States Trustee (unless notice to the
Company has already been delivered as required under any subsection of Section
8.1, in which case no further notice to the Company or any other Person shall be
required under this Section 8.2), take one or more of the following actions, at
the same or different times:
(a) terminate forthwith the Commitments of the Lenders;
(b) declare all or any portion of the Loans then outstanding
and other Obligations (including Reimbursement Obligations) to be
forthwith due and payable, whereupon the principal of the Loans
together with accrued interest thereon and any unpaid accrued fees and
all other liabilities of the Obligors accrued hereunder and under any
other Loan Document, shall become forthwith due and payable (and the
Borrowers shall automatically and immediately be obligated to Cash
Collateralize all Letter of Credit Outstandings), without presentment,
demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrowers, anything contained herein or
in any other Loan Document to the contrary notwithstanding;
(c) set-off amounts in any accounts maintained with any Lender
and apply such amounts to the Obligations; and
(d) exercise any and all remedies under the Loan Documents
and/or under applicable law available to the Administrative Agent and
the Lenders. The enumeration of the foregoing rights is not intended to
be exhaustive and the exercise of any right shall not preclude the
exercise of any other rights, all of which shall be cumulative.
SECTION 8.3. Other Action if Event of Default. As set forth in the
Financing Order, all stays and injunctions, including the automatic stay
pursuant to Bankruptcy Code Section 362, shall be vacated and terminated to the
extent necessary to permit the Administrative Agent and the Lenders full
exercise of all of their rights and remedies upon the occurrence of an Event of
Default and following the giving of notice required by Section 8.2, including
all of their rights
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and remedies with respect to the Collateral. With respect to the Administrative
Agent's and Lenders' exercise of their rights and remedies, each Borrower
waives, releases, and shall be enjoined from attempting to contest, delay, or
otherwise dispute the exercise by the Administrative Agent and the Lenders of
their rights and remedies before the Bankruptcy Court or otherwise.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1. Actions. Each Lender hereby appoints CIT as its
Administrative Agent under and for purposes of this Agreement and each other
Loan Document. Each Lender authorizes the Administrative Agent to act on behalf
of such Lender under this Agreement and each other Loan Document and, in the
absence of other written instructions from the Required Lenders received from
time to time by the Administrative Agent (with respect to which the
Administrative Agent agrees that it will comply, except as otherwise provided in
this Section or as otherwise advised by counsel), to exercise such powers
hereunder and thereunder as are specifically delegated to or required of the
Administrative Agent by the terms hereof and thereof, together with such powers
as may be reasonably incidental thereto. The Administrative Agent may execute
any of its duties under this Agreement and each other Loan Document by or
through its employees, agents and attorneys-in-fact. Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Administrative Agent, pro rata according to such Lender's Percentage of each
existing Loan Commitment Amount, from and against any and all liabilities,
obligations, losses, damages, claims, costs or expenses of any kind or nature
whatsoever which may at any time be imposed on, incurred by, or asserted
against, the Administrative Agent in any way relating to or arising out of this
Agreement and any other Loan Document, including reasonable attorneys' fees, and
as to which the Administrative Agent is not reimbursed by any Obligor (and
without limiting the obligation of any Obligor to do so); provided, however,
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, claims, costs or expenses which are
determined by a court of competent jurisdiction in a final proceeding to have
resulted from the Administrative Agent's gross negligence or willful misconduct.
The Administrative Agent shall not be required to take any action hereunder or
under any other Loan Document, or to prosecute or defend any suit in respect of
this Agreement or any other Loan Document, unless it is indemnified hereunder to
the Administrative Agent's satisfaction. If any indemnity in favor of the
Administrative Agent shall be or become, in the Administrative Agent's
determination, inadequate, the Administrative Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
SECTION 9.2. Funding Reliance, etc. Unless the Administrative Agent
shall have been notified by telephone, confirmed in writing, by any Lender by
3:00 p.m., New York City time, on the day prior to a Borrowing, or Disbursement
with respect to a Letter of Credit pursuant to Section 2.6.2, that such Lender
will not make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent and,
in reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Administrative Agent, such Lender and such Borrower
severally agree to repay the
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Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Administrative Agent made such
amount available to such Borrower to the date such amount is repaid to the
Administrative Agent, at the interest rate applicable at the time to Loans
comprising such Borrowing.
SECTION 9.3. Exculpation. Neither the Administrative Agent nor any of
its directors, officers, employees or agents shall be liable to any Lender for
any action taken or omitted to be taken by it under this Agreement or any other
Loan Document, or in connection herewith or therewith, except for its own
willful misconduct or gross negligence, nor responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan Document, nor for
the creation, perfection or priority of any Liens purported to be created by any
of the Loan Documents, or the validity, genuineness, enforceability, existence,
value or sufficiency of any collateral security, nor to make any inquiry
respecting the performance by each Borrower or any other Obligor of its
obligations hereunder or under any other Loan Document. Neither the
Administrative Agent nor any of its respective directors, officers, employees or
agents shall be responsible for or have any duty to ascertain, inquire into or
verify (a) any statement, warranty or representation made in connection with any
Loan Document or any borrowing hereunder (other than a statement, warranty or
representation made by the Administrative Agent in writing), (b) the performance
or observance of any of the covenants or agreements of any Person under any Loan
Document, including, without limitation, any agreement by an Obligor to furnish
information directly to each Lender, (c) the satisfaction of any condition
specified in Article V, expect receipt of items required to be delivered solely
to the Administrative Agent, (d) the existence or possible existence of any
Default or Event of Default, or (e) the financial condition of any Obligor. Any
such inquiry which may be made by the Administrative Agent or the Issuer shall
not obligate it to make any further inquiry or to take any action. The
Administrative Agent and the Issuer shall be entitled to rely upon advice of
counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which the Administrative Agent or the Issuer, as
applicable, believe to be genuine and to have been presented by a proper Person.
