Exhibit 10.12
CREDIT AGREEMENT
Among
BURLINGTON RESINS, INC.
as the Company
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
Individually, as Issuing Bank and as Agent,
and
FINANCIAL INSTITUTIONS
NOW OR HEREAFTER PARTIES HERETO
$5,500,000 Revolving Credit Facility
$5,500,000 Term Loan
August 18, 1995
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01 Definitions................................................ 1
Section 1.02 Accounting Terms and Determinations........................ 16
Section 1.03 Other Definitional Terms................................... 16
ARTICLE II
AMOUNT AND TERMS OF LOANS
Section 2.01 Loans and Commitments...................................... 16
Section 2.02 Borrowing Requests......................................... 17
Section 2.03 Letters of Credit.......................................... 18
Section 2.04 Disbursement of Funds...................................... 22
Section 2.05 Notes...................................................... 23
Section 2.06 Interest................................................... 24
Section 2.07 Repayment of Loans......................................... 24
Section 2.08 Termination or Reduction of Revolving Credit Commitments... 24
Section 2.09 Prepayments................................................ 25
Section 2.10 Fees....................................................... 26
Section 2.11 Payments, etc.............................................. 27
Section 2.12 Capital Adequacy........................................... 28
Section 2.13 Sharing of Payments, etc................................... 28
Section 2.14 Taxes...................................................... 29
Section 2.15 Pro Rata Treatment......................................... 31
Section 2.16 Restoration Account........................................ 31
ARTICLE III
CONDITIONS TO BORROWINGS AND TO
PURCHASE, RENEWAL AND REARRANGEMENT
Section 3.01 Closing.................................................... 34
Section 3.02 Conditions Precedent to Initial Loan....................... 34
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Section 3.03 Conditions Precedent to Each Loan.......................... 36
Section 3.04 Recordings................................................. 37
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Corporate Existence........................................ 37
Section 4.02 Corporate Power and Authorization.......................... 37
Section 4.03 Binding Obligations........................................ 37
Section 4.04 No Legal Bar or Resultant Lien............................. 38
Section 4.05 No Consent................................................. 38
Section 4.06 Financial Information...................................... 38
Section 4.07 Investments and Guaranties................................. 38
Section 4.08 Litigation................................................. 38
Section 4.09 Federal Reserve Regulations. ............................. 38
Section 4.10 Compliance with ERISA...................................... 39
Section 4.11 Taxes; Governmental Charges................................ 40
Section 4.12 Titles, etc................................................ 40
Section 4.13 Defaults................................................... 40
Section 4.14 Casualties; Taking of Properties........................... 40
Section 4.15 Compliance with the Law.................................... 41
Section 4.16 No Material Misstatements.................................. 41
Section 4.17 Investment Company Act..................................... 41
Section 4.18 Public Utility Holding Company Act......................... 41
Section 4.19 Subsidiaries............................................... 41
Section 4.20 Insurance.................................................. 41
Section 4.21 Mortgaged Property......................................... 42
Section 4.22 Solvency................................................... 42
Section 4.23 Environmental Matters...................................... 42
ARTICLE V
COVENANTS
Section 5.01 Certain Affirmative Covenants.............................. 44
(a) Maintenance and Compliance, etc............................ 44
(b) Payment of Taxes and Claims, etc........................... 44
(c) Further Assurances......................................... 44
(d) Performance of Obligations................................. 45
(e) Insurance.................................................. 45
(f) Accounts and Records....................................... 49
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(g) Right of Inspection........................................ 49
(h) Operation and Maintenance of Mortgaged Property............ 49
(i) Syndication Efforts........................................ 50
Section 5.02 Reporting Covenants........................................ 50
(a) Annual Financial Statements................................ 50
(b) Quarterly Financial Statements............................. 50
(c) Monthly Financial Statements............................... 50
(d) No Default/Compliance Certificate.......................... 51
(e) Auditors' No Default Certificate; Management Letters....... 51
(f) Title Information.......................................... 51
(g) Events or Circumstances with respect to Mortgaged Property. 51
(h) Monthly Borrowing Base Reports............................. 51
(i) Notice of Certain Events................................... 52
(j) Shareholder Communications, Filings, etc................... 52
(k) Litigation................................................. 52
(l) ERISA Information and Compliance........................... 52
(m) Borrowing Base Audit....................................... 53
(n) Aged Accounts.............................................. 53
(o) Business Plan.............................................. 53
(p) Other Information.......................................... 54
Section 5.03 Financial Covenants........................................ 54
(a) Tangible Net Worth......................................... 54
(b) Current Ratio.............................................. 54
(c) Fixed Charge Coverage Ratio................................ 54
(d) Interest Coverage Ratio.................................... 54
Section 5.04 Certain Negative Covenants................................. 54
(a) Indebtedness............................................... 54
(b) Liens...................................................... 55
(c) Mergers, Sales, etc........................................ 56
(d) Dividends, etc............................................. 56
(e) Investments, Loans, etc.................................... 57
(f) Lease Payments............................................. 57
(g) Sales and Leasebacks....................................... 58
(h) Nature of Business......................................... 58
(i) ERISA Compliance........................................... 58
(j) Sale or Discount of Receivables............................ 59
(k) Proceeds of Loans.......................................... 59
(l) Transactions with Affiliates............................... 59
(m) Unconditional Purchase Obligations......................... 60
(n) Stock...................................................... 60
(o) Capital Expenditures....................................... 60
(p) Preservation of Assigned Agreements........................ 60
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(q) Subsidiaries and Partnerships.............................. 60
(r) Restoration Account........................................ 60
(s) Prepayment on Subordinated Note............................ 60
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Payments................................................... 61
Section 6.02 Covenants Without Notice................................... 61
Section 6.03 Other Covenants............................................ 61
Section 6.04 Other Financing Document Obligations....................... 61
Section 6.05 Representations............................................ 61
Section 6.06 Non-Payments of Other Indebtedness......................... 61
Section 6.07 Defaults Under Other Agreements............................ 62
Section 6.08 Bankruptcy................................................. 62
Section 6.09 ERISA...................................................... 62
Section 6.10 Money Judgment............................................. 62
Section 6.11 Discontinuance of Business................................. 63
Section 6.12 Security Instruments....................................... 63
Section 6.13 Change of Control.......................................... 63
Section 6.14 Mandatory Prepayments...................................... 63
Section 6.15 Material Adverse Event..................................... 63
ARTICLE VII
THE AGENT
Section 7.01 Appointment of Agent....................................... 63
Section 7.02 Nature of Duties of Agent.................................. 64
Section 7.03 Lack of Reliance on the Agent.............................. 64
Section 7.04 Certain Rights of the Agent................................ 64
Section 7.05 Reliance by Agent.......................................... 65
Section 7.06 INDEMNIFICATION OF AGENT................................... 65
Section 7.07 The Agent in its Individual Capacity....................... 65
Section 7.08 May Treat Lender as Owner.................................. 65
Section 7.09 Successor Agent............................................ 65
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ARTICLE VIII
MISCELLANEOUS
Section 8.01 Notices.................................................... 66
Section 8.02 Amendments, etc............................................ 66
Section 8.03 No Waiver; Remedies Cumulative............................. 67
Section 8.04 Payment of Expenses, Indemnities, etc...................... 67
Section 8.05 Right of Setoff............................................ 69
Section 8.06 Benefit of Agreement....................................... 69
Section 8.07 Assignments and Participations............................. 70
Section 8.08 Governing Law; Submission to Jurisdiction; Etc............. 72
Section 8.09 Independent Nature of Lenders' Rights...................... 72
Section 8.10 Invalidity................................................. 72
Section 8.11 Satisfaction Requirement................................... 73
Section 8.12 Renewal, Extension or Rearrangement........................ 73
Section 8.13 Interest................................................... 73
Section 8.14 Taxes, etc................................................. 74
Section 8.15 Confidential Information................................... 74
Section 8.16 ENTIRE AGREEMENT........................................... 74
Section 8.17 Attachments................................................ 74
Section 8.18 Counterparts............................................... 75
Section 8.19 Survival of Agreements..................................... 75
Section 8.20 Headings Descriptive....................................... 75
Section 8.21 Effectiveness.............................................. 75
Section 8.22 EXCULPATION PROVISIONS..................................... 75
ANNEXES
Annex I - Commitments
SCHEDULES
Schedule 4.05 - Consents
Schedule 4.07 - Investment and Guaranties
Schedule 4.08 - Litigation
Schedule 4.10 - ERISA
Schedule 4.12 - Titles
Schedule 4.13 - Defaults
Schedule 4.20 - Insurance
Schedule 4.23 - Environmental Matters
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Schedule 5.04(a) - Existing Indebtedness
Schedule 5.04(b) - Liens
EXHIBITS
Exhibit A - Form of Revolving Note
Exhibit B - Form of Term Note
Exhibit C-1 - Form of Borrowing Request for Revolving Credit Loans
Exhibit C-2 - Form of Borrowing Request for the Term Loan
Exhibit D - Form of Opinion of Xxxxxxx, Xxxxx & Xxxxxx.
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Borrowing Base Report
Exhibit G - Form of Consent and Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made and entered into as of this 18th day of
August, 1995, among BURLINGTON RESINS, INC., a Delaware corporation (the
"Company"), TEXAS COMMERCE BANK NATIONAL ASSOCIATION, individually, as Issuing
Bank and as Agent, and each of the lenders that is a signatory hereto or which
becomes a party hereto as provided in Section 8.07 (individually, a "Lender"
and, collectively, the "Lenders").
In consideration of the mutual covenants and agreements herein
contained, the Company, the Agent, the Issuing Bank and the Lenders agree as
follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01 Definitions. As used herein, the following terms shall
have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined). Reference to any party to a
Financing Document means that party and its successors and assigns.
"Advance Notice" shall mean written or telecopy notice (or
telephonic notice promptly confirmed in writing), which in each case
shall be irrevocable, from the Company to be received by the Agent no
later than 10:00 a.m. (Houston time) on the same Business Day of (and
not earlier than two Business Days before) any borrowing or prepayment
of any Loan pursuant to this Agreement. The Agent, the Issuing Bank and
each Lender are entitled to rely upon and act upon telecopy notice made
or purportedly made by the Company, and the Company hereby waives the
right to dispute the authenticity and validity of any such transaction
once the Agent or any Lender has advanced funds or the Issuing Bank has
issued Letters of Credit, absent manifest error.
"Affiliate" of any Person shall mean any other Person directly
or indirectly controlling, controlled by, or under common control with,
such Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agent" shall mean Texas Commerce Bank National Association,
acting in the manner and to the extent described in Article VII.
"Aggregate Revolving Credit Exposure" shall mean the sum of
each Lender's Revolving Credit Exposure.
"Agreement" shall mean this Credit Agreement, as amended,
supplemented or modified from time to time.
"Applicable Margin" shall mean, on any day and with respect to
any Loan, one and one-quarter of one percent (1 1/4%) per annum.
"Application" shall mean an "Application and Agreement for
Letters of Credit," or similar instruments or agreements, entered into
between the Company and the Issuing Bank in connection with any Letter
of Credit.
"Assigned Agreements" shall mean the Purchase Agreement and
the Supply Contracts.
"Assignment and Acceptance" shall have the meaning assigned
such term in Section 8.07(b).
"Bankruptcy Code" shall have the meaning provided in Section
6.08.
"Base Rate" shall have the meaning provided in Section
2.06(a).
"Benefit Plan" shall mean any employee pension benefit plan,
as defined in section 3(2) of ERISA (other than a Multiemployer Plan),
which (a) is currently or hereafter sponsored, maintained or
contributed to by the Company or an ERISA Affiliate or (b) was at any
time during the six calendar years preceding the date of this
Agreement, sponsored, maintained or contributed to by the Company or an
ERISA Affiliate.
"Borrowing" shall mean a borrowing pursuant to a Borrowing
Request.
"Borrowing Base" shall mean at any time the amount equal to
the sum of (i) eighty percent (80%) of Eligible Accounts plus (ii)
seventy percent (70%) of Eligible Inventory during the period from the
Closing Date through the 120th day following the Closing Date and fifty
percent (50%) of Eligible Inventory thereafter.
"Borrowing Base Report" shall mean the report of the Company
concerning the amount of the Borrowing Base, to be delivered pursuant
to Section 5.02(h), substantially in the form attached as Exhibit F.
"Borrowing Request" shall mean, with respect to Revolving
Credit Loans, a request for a Borrowing pursuant to Section 2.02(a)(i),
substantially in the form attached as Exhibit C-1 and, with respect to
the Term Loan, a request for a Borrowing pursuant to Section
2.02(a)(ii), substantially in the form attached as Exhibit C-2.
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"Burlington South Plant" shall mean the buildings, equipment,
facilities and real estate interests constituting the specialty
polyvinyl chloride resin production facility located at Burlington, New
Jersey and being acquired by the Company pursuant to the Purchase
Agreement.
"Business Day" shall mean any day excluding Saturday, Sunday
and any other day on which banks are required or authorized to close in
Houston, Texas.
"Capital Expenditures" shall mean capital expenditures for
capital or fixed assets, whether by way of acquisition or otherwise.
"Capital Lease Obligations" shall mean, as to any Person, the
obligations of such person to pay rent or other amounts under a lease
of (or other agreement conveying the right to use) real and/or personal
property which obligations are required to be classified and accounted
for as a liability for a capital lease on a balance sheet of such
Person and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof.
"Cash Flow" shall mean, as to any Person, the sum of the net
income of such Person after taxes for any period plus, to the extent
deducted from net income, all non-cash items, including, but not
limited to, depreciation, depletion and impairment, amortization of
intangibles and deferred taxes, in each case for such period and
determined as to such Person minus, to the extent included in net
income, all non-cash income.
"Change of Control" shall mean a change resulting when any
Unrelated Person (other than Ozite) or any Unrelated Persons acting
together which would constitute a Group together with any Affiliates
thereof (in each case also constituting Unrelated Persons) shall at any
time Beneficially Own more than 25% of the aggregate voting power of
all classes of Voting Stock of the Company. As used herein (a)
"Beneficially Own" means "beneficially own" as defined in Rule 13d-3 of
the Securities Exchange Act of 1934, as amended, or any successor
provision thereto; provided, however, that, for purposes of this
definition, a Person shall not be deemed to Beneficially Own securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates until such tendered
securities are accepted for purchase or exchange; (b) "Group" means a
"group" for purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended; (c) "Unrelated Person" means at any time any Person
other than the Company and other than any trust for any employee
benefit plan of the Company; and (d) "Voting Stock" of any Person shall
mean capital stock of such Person which ordinarily has voting power for
the election of directors (or persons performing similar functions) of
such Person, whether at all times or only so long as no senior class of
securities has such voting power by reason of any contingency.
"Closing Date" shall mean the as of date of this Agreement set
forth in the first paragraph hereof.
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"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute and the regulations promulgated
thereunder.
"Commitment" shall mean, with respect to each Lender, the
obligation of such Lender to make loans to the Company under Section
2.01, up to the maximum amount set forth opposite such Lender's name on
Annex I under the caption "Total Commitment." Each Lender's Commitment
is the sum of its Revolving Credit Commitment and its Term Loan
Commitment.
"Company" shall mean Burlington Resins, Inc., a Delaware
corporation.
"Cover" for Letter of Credit Liabilities shall be effected by
paying to the Agent in immediately available funds, to be held by the
Agent in a collateral account maintained by the Agent at its Payment
Office and collaterally assigned as security pursuant to the Cash
Collateral Account Agreement dated as of the Closing Date between the
Company and the Agent, an amount equal to the maximum amount of each
applicable Letter of Credit available for drawing at any time. Such
amount shall be retained by the Agent in such collateral account until
such time as the applicable Letter of Credit shall have expired and
Reimbursement Obligations, if any, with respect thereto shall have been
fully satisfied.
"Current Assets" of any Person, on any date of determination
shall mean, without duplication, all assets of such Person that would,
in accordance with GAAP, be classified at such date as current assets
of a company conducting a business the same as or similar to that of
such Person, after deducting adequate reserves in each case in which a
reserve is proper in accordance with GAAP.
"Current Liabilities" of any Person, on any date of
determination, shall mean, without duplication, all obligations of such
Person that would, in accordance with GAAP, be classified at such date
as current liabilities of a company conducting a business the same as
or similar to that of such Person, including but not limited to current
maturities of long-term Indebtedness.
"Default" shall mean an Event of Default or any condition or
event which, with notice or lapse of time or both, would constitute an
Event of Default.
"Dollar" and the sign "$" shall mean lawful money of the
United States of America.
"EBITDA" shall mean, as to the Company and for each Rolling
Period, the amount equal to net income of the Company less any non-cash
income included in net income, plus, to the extent deducted from net
income, interest expense, depreciation, depletion and impairment,
amortization of intangibles, other non-cash expenses, and taxes,
provided, that, non-recurring extraordinary items shall not be included
in EBITDA.
4
"Effective Date" shall mean the date on which (i) each of the
conditions precedent set forth in Article III have been satisfied or
waived by each of the Lenders, (ii) the conditions to effectiveness set
forth in Section 8.22 have been satisfied and (iii) the initial Loans
have been made, or the initial Letter of Credit has been issued.