SECTION 9.4. Successor. The Administrative Agent may resign as such at
any time upon at least 30 days' prior notice to the Company and all Lenders. The
Administrative Agent may be removed at any time with or without cause by written
notice received by the Administrative Agent from the Required Lenders, such
removal to be effective on the date specified in such notice. If the
Administrative Agent at any time shall resign or be removed, the Required
Lenders may, with the prior consent of the Company (which consent shall not be
unreasonably withheld or delayed and which shall not be required if an Event of
Default has occurred and is continuing) appoint another Lender as a successor
Administrative Agent which shall thereupon become the Administrative Agent
hereunder. If no successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving notice of resignation or
receiving notice of removal, then the retiring Administrative Agent may, on
behalf of the Lenders, with the consent of the Company, which consent shall not
be unreasonably withheld and which shall not be required if an Event of Default
has occurred and is continuing, appoint a successor Administrative Agent, which
shall be one of the lenders or a commercial banking institution organized under
the laws of the U.S. (or any State thereof) or a U.S. branch or agency of a
commercial banking institution, and having a combined capital and surplus of at
least
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$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall be entitled to receive from the retiring Agent such documents of
transfer and assignment as the successor Administrative Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation or removal hereunder as such, the provisions of (a) this Article IX
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent under this Agreement, and (b) Section 10.3
and Section 10.4 shall continue to inure to its benefit. Notwithstanding
anything else to the contrary in this Section 9.4, the Administrative Agent may
at any time, without the consent of the Company, any Obligor or any Lender,
appoint an Affiliate which is a commercial banking institution as a successor
Administrative Agent.
SECTION 9.5. Credit Extensions by Administrative Agent and Issuer. The
Administrative Agent and the Issuer shall have the same rights and powers with
respect to (a) in the case of the Administrative Agent, the Credit Extensions
made by it or any of its Affiliates and (b) in the case of the Issuer, the Loans
made by it or any of its Affiliates, as any other Lender and may exercise the
same as if it were not the Administrative Agent or the Issuer. The
Administrative Agent, the Issuer and each of their respective Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Company or any Subsidiary or Affiliate of the Company as if
the Administrative Agent or Issuer were not the Administrative Agent or Issuer
hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Administrative Agent, the Issuer and each other Lender, and
based on such Lender's review of the financial information of each Borrower,
this Agreement, the other Loan Documents (the terms and provisions of which
being satisfactory to such Lender) and such other documents, information and
investigations as such Lender has deemed appropriate, made its own credit
decision to extend its Commitments. Each Lender also acknowledges that it will,
independently of the Administrative Agent, the Issuer and each other Lender, and
based on such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under the Loan Documents.
SECTION 9.7. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each material notice or material request required or
permitted to be given to the Administrative Agent by the Borrowers pursuant to
the terms of the Loan Documents (unless concurrently delivered to the Lenders by
the Borrowers). The Administrative Agent will distribute to each Lender each
document or instrument received for its account and copies of all other
communications received by the Administrative Agent from the Borrowers for
distribution to the Lenders by the Administrative Agent in accordance with the
terms of the Loan Documents. The Administrative Agent shall have no duty to
disclose to the Lenders information that is not required to be furnished by the
Borrowers to the Administrative Agent, but that may be voluntarily furnished by
the Borrowers to the Administrative Agent (either in their capacity as
Administrative Agent or in its individual capacity).
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SECTION 9.8. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone or telecopy) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper
Person, and upon advice and statements of legal counsel, independent accountants
and other experts selected by the Administrative Agent. As to any matters not
expressly provided for by the Loan Documents, the Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Required Lenders or
all of the Lenders as is required in such circumstance, and such instructions of
such Lenders and any action taken or failure to act pursuant thereto shall be
binding on all Secured Parties. For purposes of applying amounts in accordance
with this Section, the Administrative Agent shall be entitled to rely upon any
Secured Party that has entered into a Rate Protection Agreement with any Obligor
for a determination (which such Secured Party agrees to provide or cause to be
provided upon request of the Administrative Agent) of the outstanding
Obligations owed to such Secured Party under any Rate Protection Agreement.
Unless it has actual knowledge evidenced by way of written notice from any such
Secured Party and any Borrower to the contrary, the Administrative Agent, in
acting in such capacity under the Loan Documents, shall be entitled to assume
that no Rate Protection Agreements or Obligations in respect thereof are in
existence or outstanding between any Secured Party and any Obligor.
SECTION 9.9. Defaults. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received a written notice from a Lender or a Borrower
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Administrative Agent receives such a notice of the
occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall (subject to Section 10.1)
take such action with respect to such Default as shall be directed by the
Required Lenders; provided, that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the Lenders
except to the extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the authorization of the
Required Lenders or all Lenders.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to in writing by each Obligor party thereto and the Required Lenders;
provided, however, that no such amendment, modification or waiver shall be
effective which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders, by the Approving Lenders or by the
Required Lenders unless consented to in writing by each Lender;
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(b) (i) modify this Section 10.1, or clause (a) of Section
10.10, (ii) change the definition of "Required Lenders" or "Approving
Lenders", (iii) reduce any fees described in Article III, (iv) release
Parent from its obligations under the Parent Pledge Agreement, (v)
release all or substantially all of the Collateral (except in each case
as otherwise specifically provided in this Agreement, the Revolver
Intercreditor Agreement, a Pledge Agreement or a Security Agreement)
without the written consent of each Lender adversely affected thereby,
(vi) amend, modify or waive the provisions of Section 3.1.1 or Section
3.1.2 or clause (b) of Section 2.2.2 or (vii) extend any Loan
Commitment Termination Date, in each case, without the written consent
of each Lender adversely affected thereby;
(c) increase the Fixed Assets Loan Commitment Amount without
the consent of each Fixed Assets Lender adversely affected thereby;
(d) increase the Current Assets Loan Commitment Amount (except
that the Current Assets Loan Commitment Amount may be automatically
increased from $85,000,000 to $100,000,000 on the date of entry of the
Final Order and the Current Assets Loan Commitment Amount may be
automatically further increased to $125,000,000 upon the Borrowers'
full compliance with the proviso to clause (b) of Section 5.2.3) or the
Letter of Credit Commitment Amount or the Current Assets Loan
Percentage of any Current Assets Lender, without the consent of each
Current Assets Lender adversely affected thereby;
(e) (i) extend the final Maturity Date for any Lender's Loan,
(ii) reduce the principal amount of or rate of interest on any Lender's
Loan or reduce any fee payable to any Lender or (iii) extend the date
on which any principal payment, interest or fees are payable on any
Lender's Loans, in each case without the written consent of such Lender
(it being understood and agreed, however, that any vote to rescind any
acceleration made pursuant to Section 8.2 of amounts owing with respect
to the Loans and other Obligations shall only require the vote of the
Required Lenders);
(f) increase the Stated Amount of any Letter of Credit unless
consented to by the Issuer of such Letter of Credit;
(g) affect adversely the interests, rights or obligations of
the Administrative Agent, any Issuer or, the Swing Line Lender, (in its
capacity as the Administrative Agent, Issuer or, the Swing Line
Lender), unless consented to in writing by the Administrative Agent,
any Issuer or, the Swing Line Lender, as the case may be;
(h) change the definition of "Borrowing Base Amount,"
"Eligible Account," "Eligible Inventory," "Generator Receivable" or
"Minimum Excess Availability," in each case if the effect of such
change would be to require a Current Assets Lender to make or
participate in a Credit Extension in an amount that is greater than
such Current Assets Lender would have had to make or participate in
immediately prior to such amendment, modification or waiver without the
written consent of each Current Assets Lender; provided, however,
nothing contained in this clause shall limit the Administrative Agent's
ability to adjust the Borrowing Base Amount, the amount of Eligible
Accounts, Generator
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Receivables or Eligible Inventory or the Minimum Excess Availability to
the extent otherwise permitted by this Agreement;
(i) have the effect (either immediately or at some later time)
of enabling the Borrowers to satisfy a condition precedent set forth in
Section 5.2 to the making of a Loan or the issuance of a Letter of
Credit without the written consent of applicable Lenders holding at
least 51 % of the applicable Loan Commitments (provided that in no
event may the provisions of Section 5.2.3 be modified without the
consent of all of the Approving Lenders);
(j) amend (i) the Fixed Assets Security Documents without the
consent of the Fixed Assets Required Lenders or (ii) amend the Current
Assets Security Agreement or Section 7.1.14 without the consent of the
Current Assets Required Lenders or (iii) the Revolver Intercreditor
Agreement without the consent of the Required Lenders; or
(k) amend or modify the Superpriority Claim status of the
Lenders (as contemplated by Section 7.1.8 and the Financing Order
without the consent of the Lenders.)
Notwithstanding anything to the contrary contained in this Section 10.1, the
Administrative Agent may, without the consent of any Lender, execute amendments
or modifications of any Loan Document to cure any ambiguity, omission, defect or
inconsistency therein or which otherwise are immaterial or would otherwise not
have any adverse affect the rights or interests of any Lender hereunder. No
failure or delay on the part of the Administrative Agent, the Issuer, any Lender
in exercising any power or right under this Agreement or any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. No notice to or demand on any Obligor in
any case shall entitle it to any notice or demand in similar or other
circumstances. No waiver or approval by the Administrative Agent, the Issuer,
any Lender under this Agreement or any other Loan Document shall, except as may
be otherwise stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.
For purposes of this Section 10.1, the Administrative Agent, shall
have primary responsibility, together with the Company, in the negotiation,
preparation and documentation relating to any amendment, modification or waiver
of this Agreement, any other Loan Document or any other agreement or document
related hereto or thereto contemplated pursuant to this Section.