Subject to Section 3.01, the Effective Date and Closing Date may be the
same date.
"Eligible Account" shall mean at any time the net invoice or
ledger amount owing on each account (which shall mean any "account" as
such term is defined in Section 9.106 of the UCC and any "chattel
paper" as such term is defined in Section 9.105(a)(2) of the UCC) of
the Company (net of any credit balance, returns, trade discounts, or
unbilled amounts or retention) for which each of the following
statements is accurate and complete (and the Company by including such
account in any computation of the Borrowing Base shall be deemed to
represent and warrant to the Agent, the Issuing Bank and the Lenders
the accuracy and completeness of such statements):
(a) Said account is a binding and valid obligation of
the obligor thereon in full force and effect;
(b) Said account is genuine as appearing on its face
or as represented in the books and records of the Company;
(c) Said account is free from claims regarding
rescission, cancellation or avoidance, whether by operation of
law or otherwise;
(d) Payment of said account is not more than 90 days
past the invoice date thereof and is less than 60 days past
due;
(e) Said account is net of concessions, offset
(excluding any accounts payable offset supported by a Letter
of Credit) or understandings with the obligor thereon of any
kind;
(f) Said account is, and at all times will be, free
and clear of all Liens, except in favor of the Agent, and the
Agent has a first priority, perfected security interest in
such account;
(g) Said account is derived from goods sold or leased
or services rendered to the obligor in the ordinary course of
the Company's business;
(h) Said account is not (i) carried on the books of
the Company as an "exchange account receivable" or (ii)
subject to an exchange agreement with another Person;
5
(i) Said account is not payable by an obligor who is
more than 30 days past due with regard to 20% or more of the
total accounts owed by such obligor;
(j) The account debtor has sent an invoice within 10
days after said account has been entered on the financial
records of the Company;
(k) 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 said account by each party obligated thereunder
have been duly obtained, effected or given and are in full
force and effect;
(l) The obligor on said 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, admitted its inability to pay its debts as they
mature or suspended its business;
(m) The obligor on said account is not affiliated,
directly or indirectly, with the Company, as an Affiliate,
employee or otherwise; provided, however, that subject to
Section 5.04(l), accounts that are obligations of the Colorite
Division of Plastic Specialties and Technologies, a Delaware
corporation, may be included as Eligible Accounts in an
aggregate amount not to exceed $500,000;
(n) The goods sold or leased or services rendered
resulting in the right to payment in connection with said
account were sold, leased or rendered in a state or territory
of the United States of America (excluding however, such goods
which are sold or leased for export outside of the United
States of America), which is payable in the United States of
America, and the obligor of which is subject to the
jurisdiction of federal or state courts in the United States
of America, unless said account is backed by a letter of
credit in form and substance, and issued by an issuer,
acceptable to the Agent;
(o) Said account, which when added to all other
accounts that are obligations of the same obligor, does not at
any time result in a total sum that exceeds 10% of the total
balance then due on all of the Company's accounts; and
(p) Said account has not been otherwise determined by
the Agent, in its good faith discretion, to be unacceptable in
accordance with its customary practices for facilities of this
nature.
"Eligible Inventory" shall mean, at any time, all inventory
(as such term is defined in Section 9.109(4) of the UCC) of the Company
(less the Obsolescence Reserve at such time) valued at the lower of
cost or current market for which each of the following statements is
6
accurate and complete (and the Company by including such inventory in
any computation of the Borrowing Base shall be deemed to represent and
warrant to the Agent, the Issuing Bank and each Lender the accuracy and
completeness of such statements):
(a) Said inventory is, and at all times will be, free
and clear of all Liens, except for Liens in favor of the
Agent, and the Agent has a first priority, perfected security
interest in such inventory;
(b) Said inventory does not include capitalized goods
which are part of inventory of the Company;
(c) Said inventory does not include goods that have
been damaged or returned;
(d) Said inventory does not include goods that are
not owned by the Company or are held by the Company pursuant
to a consignment agreement;
(e) Said inventory does not include "private-label"
goods; and
(f) Said inventory does not include goods that are
classified as "work-in-progress."
"Eligible Transferee" shall mean any financial institution
which is a Lender as of the Effective Date or which is a commercial
bank, a financial institution or an "accredited investor" (as defined
in Regulation D) which makes loans in the ordinary course of its
business and that makes or acquires Loans for its own account in the
ordinary course of its business and which has capital, surplus and
undivided profits aggregating at least $500,000,000 (as of the date of
its most recent financial statements).
"Environmental Laws" shall mean any and all laws, statutes,
ordinances, rules, regulations, orders, or determinations of any
Governmental Authority pertaining to health or the environment in
effect in any and all jurisdictions in which the Company is conducting
or at any time has conducted business, or where any Property of the
Company is located, or where any hazardous substances generated by or
disposed of by the Company are located, including but not limited to
the Oil Pollution Act of 1990 ("OPA"), the Clean Air Act, as amended,
the Comprehensive Environmental, Response, Compensation, and Liability
Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution Control
Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 ("RCRA"),
as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and
Reauthorization Act of 1986, as amended, and other environmental
conservation or protection laws. The term "oil" shall have the meaning
specified in OPA; the terms "hazardous substance," "release" and
7
"threatened release" have the meanings specified in CERCLA, and the
terms "solid waste" and "disposal" (or "disposed") have the meanings
specified in RCRA; provided, however, in the event either CERCLA or
RCRA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply subsequent to the effective
date of such amendment, and provided, further, that, to the extent the
laws of the state in which any Property of the Company is located
establish a meaning for "oil," "hazardous substance," "release," "solid
waste" or "disposal" which is broader than that specified in either
OPA, CERCLA or RCRA, such broader meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and the regulations promulgated thereunder and any
successor statute.
"ERISA Affiliate" shall mean each trade or business (whether
or not incorporated) which together with the Company would be deemed to
be a "single employer" within the meaning of section 4001(b)(1) of
ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code.
"ERISA Event" shall mean (i) a "Reportable Event" described in
section 4043 of ERISA and the regulations issued thereunder, (ii) the
withdrawal of the Company or any ERISA Affiliate from a Plan during a
plan year in which it was a "substantial employer" as defined in
section 4001(a)(2) of ERISA, (iii) the filing of a notice of intent to
terminate a Plan or the treatment of a Plan amendment as a termination
under section 4041 of ERISA, (iv) the institution of proceedings to
terminate a Plan by the PBGC, (v) any other event or condition which
might constitute grounds under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan
or (vi) the partial or complete withdrawal of the Company or any ERISA
Affiliate from a Multiemployer Plan.
"Event of Default" shall have the meaning provided in Article
VI.
"Event of Loss" shall mean, with respect to the Burlington
South Plant, (a) the loss of all or any material portion of the
Burlington South Plant due to destruction or damage beyond repair; (b)
the loss of use of all or any material portion of the Burlington South
Plant for a period reasonably expected to extend for at least three
months for any of the reasons referenced in clause (a); (c) the receipt
of insurance proceeds based upon an actual or constructive total loss
with respect to the Burlington South Plant; (d) the condemnation,
confiscation or seizure of title to all or any portion of the
Burlington South Plant such that the then remaining portion cannot
practically be utilized for the purposes intended; (e) the
condemnation, confiscation, seizure or requisition for use of the
Burlington South Plant (in its entirety or a material portion as
aforesaid) for a stated period which shall exceed, or for an indefinite
period which is reasonably expected to exceed, three months; or (f)
shutdown of the Burlington South Plant as a result of any Governmental
Requirement for a period exceeding three consecutive months.
8
"Excess Cash Flow" shall mean (a) Cash Flow of the Company for
any fiscal year, minus (b) regularly scheduled payments of principal on
Indebtedness for any fiscal year, minus (c) those fees set forth in
Section 2.10, minus (d) the lesser of (i) actual Capital Expenditures
of the Company and (ii) Capital Expenditures permitted pursuant to
Subsection 5.04(o), during such fiscal year.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate per annum equal for each day during such period to 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, 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 Agent from three Federal funds brokers of
recognized standing selected by it.
"Final Maturity Date" shall mean August 18, 2002.
"Financial Statements" shall mean the financial statements of
the Company described or referred to in Section 4.06.
"Financing Documents" shall mean this Agreement, the Notes,
the Security Instruments, the Applications, the Letters of Credit,
Borrowing Requests, Borrowing Base Reports, and the other documents,
instruments or agreements described in Subsection 3.02(d), together
with any other document, instrument or agreement (other than
participation, agency or similar agreements among the Lenders or
between any Lender and any other bank or creditor with respect to any
indebtedness or obligations of the Company hereunder) now or hereafter
entered into in connection with the Loans, the Lender Indebtedness or
the Mortgaged Properties, as such documents, instruments or agreements
may be amended, modified or supplemented from time to time.
"Fixed Charges" shall mean, as to the Company and for each
Rolling Period, the sum of scheduled debt payments on Indebtedness
(including, without limitation, Capital Lease Obligations payable
during such Rolling Period), plus interest expense paid or accrued,
plus cash dividends, plus Capital Expenditures.
"Form 1001 Certification" shall have the meaning provided in
Section 2.14(f).
"Form 4224 Certification" shall have the meaning provided in
Section 2.14(f).
"GAAP" shall mean generally accepted accounting principles as
applied in accordance with Section 1.02.
9
"Governmental Authority" shall mean any (domestic or foreign)
federal, native American Indian, state, province, county, city,
municipal or other political subdivision or government, department,
commission, board, bureau, court, agency or any other instrumentality
of any of them, which exercises jurisdiction over the Company or any of
its Property.
"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other
direction or requirement (including but not limited to any of the
foregoing which relate to Environmental Laws, energy regulations and
occupational, safety and health standards or controls) of any
Governmental Authority.
"Highest Lawful Rate" shall mean, with respect to each Lender,
the maximum nonusurious interest rate, if any, that at any time or from
time to time may be contracted for, taken, reserved, charged or
received on the Notes or on other Lender Indebtedness, as the case may
be, owed to it under the law of any jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding other provisions
of this Agreement, or law of the United States of America applicable to
such Lender and the Transactions which would permit such Lender to
contract for, charge, take, reserve or receive a greater amount of
interest than under such jurisdiction's law.
"Indebtedness" of any Person shall mean, without duplication:
(i) all obligations of such Person for borrowed money
and obligations evidenced by bonds, debentures, notes or other
similar instruments;
(ii) all obligations of such Person (whether
contingent or otherwise) in respect of bankers' acceptances,
letters of credit, surety or other bonds and similar
instruments;
(iii) all obligations of such Person to pay the
deferred purchase price of Property or services (other than
for borrowed money);
(iv) all Capital Lease Obligations in respect of
which such Person is liable, contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which
obligations such Person otherwise assures a creditor against
loss;
(v) all guaranties (direct or indirect), and other
contingent obligations of such Person in respect of, or
obligations to purchase or otherwise acquire or to assure
payment of, Indebtedness of others;
(vi) Indebtedness of others secured by any Lien upon
Property owned by such Person, whether or not assumed;
10
(vii) all obligations or undertakings of such Person
to maintain or cause to be maintained the financial position
or covenants of other Persons; and
(viii) obligations to deliver goods or services in
consideration of advance payments.
"Initial Funding Date" shall mean the date on which the
initial Loan is made.
"Interest Coverage Ratio" shall mean the ratio of (i) EBITDA
for the Rolling Period immediately preceding the date of determination
to (ii) interest expense paid or accrued during such Rolling Period.
"Issuing Bank" shall mean, for each Letter of Credit, TCB as
the issuing bank for such Letter of Credit.
"Lender" shall have the meaning assigned such term in the
opening paragraph of this Agreement.
"Lender Indebtedness" shall mean any and all amounts owing or
to be owing by the Company to the Agent, the Issuing Bank or the
Lenders with respect to or in connection with the Loans, any Letter of
Credit Liabilities, the Notes, this Agreement, or any other Financing
Document and shall include, without limitation, the fees payable
pursuant to Section 2.10.
"Lending Office" shall mean for each Lender the office
specified opposite such Lender's name on the signature pages hereof, or
in the Assignment and Acceptance pursuant to which it became a Lender,
with respect to each Loan, or such other office as such Lender may
designate in writing from time to time to the Company and the Agent
with respect to each Loan.
"Letters of Credit" shall have the meaning assigned such term
in Section 2.03(a).
"Letter of Credit Liabilities" shall mean, at any time and in
respect of any Letter of Credit, the sum of (i) the amount available
for drawings under such Letter of Credit as of the date of
determination plus (ii) the aggregate unpaid amount of all
Reimbursement Obligations due and payable as of the date of
determination in respect of previous drawings made under such Letter of
Credit.
"Lien" shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or
contract, and including but not limited to the lien or security
interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions
and encumbrances affecting Property. For the purposes of this
Agreement, the Company shall be deemed to be the owner of any Property
which it has acquired or holds subject to a conditional sale agreement,
financing lease or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for
security purposes.
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"Loan" shall mean a Revolving Credit Loan or a Term Loan, and
"Loans" shall mean collectively the Revolving Credit Loans or Term
Loans or one or more of them as provided herein.
"Majority Lenders" shall mean at any time (a) prior to the
Commitments expiring or being terminated in full, Lenders holding at
least 66-2/3% of the Commitments in effect at such time, or (b)
thereafter, Lenders holding at least 66-2/3% of the sum of (i) the then
Aggregate Revolving Credit Exposure, plus (ii) the then unpaid
principal amount of the Term Loans at such time.
"Margin Stock" shall have the meaning provided in Regulation U
and Regulation X.
"Material Adverse Effect" shall mean any material and adverse
effect on (i) the assets, liabilities, financial condition or
operations of the Company, or (ii) the ability of the Company to carry
out its business or meet its obligations under the Notes, this
Agreement or the other Financing Documents, on a timely basis.
"Maximum Available Amount" shall mean, at any date, an amount
equal to the lesser of (a) the aggregate Revolving Credit Commitments
as of such date and (b) the Borrowing Base as of such date.
"Maximum Revolving Credit Loan Available Amount" shall mean,
at any date, an amount equal to the difference between (a) Maximum
Available Amount as of such date and (b) the aggregate amount of all
Letter of Credit Liabilities as of such date.
"Mortgage" shall mean the Mortgage and Security Agreement
dated as of the Closing Date between the Company and the Agent.
"Mortgaged Property" shall mean the Company's Properties
described in and subject to the Liens, privileges, priorities and
security interests existing and to exist under the terms of the
Security Instruments, including but not limited to the Burlington South
Plant, which have been or are hereafter mortgaged to the Agent for the
benefit of the Lenders pursuant to the Security Instruments.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in section 3(37) or 4001 (a)(3) of ERISA which is, or within
the six calendar years preceding this Agreement was, contributed to by
the Company or an ERISA Affiliate.
"Notes" shall mean the Revolving Credit Notes and the Term
Notes.
"Obsolescence Reserve" shall mean the amount at any time and
from time to time that is or should, in accordance with GAAP, be
included as a contra-account to inventory on the Company's balance
sheet as the "reserve for obsolescence," "reserve for slow-moving
inventory" or other similar contra-account to inventory (excluding,
however, any "LIFO reserve").
"Other Taxes" shall have the meaning provided in Subsection
2.14(b).
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"OxyChem" shall mean Occidental Chemical Corporation, a New
York corporation.
"Ozite" shall mean Ozite Corporation, a Delaware corporation.
"Payment Office" shall mean the Agent's office located at 000
Xxxx Xxxxxx, Xxxxxxx, Xxxxx, 00000; Attention: Mr. P. Xxxx Xxxxx.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Percentage Share" shall mean, as to any Lender, the fraction,
expressed as a percentage, the numerator of which is the amount of such
Lender's Revolving Credit Commitment and the denominator of which is
the amount of the aggregate Revolving Credit Commitments.
"Person" shall mean any individual, partnership, firm,
corporation (including, but not limited to the Company), association,
joint venture, trust or other entity, or any government or political
subdivision or agency, department or instrumentality thereof;
provided,however, for the purpose of the definition of "Change of
Control," "Person" shall mean a "person" or group of persons within the
meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended.
"Plan" shall mean each Benefit Plan and Multiemployer Plan.
"Prime Rate" shall mean the rate which the Agent announces
from time to time as its prime rate, and is thereafter entered in the
minutes of the Agent's Loan and Discount Committee. Without notice to
the Company or any other Person, the Prime Rate shall change
automatically from time to time as and in the amount by which such
prime rate shall fluctuate. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to
any customer. The Agent may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Purchase Agreement" shall mean the Asset Transfer Agreement
dated as of September 29, 1994 between OxyChem and Ozite, as amended by
the First Amendment to Asset Transfer Agreement dated as of October 3,
1994, the Second Amendment to Asset Transfer Agreement dated as of
October 14, 1994, the Third Amendment to Asset Transfer Agreement dated
as of May 24, 1995 and the Fourth Amendment to Asset Transfer Agreement
dated as of the Closing Date.
"Pure Tech" shall mean Pure Tech International, Inc., a
Delaware corporation.
"Quarterly Dates" shall mean the last day of each January,
April, July and October, in each year, the first of which shall be
October 31, 1995; provided, however, that if any such day is not a
Business Day, such Quarterly Date shall be the next succeeding Business
Day.