SECTION 10.2. Notices: Time. All notices, requests and other
communications provided to any party hereto under this Agreement or any other
Loan Document shall be in writing and addressed, delivered or transmitted to
such party at its address or facsimile number set forth on Schedule II hereto
or, in the case of a Lender which becomes a party hereto after the date hereof,
as set forth in the Lender Assignment Agreement pursuant to which such Lender
becomes a Lender hereunder or at such other address or facsimile number as may
be designated by such party in a notice to the other parties. Any notice, (a) if
mailed and properly addressed
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with postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when has been received or (b) if transmitted by
facsimile, shall be deemed given when transmitted (and telephonic confirmation
of receipt thereof has been received). Unless otherwise indicated, all
references to the time of a day in a Loan Document shall refer to New York City
time.
SECTION 10.3. Payment of Costs and Expenses. Each Borrower, jointly and
severally, agrees to pay on demand all reasonable expenses of the Administrative
Agent (including the reasonable fees and out-of-pocket expenses of Xxxxx Xxxxx,
L.L.P., counsel to the Administrative Agent and of local or foreign counsel, if
any, who may be retained by counsel to the Administrative Agent) in connection
with:
(a) the syndication of the Loans, the negotiation,
preparation, execution, and delivery of this Agreement and of each
other Loan Document, including schedules, opinions and exhibits, and
any amendments, waivers, consents, supplements or other modifications
to this Agreement or any other Loan Document as may from time to time
hereafter be required, whether or not the transactions contemplated
hereby are consummated and the consummation and administration of the
transactions contemplated hereby and thereby;
(b) the filing, recording or refiling or rerecording of any
Loan Document and/or any U.C.C. financing statements relating thereto
and all amendments, supplements and modifications to any thereof and
any and all other documents or instruments of further assurance
required to be filed or recorded or refiled or rerecorded by the terms
of any Loan Document;
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document;
(d) post-closing lien searches required pursuant to Section
5.2.6;
(e) the enforcement or preservation of any rights under this
Agreement, any Loan Document, or any other document related thereto;
and
(f) all Indemnified Liabilities.
Each Borrower further jointly and severally agrees to pay, and to save the
Administrative Agent and the Lenders harmless from all liability for, any stamp
or other similar Taxes which may be payable in connection with the execution or
delivery of this Agreement, the Borrowings hereunder, the issuance of the Notes,
the issuance of the Letters of Credit or any other Loan Documents. Each Borrower
also agrees to jointly and severally reimburse the Administrative Agent and each
Lender upon demand for all reasonable out-of-pocket expenses (including
attorneys' fees and legal expenses) incurred by the Administrative Agent or such
Lender in connection with (i) the negotiation of any restructuring or
"work-out", whether or not consummated, of any Obligations and (ii) the
enforcement of any Obligations. In addition, the Borrowers jointly and severally
also agree, subject to the terms of this Agreement, to reimburse the
Administrative Agent on demand for all reasonable third party administration,
audit and monitoring expenses incurred in connection with determinations in
respect of Eligible Accounts,
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Generator Receivables, Eligible Inventory and/or any other matters concerning
the Borrowing Base Amount. The payments to be made under clause (a) of Section
10.3 shall be made on the date of the Interim Order and all other payments under
this Section 10.3 shall be made on demand.
SECTION 10.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
each Borrower jointly and severally indemnifies, exonerates and holds the
Administrative Agent, the Issuer and each Lender and each of their respective
partners, trustees, officers, directors, attorneys, employees and agents
(collectively, the "Indemnified Parties") free and harmless from and against any
and all actions, causes of action, suits, losses, costs, liabilities and
damages, and expenses incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for which indemnification
hereunder is sought), including reasonable attorneys' fees and disbursements,
whether incurred in connection with actions between or among the parties hereto
or the parties hereto and third parties (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to:
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit
Extension, including all Indemnified Liabilities arising in connection
with the DIP Financing, the Existing Credit Agreement, and all
documents related thereto;
(b) the entering into and performance of this Agreement, and
any other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of any Borrower as the result of any
determination by the Required Lenders pursuant to Article V not to make
any Credit Extension hereunder but excluding any such action in which a
court of competent jurisdiction in a final non-appealable judgment
determined that such Lenders breached their obligations hereunder in
respect of such Credit Extension);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by any Obligor or any Subsidiary
thereof of all or any portion of the Capital Securities or assets of
any Person, whether or not an Indemnified Party is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to
the protection of the environment or the Release by any Obligor or any
Subsidiary thereof of any Hazardous Material;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by any Obligor or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, such Obligor or Subsidiary; or,
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(f) each Lender's Environmental Liability (the indemnification
herein shall survive repayment of the Obligations and any transfer of
the property of any Obligor or its Subsidiaries by foreclosure or by a
deed in lieu of foreclosure for any Lender's Environmental Liability,
regardless of whether caused by, or within the control of, such Obligor
or such Subsidiary);
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or willful misconduct. Each Borrower and its permitted successors and
assigns hereby waive, release and agree not to make any claim, or bring any cost
recovery action against, any Indemnified Party under CERCLA or any state
equivalent, or any similar law now existing or hereafter enacted. It is
expressly understood and agreed that to the extent that any Indemnified Party is
strictly liable under any Environmental Laws, such Borrower's obligation to such
Indemnified Party under this indemnity shall likewise be without regard to fault
on the part of such Borrower, to the extent permitted under applicable law, with
respect to the violation or condition which results in liability of an
Indemnified Party. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, such Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
SECTION 10.5. Survival. The obligations of each Borrower under Sections
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 and the obligations of the Lenders under
Section 9.1, shall in each case survive any termination of this Agreement
(including in the event of any release of any Borrower pursuant to the terms of
this Agreement other than in connection with a Transfer of the Fibers Business
pursuant to this Agreement, including Section 7.2.16), the payment in full in
cash of all Obligations, the termination of all Commitments and any assignment
from one Lender to another (in the case of Sections 10.3 and 10.4) and the
occurrence of the Termination Date. The representations and warranties made by
each Obligor in this Agreement and in each other Loan Document shall survive the
execution and delivery of this Agreement and each such other Loan Document.