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"Register" shall mean the register maintained by the Agent at
its Payment Office showing the name and address of each Lender, its
Commitment, and the principal amount of the Loans owing to each Lender
from time to time.
"Regulation D", "Regulation U" and "Regulation X" shall mean,
respectively, Regulation D under the Securities and Exchange Act of
1933, as amended or modified from time to time, and Regulation U and
Regulation X of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor thereto.
"Reimbursement Obligations" shall mean, at any date, the
obligations of the Company then outstanding in respect of the Letters
of Credit, to reimburse the Agent for the account of the Issuing Bank
for the amount paid by the Issuing Bank in respect of any drawings
under the Letters of Credit.
"Responsible Officer" shall mean, with respect to any
corporation, the chairman of the board, the president, any vice
president, the chief executive officer or the chief operating officer,
or any equivalent officer (regardless of his or her title), and, in
respect of financial or accounting matters, the chief financial
officer, the vice president of finance, the treasurer, the controller,
or any equivalent officer (regardless of his or her title); and, with
respect to any partnership, the chairman of the board, the president,
any vice president, the chief executive officer or the chief operating
officer, or any equivalent officer (regardless of his or her title),
and, in respect of financial or accounting matters, the chief financial
officer, the vice president of finance, the treasurer, the controller,
or any equivalent officer (regardless of his or her title), of any
general partner. Unless otherwise specified, all references to a
Responsible Officer herein shall mean a Responsible Officer of the
Company.
"Restoration Account" shall have the meaning assigned such
term in the Security Agreement.
"Revolving Credit Commitment" shall have the meaning assigned
such term in Subsection 2.01(b).
"Revolving Credit Exposure" shall mean, at any time and as to
each Lender, the sum of (a) the aggregate principal amount of the
Revolving Credit Loans made by such Lender as of such date plus (b)
such Lender's Percentage Share of the aggregate amount of all Letter of
Credit Liabilities as of such date.
"Revolving Credit Loan" shall have the meaning provided in
Subsection 2.01(a)(ii); the Revolving Credit Loans shall not include
any Letter of Credit Liabilities.
"Revolving Credit Note" shall mean a promissory note of the
Company described in Section 2.05(a) payable to any Lender and being
substantially in the form of Exhibit A, evidencing the aggregate
Indebtedness of the Company to such Lender resulting from Revolving
Credit Loans made by such Lender.
"Rolling Period" shall mean (i) for the fiscal quarter ending
on October 31, 1995, such quarter, (ii) for the fiscal quarter ending
on January 31, 1996C, such quarter and the preceding
00
xxxxxx xxxxxxx, (xxx) for the fiscal quarter ending on April 30, 1996
such quarter and the two preceding fiscal quarters (in each case
determined on an annualized basis from the Closing Date forward) and
for each fiscal quarter thereafter, such quarter and the three
preceding fiscal quarters.
"Security Instruments" shall mean the agreements or
instruments described or referred to in Subsections 3.02(d)(i) through
(vi) and any and all other agreements or instruments now or hereafter
executed and delivered by the Company or any other Person as security
for the payment or performance of the Lender Indebtedness.
"Subsidiary" of any Person shall mean a corporation of which a
majority of the outstanding shares of stock of each class having
ordinary voting power is owned by such Person, by one or more
Subsidiaries of such Person, or by such Person and one or more of its
Subsidiaries.
"Supply Contracts" shall mean (i) the VCM Supply Agreement
dated as of the Closing Date between OxyChem and Ozite, (ii) the VAM
Supply Agreement dated as of the Closing Date between OxyChem and Ozite
and (iii) the AFA Chemical Supply and License Agreement dated as of the
Closing Date between OxyChem and Ozite.
"Tangible Net Worth" shall mean, at any time and from time to
time, the sum of preferred or common stock not subject to a mandatory
redemption obligation (other than a mandatory redemption obligation
that can be satisfied by the tendering of common stock of the Company)
as of the date of determination, par value of common stock, additional
paid-in capital of common stock, and retained earnings less treasury
stock (if any), less good will, cost in excess of net assets acquired
and all other assets as are properly classified as intangible assets,
in each case as to the Company.
"Taxes" shall have the meaning provided in Subsection 2.14(a).
"TCB" shall mean Texas Commerce Bank National Association, in
its individual capacity or as Issuing Bank, as the case may be, and not
as Agent.
"Term Loan" shall have the meaning provided in Subsection
2.01(a)(i).
"Term Loan Commitment" shall have the meaning assigned such
term in Subsection 2.01(c)
"Term Note" shall mean a promissory note of the Company
described in Section 2.05(b) payable to any Lender and being
substantially in the form of Exhibit B, evidencing the aggregate
indebtedness of the Company to such Lender resulting from the Term Loan
made by such Lender.
"Transactions" shall mean the transactions provided for in and
contemplated by this Agreement and the other Financing Documents.
15
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the State of New Jersey or, where applicable as to
specific Mortgaged Property, any other relevant state.
Section 1.02 Accounting Terms and Determinations. Unless otherwise
defined or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared and all financial records
shall be maintained in accordance with GAAP applied on a basis consistent with
the Financial Statements.
Section 1.03 Other Definitional Terms. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and article, section, schedule, exhibit and like references are to
this Agreement unless otherwise specified.
ARTICLE II
AMOUNT AND TERMS OF LOANS
Section 2.01 Loans and Commitments.
(a) Loans. Subject to the terms and conditions and relying on
the representations and warranties contained herein, each Lender
severally agrees (i) to make, on the Initial Funding Date, a term loan
(each a "Term Loan") to the Company; and (ii) on any Business Day prior
to the Final Maturity Date, to make Revolving Credit Loans (each a
"Revolving Credit Loan") to the Company.
(b) Revolving Credit Commitments. Each Lender's Revolving
Credit Exposure shall not exceed at any one time the amount set forth
opposite such Lender's name on Annex I under the caption "Revolving
Credit Commitment" (as the same may be reduced pursuant to Section 2.08
or otherwise from time to time modified pursuant to Section 8.07(b),
its "Revolving Credit Commitment," and collectively for all Lenders,
the "Revolving Credit Commitments"); provided, however, that the
Aggregate Revolving Credit Exposure at any one time outstanding shall
not exceed the Maximum Available Amount in effect at such time; and,
provided, further, the aggregate principal amount of all Revolving
Credit Loans at any one time outstanding shall not exceed the Maximum
Revolving Credit Loan Available Amount in effect at such time. There
may be more than one Borrowing with respect to Revolving Credit Loans
on any day. Within the foregoing limits and subject to the conditions
set out in Article III, the Company may obtain Borrowings of Revolving
Credit Loans, repay or prepay such Revolving Credit Loans, and reborrow
such Revolving Credit Loans.
(c) Term Loan Commitments. The Term Loan made pursuant hereto
by each Lender shall not exceed in aggregate principal amount
outstanding the amount set forth opposite such Lender's name on Annex I
under the caption "Term Loan Commitment", its "Term Loan Commitment,"
and collectively for all Lenders, the "Term Loan Commitments"). There
may be one Borrowing of Term Loans on the Initial Funding Date. Any
portion of each Lender's
16
Term Loan Commitment not utilized on the Initial Funding Date shall be
permanently cancelled. Any Term Loans that are repaid or prepaid may
not be reborrowed.
(d) Amounts of Borrowings, etc. The aggregate principal amount
of each Borrowing of Loans hereunder shall be not less than $250,000
and shall be in an integral multiple of $50,000, except that any
Borrowing of Revolving Credit Loans may be in the aggregate amount of
the unused Maximum Revolving Credit Loan Amount in effect at such time.
Section 2.02 Borrowing Requests.
(a) Borrowing Requests.
(i) Revolving Credit Loans. Whenever the Company
desires to make a Borrowing of Revolving Credit Loans
hereunder, it shall give Advance Notice in the form of a
Borrowing Request for Revolving Credit Loans, specifying,
subject to the provisions hereof, (A) the aggregate principal
amount of the Revolving Credit Loans to be made pursuant to
such Borrowing and (B) the date of Borrowing (which shall be a
Business Day).
(ii) Term Loans. The Company shall give Advance
Notice in the form of a Borrowing Request for Term Loans,
specifying, subject to the provisions hereof, (A) the
aggregate principal amount of the Term Loan to be made
pursuant to such Borrowing and (B) the date of the Initial
Funding Date (which shall be a Business Day).
(b) Notice by Agent. The Agent shall promptly give each Lender
telecopy or telephonic notice (and, in the case of telephonic notices,
confirmed by telecopy or otherwise in writing) of the proposed
Borrowing, of such Lender's Percentage Share thereof and of the other
matters covered by the Advance Notice. Without in any way limiting the
Company's obligation to confirm in writing any telephonic notice, the
Agent may act without liability upon the basis of telephonic notice
believed by the Agent in good faith to be from the Company prior to
receipt of written confirmation. In each such case, the Company hereby
waives the right to dispute the Agent's record of the terms of such
telephonic notice, absent manifest error.
Section 2.03 Letters of Credit.
(a) Issuance of Letters of Credit. Subject to the terms and
conditions hereof, and on the condition that the aggregate Letter of
Credit Liabilities shall not at any time exceed $3,000,000, the Company
shall have the right, in addition to Revolving Credit Loans provided
for in Section 2.01, to utilize the Revolving Credit Commitments from
time to time prior to the Final Maturity Date by obtaining the issuance
of letters of credit for the account of the Company by the Issuing Bank
if the Company shall so request in the notice referred to in Subsection
2.03(b)(i) (such letters of credit being collectively referred to as
the "Letters of Credit"); provided, however, that the Aggregate
Revolving Credit Exposure at any one time outstanding shall not exceed
the Maximum Available Amount in effect at such time. The Letters of
Credit may be issued to support the obligations of the Company. Upon
the date of the issuance of a Letter of Credit, the Issuing Bank shall
be deemed, without further action by any party hereto, to have sold to
each Lender, and each Lender shall be deemed, without further
17
action by any party hereto, to have purchased from the Issuing Bank, a
participation, to the extent of such Lender's Percentage Share, in such
Letter of Credit and the related Letter of Credit Liabilities. No
Letter of Credit issued pursuant to this Agreement shall have an expiry
date later than one year from date of issuance , provided that any
Letter of Credit having an expiry date after the Final Maturity Date
shall have been fully Covered or shall be backed by a letter of credit
in form and substance, and issued by an issuer, acceptable to each of
the Agent and the Issuing Bank in their sole discretion, provided,
further, that, subject to the immediately preceding proviso, any Letter
of Credit may give the beneficiary thereof the right to draw such
Letter of Credit unless the expiry date thereof is extended for periods
of up to one year per extension.
(b) Additional Letter of Credit Provisions. The following
additional provisions shall apply to each Letter of Credit:
(i) The Company shall give the Agent and the Issuing Bank at
least three Business Days' prior notice (effective upon receipt), or in
each case, such shorter period as may be agreed to by the Issuing Bank,
specifying the date such Letter of Credit is to be issued (which shall
be a Business Day) and the Issuing Bank and describing: (A) the face
amount of the Letter of Credit, (B) the expiration date of the Letter
of Credit, (C) the name and address of the beneficiary, (D) information
concerning the transaction proposed to be supported by such Letter of
Credit as the Agent or the Issuing Bank may reasonably request, (E)
such other information and documents relating to the Letter of Credit
as the Agent or the Issuing Bank may reasonably request, and (F) a
precise description of documents and the verbatim text of any
certificate to be presented by the beneficiary, which, if presented
prior to the expiry date of the Letter of Credit, would require the
Issuing Bank to make payment under the Letter of Credit; provided that
the Issuing Bank, in its reasonable judgment, may require changes in
such documents and certificates; and provided further that the Issuing
Bank shall not be required to issue any Letter of Credit that on its
terms requires payment thereunder prior to the third Business Day
following receipt by the Issuing Bank of such documents and
certificates. Each such notice shall be accompanied by the Issuing
Bank's Application and by a certificate executed by a Responsible
Officer setting forth calculations evidencing availability for such
Letter of Credit pursuant to Subsection 2.03(b)(ii) and stating that
all conditions precedent to such issuance have been satisfied. Each
Letter of Credit shall, to the extent not inconsistent with the express
terms hereof or the applicable Application, be subject to the Uniform
Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 (together with
any subsequent revisions thereof approved by a Congress of the
International Chamber of Commerce and adhered to by the Issuing Lender,
the "UCP"), and shall, as to matters not governed by the UCP, be
governed by, and construed and interpreted in accordance with, the laws
of the State of New Jersey. In determining whether to pay any Letter of
Credit, the Issuing Bank shall be responsible only to use reasonable
care to determine that the documents and certificates required to be
delivered under that Letter of Credit have been delivered and that they
comply on their face with the requirements of that Letter of Credit.
(ii) No Letter of Credit may be issued if after giving effect
thereto the Aggregate Revolving Credit Exposure would exceed the
Maximum Available Amount. On each day during the period commencing with
the issuance of any Letter of Credit and until such Letter of Credit
shall have expired or have been terminated, the Revolving Credit
Commitment of each Lender
18
shall be deemed to be utilized for all purposes hereof in an amount
equal to such Lender's Percentage Share of the amount of the Letter of
Credit Liabilities related to such Letter of Credit.
(iii) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment thereunder, the Issuing Bank shall
promptly notify the Company and the Agent of such demand (provided that
the failure of the Issuing Bank to give such notice shall not affect
the Reimbursement Obligations of the Company hereunder) and the Company
shall immediately, and in any event no later than 11:00 a.m. (Houston,
Texas time) on the date of such drawing, reimburse the Agent for the
account of the Issuing Bank for any amount paid by the Issuing Bank
upon any drawing under any Letter of Credit, without presentment,
demand, protest or other formalities of any kind in an amount, in same
day funds, equal to the amount of such drawing. Unless prior to 11:00
a.m. (Houston, Texas time) on the date of such drawing, the Company
shall have either notified the Issuing Bank and the Agent that the
Company intends to reimburse the Agent for the account of the Issuing
Bank for the amount of such drawing with funds other than the proceeds
of a Revolving Credit Loan or delivered to the Agent a Borrowing
Request for Revolving Credit Loans in an amount equal to such drawing,
the Company will be deemed to have given a Borrowing Request to the
Agent requesting that the Lenders make Revolving Credit Loans on the
date on which such drawing is honored in an amount equal to the amount
of such drawing. Such Loans shall be subject to satisfaction of the
conditions in Article III and to existence of Maximum Revolving Credit
Loan Available Amount. Subject to the preceding sentence, if so
requested by the Agent, the Lenders shall, on the date of such drawing,
make such Revolving Credit Loans in an amount equal to such Lender's
Percentage Share of such drawing, the proceeds of which shall be
applied directly by the Agent to reimburse the Issuing Bank for the
amount of such drawing.
(iv) If the Company fails to reimburse the Issuing Bank as
provided in clause (iii) above, the Issuing Bank shall promptly notify
the Agent and the Agent shall notify each Lender of the unreimbursed
amount of such drawing and of such Lender's respective participation
therein based on such Lender's Percentage Share. Each Lender will pay
to the Agent for the account of the Issuing Bank on the date of such
notice an amount equal to such Lender's Percentage Share of such
unreimbursed drawing (or, if such notice is made after 11:00 a.m.
(Houston, Texas time) on such date, on the next succeeding Business
Day). If any Lender fails to make available to the Issuing Bank the
amount of such Lender's participation in such Letter of Credit as
provided in this clause (iv), the Issuing Bank shall be entitled to
recover such amount on demand from such Lender together with interest
at the Federal Funds Rate for one Business Day and thereafter at the
Base Rate. Nothing in this clause (iv) shall be deemed to prejudice the
right of any Lender to recover from the Issuing Bank any amounts made
available by such Lender to the Issuing Bank pursuant to this clause
(iv) if it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit by the Issuing Bank was
wrongful and such wrongful payment was the result of gross negligence
or willful misconduct on the part of the Issuing Bank. The Issuing Bank
shall pay to the Agent and the Agent to each Lender such Lender's
Percentage Share of all amounts received from the Company for payment,
in whole or in part, of the Reimbursement Obligation in respect of any
Letter of Credit, but only to the extent such Lender has made payment
to the Issuing Bank in respect of such Letter of Credit pursuant to
this clause (iv).
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(v) The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article
III, be subject to the conditions precedent that such Letter of Credit
shall be in such form and contain such terms as shall be reasonably
satisfactory to the Issuing Bank, and that the Company shall have
executed and delivered such other instruments and agreements relating
to such Letter of Credit as the Issuing Bank shall have reasonably
requested and that are not inconsistent with the terms of this
Agreement including the Issuing Bank's Application therefor. In the
event of a conflict between the terms of this Agreement and the terms
of any Application, the terms of this Agreement shall control.
(vi) AS BETWEEN THE COMPANY AND THE ISSUING BANK, THE COMPANY
ASSUMES ALL RISKS OF THE ACTS AND OMISSIONS OF OR MISUSE OF THE LETTERS
OF CREDIT ISSUED BY THE ISSUING BANK BY THE RESPECTIVE BENEFICIARIES OF
SUCH LETTERS OF CREDIT. IN FURTHERANCE AND NOT IN LIMITATION OF THE
FOREGOING, THE ISSUING BANK SHALL NOT BE RESPONSIBLE: (A) FOR THE FORM,
VALIDITY, SUFFICIENCY, ACCURACY, GENUINENESS OR LEGAL EFFECT OF ANY
DOCUMENT SUBMITTED BY ANY PERSON IN CONNECTION WITH THE APPLICATION FOR
OR ISSUANCE OF SUCH LETTERS OF CREDIT, EVEN IF IT SHOULD IN FACT PROVE
TO BE IN ANY OR ALL RESPECTS INVALID, INSUFFICIENT, INACCURATE,
FRAUDULENT OR FORGED; (B) FOR THE VALIDITY OR SUFFICIENCY OF ANY
INSTRUMENT TRANSFERRING OR ASSIGNING OR PURPORTING TO TRANSFER OR
ASSIGN ANY SUCH LETTER OF CREDIT OR THE RIGHTS OR BENEFITS THEREUNDER
OR PROCEEDS THEREOF, IN WHOLE OR IN PART, WHICH MAY PROVE TO BE INVALID
OR INEFFECTIVE FOR ANY REASON; (C) FOR FAILURE OF THE BENEFICIARY OF
ANY SUCH LETTER OF CREDIT TO COMPLY FULLY WITH CONDITIONS REQUIRED IN
ORDER TO DRAW UPON SUCH LETTER OF CREDIT, WHICH FAILURE IS NOT THE
RESULT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE ISSUING BANK AS
DETERMINED BY A COURT OF COMPETENT JURISDICTION; (D) FOR ERRORS,
OMISSIONS, INTERRUPTIONS OR DELAYS IN TRANSMISSION OR DELIVERY OF ANY
MESSAGES, BY MAIL, CABLE, TELEGRAPH, TELEX OR OTHERWISE, WHETHER OR NOT
THEY ARE IN CIPHER; (E) FOR ERRORS IN INTERPRETATION OF TECHNICAL
TERMS; (F) FOR ANY LOSS OR DELAY IN THE TRANSMISSION OR OTHERWISE OF
ANY DOCUMENT REQUIRED IN ORDER TO MAKE A DRAWING UNDER ANY SUCH LETTER
OF CREDIT OR OF THE PROCEEDS THEREOF; (G) FOR THE MISAPPLICATION BY THE
BENEFICIARY OF ANY SUCH LETTER OF CREDIT OF THE PROCEEDS OF ANY DRAWING
UNDER SUCH LETTER OF CREDIT; AND (H) FOR ANY CONSEQUENCES ARISING FROM
CAUSES BEYOND THE CONTROL OF THE ISSUING BANK, INCLUDING, WITHOUT
LIMITATION, THE ACTIONS OF ANY GOVERNMENTAL AUTHORITY. NONE OF THE
ABOVE SHALL AFFECT, IMPAIR, OR PREVENT THE VESTING OF ANY OF THE
ISSUING BANK'S RIGHTS OR POWERS HEREUNDER. NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED IN THIS CLAUSE (VI), THE COMPANY SHALL HAVE NO
OBLIGATION TO INDEMNIFY THE ISSUING BANK IN RESPECT OF ANY LIABILITY
INCURRED BY THE ISSUING BANK ARISING SOLELY OUT OF THE GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT OF THE ISSUING BANK, AS DETERMINED BY A COURT OF
COMPETENT JURISDICTION.
(vii) The Issuing Bank will send to the Company and the Agent
immediately upon issuance of any Letter of Credit, or an amendment
thereto, a true and complete copy of such Letter of Credit, or such
amendment thereto. Upon issuance of any Letter of Credit or an
amendment thereto, the Agent shall promptly notify each Lender of the
terms of such Letter of Credit or amendment thereto, the Issuing Bank
for such Letter of Credit or amendment thereto, and of such Lender's
Percentage Share of the amount of such Letter of Credit or amendment
20
thereto, and the Agent shall provide to each Lender a copy of such
Letter of Credit or such amendment thereto. Upon cancellation or
termination of any Letter of Credit, the Issuing Bank shall promptly
notify the Agent and the Company, and the Agent will then promptly
notify each Lender, of such cancellation or termination.
(viii) The obligation of the Company to reimburse the Issuing
Bank for Reimbursement Obligations with regard to the Letters of Credit
issued by it and the obligations of Lenders under clause (iv) shall be
unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement and under all circumstances including,
without limitation, the following circumstances:
(A) any lack of validity or enforceability of any
Letter of Credit;
(B) the existence of any claim, set-off, defense or
other right that the Company may have at any time against a beneficiary
or any transferee of any Letter of Credit (or any Persons for whom any
such transferee may be acting), any Lender or any other Person, whether
in connection with this Agreement, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction
between the Company and the beneficiary for which the Letter of Credit
was procured) other than a defense based on the gross negligence or
willful misconduct of the Issuing Bank, as determined by a court of
competent jurisdiction;
(C) any draft, demand, certificate or any other
document presented under any Letter of Credit is proved to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein is untrue or inaccurate in any respect;
(D) payment by the Issuing Bank under any Letter of
Credit against presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter of Credit,
provided that such payment does not occur as a result of the gross
negligence or willful misconduct of the Issuing Bank, as determined by
a court of competent jurisdiction;
(E) any adverse change in the condition (financial or
otherwise) of the Company;
(F) any breach of this Agreement or any other
Financing Document by the Company, Agent or any Lender (other than the
Issuing Bank);
(G) any other circumstance or happening whatsoever
which is similar to any of the foregoing; provided that such other
occurrence or happening is not the result of the gross negligence or
willful misconduct of the Issuing Bank, as determined by a court of
competent jurisdiction; or
(H) the fact that a Default shall have occurred and
be continuing.
Section 2.04 Disbursement of Funds.
(a) Availability. No later than 11:00 a.m. (Houston time)
on the date of each Borrowing, each Lender will make available to the
Agent such Lender's Percentage Share of the
21
amount (if any) by which the principal amount of the Borrowing
requested to be made on such date exceeds the principal amount of Loans
(if any) maturing or Reimbursement Obligations (if any) due and owing
on such date, in Dollars and in immediately available funds at the
Payment Office. The Agent will make available to the Company at the
Payment Office the aggregate of the amounts (if any) so made available
by the Lenders by depositing such amounts, in immediately available
funds, to an account of the Company at the Agent designated by the
Company for such purpose. To the extent that Loans mature or
Reimbursement Obligations are due and owing on the date of a requested
Borrowing of Revolving Credit Loans, the Lenders shall apply the
proceeds of the Revolving Credit Loans then being made, to the extent
thereof, to the repayment of such maturing Loans or Reimbursement
Obligations, such Revolving Credit Loans and repayments intended to be
a contemporaneous exchange.
(b) Funds to the Agent. Unless the Agent shall have been
notified by any Lender prior to the date of a Borrowing that such
Lender does not intend to make available to the Agent such Lender's
Percentage Share of the Borrowing to be made on such date, the Agent
may assume that such Lender has made such amount available to the Agent
on such date, and the Agent may make available to the Company a
corresponding amount. If such corresponding amount is not in fact made
available to the Agent by such Lender on the date of a Borrowing, the
Agent shall be entitled to recover such corresponding amount on demand
from such Lender together with interest at the Federal Funds Rate. If
such Lender does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent shall promptly notify the Company,
and the Company shall immediately pay such corresponding amount to the
Agent together with interest at the rate specified for the Borrowing
which includes such amount paid. Nothing in this Section shall be
deemed to relieve any Lender from its obligation to fulfill its
Commitment hereunder or to prejudice any rights which the Company may
have against any Lender as a result of any default by such Lender
hereunder.
(c) Lenders' Responsibilities. No Lender shall be responsible
for any default by any other Lender in its obligation to make Loans
hereunder, and each Lender shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any
other Lender to fulfill its Commitment hereunder.
Section 2.05 Notes.
(a) Revolving Credit Notes. The Company's obligation to pay
the principal of, and interest on, the Revolving Credit Loans made by
each Lender shall be further evidenced by the Company's issuance,
execution and delivery of a Revolving Credit Note payable to the order
of each such Lender in the amount of such Lender's Revolving Credit
Commitment and shall be dated as of the date of issuance of such
Revolving Credit Note. The principal amount of each Revolving Credit
Note shall be payable on or before the Final Maturity Date.
(b) Term Notes. The Company's obligation to pay the principal
of, and interest on, the Term Loan made by each Lender shall be further
evidenced by the Company's issuance, execution and delivery of a Term
Note payable to the order of each such Lender in the amount of such
Lender's Term Loan Commitment and dated as of the date of issuance of
such Term Note. The principal amount of each Term Note shall be payable
in twenty-eight (28) equal installments commencing on October 31, 1995,
and on each Quarterly Date thereafter. The
22
Company agrees to make such installments on each Quarterly Date with
the final installment in the amount of the aggregate unpaid principal
balance then owing thereunder being payable on or before the Final
Maturity Date. Any prepayment of the principal amount of the Term Notes
shall be applied to the installments unpaid at such time in the inverse
order of maturity.
Section 2.06 Interest. In all cases subject to Section 8.13:
(a) Base Rate Loans. Subject to Section 2.06(b), the Company
agrees to pay interest in respect of the unpaid principal amount of
each Loan from the date thereof until payment in full thereof at a rate
per annum which shall be, for any day, equal to the sum of the
Applicable Margin plus the Base Rate in effect on such day, but in no
event to exceed the Highest Lawful Rate. The term "Base Rate" shall
mean the higher of (i) the Prime Rate in effect on such day or (ii)
one-half of one percent (1/2%) plus the Federal Funds Rate in effect
for such day (rounded upwards, if necessary, to the nearest 1/16th of
1%), but in no event to exceed the Highest Lawful Rate. For purposes of
this Agreement, any change in the Base Rate due to a change in the
Federal Funds Rate or the Prime Rate shall be effective on the
effective date of such change in the Federal Funds Rate or the Prime
Rate, as the case may be. If for any reason the Agent shall have
determined (which determination shall be conclusive and binding, absent
manifest error) that it is unable to ascertain the Federal Funds Rate
for any reason, including but not limited to the inability of the Agent
to obtain sufficient bids or publications in accordance with the terms
hereof, the Base Rate shall be the Prime Rate until the circumstances
giving rise to such inability no longer exist.
(b) Default Interest. Overdue principal and, to the extent
permitted by law, overdue interest in respect of each Loan and all
other amounts owing hereunder shall bear interest for each day that
such amounts are overdue at a rate per annum equal to two percent (2%)
in excess of the Base Rate, in effect for each such day, but in no
event shall any such rate exceed the Highest Lawful Rate.
(c) Interest Payment Dates. Interest on each Loan shall accrue
from and including the date of such Loan to but excluding the date of
payment in full thereof. Interest on each Loan shall be payable on each
Quarterly Date, commencing on the first Quarterly Date to occur after
such Loan is made, at maturity (whether by acceleration or otherwise)
and, after maturity, on demand.
Section 2.07 Repayment of Loans. Subject to the provisions of Sections
2.08 and 2.09, the Company shall pay to the Agent for the ratable benefit of the
Lenders the unpaid principal amount of each Loan on or before the Final Maturity
Date.
Section 2.08 Termination or Reduction of Revolving Credit Commitments.
(a) Voluntary Reduction of Revolving Credit Commitment. The
Company may, upon at least five Business Days' notice to the Agent,
terminate entirely at any time, or proportionately reduce from time to
time by an aggregate amount of $1,000,000 or any larger multiple of
$100,000, the unused portions of the Revolving Credit Commitments,
without penalty or premium, provided that any such reduction shall
apply proportionately to the Revolving Credit Commitment of each
Lender. If the Revolving Credit Commitments are
23
terminated in their entirety, all accrued commitment fees with respect
thereto shall be payable on the effective date of such termination. Any
such reduction or termination of the Revolving Credit Commitment shall
be permanent.
(b) Mandatory Reduction of Revolving Credit Commitment. If at
any time the Company shall make a prepayment of Revolving Credit Loans
or provide Cover for Letter of Credit Liabilities, in each case
pursuant to Section 2.09(d)(ii), the Revolving Credit Commitments shall
be permanently reduced (to the extent that such Revolving Credit
Commitments exceed $5,000,000) by an amount equal to the principal
amount of such prepayment or Cover.
Section 2.09 Prepayments.
(a) Mandatory Sale Proceeds Prepayments. The Company shall
apply the net proceeds of any sale or other disposition of any Property
of the Company in the ordinary course of business to pay or prepay an
aggregate principal amount of the Term Loans equal to the proceeds of
such sale or disposition, together with any accrued interest thereon.
Any such payment or prepayment shall be applied to the installments of
principal in the inverse order of their maturity.
(b) Mandatory Prepayments Upon an Event of Loss. If an Event
of Loss (whether resulting from damage or destruction or from
condemnation, confiscation, seizure, requisition or forced shutdown)
with respect to the Burlington South Plant shall occur and if the
Company shall not have satisfied the conditions of Subsection 2.16(b)
within 60 days of the determination of the occurrence of such Event of
Loss or within 90 days of the event giving rise to such determination,
whichever period is shorter, then the Company shall prepay an aggregate
principal amount of the Loans equal to the funds received as proceeds
from such Event of Loss, together with accrued interest thereon to the
date of prepayment, on or before the 60th day following the date of the
determination of the occurrence of such Event of Loss or within 90 days
of the event giving rise to such determination, whichever period is
shorter; provided that, if the Company shall have given the Agent
written notice on or before the 60th day following the date of
determination of the occurrence of such Event of Loss or within 90 days
of the event giving rise to such determination, whichever period is
shorter, stating that it believes the Burlington South Plant could be
repaired and/or restored and the conditions of Subsection 2.16(b) could
be satisfied, and that the Company is diligently working to obtain the
necessary information to meet the conditions of Subsection 2.16(b), the
Company may defer such prepayment of the Loans and compliance with the
provisions of Subsection 2.16(b) for a period of up to 30 additional
days. From the date of the determination of the occurrence of such
Event of Loss, the Company shall provide to each Lender a monthly
status report describing the status of discussions with contractors and
insurers or Governmental Authorities, as the case may be (including
information on cost and scheduling estimates). On such date of
prepayment, any funds constituting proceeds from such damage or
destruction, condemnation, confiscation, seizure, requisition or forced
shutdown shall (to the extent not already so applied) be applied in
satisfaction (to the extent of such proceeds) of such obligation to
prepay the Loans.
(c) Mandatory Commitment Reduction/Borrowing Base Prepayments.
If at any time the Aggregate Revolving Credit Exposure is in excess of
the Maximum Available Xxxxxx,
00
the Company shall make a prepayment of Revolving Credit Loans or
provide Cover for Letter of Credit Liabilities, or a combination
thereof, in an amount equal to such excess together with accrued
interest thereon and any related costs. Any such prepayment or Cover
shall be payable or provided in full on the date on which the reduction
or termination of the Revolving Credit Commitments pursuant to Section
2.08 becomes effective or within 30 days of the date of the Borrowing
Base Report first reporting such excess, as applicable.
(d) Mandatory Excess Cash Flow Prepayments. Concurrently with
the delivery of the financial statements referred to in Section
5.02(a), the Company shall prepay (by payment to the Agent for the
benefit of the Lenders) (i) an aggregate principal amount of Term Loans
equal to 75% of Excess Cash Flow for the fiscal year ending on such
date less the amount of any voluntary prepayments of Term Loans made by
the Company pursuant to Subsection 2.09(e) during such fiscal year;
such prepayments shall be applied to installments of principal in the
inverse order of their maturity, and (ii) upon payment in full of the
Term Loans, an aggregate principal amount of Revolving Credit Loans in
an amount equal to 75% of Excess Cash Flow for the fiscal year ending
on such date, provided that such Excess Cash Flow shall be so applied
only to the extent necessary to reduce the Revolving Credit Loans to
$5,000,000.
(e) Voluntary Prepayments. The Company may, at its option, at
any time and from time to time, prepay Loans, in whole or in part,
without premium or penalty, upon giving five Business Day's prior
written notice to the Agent. Such notice shall specify the date and
amount of prepayment and the Loan or Loans to which such prepayment is
to be applicable. Upon receipt of such notice, the Agent shall promptly
notify each Lender of the contents thereof and of such Lender's ratable
share of such prepayment. The payment amount specified in the such
notice shall be due and payable on the date specified. Each prepayment
of Term Loans shall be in the minimum principal amount of $500,000 and
in integral multiples of $100,000, or the aggregate balance outstanding
on the applicable Notes. Each prepayment shall be applied ratably to
prepay the Term Loan of the several Lenders.
(f) Notice by Agent. Upon receipt of a notice of prepayment
pursuant to this Section, the Agent shall promptly notify each Lender
of the contents thereof and of such Lender's ratable share of such
prepayment.
Section 2.10 Fees.
(a) Revolving Credit Commitments. The Company shall pay to the
Agent for the account of and distribution to each Lender in accordance
with its Percentage Share, a commitment fee for the period commencing
on the Closing Date to and including the Final Maturity Date (or such
earlier date as the Revolving Credit Commitments shall have been
terminated entirely) computed at a rate equal to one-half of one
percent (1/2%) per annum on the average daily excess amount of the
Revolving Credit Commitments over the Revolving Credit Exposure,
payable in arrears on the Quarterly Dates, commencing on the first
Quarterly Date to occur after the Closing Date.