SECTION 10.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original (whether such counterpart is originally
executed or an electronic copy of an original and each party hereto other than
the Administrative Agent and the Company expressly waives its rights to receive
originally executed documents other than with respect to any Notes) and all of
which shall constitute together but one and the same agreement. This Agreement
shall become
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effective as of the date first above written when counterparts hereof executed
on behalf of each Borrower, the Administrative Agent and each Lender (or notice
thereof satisfactory to the Administrative Agent) shall have been received by
the Administrative Agent.
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT AND EACH
OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCLUDING THE LAW OF
CONFLICTS BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS, AND,
TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE. EACH LETTER OF CREDIT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN
SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL
STANDBY PRACTICES (ISP98--INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER
590 (THE "ISP98 RULES")) AND, AS TO MATTERS NOT GOVERNED BY THE ISP98 RULES, THE
INTERNAL LAWS OF THE STATE OF NEW YORK. This Agreement and the other Loan
Documents constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and thereof and supersede any prior
agreements, written or oral, with respect thereto.
SECTION 10.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
(a) no Borrower may assign or transfer its rights or
obligations hereunder without the prior written consent of the
Administrative Agent and all Lenders other than pursuant to Section
7.2.10; and
(b) the rights of sale, assignment and transfer of the Lenders
are subject to Section 10.11.
SECTION 10.11. Sale and Transfer of Loans: Participations in Loans and
Notes. Each Lender may assign, or sell participations in, its Loans and
Commitments to one or more other Persons in accordance with this Section 10.11.
10.11.1. Assignments. Any Lender (an "Assignor Lender") may,
with notice to the Administrative Agent and the Company, assign and delegate to
any commercial bank, fund which is regularly engaged in making, purchasing or
investing in loans or securities or any other financial institution or
commercial finance company (an "Eligible Assignee"), all or any fraction of such
Lender's total Loans, participations in each Letter of Credit and Letter of
Credit Outstandings with respect thereto and Commitments (each such Eligible
Assignee to whom such assignment and delegation is to be made, being hereinafter
referred to as an "Assignee Lender") in a minimum aggregate amount equal to the
lesser of (i) $5,000,000 or (ii) the then remaining amount of such Lender's
Loans and Commitments; provided, however, that any such Assignee Lender will
comply, if applicable, with the provisions contained in Section 4.6 and each
Obligor and the Administrative Agent shall be entitled to continue to deal
solely and directly with such Lender in connection with the interests so
assigned and delegated to an Assignee Lender until
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(A) written notice of such assignment and delegation, together with payment
instructions, addresses and related information with respect to such Assignee
Lender, shall have been given to each Borrower and the Administrative Agent by
such Lender and such Assignee Lender, (B) the Assignor Lender and such Assignee
Lender shall have executed and delivered to each Borrower and the Administrative
Agent a Lender Assignment Agreement, accepted by the Administrative Agent, and
(C) the processing fees described below shall have been paid:
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (i) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (ii)
the Assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within ten Business Days after its receipt of notice that the
Administrative Agent has received an executed Lender Assignment Agreement, if
the Assignor Lender or Assignee Lender so requests, the Borrowers shall execute
and deliver to the Administrative Agent (for delivery to the relevant Assignee
Lender), new Notes evidencing such Assignee Lender's assigned Loans and
Commitments and, if the Assignor Lender has retained Loans and Commitments
hereunder, replacement Notes in the principal amount of the Loans and
Commitments retained by the Assignor Lender hereunder (such Notes to be in
exchange for, but not in payment of, those Notes then held by such Assignor
Lender). Each such Note shall be dated the date of the predecessor Notes. The
Assignor Lender shall xxxx the predecessor Notes "exchanged" and deliver them to
the Company. Accrued interest and accrued fees on the Loans prior to assignment
shall be paid to the assignee Lender and following assignment shall be paid to
the Assignor Lender at the same time or times provided in this Agreement. Such
Assignor Lender or such Assignee Lender must also pay a processing fee to the
Administrative Agent upon delivery of any Lender Assignment Agreement in the
amount of $2,500, unless such assignment and delegation is by a Lender to its
Affiliate or to a Related Fund, if such assignment and delegation is by a Lender
to a Federal Reserve Bank (or, if such Lender is an investment fund, to the
trustee under the indenture to which such fund is a party in support of its
obligations to such trustee), as provided below, is otherwise consented to by
the Administrative Agent or if such assignment is by the Administrative Agent
during the Initial Syndication. Any attempted assignment and delegation not made
in accordance with this Section 10.11.1 shall be null and void. Nothing
contained in this Section 10.11.1 shall prevent or prohibit any Lender from
pledging its rights (but not its obligations to make Loans or participate in
Letters of Credit of Letter of Credit Outstandings) under this Agreement and/or
its Loans hereunder (i) to a Federal Reserve Bank in support of borrowings made