(b) Letters of Credit. As consideration for the issuance of
any Letter of Credit, the Company will pay to the Agent for the account
of and pro rata distribution to each Lender, a fee on the daily average
amount available for drawings under each Letter of Credit, in each case
for
25
the period from and including the date of issuance of such Letter of
Credit to and excluding the date of expiration or termination thereof
computed at a rate equal to one and one-quarter (1 1/4%) of one percent
per annum, payable on the date of issuance of such Letter of Credit.
The Company shall pay to the Issuing Bank in arrears on each Quarterly
Date, with respect to any amendment or transfer of any Letter of Credit
and for each drawing made thereunder, documentary and processing
charges in accordance with the Issuing Bank's standard schedule for
such charges in effect at the time of such amendment, transfer or
drawing, as the case may be.
(c) Contingent Fee. Concurrently with the delivery of the
financial statements pursuant to Section 5.02(a), the Company shall pay
to Agent for its own account, a contingent fee for the period
commencing on the Closing Date to and including August 31, 2002
computed at a rate equal to three percent (3%) per annum of EBITDA
payable in arrears for each annual period, commencing with the annual
period ending on December 31, 1995. The obligations of the Borrower
pursuant to this paragraph shall survive the payment in full of the
Loans and the Letter of Credit Liabilities.
(d) Agent Fees. The Company shall pay to the Agent such fees
as are set forth in the letter agreement and summary of indicative
terms and conditions attached thereto between the Agent and the Company
dated as of October 17, 1994, and accepted and agreed to by the Company
as of October 19, 1994, as amended on November 10, 1994 and as the same
has been or may be hereafter amended or supplemented, on the dates
specified therein.
Section 2.11 Payments, etc.
(a) Without Setoff, etc. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Agent on behalf of the Lenders without defense, set-off or counterclaim
to the Agent not later than 11:00 a.m. Houston time on the date when
due and shall be made in Dollars in immediately available funds at the
Payment Office. The Agent will promptly thereafter distribute funds in
the form received relating to the payment of principal or interest or
commitment fees ratably to the Lenders for the account of their
respective Lending Offices, and funds in the form received relating to
the payment of any other amount payable to any Lender to such Lender
for the account of its Lending Office.
(b) Non-Business Days. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is
not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the applicable rate during such
extension.
(c) Computations. All computations of interest shall be made
on the basis of a year of 365 or 366 days (as the case may be) in the
case of Loans, and all computations of fees shall be made on the basis
of a year of 360 days (unless such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis
of a year of 365 or 366 days, as the case may be), in each case for the
factual number of days (including the first day but excluding the last
day) occurring in the period for which such interest or fees are
payable. Each determination by the Agent of an interest rate or fee
hereunder shall, except for manifest error, be final, conclusive and
binding for all purposes, provided that such determination shall be
made
26
in good faith in a manner generally consistent with the Agent's
standard practice. If the Agent and the Company determine that manifest
error exists, said parties shall correct such error by way of an
adjustment to the payment due on the next Quarterly Date.
Section 2.12 Capital Adequacy.
(a) The Company shall pay directly to each Lender from time to
time on request such amounts as such Lender may determine to be
necessary to compensate such Lender or its parent or holding company
for any costs which it determines are attributable to the maintenance
by such Lender or its parent or holding company, pursuant to any law or
regulation or any interpretation, directive or request (whether or not
having the force of law) of any court or Governmental Authority, of
capital in respect of its Commitment or making, funding or maintaining
any Loans or Letters of Credit (such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on
assets or equity of such Lender or its parent or holding company to a
level below that which such Lender or its parent or holding company
could have achieved but for such law, regulation, interpretation,
directive or request). Each Lender will notify the Company that it is
entitled to compensation pursuant to this Section 2.12 as promptly as
practicable after it determines to request such compensation.
(b) Determinations and allocations by any Lender for purposes
of this Section 2.12 shall be conclusive, provided that such
determinations and allocations are made on a reasonable basis.
Section 2.13 Sharing of Payments, etc. If any Lender shall obtain any
payment or reduction (including, but not limited to, any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of any obligation of the Company hereunder (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share of payments or reductions on account of such
obligations obtained by all the Lenders, such Lender shall forthwith (i) notify
each of the other Lenders and the Agent of such receipt, and (ii) purchase from
the other Lenders such participations in the affected obligations as shall be
necessary to cause such purchasing Lender to share the excess payment or
reduction, net of costs incurred in connection therewith, ratably with each of
them, provided that if all or any portion of such excess payment or reduction is
thereafter recovered from such purchasing Lender or additional costs are
incurred, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery or such additional costs, but without interest. The
Company agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the Company
in the amount of such participation.
Section 2.14 Taxes.
(a) Payments Free and Clear. Any and all payments by the
Company under this Agreement or any other Financing Document shall be
made, in accordance with Section 2.11, free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender, the Agent and the
Issuing Bank, taxes imposed on its income, and franchise or similar
taxes imposed on it, by (i) any jurisdiction (or political subdivision
thereof) of which
27
the Agent, the Issuing Bank or such Lender, as the case may be, is a
citizen or resident or in which such Lender has a permanent
establishment (or is otherwise engaged in the active conduct of its
banking business through an office or a branch) which is such Lender's
applicable Lending Office, (ii) the jurisdiction (or any political
subdivision thereof) in which the Agent, the Issuing Bank or such
Lender is organized, or (iii) any jurisdiction (or political
subdivision thereof) in which such Lender, the Issuing Bank or the
Agent is presently doing business which taxes are imposed solely as a
result of doing business in such jurisdiction (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and
liabilities so arising out of payments by the Company being hereinafter
referred to as "Taxes"). If the Company shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to the
Lenders, the Issuing Bank or the Agent (i) the sum payable shall be
increased by the amount necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section 2.14) such Lender, the Issuing Bank or the Agent (as
the case may be) shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) the Company shall make
such deductions and (iii) the Company shall pay the full amount
deducted to the relevant taxing authority or other Governmental
Authority in accordance with applicable law.
(b) Other Taxes. In addition, the Company agrees to pay any
present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies that arise from any payment
made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement, any Assignment and
Acceptance or any other Financing Document (hereinafter referred to as
"Other Taxes").
(c) INDEMNIFICATION. THE COMPANY WILL INDEMNIFY EACH
LENDER, THE ISSUING BANK AND THE AGENT FOR THE FULL AMOUNT OF
TAXES AND OTHER TAXES (INCLUDING, BUT NOT LIMITED TO, ANY TAXES
OR OTHER TAXES IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE
UNDER THIS SECTION 2.14) PAID BY SUCH LENDER OR THE ISSUING
BANK OR THE AGENT (ON THEIR BEHALF OR ON BEHALF OF ANY LENDER),
AS THE CASE MAY BE, AND ANY LIABILITY (INCLUDING PENALTIES,
INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT
THERETO, WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE
CORRECTLY OR LEGALLY ASSERTED. ANY PAYMENT PURSUANT TO SUCH
INDEMNIFICATION SHALL BE MADE WITHIN 30 DAYS AFTER THE DATE ANY
LENDER, THE ISSUING BANK OR THE AGENT, AS THE CASE MAY BE,
MAKES WRITTEN DEMAND THEREFOR. IF ANY LENDER, THE ISSUING BANK
OR THE AGENT RECEIVES A REFUND OR CREDIT IN RESPECT OF ANY
TAXES OR OTHER TAXES FOR WHICH SUCH LENDER, THE ISSUING BANK OR
THE AGENT HAS RECEIVED PAYMENT FROM THE COMPANY HEREUNDER IT
SHALL PROMPTLY NOTIFY THE COMPANY OF SUCH REFUND OR CREDIT AND
SHALL, WITHIN 30 DAYS AFTER RECEIPT OF A REQUEST BY THE COMPANY
(OR PROMPTLY UPON RECEIPT, IF THE COMPANY HAS REQUESTED
APPLICATION FOR SUCH REFUND OR CREDIT PURSUANT HERETO), PAY AN
AMOUNT EQUAL TO SUCH REFUND OR CREDIT TO THE COMPANY WITHOUT
INTEREST (BUT WITH ANY INTEREST SO REFUNDED OR CREDITED),
PROVIDED THAT THE COMPANY, UPON THE REQUEST OF SUCH LENDER, THE
ISSUING BANK OR THE AGENT, AGREES TO RETURN SUCH REFUND OR
CREDIT (PLUS PENALTIES, INTEREST OR OTHER CHARGES) TO SUCH
LENDER, THE ISSUING BANK OR THE AGENT IN THE EVENT SUCH LENDER,
THE ISSUING BANK OR THE AGENT IS REQUIRED TO REPAY SUCH
REFUND OR CREDIT.
28
(d) Receipts. Within 30 days after the date of any payment of
Taxes or Other Taxes withheld by the Company in respect of any payment
to any Lender, the Issuing Bank or the Agent, the Company will furnish
to the Agent the original or a certified copy of a receipt evidencing
payment thereof.
(e) Survival. Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations contained in
this Section 2.14 shall survive the payment in full of principal and
interest hereunder.
(f) Lender Representations. Each Lender represents that it is
either (i) a corporation organized under the laws of the United States
of America or any state thereof or (ii) it is 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 (A) under an applicable provision of a tax convention to
which the United States of America is a party or (B) because it is
acting through a branch, agency or office in the United States of
America and any payment to be received by it hereunder is effectively
connected with a trade or business in the United States of America.
Each Lender that is not a corporation organized under the laws of the
United States of America or any state thereof agrees to provide to the
Company and the Agent on the Effective Date, or on the date of its
delivery of the Assignment and Acceptance pursuant to which it becomes
a Lender, and at such other times as required by United States law or
as the Company or the Agent shall reasonably request, two accurate and
complete original signed copies of either (A) Internal Revenue Service
Form 4224 (or successor form) certifying that all payments to be made
to it hereunder will be effectively connected to a United States trade
or business (the "Form 4224 Certification") or (B) Internal Revenue
Service Form 1001 (or successor form) certifying that it is entitled to
the benefit of a provision of a tax convention to which the United
States of America is a party which completely exempts from United
States withholding tax all payments to be made to it hereunder (the
"Form 1001 Certification"). In addition, each Lender agrees that if it
previously filed a Form 4224 Certification it will deliver to the
Company and the Agent a new Form 4224 Certification prior to the first
payment date occurring in each of its subsequent taxable years; and if
it previously filed a Form 1001 Certification, it will deliver to the
Company and the Agent a new certification prior to the first payment
date falling in the third year following the previous filing of such
certification. Each Lender also agrees to deliver to the Company and
the 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 permit it to do so. If a Lender determines, as a result
of any change in either (i) applicable law, regulation or treaty, or in
any official application thereof or (ii) its circumstances, that it is
unable to submit any form or certificate that it is obligated to submit
pursuant to this Section, or that it is required to withdraw or cancel
any such form or certificate previously submitted, it shall promptly
notify the Company and the Agent of such fact. If a Lender is organized
under the laws of a jurisdiction outside the United States of America,
unless the Company and the Agent have received a Form 1001
Certification or Form 4224 Certification satisfactory to them
indicating that all payments to be made to such Lender hereunder are
not subject to United States withholding tax, the Company shall
withhold taxes from such payments at the applicable statutory rate,
provided that such withholding shall not increase the amount of
payments for the account of such Lender to be made by the Company
pursuant to Subsection
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2.14(a). Each Lender agrees to indemnify and hold harmless from any
United States taxes, penalties, interest and other expenses, costs and
losses incurred or payable by (i) the Agent as a result of such
Lender's failure to submit any form or certificate that it is required
to provide pursuant to this Section or (ii) the Company or the Agent as
a result of their reliance on any such form or certificate which it has
provided to them pursuant to this Section.
(g) Efforts to Avoid or Reduce. Any Lender claiming any
additional amounts payable pursuant to this Section 2.14 shall use
reasonable efforts (consistent with legal and regulatory restrictions)
to file any certificate or document requested by the Company or the
Agent or to change the jurisdiction of its applicable Lending Office or
to contest any tax imposed if the making of such a filing or change or
contesting such tax 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.
Section 2.15 Pro Rata Treatment. Each Borrowing, each payment or
prepayment of principal of any Borrowing, each payment of interest on the Loans,
each payment of the fees, each reduction of the Commitments, and each
refinancing of any Borrowing, shall be allocated ratably and pro rata among the
Lenders in accordance with their respective Percentage Share. Each Lender agrees
that in computing such Lender's portion of any Borrowing to be made hereunder,
the Agent may, in its discretion, round each Lender's portion of such Borrowing
to the next higher or lower whole dollar amount.
Section 2.16 Restoration Account. Subject to the terms and conditions
of the Security Agreement, the Company will establish, at the times provided in
the Security Agreement, the Restoration Account.
(a) Deposits and Release of Funds. Upon the occurrence of an
Event of Loss, the Company shall give the Agent written notice thereof
as soon as possible. All amounts of insurance proceeds in excess of
$100,000 for Property losses and all other proceeds in excess of
$100,000 (whether resulting from damage or destruction or from
condemnation, confiscation, seizure, requisition or forced shutdown)
relating to any single event with respect to the Burlington South Plant
shall be deposited into the Restoration Account (except proceeds of
business interruption insurance maintained or caused to be maintained
by the Company pursuant to Section 5.01(e) or otherwise) and, in the
case of proceeds payable or paid as a result of an Event of Loss to the
Burlington South Plant, held and released pursuant to the provisions of
Section 2.09(b) unless the Company shall satisfy the conditions of
Subsection 2.16(b) within 60 days of the determination of the
occurrence of such Event of Loss and within 90 days of the event giving
rise to such determination (in either case, subject to extension in
accordance with the provisions of Section 2.09(b) hereof), in which
case the proceeds shall be released as specified in Subsection 2.16(c)
and in the case of any other proceeds (whether related to the
Burlington South Plant), held and released in accordance with
Subsection 2.16(c).
(b) Restoration or Repair. The Company shall not be obligated
to prepay the Loans pursuant to Section 2.09(b) if the conditions
specified in the following clauses (i) through (v) below shall be
satisfied within 60 days of the determination of the occurrence of the
Event of Loss and within 90 days of the event giving rise to such
determination (in either case, subject to extension in accordance with
the provisions of Section 2.09(b) hereof):
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(i) the Company shall notify the Agent within 30 days
of the determination of the occurrence of such Event of Loss
of the Company's intention to repair, rebuild and/or restore
the Burlington South Plant to its original condition, wear and
tear excepted, pursuant to this Subsection;
(ii) no Default or Event of Default (other than a
Default or Event of Default caused solely by such Event of
Loss) shall have occurred and be continuing;
(iii) the Agent shall have received a written
application of the Company accompanied by a certificate of a
Responsible Officer showing in reasonable detail (A) the
nature (including scope and timing) of such repair, rebuilding
or restoration, (B) the actual cash expenditures made to date
for such repair, rebuilding or restoration, and (C) expected
total cash expenditures required to complete the work;
(iv) the Agent shall have received a written
certificate from its independent engineer confirming (A) the
reasonableness of the matters in subclauses (A) and (B) of
clause (iii) above and substantially concurring in the matters
in subclause (C) of clause (iii) above, (B) that such proposed
repair, rebuilding and restoration can be expected to restore
the Burlington South Plant to its original condition (ordinary
wear and tear excepted), and (C) the reasonableness of the
schedule of the repair, rebuilding and restoration; and
(v) the Company shall have provided evidence
satisfactory to the Agent that the amount of proceeds
available, together with the additional amounts irrevocably
agreed to be provided by any Person acceptable to the Majority
Lenders, such agreement to be between the Company and the
Person agreeing to provide such amount (and, if applicable,
the Person agreeing to guarantee such obligations), and the
benefits of any such agreement to be assigned to the Agent,
for the benefit of the Lenders, shall be sufficient to
complete the construction, repair, rebuilding and restoration
of the Burlington South Plant, pay debt service on the Loans
during the period of such construction, repair, rebuilding and
restoration, and pay operating expenses of the Burlington
South Plant during such period.
(c) Priority of Payments. In the case of any Event of Loss
with respect to the Burlington South Plant, if the conditions specified
in Subsection 2.16(b) shall have been satisfied, and in the case of any
other damage or destruction to or any condemnation, confiscation,
seizure requisition or forced shutdown with respect to the Burlington
South Plant, if no Default (other than a Default caused solely by the
events giving rise to such damage, destruction, condemnation,
confiscation, seizure, requisition or forced shutdown) shall have
occurred and be continuing, the amounts then available in the
Restoration Account shall be released by the Agent from time to time
during the period of repair, rebuilding and restoration in the
following order of priority: first, to payments then due hereunder and
under the Notes, if any; second, in payment for the repair, rebuilding
or restoration of the Burlington South Plant, against presentation to
the Agent of the following:
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(i) a certificate executed by a Responsible Officer,
dated not more than 30 days prior to the date of the request
for the withdrawal and payment of funds from the Restoration
Account, setting forth that (A) expenditures have been made,
or costs incurred, by or for the account of the Company in a
specified amount for the purpose of making certain repairs,
rebuilding and restoration, which shall be briefly described,
including the amount of any such expenditures or costs for the
acquisition of a major item of Property, which shall be
separately specified, in replacement of any destroyed or
damaged Property; (B) no part of such expenditures or costs
has been or is being made the basis for the withdrawal of any
cash or the release of any Property from the Lien of the
Financing Documents or has been paid out of the proceeds of
insurance not required to be paid to the Agent under
Subsection 5.01(e)(ii)(B); (C) there is no outstanding
Indebtedness, other than costs for which payment is being
requested, known to the Company, after due inquiry, for the
purchase price or construction of such repairs, rebuilding or
restoration, or for labor, wages, materials or supplies in
connection with the making thereof, which, if unpaid when due,
could reasonably be expected to become the basis of a Lien
upon any of such repairs, rebuilding or restoration, which
Lien might, in the opinion of the Responsible Officer signing
such certificate, materially impair the security afforded by
such repairs, rebuilding or restoration; (D) no Default
exists; and (E) that all conditions precedent herein provided
relating to such withdrawal and payment have been complied
with;
(ii) an opinion of counsel stating that (A) the
documents which have been or are therewith delivered to the
Agent conform to the requirements of this Agreement; (B) upon
the basis of the related request, the funds, the withdrawal of
which is then requested, may be lawfully paid over under this
Subsection, and all conditions precedent herein provided
relating to such withdrawal and payment have been complied
with; (C) the Company has acquired, or upon payment of the
costs to be paid as requested will acquire, title to such
repairs, rebuilding and restoration at least equivalent to its
title to the Property being repaired, rebuilt or restored,
subject only to the Liens permitted by Section 5.04(b); and
(D) the right, title and interest of the Company in and to any
of such repairs, rebuilding and restoration are subject to the
Lien of the Agent for the benefit of the Lenders;
and third, upon completion of all repair, rebuilding and restoration to
the reasonable satisfaction of the Agent, the balance remaining in the
Restoration Account, if any, shall be paid to the Company. Any amount
of proceeds paid directly to the Company shall be applied by the
Company in the order of priority set forth above.
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ARTICLE III
CONDITIONS TO BORROWINGS AND TO
PURCHASE, RENEWAL AND REARRANGEMENT
The obligation of each Lender to make a Loan or the Issuing Bank to
issue a Letter of Credit hereunder is subject to the satisfaction of the
following conditions:
Section 3.01 Closing. The Company shall have delivered to the Agent
(unless waived by the Agent) at least three Business Days' advance written
notice of the proposed Effective Date, which shall be a Business Day not later
than 10 days from the Closing Date, for the delivery of all instruments,
certificates and opinions referred to in Section 3.02 not theretofore delivered.
Section 3.02 Conditions Precedent to Initial Loan. At the time of the
making by such Lender of its initial Loan hereunder or the issuance by the
Issuing Bank of the initial Letter of Credit, all obligations of the Company
hereunder to the Agent or any Lender incurred prior to such initial Loan or
Letter of Credit (including, but not limited to, the Company's obligation to
reimburse the reasonable fees and disbursements of counsel to the Agent), shall
have been paid in full, and the Agent shall have received the following, each
dated as of the Closing Date, in form and substance satisfactory to the Agent,
with an original thereof for the Agent and with sufficient copies thereof for
each Lender (except that in the case of the Notes, the originals thereof will be
delivered to the respective Lenders):
(a) Notes - A duly completed and executed Revolving Credit
Note and Term Note for each Lender and in each case payable to the
order of the Agent for the benefit of such Lender.
(b) Resolutions and Incumbency Certificates -
(i) certified copies of the resolutions of the Board
of Directors of the Company approving, as appropriate, the
Loans, the Notes, this Agreement and the other Financing
Documents, and all other documents, if any, to which the
Company is a party evidencing corporate authorization with
respect to such documents; and
(ii) a certificate of the Secretary or an Assistant
Secretary of the Company certifying (A) the name, title and
true signature of each officer of the Company authorized to
execute the Notes, this Agreement, Applications and the other
Financing Documents, (B) the name, title and true signature of
each officer of the Company authorized to provide the
certifications required pursuant to this Agreement including,
but not limited to, certifications required pursuant to
Section 5.02, Borrowing Requests, and Borrowing Base Reports,
and (C) that attached thereto is a true and complete copy of
the articles of incorporation and bylaws of the Company, as
amended to date, and a recent good standing certificate.
(c) Opinions of Counsel - The opinion of Xxxxxxx, Xxxxx &
Xxxxxx, counsel to the Company, addressed to the Agent, the Issuing
Bank and each of the Lenders, substantially in the form of Exhibit D,
and covering such other matters as any Lender through the Agent, the
Issuing Bank or the Agent may reasonably request.
(d) The Security Instruments -
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(i) Security Agreement dated as of the Closing Date
executed by the Company granting to the Agent a first priority
security interest in all personal Property described therein
of the Company, as security for the indebtedness respectively
defined therein as the "Obligations;"
(ii) Pledge Agreement dated as of the Closing Date
executed by Ozite granting to the Agent a first priority
security interest in 100% of the capital stock of the Company,
as security for the Lender Indebtedness;
(iii) the Mortgage;
(iv) Financing Statements, as appropriate, to perfect
the security interests created by the instruments delivered
under clauses (i) through (iii) above;
(v) Stock certificates and corresponding stock powers
to perfect the Agent's security in the stock pledged by the
instrument delivered under clause (ii) above;
(vi) the Cash Collateral Account Agreement described
in the definition of "Cover"; and
(vii) all Property in which the Agent shall, at such
time, be entitled to have a Lien pursuant to this Agreement or
any other Financing Document shall have been physically
delivered to the possession of the Agent or any bailee
accepted by the Agent to the extent that such possession is
necessary for the purpose of perfecting the Agent's Lien in
such collateral security.
(e) Insurance. A certificate of insurance coverage of the
Borrower evidencing that the Borrower is carrying insurance in
accordance with Section 5.01(e) hereof. In addition, the Agent shall
have received evidence satisfactory to the Agent that the Burlington
South Plant is not situated in an area that has been identified by the
Director of the Federal Emergency Management Agency or any other
Governmental Authority as an area having special flood hazards. Should
it be determined, however, that any portion of the Burlington South
Plant is situated in an area identified as having special flood
hazards, the Agent shall have received a copy of the applicable flood
insurance policies (or policy applications), in form and substance
satisfactory to the Agent, indicating that the maximum limits of
coverage have been obtained and that the full premium therefor has been
paid in full.
(f) Assigned Agreements. A copy of each executed Assigned
Agreement.
(g) Title Insurance; Survey. A Mortgagee's Policy of Title
Insurance in form and substance satisfactory to the Agent insuring the
lien granted pursuant to the Mortgage and a current survey covering the
Burlington South Plant.
(h) Environmental Report. A review by an environmental
consultant approved by the Agent, in its sole discretion, of prior
environmental site assessments for the Burlington South Plant and such
other reviews or further assessments that may be determined to be
required by
34
the Agent, in its sole discretion, to assess existence of any
environmental items which could reasonably be expected to have a
Material Adverse Affect.
(i) Equity Contribution. Evidence of the contribution by the
direct or indirect owners of the Company of $13,500,000 towards the
purchase of the Burlington South Plant, which such contribution shall
be in form and substance satisfactory to the Agent.
(j) Borrowing Base Audit. A review by an independent
collateral field examiner with respect to the Eligible Accounts and
Eligible Inventory components of the Borrowing Base satisfactory to the
Agent.
(k) Assignment and Assumption Agreement. A copy of an executed
Assignment and Assumption Agreement dated as of the Closing Date in
form and substance satisfactory to the Agent pursuant to which Ozite
has assigned to the Company its rights, titles, interests and
obligations under the Assigned Agreements.
(l) Consent Agreement. A copy of the executed Consent and
Agreement dated as of the Closing Date among OxyChem, the Agent and the
Company in the form attached as Exhibit G.
(m) Miscellaneous. Such other documents or conditions
precedent which the Agent may reasonably have requested or require in
its sole discretion.
(n) Acquisition. The acquisition by the Company of the
Burlington South Plant from OxyChem has been consummated, subject only
to funds being available under this Agreement.
Section 3.03 Conditions Precedent to Each Loan. At the time of the
making by such Lender of each Loan, including the initial Loan (before as well
as after giving effect to such Loan and to the proposed use of the proceeds
thereof):
(a) Notes. The Company shall have issued, executed and
delivered the Notes;
(b) No Default. There shall exist no Default or Event of
Default;
(c) Representations and Warranties. Except for facts timely
disclosed to the Agent from time to time in writing, not materially
more adverse to the Company than those existing on the Effective Date,
all representations and warranties contained herein and in the other
Financing Documents executed and delivered on or after the date hereof
shall be true and correct in all material respects with the same effect
as though such representations and warranties had been made on and as
of the date of such Loan; and
(d) Documentation. The Agent shall have received such other
documents as the Agent or any Lender or counsel to the Agent may
reasonably request, all in form and substance satisfactory to the
Agent.
Each Borrowing Request submitted by the Company, and the acceptance by
the Company of the proceeds of such Borrowing, shall constitute a representation
and warranty by the Company, as of the
35
date of the Loans comprising such Borrowing, that the conditions specified in
Subsections 3.03(b) and (c) have been satisfied.
Section 3.04 Recordings. The Security Instruments and accompanying
financing statements covering the Mortgaged Property, or other notices related
thereto if necessary or appropriate, shall have been duly delivered by the Agent
to the appropriate offices for filing or recording.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement, the
Company represents and warrants to the Lenders (which representations and
warranties will survive the delivery of the Notes) that:
Section 4.01 Corporate Existence. The Company is a corporation duly
organized, legally existing and in good standing under the laws of the
jurisdictions in which it is incorporated and is duly qualified as a foreign
corporation in all jurisdictions wherein the Property owned or the business
transacted by it makes such qualification necessary, except where the failure to
be so qualified would not have a Material Adverse Effect.
Section 4.02 Corporate Power and Authorization. The Company is
authorized and empowered to create and issue the Notes, and to execute, deliver
and perform the Financing Documents, including this Agreement; and all corporate
action on the Company's part requisite for the due creation and issuance of the
Notes and for the due execution, delivery and performance of the Financing
Documents, including this Agreement, has been duly and effectively taken.
Section 4.03 Binding Obligations. This Agreement does, and the Notes
and other Financing Documents upon their creation, issuance, execution and
delivery will, when issued and delivered under this Agreement, constitute valid
and binding obligations of the Company, and will be enforceable in accordance
with their respective terms (except that enforcement may be subject to any
applicable bankruptcy, insolvency or similar laws generally affecting the
enforcement of creditors' rights and subject to the availability of equitable
remedies).
Section 4.04 No Legal Bar or Resultant Lien. The Notes and the other
Financing Documents, including this Agreement, do not and will not violate or
create a default under any provisions of the articles or certificate of
incorporation or bylaws of the Company, or any contract, agreement, instrument
or Governmental Requirement to which the Company is subject, or result in the
creation or imposition of any Lien upon any Properties of the Company, other
than those violations and defaults that would not affect the Company's use of
such Properties or those permitted by this Agreement.
Section 4.05 No Consent. Except as set forth on Schedule 4.05, the
Company's execution, delivery and performance of the Notes and the other
Financing Documents, including this Agreement, do not require notice to or
filing or registration with, or the authorization, consent or approval of or
other action by any other Person, including, but not limited to, any
Governmental Authority.
36
Section 4.06 Financial Information.
(a) Financial Statements. The April 30, 1995 pro forma
consolidated financial statements of the Company heretofore delivered
to the Lenders were prepared in accordance with GAAP applied on a
consistent basis and fairly present the consolidated financial
condition and operations of the Company at such date and the results of
its operations for the period then ended on a pro forma basis.
(b) No Material Adverse Effect. Since April 30, 1995, there
has been no event or occurrence that could reasonably be expected to
have a Material Adverse Effect.
Section 4.07 Investments and Guaranties. At the date of this Agreement,
the Company has not made investments in or advances to any Person or guaranties
of the obligations of any Person, except those permitted by Subsections
5.04(e)(i) through (vii), those reflected in the Financial Statements or
described in Schedule 4.07.
Section 4.08 Litigation. Except as set forth in Schedule 4.08, there is
no action, suit or proceeding, or any governmental investigation or any
arbitration, in each case pending or, to the knowledge of the Company,
threatened against the Company or any material Property thereof before any court
or arbitrator or any Governmental Authority which (i) challenges the validity of
this Agreement, any Note, any Application, or any of the other Financing
Documents or (ii) if adversely determined would have a Material Adverse Effect.
Section 4.09 Federal Reserve Regulations. The Company is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock (within the meaning of Regulation U or X). Neither the
Company nor any Person acting on behalf of the Company has taken any action
which might cause the Notes or any of the Financing Documents, including this
Agreement, to violate Regulation U or X or any other regulation of the Board of
Governors of the Federal Reserve System or to violate Section 7 of the
Securities Exchange Act of 1934, as amended, (or any successor thereto) or any
rule or regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect.
Section 4.10 Compliance with ERISA.
(a) The Company and each ERISA Affiliate have complied in all
material respects with ERISA and, where applicable, the Code regarding
each Plan.
(b) Each Plan is, and has been, maintained in substantial
compliance with ERISA and, where applicable, the Code.
(c) No act, omission or transaction has occurred which could
result in imposition on the Company or any ERISA Affiliate (whether
directly or indirectly) of (i) either a civil penalty assessed pursuant
to subsections (c), (i) or (l) of section 502 of ERISA or a tax imposed
pursuant to section 4975 of the Code or (ii) breach of fiduciary duty
liability damages under section 409 of ERISA.
37
(d) No Plan (other than a defined contribution plan) or any
trust created under any such Plan has been terminated since September
2, 1974. No liability to the PBGC (other than for the payment of
current premiums which are not past due) by the Company or any ERISA
Affiliate has been or is expected by the Company or any ERISA Affiliate
to be incurred with respect to any Plan. No ERISA Event with respect to
any Plan has occurred.
(e) Full payment when due has been made of all amounts which
the Company or any ERISA Affiliate is required under the terms of each
Plan or applicable law to have paid as contributions to such Plan as of
the date hereof, and no accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not
waived, exists with respect to any Benefit Plan.
(f) The actuarial present value of the benefit liabilities
under each Benefit Plan which is subject to Title IV of ERISA does not,
as of the end of the Company's most recently ended fiscal year, exceed
the current value of the assets (computed on a plan termination basis
in accordance with Title IV of ERISA) of such Benefit Plan allocable to
such benefit liabilities. The term "actuarial present value of the
benefit liabilities" shall have the meaning specified in section 4041
of ERISA.
(g) Neither the Company nor any ERISA Affiliate sponsors,
maintains, or contributes to an employee welfare benefit plan, as
defined in section 3(1) of ERISA, including, without limitation, any
such plan maintained to provide benefits to former employees of such
entities, that may not be terminated by the Company or any ERISA
Affiliate in its sole discretion at any time without any material
liability.
(h) Neither the Company nor any ERISA Affiliate sponsors,
maintains or contributes to, or has at any time in the six-year period
preceding the date of this Agreement sponsored, maintained or
contributed to, any Multiemployer Plan other than those listed on
Schedule 4.10 attached hereto. Prior to the execution of this
Agreement, the Company has furnished to the Agent with respect to each
Multiemployer Plan listed on Schedule 4.10 hereto (i) a true and
complete listing of the contributions required to be made by the
Company and all ERISA Affiliates to such Multiemployer Plan for each of
the five calendar years preceding the date of this Agreement, and (ii)
true and complete copies of all information which has been provided to
the Company or any ERISA Affiliate regarding assessed or potential
withdrawal liability under any such Multiemployer Plan.
(i) Neither the Company nor any ERISA Affiliate is required to
provide security under section 401(a)(29) of the Code due to a Plan
amendment that results in an increase in current liability for the
Plan.
Section 4.11 Taxes; Governmental Charges. The Company has filed all tax
returns and reports required to be filed and has paid all taxes, assessments,
fees and other governmental charges levied upon it or upon its Properties or
income which are due and payable, including interest and penalties, or has
provided adequate reserves for the payment thereof if required in accordance
with GAAP for the payment thereof, except such interest and penalties as are
being contested in good faith by appropriate actions or proceedings and for
which adequate reserves for the payment thereof as required by GAAP have been
provided.
38
Section 4.12 Titles, etc. The Company has indefeasible title to its
material (individually or in the aggregate) Properties, free and clear of all
Liens except (i) Liens referred to in the Financial Statements, (ii) Liens
disclosed to the Lenders in Schedule 4.12, (iii) Liens and minor irregularities
in title which do not materially interfere with the occupation, use and
enjoyment by the Company of any of its Properties in the normal course of
business as presently conducted or materially impair the value thereof for such
business, or (iv) Liens otherwise permitted or contemplated by this Agreement or
the other Financing Documents.
Section 4.13 Defaults. The Company is not in default nor has any event
or circumstance occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default (in any respect that would have a
Material Adverse Effect) under any loan or credit agreement, indenture,
mortgage, deed of trust, security agreement or other instrument or agreement
evidencing or pertaining to any Indebtedness of the Company, or under any
material agreement or instrument to which the Company is a party or by which the
Company is bound, except as disclosed to the Lenders in Schedule 4.13. No
Default hereunder has occurred and is continuing.