by such Lender from such Federal Reserve Bank or (ii) in the case of a Lender
that is an investment fund, to the trustee under the indenture to which such
fund is a party in support of its obligations to such trustee; provided, that
any such assignment to a trustee shall be subject to the provisions of clause
(a) of this Section 10.11.1. In the event that S&P, Xxxxx'x or Xxxxxxxx'x
BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders that are
insurance companies (or Best's Insurance Reports, if such insurance company is
not rated by Insurance Watch Ratings Service)) shall, after the date that any
Lender with a Commitment to make Revolving Loans or participate in Letters of
Credit becomes a Lender, downgrade the long-term certificate of deposit rating
or long-term senior unsecured debt rating of such Lender, and the resulting
rating shall be below
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BBB-, Baa3 or C (or BB, in the case of Lender that is an insurance company (or
B, in the case of an insurance company not rated by InsuranceWatch Ratings
Service)) respectively, then the Borrowers (with the consent of the
Administrative Agent, such consent not to be unreasonably withheld) shall have
the right, but not the obligation, upon notice to such Lender and the
Administrative Agent, to replace such Lender with an Assignee Lender in
accordance with and subject to the restrictions contained in this Section, and
such Lender hereby agrees to transfer and assign without recourse (in accordance
with and subject to the restrictions contained in this Section) all its
interests, rights and obligations in respect of its Revolving Loan Commitment
under this Agreement to such Assignee Lender; provided, however, that (i) no
such assignment shall conflict with any law, rule and regulation or order of any
Governmental Authority and (ii) such Assignee Lender shall pay to such Lender in
immediately available funds on the date of such assignment the principal of and
interest and fees (if any) accrued to the date of payment on the Loans made, and
Letters of Credit participated in, by such Lender hereunder and all other
amounts accrued for such Lender's account or owed to it hereunder.
10.11.2. Participations. Any Lender may at any time sell to
one or more commercial banks or other Persons (each such commercial bank and
other Person being herein called a "Participant") participating interests in any
of the Loans, Commitments, participations in each Letter of Credit and Letters
of Credit Outstandings or other interests of such Lender hereunder; provided,
however that
(a) no participation contemplated in this Section shall
relieve such Lender from its Commitments or its other obligations
hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations and such
Participant shall not become a Lender hereunder unless such Lender and
such Participant comply with the provisions set forth in this Section
10.11;
(c) each Obligor and the Administrative Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and each of the
other Loan Documents;
(d) no Participant, unless such Participant is an Affiliate of
such Lender, or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such Participant's
consent, agree to any reduction in the interest rate or amount of fees
that such Participant is otherwise entitled to, a decrease in the
principal amount, or an extension of the Maturity Date, of any Loan in
which such Participant has purchased a participating interest or a
release of all or substantially all of the Collateral under the Loan
Documents or any Borrower, in each case except as otherwise
specifically provided in a Loan Document; and
(e) the Borrowers shall not be required to pay any amount
under Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 that is greater than
the amount which it would have been required to pay had no
participating interest been sold.
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Each Borrower acknowledges and agrees, subject to clause (a) of this Section
10.11.2, that, to the fullest extent permitted under applicable law, each
Participant, for purposes of Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and
10.4, shall be considered a Lender.
SECTION 10.12. Confidentiality. The Lenders shall hold all non-public
information obtained pursuant to the requirements of this Agreement in
accordance with their customary procedures for handling confidential information
of this nature and in accordance with safe and sound banking practices and in
any event may make disclosure to any of their examiners, Affiliates, outside
auditors, counsel and other professional advisors in connection with this
Agreement or as reasonably required by any bona fide transferee, participant or
assignee or as required or requested by any governmental agency or
representative thereof or pursuant to legal process; provided, however, that
(a) unless specifically prohibited by applicable law or court
order, each Lender shall notify the Company of any request by any
governmental agency or representative thereof (other than any such
request in connection with an examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such
nonpublic information prior to disclosure of such information;
(b) prior to any such disclosure pursuant to this Section
10.12, each Lender shall require any such bona fide transferee,
participant and assignee receiving a disclosure of non-public
information to agree (i) to be bound by this Section 10.12, and (ii) to
require such Person to require any other Person to whom such Person
discloses such non-public information to be similarly bound by this
Section 10.12; and
(c) except as may be required by an order of a court of
competent jurisdiction and to the extent set forth therein, no Lender
shall be obligated or required to return any materials furnished by
Parent, any Borrower or any Subsidiary.
SECTION 10.13. Other Transactions. Nothing contained herein shall
preclude the Secured Parties from engaging in any transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with any
Borrower or any of its Affiliates in which such Borrower or such Affiliate is
not restricted hereby from engaging with any other Person.