Section 4.14 Casualties; Taking of Properties. Since the date of the
Financial Statements, neither the business nor the Properties of the Company
have been affected in a manner that has had or would have a Material Adverse
Effect as a result of any fire, explosion, earthquake, flood, drought,
windstorm, accident, strike or other labor disturbance, embargo, requisition or
taking of Property or cancellation of contracts, permits or concessions by any
domestic or foreign government or any agency thereof, riot, activities of armed
forces or acts of God or of any public enemy.
Section 4.15 Compliance with the Law. The Company:
(a) is not in violation of any Governmental Requirement; and
(b) has not failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of any of
its Properties or the conduct of its business, including but not
limited to, (i) approval from the Federal Trade Commission as required
pursuant to the Stipulation and Final Order of the United States Court
of Appeals for the Second Circuit in Occidental Petroleum Corporation,
et al. vs. The Federal Trade Commission, Docket 93-4122, modifying the
order of the Federal Trade Commission entered December 22, 1992 in
Commission Docket No. 9205 and (ii) authorizations and approvals from
the New Jersey Department of Environmental Protection for the transfer
of the Burlington South Plant in accordance with the New Jersey
Industrial Site Recovery Act, NJSA 13:lk-6, et. seq., as amended;
which violation or failure would have (in the event that such a violation or
failure were asserted by any Person through appropriate action) a Material
Adverse Effect.
Section 4.16 No Material Misstatements. No information, exhibit or
report furnished to the Agent or the Lenders by or at the direction of the
Company in connection with the negotiation of this Agreement contained any
material misstatement of fact or, when such statement is considered with all
other written statements furnished to the Lenders in that connection, omitted to
state a material fact or any fact necessary to make the statement contained
therein not misleading.
39
Section 4.17 Investment Company Act. The Company is not an "investment
company" or a company "controlled" by an "investment company" that is
incorporated in or organized under the laws of the United States or any "State,"
as those terms are defined in the Investment Company Act of 1940, as amended.
The execution and delivery by the Company of this Agreement and the other
Financing Documents and its performance of the obligations provided for therein,
will not result in a violation of the Investment Company Act of 1940, as
amended.
Section 4.18 Public Utility Holding Company Act. The Company is not 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," or a "public-utility company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
Section 4.19 Subsidiaries. The Company has no Subsidiaries.
Section 4.20 Insurance. Schedule 4.20 attached hereto contains an
accurate and complete description of all material policies of fire, liability,
workmen's compensation, casualty, flood, business interruption and other forms
of insurance owned or held by the Company. All such policies are in full force
and effect, all premiums with respect thereto have been paid in accordance with
their respective terms, and no notice of cancellation or termination has been
received with respect to any such policy. Such policies are sufficient for
compliance with all requirements of law and of all agreements to which the
Company is a party; are valid, outstanding and enforceable policies; provide
adequate insurance coverage in at least such amounts and against at least such
risks (but including in any event public liability) as are usually insured
against in the same general area by companies engaged in the same or a similar
business for the assets and operations of the Company; and will not in any way
be affected by, or terminate or lapse by reason of, the transactions
contemplated by this Agreement. Schedule 4.20 identifies all material risks, if
any, which the Company and its Board of Directors or officers have designated as
being self insured. The Company has not been unable to obtain any insurance with
respect to its assets or operations, nor has its coverage been limited below
usual and customary policy limits during the last three years.
Section 4.21 Mortgaged Property. Substantially all of the Mortgaged
Property is described in and covered by the written reports which have
previously been delivered to and relied upon by the Lenders in connection with
this Agreement.
Section 4.22 Solvency. After giving effect to the Transaction, (a) the
assets of the Company, at a fair valuation, will exceed its liabilities,
including contingent liabilities, (b) the remaining capital of the Company will
not be unreasonably small to conduct its business; and (c) the Company has not
incurred debts, and does not intend to incur debts, beyond its ability to pay
such debts as they mature. For purposes of this Section 4.22, "debt" means any
liability on a claim, and "claim" means (i) any right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured, or (ii) any right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.
Section 4.23 Environmental Matters.
40
(a) Environmental Laws, etc. Except as disclosed to the
Lenders in Schedule 4.23, neither any Property of the Company nor the
operations conducted thereon violate any applicable order of any court
or Governmental Authority or Environmental Laws, which violation could
reasonably be expected to result in liability to the Company that has
not been indemnified by OxyChem pursuant to the Purchase Agreement in
excess of $250,000 individually, or $500,000 in the aggregate, or which
could reasonably be expected to result in remedial obligations of the
Company that have not been indemnified by OxyChem pursuant to the
Purchase Agreement in excess of $250,000 individually, or $500,000 in
the aggregate assuming disclosure to the applicable Governmental
Authority of all relevant facts, conditions and circumstances, if any,
pertaining to the relevant Property.
(b) No Litigation. Without limitation of clause (a) above, no
Property of the Company nor the operations currently conducted thereon
or by any prior owner or operator of such Property or operation, are in
violation of or subject to any existing, pending or threatened action,
suit, investigation, inquiry or proceeding by or before any court or
Governmental Authority or to any remedial obligations under
Environmental Laws, which violation, action, suit, investigation,
inquiry or proceeding could reasonably be expected to result in
liability in excess of $250,000 individually, or $500,000 in the
aggregate, or which could reasonably be expected to result in remedial
obligations in excess of $250,000 individually, or $500,000 in the
aggregate assuming disclosure to the applicable Governmental Authority
of all relevant facts, conditions and circumstances, if any, pertaining
to the relevant Property.
(c) Notices, Permits, etc. Except as disclosed to the Lenders
in Schedule 4.23, all notices, permits, licenses or similar
authorizations, if any, required to be obtained or filed by the Company
in connection with the operation or use of any and all Property of the
Company, including but not limited to past or present treatment,
storage, disposal or release of a hazardous substance or solid waste
into the environment, have been duly obtained or filed except to the
extent the failure to obtain or file such notices, permits, licenses or
similar authorizations could not reasonably be expected to result in
liability to the Company that has not been indemnified by OxyChem
pursuant to the Purchase Agreement in excess of $250,000 individually,
or $500,000 in the aggregate, or which could not reasonably be expected
to result in remedial obligations of the Company that have not been
indemnified by OxyChem pursuant to the Purchase Agreement in excess of
$250,000 individually, or $500,000 in the aggregate assuming disclosure
to the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to the relevant
Property.
(d) Hazardous Substances Carriers. All hazardous substances or
solid waste generated at any and all Property of the Company have in
the past been transported, treated and disposed of only by carriers
maintaining valid permits under RCRA and any other Environmental Law,
except to the extent the failure to have such substances or waste
transported, treated or disposed by such carriers could not reasonably
be expected to result in liability in excess of $250,000 individually,
or $500,000 in the aggregate, or which could not reasonably be expected
to result in remedial obligations in excess of $250,000 individually,
or $500,000 in the aggregate, and only at treatment, storage and
disposal facilities maintaining valid permits under RCRA and any other
Environmental Law, which carriers and facilities have been and are
operating in compliance with such permits, except to the extent the
failure to have such substances or waste treated, stored or disposed at
such facilities, or the failure of such
41
carriers or facilities to so operate, could not reasonably be expected
to result in liability in excess of $250,000 individually, or $500,000
in the aggregate, or which could not reasonably be expected to result
in remedial obligations in excess of $250,000 individually, or $500,000
in the aggregate assuming disclosure to the applicable Governmental
Authority of all relevant facts, conditions and circumstances, if any,
pertaining to the relevant Property.
(e) Hazardous Substances Disposal. The Company has taken all
reasonable steps necessary to determine and has determined that no
hazardous substances or solid waste have been disposed of or otherwise
released and there has been no threatened release of any hazardous
substances on or to any Property of the Company except in compliance
with Environmental Laws, except to the extent the failure to do so
could not reasonably be expected to result in liability in excess of
$250,000 individually, or $500,000 in the aggregate, or which could not
reasonably be expected to result in remedial obligations in excess of
$250,000 individually, or $500,000 in the aggregate assuming disclosure
to the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to the relevant
Property.
(f) OPA Requirements. To the extent applicable, the Company
has complied with all design, operation and equipment requirements
imposed by OPA or scheduled to be imposed by OPA during the term of
this Agreement, and the Company does not have reason to believe that it
will not be able to maintain such compliance with OPA requirements
during the term of this Agreement, except to the extent the failure to
so comply could not reasonably be expected to result in liability in
excess of $250,000 individually, or $500,000 in the aggregate, or which
could not reasonably be expected to result in remedial obligations in
excess of $250,000 individually, or $500,000 in the aggregate assuming
disclosure to the applicable Governmental Authority of all relevant
facts, conditions and circumstances, if any, pertaining to the relevant
Property.
(g) No Contingent Liability. The Company has no material
contingent liability in connection with any release or threatened
release of any hazardous substance or solid waste into the environment
other than such contingent liabilities at any one time and from time to
time which could reasonably be expected to exceed $250,000 in excess of
applicable insurance coverage and for which adequate reserves for the
payment thereof as required by GAAP have not been provided, or which
could reasonably be expected to result in remedial obligations in
excess of $250,000 individually or $500,000 in the aggregate assuming
disclosure to the applicable Governmental Authority of all relevant
facts, conditions and circumstances, if any, pertaining to such release
or threatened release.
ARTICLE V
COVENANTS
Section 5.01 Certain Affirmative Covenants. So long as any Lender has
any Commitment hereunder or any Loan remains unpaid or any Revolving Credit
Exposure remains outstanding, the Company will at all times comply with the
following covenants:
42
(a) Maintenance and Compliance, etc. The Company will (i)
except as permitted by Section 5.04(c), preserve and maintain its
corporate existence, rights and franchises and (ii) observe and comply
in all material respects with all Governmental Requirements, except
where failure to do so could not reasonably be expected to have a
Material Adverse Effect.
(b) Payment of Taxes and Claims, etc. The Company will pay (i)
all taxes, assessments and governmental charges imposed upon it or upon
its Property, and (ii) all claims (including, but not limited to,
claims for labor, materials, supplies or services) which might, if
unpaid, become a Lien upon its Property, unless, in each case, the
validity or amount thereof is being contested in good faith by
appropriate action or proceedings and the Company has established
adequate reserves in accordance with GAAP with respect thereto.
(c) Further Assurances. The Company will cure promptly any
defects in the creation and issuance of the Notes, and the execution
and delivery of the Financing Documents, including this Agreement. The
Company at its expense will, as promptly as practical, execute and
deliver to the Agent or the Issuing Bank upon request all such other
and further documents, agreements and instruments in compliance with or
performance of the covenants and agreements of the Company in the
Financing Documents, including this Agreement, or to further evidence
and more fully describe the collateral intended as security for the
Notes or other Lender Indebtedness, or to correct any omissions in the
Financing Documents, or more fully to state the security obligations
set out herein or in any of the Financing Documents, or to perfect,
protect or preserve any Liens created pursuant to any of the Financing
Documents, or to make any recordings, to file any notices, or obtain
any consents, all as may be necessary or appropriate in connection
therewith.
(d) Performance of Obligations. The Company will pay the Notes
according to the reading, tenor and effect thereof; and the Company
will do and perform every act and discharge all of the obligations
provided to be performed and discharged by the Company under the
Financing Documents, including this Agreement, at the time or times and
in the manner specified.
(e) Insurance. The Company will provide, or cause to be
provided, insurance in accordance with the terms of this Subsection,
which insurance shall be placed and maintained with insurers of
recognized responsibility and who are approved by the Agent.
(i) Coverage. At all times subsequent to the Closing
Date, the Company shall provide, or cause to be provided, the
following property and liability coverages:
(A) with respect to the Burlington South
Plant, all-risk property coverage, with limits of
coverage at least equal to the replacement cost
(which limits shall be not less than $82,000,000 for
the Burlington South Plant, or such higher amount as
the Company may determine after its annual review
thereof and consultation with the Agent or its
insurance consultant) of the Burlington South Plant.
Such insurance shall include, without limitation,
coverage for (1) floods, windstorms, hurricanes,
tornados, earthquakes, collapse and other perils
(including, without limitation, debris and hazardous
substance removal and cleanup) customarily included
under all-risk policies available with respect to
43
Property similar in construction, location, occupancy
and operation to the Burlington South Plant, and (2)
"boiler and machinery" property damage insurance on a
comprehensive basis with respect to damage to the
machinery, plants, equipment or similar apparatus
(including production machinery) included in the
Burlington South Plant, from risks and in amounts
normally insured against under machinery policies.
Such insurance may include deductible amounts for the
account of the Company and other insureds in the
aggregate not to exceed the following:
Type Amount
all-risk property coverage $ 100,000
boiler and machinery/property
damage/business interruption/
extra expense $50,000,000
earthquake $15,000,000
debris removal $5,000,000,
or 25% of loss,
whichever is greater
pollution clean-up $25,000,000
(B) with respect to the Burlington South
Plant, business interruption insurance covering
perils at least as broad as described in Subsections
5.01(e)(i)(A)(1) and (2), in an amount sufficient to
cover projected gross earnings less non-continuing
expenses arising from the Burlington South Plant for
a period of not less than 24 months. Such insurance
may include a waiting period not to exceed 30 days.
(C) with respect to the Burlington South
Plant:
(1) statutory workers' compensation
and occupational disease insurance
(including, without limitation, coverage
under the U.S. Longshoremen's and Harbor
Workers' Act) in accordance with applicable
state and federal law, and employer's
liability insurance with limits complying
with the underlying requirements of the
excess liability policy described in
Subsection 5.01(e)(i)(C)(4), with respect to
(x) the Company and (y) any contractor or
subcontractor in any tier involved in the
operation of, or any construction with
respect to, the Burlington South Plant;
(2) commercial general liability
insurance covering operations of the
Company, including coverage for hazards
customarily insured with respect to Property
similar in construction, location, occupancy
and operation to the Burlington South Plant,
but in no event less than the standard
coverage provided by the "occurrence" form
approved for use in the State of New Jersey
on the date hereof, with limits complying
44
with the underlying requirements of the
excess liability policy described in
Subsection 5.01(e)(i)(C)(4), with respect to
(x) the Company and (y) any contractor or
subcontractor in any tier involved in the
operation of, or any construction with
respect to, the Burlington South Plant;
(3) automobile liability insurance
including coverage for owned, non-owned,
hired and leased vehicles, with limits of
liability complying with the underlying
requirements of the excess liability policy
described in Subsection 5.01(e)(i)(C)(4),
with respect to (x) the Company and (y) any
contractor or subcontractor in any tier
involved in the operation of the Burlington
South Plant; and
(4) (x) excess commercial liability
insurance in excess of the liability
policies described in Subsections
5.01(e)(i)(C)(1), (2) and (3) with limits of
not less than $10,000,000 for each
occurrence and in the aggregate per year
with respect to the Company, (y) excess
commercial liability insurance in excess of
the liability policies described in
Subsections 5.01(e)(i)(C)(1), (2) and (3)
with limits of not less than $1,000,000 for
each occurrence and in the aggregate per
year with respect to any general contractor
involved in the operation of, or any
construction with respect to, the Burlington
South Plant, and (z) excess commercial
liability insurance in excess of the
liability policies described in Subsections
5.01(e)(i)(C)(1), (2) and (3) with limits of
not less than $1,000,000 for each occurrence
and in the aggregate per year with respect
to any contractor or subcontractor in any
tier involved in the operation of, or any
construction with respect to, the Burlington
South Plant.
(ii) Insurance Endorsements. Any insurance carried in
accordance with clause (i) of this Subsection shall, except as
hereinafter permitted, provide or be endorsed to provide that:
(A) the Agent on behalf of itself and the
Lenders, as their interests may appear, shall be
included as additional insureds or named as loss
payees, with the understanding that any obligation
imposed upon the insured (including, without
limitation, the liability to pay premiums) shall be
the obligation of the Company and not that of the
Agent or any Lender;
(B) losses, if any, under any property
insurance with respect to the Burlington South Plant
shall be adjusted as provided in Subsection
5.01(e)(iii), and insurance proceeds with respect to
losses, if any, in excess of $100,000 per occurrence
(including such amount) in respect of the Burlington
South Plant shall be paid into the Restoration
Account, and insurance proceeds with respect to
losses less than $100,000 in respect of the
Burlington South Plant shall be payable to the
Company;
45
(C) except with respect to the coverage
required by Subsections 5.01(e)(i)(A), 5.01(e)(i)(B)
and 5.01(e)(i)(C)(1), a cross-liability and
severability of interest endorsement providing that
to the extent the policy is written to cover more
than one insured, all terms, conditions, insuring
agreements and endorsements, with the exception of
limits of liability and deductibles, shall operate in
the same manner as if there were a separate policy
covering each insured;
(D) the interests of the Agent and the
Lenders shall not be invalidated by any action or
inaction of the Company or any other Person and shall
insure the Agent and the Lenders regardless of any
breach or violation by the Company or any other
Person of any warranties, declarations or conditions
contained in such policies;
(E) the insurer thereunder waives all rights
of subrogation against the Agent or the Lenders;
(F) such insurance shall be primary without
right of contribution of any other insurance carried
by or on behalf of the Agent or the Lenders with
respect to its or their interests in the Burlington
South Plant; and
(G) if such insurance is cancelled for any
reason whatsoever (including, without limitation,
nonpayment of premium) or any material change is made
in the coverage that affects the interests of the
Agent or the Lenders, such cancellation or change
shall not be effective as to the Agent for 10 days
for nonpayment of premiums and otherwise for 45 days,
in both cases after receipt by the Agent (at the
address provided pursuant to Section 8.01) of written
notice sent by certified mail from such insurer of
such cancellation or change.