SECTION 10.14. Forum Selection and Consent to Jurisdiction. EACH PARTY
TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS FOR ITSELF AND
ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT
IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE BANKRUPTCY
COURT AND TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION SITTING IN NEW YORK COUNTY, NEW YORK. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, THE LENDERS OR THE BORROWERS THAT IS
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000
XXXXXXX XX XXX XXXXX XX XXX XXXX SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN
THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY OF THE STATE OF
NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE BORROWERS HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO
THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE
BORROWERS FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK AND EXPRESSLY AND IRREVOCABLY APPOINTS CT CORPORATION SYSTEM AS ITS
DOMICILE AND ADDRESS FOR SERVICE OF PROCESS FOR PURPOSES OF ANY ACTION AS TO
WHICH IT HAS SUBMITTED TO JURISDICTION AS SET FORTH IN THIS , AND AGREES THAT
SERVICE UPON SUCH AUTHORIZED AGENT SHALL BE DEEMED IN EVERY RESPECT SERVICE OF
PROCESS UPON ANY BORROWER OR ITS SUCCESSORS AND ASSIGNS, AND, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, SHALL BE TAKEN AND HELD TO BE VALID PERSONAL
SERVICE UPON IT. EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. NOTHING IN THIS SHALL AFFECT THE RIGHT OF ANY AGENT, ANY
LENDER OR THE ISSUER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF ANY SUCH PERSON TO BRING ANY ACTION OR PROCEEDING AGAINST
SUCH BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION. TO THE
EXTENT THAT ANY BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH BORROWER HEREBY, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.15. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT, THE
LENDERS, THE ISSUER AND THE BORROWERS HEREBY, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, KNOWINGLY, VOLUNTARILY AND
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INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, THE ISSUER
OR THE BORROWERS. EACH BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION
OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, THE LENDERS AND THE ISSUER
ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 10.16. Certain Collateral Matters. The Administrative Agent is
authorized on behalf of all the Lenders, without the necessity of any notice to
or further consent from the Lenders, from time to time to take any action with
respect to any Collateral or the Loan Documents which may be necessary to
perfect and maintain perfected the security interest in and Liens upon the
Collateral granted pursuant to the Loan Documents. The Lenders irrevocably
authorize the Administrative Agent, at its option and in its discretion, to
release or modify any security interest or Lien granted to or held by the
Administrative Agent (a) on any Collateral subject to the Fixed Assets Security
Documents on the Fixed Assets Termination Date; (b) on any Collateral subject to
the Current Assets Security Documents on the Current Assets Termination Date;
(c) on any property Disposed of as part or in connection with any Permitted
Disposition; (d) on any property in which the Borrowers owned no interest at the
time the security interest and/or Lien was granted or at any time thereafter
owns no interest; (e) on property leased to the Borrowers under a lease which
has expired or been terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not intended by the
Borrowers to be, renewed or extended; (f) on an instrument evidencing
Indebtedness or other debt instrument, if the Indebtedness evidenced thereby has
been paid in full or (g) if approved, authorized or ratified in writing by the
applicable Required Lenders or each Lender required by Section 10.1. Upon
request by the Administrative Agent at any time, the Lenders will confirm in
writing the Administrative Agent's authority to release or modify particular
types or items of collateral pursuant to this Section. Additionally, the Lenders
hereby irrevocably authorize the Administrative Agent to enter into the Revolver
Intercreditor Agreement and agree to be bound by all of the terms and conditions
contained therein.
SECTION 10.17. Waivers and Releases.
(a) In consideration of the Credit Extensions to be made to
the Borrowers hereunder, each Borrower hereby agrees not to assert and
affirmatively waives and releases any claim such Borrower might have
with respect to the Credit Extensions under Section 510 of the
Bankruptcy Code against the Administrative Agent and the Lenders in any
form or manner whatsoever and further releases the Administrative Agent
and the Lenders from and affirmatively waives and releases any and all
claims the Borrowers may have with respect to the Credit Extensions
against the Administrative Agent and the Lenders from the beginning of
time to the date hereof.
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(b) Except (i) as expressly permitted by the Approved Budget
or this Agreement, or (ii) to the extent otherwise consented to in
writing by Administrative Agent in its sole discretion, each Borrower
hereby agrees not to request an order of the Bankruptcy Court
permitting it to use any cash Collateral pursuant to Section 363 of the
Bankruptcy Code while this Agreement is in effect and the Obligations
are outstanding, and waives and releases its rights to request such use
of any cash Collateral.
SECTION 10.18. ANEXCO Information.
(a) The Administrative Agent and each of the Lenders agrees
that (i) it shall hold all non-public information of ANEXCO obtained
pursuant to this Agreement (the "ANEXCO Information"), including
account obligor information with respect to the accounts receivable of
ANEXCO, in strict confidence, (ii) it will not disclose any of the
ANEXCO Information to any Person other than (A) the Administrative
Agent or any Lender, (B) its employees who need to know the ANEXCO
Information in connection with the transactions contemplated by this
Agreement, who are informed of the confidential nature of the ANEXCO
Information and who agree to abide by and act in accordance with the
terms of this Section to the same extent as if they were parties
hereto, (C) its examiners, outside auditors, counsel and other
professional advisors in connection with this Agreement, (D) any Person
that has become, in accordance with the requirements of this Agreement,
a bona fide transferee, participant or assignee of the interest of any
Lender under this Agreement and (E) any governmental agency or
representative thereof as required or requested pursuant to legal
process, and (iii) it shall use the ANEXCO Information only in
connection with this Agreement and not for any other purpose; provided,
however, this Section shall not apply (A) if any of the ANEXCO
Information (x) was or becomes generally available to the public other
than by disclosure by the Agents or any Lender or any of their
respective employees, agents, examiners, outside auditors, counsel,
other professional advisors, transferees, participants or assignees or
(y) was or becomes available on a non-confidential basis from a source
other than the Borrowers, ANEXCO or BP, or (B to the extent reasonably
required in connection with the enforcement of any Loan Document
(collectively "Excluded Information").
(b) The Administrative Agent and each of the Lenders agrees
that:
(i) it will cause its employees, outside auditors,
counsel and other professional advisors to observe the terms
of this Section and will be responsible for any breach of this
Section;
(ii) any outside auditor, counsel or professional
advisor (other than those outside auditors, counsel or
professional advisors regularly providing such services to
such Lender or to the Administrative Agent) to whom it
proposes to disclose any ANEXCO Information other than the
Excluded Information must be approved by BP or ANEXCO prior to
such disclosure, such approval not to be unreasonably withheld
or delayed;
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(iii) prior to disclosing any information to a
transferee, participant or assignee pursuant to this Section,
it will require such transferee, participant or assignee to
agree to be bound by this Section; and
(iv) unless specifically prohibited by applicable law
or court order, it will (A) notify BP and ANEXCO of any
request by any governmental agency or representative thereof
(other than any request in connection with a routine
examination of its financial condition by such governmental
agency) for disclosure of any ANEXCO Information other than
Excluded Information at least five business days prior to
disclosure of such ANEXCO Information other than Excluded
Information (or if prior notification of such length is not
reasonably practicable under the circumstances, as soon as is
reasonably practicable under the circumstances but in any
event prior to such disclosure) and (B) permit BP and ANEXCO
to file or otherwise make an objection with the relevant
governmental agency or representative thereof to the
disclosure of such ANEXCO Information.
(c) The Administrative Agent and each of the Lenders
acknowledges that the ANEXCO Information other than the Excluded
Information may be of a competitively sensitive nature and agrees to
hold all of the ANEXCO Information other than the Excluded Information
in accordance with it customary procedures for handling confidential
information of that nature and in accordance with safe and sound
banking practices.
(d) Notwithstanding anything to the contrary contained in this
Agreement, each of BP and ANEXCO (i) shall be a third party beneficiary
of this Section and shall be entitled to rights and privileges hereof
to the extent that (A) any ANEXCO Information other than the Excluded
Information was obtained by Sterling from BP or ANEXCO and disclosed to
the Administrative Agent or any of the Lenders or (B) any ANEXCO
Information other than the Excluded Information is otherwise obtained
by the Administrative Agent or any of the Lenders from BP or ANEXCO,
and (ii) shall be entitled to enforce this Section 10.18 against the
Administrative Agent and the Lenders to the same extent as if BP and
ANEXCO were parties hereto.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no amendment, modification or restatement of, or waiver
under, this Section 10.18 which would adversely affect BP or ANEXCO
shall be or become effective without the prior written consent of BP
and ANEXCO.
(f) All notices, requests and other communications provided to
BP or ANEXCO under this Agreement shall be in writing and addressed,
delivered or transmitted to the following address or facsimile number:
BP Chemicals Inc.
Manager, Planning, Control & Development
Nitriles Business Xxxx
Xxxx. 000-0, N-3 1561
000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
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or at such other address or facsimile number as may be designated by BP
or ANEXCO in a notice to the Administrative Agent. Any notice, (i) if
mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given
when it has been received or (ii) if transmitted by facsimile, shall be
deemed given when transmitted (and telephonic confirmation of receipt
thereof has been received).
[REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK;
SIGNATURE PAGES TO FOLLOW]
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WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
BORROWERS:
STERLING CHEMICALS, INC.,
as a Borrower
By:
--------------------------------------
Title:
--------------------------------
STERLING CANADA, INC.,
as a Borrower
By:
--------------------------------------
Title:
--------------------------------
STERLING PULP CHEMICALS US, INC.,
as a Borrower
By:
--------------------------------------
Title:
--------------------------------
STERLING PULP CHEMICALS, INC.,
as a Borrower
By:
--------------------------------------
Title:
--------------------------------
STERLING FIBERS, INC.,
as a Borrower
By:
--------------------------------------
Title:
--------------------------------
142
STERLING CHEMICALS ENERGY, INC.,
as a Borrower
By:
--------------------------------------
Title:
--------------------------------
STERLING CHEMICALS INTERNATIONAL, INC.,
as a Borrower
By:
--------------------------------------
Title:
--------------------------------
LENDERS:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as the Administrative Agent and
as a Lender
By:
--------------------------------------
Title:
--------------------------------
IBJ WHITEHALL BUSINESS CREDIT CORPORATION
By:
--------------------------------------
Title:
--------------------------------
FLEET CAPITAL CORPORATION
By:
--------------------------------------
Title:
--------------------------------
143
TEXTRON FINANCIAL CORP.
By:
--------------------------------------
Title:
--------------------------------
TRANSAMERICA BUSINESS CAPITAL CORPORATION
By:
--------------------------------------
Title:
--------------------------------
GMAC BUSINESS CREDIT, LLC
By:
--------------------------------------
Title:
--------------------------------
THE PROVIDENT BANK
By:
--------------------------------------
Title:
--------------------------------
GPSF SECURITIES, INC.
By:
--------------------------------------
Title:
--------------------------------
FOOTHILL INCOME TRUST II, L.P.
By:
--------------------------------------
Title:
--------------------------------
144
CONGRESS FINANCIAL CORPORATION
By:
--------------------------------------
Title:
--------------------------------
COMERICA BANK
By:
--------------------------------------
Title:
-----------------------------------