(iii) Adjustment of Property Losses. The loss, if
any, under any property insurance covering the Burlington
South Plant required to be carried by this Section shall be
adjusted with the insurance companies or otherwise collected,
including, without limitation, the filing of appropriate
proceedings, by the Company in consultation with the Agent.
(iv) Reinstatement of Limits. The Company shall, or
shall cause its insurance broker to, notify promptly the Agent
and the Lenders at any time when the limits of the excess
commercial liability insurance required by Subsection
5.01(e)(ii)(C)(4) shall have been reduced, either by reason of
payments of, or the establishment of reserves for
the ultimate payment of, claims which have been asserted
during the term of such insurance, by an aggregate amount in
excess of $250,000. At such time, the Company shall, if so
requested by the Agent, use its best efforts to reinstate such
insurance so as to comply with the requisite limits prescribed
herein.
(v) Evidence of Insurance. On or before the Effective
Date and each anniversary thereof, the Company shall arrange
to furnish to the Agent and its insurance consultant, if any,
satisfactory certification of all insurance required as of
such date
46
under this Agreement, together with receipts evidencing the
payment of all premiums therefor. Such certification shall be
executed by each insurer or by an authorized representative of
each insurer where it is not practical for such insurer to
execute the certificate itself. Such certification shall
identify the underwriters, the type of insurance, the
insurance limits (including applicable deductibles), the
policy term, the principal exclusions, restrictions,
limitations and similar provisions, shall specifically list
the special provisions enumerated for such insurance required
by this Section, and, with respect to the policy or policies
obtained pursuant to Subsection 5.01(e)(ii)(A), shall be
accompanied by an estimate of a Responsible Officer stating
the full replacement value of the Burlington South Plant, as
of the effective date of such insurance or renewal thereof.
On or before the Effective Date, and at any time upon
request, the Company will furnish the Agent and its insurance
consultant, if any, copies of all insurance policies, binders
and cover notes or other evidence of such insurance relating
to the Burlington South Plant.
(vi) Report. Concurrently with the furnishing of the
certification referred to in clause (v), the Company will
furnish the Agent a report of Xxxxx & XxXxxxxx, Incorporated
or another independent insurance broker setting forth the
insurance obtained by the Company in accordance with this
Section and stating that, in the opinion of such broker, such
insurance complies with the requirements of this Section (or,
in the event of any non-compliance, specifying the same) and
is in full force and effect, and that the Company is not
delinquent in the payment of any premiums then due thereon.
The Agent may at its sole option obtain such insurance if not
obtained by the Company and, in such event, the Company shall
reimburse the Agent, upon demand, for the cost thereof
(together with interest thereon at the Base Rate from the date
the Agent expends such funds to the date of such repayment).
(vii) Additional Insurance by the Lenders or the
Company. Nothing in this Section shall prohibit any Lender or
the Company, as their respective interests may appear, from
maintaining for its own account, at the expense of the Person
purchasing such insurance, additional insurance on or with
respect to the Burlington South Plant, or any part thereof,
with coverage exceeding that otherwise required under this
Section, unless such insurance would conflict with or limit
the insurance otherwise required under this Section.
(f) Accounts and Records. The Company will keep proper books
of record and account in which full, true and correct entries will be
made of all financial or business dealings or transactions in relation
to their respective business and activities.
(g) Right of Inspection. The Company will permit any officer,
employee or agent of the Agent or any of the Lenders to visit and
inspect any of the Properties of the Company, examine the Company's
books of record and accounts, take copies and extracts therefrom, and
discuss the affairs, finances and accounts of the Company with the
Company's officers, accountants and auditors, as often and all at such
reasonable times during normal business hours as may be reasonably
requested by the Agent or any of the Lenders.
47
(h) Operation and Maintenance of Mortgaged Property. The
Company will operate its Properties or cause its Properties to be
operated in accordance with prudent industry practice and in compliance
with all material terms and provisions of all applicable leases,
contracts and agreements and in compliance with all applicable
proration and conservation laws of the jurisdiction in which such
Properties may be situated, and all applicable laws, rules and
regulations of every other agency and authority from time to time
constituted to regulate the development and operation of such
Properties.
(i) Syndication Efforts. The Company agrees to use its good
faith efforts to enable the Agent's syndication efforts to benefit
materially from the Company's banking and institutional relationships.
The Company further agrees to coordinate the syndication effort with
any other syndicated bank financings by it or any of its affiliates and
to refrain from any such syndicated bank financings during such
syndication process unless otherwise agreed to by the Agent.
Section 5.02 Reporting Covenants. So long as any Lender has any
Commitment hereunder or any Loan remains unpaid or any Revolving Credit Exposure
remains outstanding, the Company will furnish to each Lender:
(a) Annual Financial Statements. As soon as available and in
any event within 90 days after the end of each fiscal year of the
Company, a balance sheet of the Company as at the end of such year and
the related statements of income, retained earnings and cash flows of
the Company for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in
reasonable detail and accompanied by a report thereon of Deloitte &
Touche or other independent public accountants of comparable recognized
national standing, which such report shall state that such financial
statements present fairly the financial condition as at the end of such
fiscal year, and the results of operations and cash flows for such
fiscal year, of the Company in accordance with GAAP, applied on a
consistent basis.
(b) Quarterly Financial Statements. As soon as available and
in any event within 45 days after the end of each fiscal quarter of the
Company, a balance sheet of the Company as at the end of such quarter
and the related statements of income, retained earnings and cash flows
of the Company for such fiscal quarter and for the portion of the
Company's fiscal year ended at the end of such quarter, setting forth
in each case in comparative form the figures for the corresponding
quarter and the corresponding portion of the Company's previous fiscal
year, all in reasonable detail and certified by a Responsible Officer
that such financial statements are complete and correct and fairly
present the financial condition as at the end of such fiscal quarter,
and the results of operations and cash flows for such fiscal quarter
and such portion of the Company's fiscal year, of the Company in
accordance with GAAP (subject to normal, year-end adjustments).
(c) Monthly Financial Statements. As soon as available and in
any event within 25 days after the end of each fiscal month of the
Company, a balance sheet of the Company as at the end of such month and
the related statements of income, retained earnings and cash flows of
the Company for such fiscal month and for the portion of the Company's
fiscal year ended at the end of such month, setting forth in each case
in comparative form the figures for the corresponding month and the
corresponding portion of the Company's previous fiscal year, all
48
in reasonable detail and certified by a Responsible Officer that such
financial statements are complete and correct and fairly present the
financial condition as at the end of such fiscal month, and the results
of operations and cash flows for such fiscal month and such portion of
the Company's fiscal year, of the Company in accordance with GAAP
(subject to normal, year-end adjustments).
(d) No Default/Compliance Certificate. Together with the
financial statements required pursuant to subsections (a), (b) and (c)
above, a certificate of a Responsible Officer (i) stating that a review
of such financial statements during the period covered thereby and of
the activities of the Company has been made under such Responsible
Officer's supervision with a view to determining whether the Company
has fulfilled all of its obligations under this Agreement, the other
Financing Documents, and the Notes; (ii) stating that the Company has
fulfilled its obligations under such instruments and that all
representations made in this Agreement continue to be true and correct
(or specifying the nature of any change), or if there shall be a
Default or Event of Default, specifying the nature and status thereof
and the Company's proposed response thereto; (iii) demonstrating in
reasonable detail compliance (including, but not limited to, showing
all material calculations) as at the end of such fiscal year, such
fiscal quarter or such fiscal month with Subsections 5.03(a) through
(g) and Subsection 5.04(o); and (iv) containing or accompanied by such
financial or other details, information and material as the Agent may
reasonably request to evidence such compliance.
(e) Auditors' No Default Certificate; Management Letters.
Together with the financial statements required pursuant to subsection
(a) above, a certificate of the independent public accountants who
audited the annual report referred to therein to the effect that their
audit has not disclosed the existence of an Event of Default or a
Default under this Agreement, or if there exists an Event of Default or
a Default hereunder, specifying the nature thereof; and, as soon as
available, copies of each management letter issued to the Company by
such accountants promptly following consideration or review by the
Board of Directors of the Company, or any committee thereof (together
with any response thereto prepared by the Company).
(f) Title Information. Within a reasonable time after a
request by the Agent, additional title information in form and
substance acceptable to the Majority Lenders as is reasonably necessary
covering the Mortgaged Property so that the Lenders shall have
received, together with the title information previously received by
the Lenders, satisfactory title information covering all of the
Mortgaged Property.
(g) Events or Circumstances with respect to Mortgaged
Property. Promptly after the occurrence of any event or circumstance
concerning or changing any of the Mortgaged Property that would have a
Material Adverse Effect, notice of such event or circumstance in
reasonable detail.
(h) Monthly Borrowing Base Reports. As soon as available and
in any event within 15 days after the end of each calendar month, a
Borrowing Base Report dated and reflecting amounts as of the last day
of such calendar month which have been reconciled to the financial
statements delivered pursuant to Subsection 5.02(c).
49
(i) Notice of Certain Events. As soon as practicable after the
Company learns of the receipt or occurrence of any of the following, a
certificate of a Responsible Officer specifying (i) any official notice
of any violation, possible violation, non-compliance or possible
non-compliance, or claim made by any Governmental Authority pertaining
to all or any part of the Properties of the Company which, if adversely
determined, would have a Material Adverse Effect; (ii) any event which
constitutes a Default or Event of Default, together with a detailed
statement specifying the nature thereof and the steps being taken to
cure such Default or Event of Default; (iii) the receipt of any notice
from, or the taking of any other action by, the holder of any
promissory note, debenture or other evidence of indebtedness in excess
of $100,000 of the Company with respect to a claimed default, together
with a detailed statement specifying the notice given or other action
taken by such holder and the nature of the claimed default and what
action the Company is taking or proposes to take with respect thereto;
(iv) any default or noncompliance of any party to any of the Financing
Documents with any of the terms and conditions thereof or any notice of
termination or other proceedings or actions which could reasonably be
expected to adversely affect any of the Financing Documents; (v) the
creation, dissolution, merger or acquisition of any Subsidiary of the
Company with material operations; (vi) any event or condition which
violates any Environmental Law and which could potentially have a
Material Adverse Effect or which could potentially result in remedial
obligations having a Material Adverse Effect, assuming disclosure to
the applicable Governmental Authority of all relevant facts, conditions
and circumstances, if any, pertaining to such event or condition; or
(vii) any event or condition which may reasonably be expected to have a
Material Adverse Effect.
(j) Shareholder Communications, Filings, etc. Promptly upon
the mailing or filing thereof, copies of all financial statements,
reports and proxy statements mailed to the Company's shareholders, and
copies of all registration statements, periodic reports and other
documents (excluding the related exhibits except to the extent
expressly requested by the Agent) filed with or received by the Company
in connection therewith from the Securities and Exchange Commission (or
any successor thereto) or any national securities exchange.
(k) Litigation. As soon as practicable after (i) the
occurrence thereof, notice of the institution of or any material
adverse development in any action, suit or proceeding or any
governmental investigation or any arbitration, before any court or
arbitrator or any governmental or administrative body, agency or
official, against the Company or any material Property thereof; or (ii)
actual knowledge thereof, notice of the threat of any such action,
suit, proceeding, investigation or arbitration, in either case in which
the amount involved is material and is not covered by insurance or
which, if adversely determined, would have a Material Adverse Effect.
(l) ERISA Information and Compliance. Promptly and will cause
any ERISA Affiliate to furnish (i) promptly after the filing thereof
with the United States Secretary of Labor, the Internal Revenue Service
or the PBGC, copies of each annual and other report with respect to
each Benefit Plan or any trust created thereunder, (ii) immediately
upon becoming aware of the occurrence of any ERISA Event or of any
"prohibited transaction," as described in section 406 of ERISA or in
section 4975 of the Code, in connection with any Plan or any trust
created thereunder, a written notice signed by the President or the
principal financial officer of the Company or the ERISA Affiliate, as
the case may be, specifying the nature thereof, what action the Company
or the ERISA Affiliate is taking or proposes to take with respect
thereto, and,
50
when known, any action taken or proposed by the Internal Revenue
Service, the Department of Labor or the PBGC with respect thereto,
(iii) promptly after receipt of each actuarial report for any Plan and
each annual report for any Multiemployer Plan, true and complete copies
of each such report, (iv) immediately upon receipt of a notice from a
Multiemployer Plan regarding the imposition of withdrawal liability, a
true and complete copy of such notice, (v) immediately upon becoming
aware that a Multiemployer Plan has been terminated, that the
administrator or plan sponsor of a Multiemployer Plan intends to
terminate a Multiemployer Plan, or that the PBGC has instituted or
intends to institute proceedings under section 4042 of ERISA to
terminate a Multiemployer Plan, a written notice signed by the
President or the principal financial officer of the Company or the
ERISA Affiliate, as the case may be, specifying the nature of such
occurrence and any other information relating thereto requested by the
Agent, and (vi) immediately upon receipt thereof, copies of any notice
of the PBGC's intention to terminate or to have a trustee appointed to
administer any Benefit Plan. With respect to each Benefit Plan, the
Company will, and will cause each ERISA Affiliate to, (i) satisfy in
full and in a timely manner, without incurring any late payment or
underpayment charge or penalty (excluding any interest charge for a
quarterly payment) and without giving rise to any lien, all of the
contribution and funding requirements of section 412 of the Code
(determined without regard to subsections (d), (e), (f) and (k)
thereof) and of section 302 of ERISA (determined without regard to
sections 303, 304 and 306 of ERISA), and (ii) pay, or cause to be paid,
to the PBGC in a timely manner, without incurring any late payment or
underpayment charge or penalty (excluding any interest change for a
quarterly payment), all premiums required pursuant to sections 4006 and
4007 of ERISA.
(m) Borrowing Base Audit. Annually, as of a date to be
designated by the Agent, but at the cost of the Company, a report of an
independent collateral field examiner approved by the Agent in writing
and reasonably acceptable to the Company (which may be the Agent or an
affiliate thereof) with respect to the Eligible Accounts and Eligible
Inventory components included in the Borrowing Base, and the Agent
shall have the option to receive such additional reports as the Agent
or the Majority Lenders shall reasonably request; provided, however,
that so long as no Default has occurred and is continuing, neither the
Agent nor the Majority Lenders shall request more than one such
additional report (for a total of two such reports) per calendar year.
(n) Aged Accounts. On or before the fifteenth day of each
calendar month, a report listing by obligor's name and showing the
aggregate amount of each account receivable of the Company.
(o) Business Plan. On or before the day prior to the
commencement of the fiscal year of the Company to which it applies, an
annual business plan setting forth the Company's strategies,
projections and assumptions.
(p) Other Information. With reasonable promptness, such other
information about the business and affairs and financial condition of
the Company as any Lender may reasonably request from time to time.
Section 5.03 Financial Covenants. So long as any Lender has any
Commitment hereunder or any Loan remains unpaid or any Revolving Credit Exposure
remains outstanding, the Company will:
51
(a) Tangible Net Worth. Maintain Tangible Net Worth in an
amount not less than (i) for the fiscal year ending July 31, 1996,
$12,000,000, and (ii) for the fiscal year beginning August 1, 1996, and
for each fiscal year thereafter, the sum of the amount calculated
pursuant to this Subsection for the previous year plus 75% of the
Company's net income for such previous year;
(b) Current Ratio. Maintain at all times a ratio of (i)
Current Assets of the Company to (ii) Current Liabilities of the
Company of not less than 1.00 to 1.00 during the period from the
Closing Date through January 31, 1996 and 1.05 to 1.00 thereafter.
(c) Fixed Charge Coverage Ratio. Maintain a ratio of (i)
EBITDA minus all current taxes, to the extent paid during the
applicable Rolling Period and not reimbursed during such Rolling Period
to the payer of such taxes by a Person other than the Borrower to (ii)
Fixed Charges determined as of any Quarterly Date of not less than 1.25
to 1.00.
(d) Interest Coverage Ratio. Maintain an Interest Coverage
Ratio for itself as of any Quarterly Date of at least 2.50 to 1.00.
Section 5.04 Certain Negative Covenants. So long as any Lender has any
Commitment hereunder or any Loan remains unpaid or any Revolving Credit Exposure
remains outstanding, the Company will not:
(a) Indebtedness. Create, incur, assume or suffer to exist,
any Indebtedness, other than:
(i) the Lender Indebtedness;
(ii) Indebtedness outstanding on the date hereof
which is set out in the Company's Financial Statements or on
Schedule 5.04(a) and any renewal, extension, refinancing or
refunding of such Indebtedness; provided that (A) the
principal amount of such Indebtedness that renews, extends,
refinances or refunds any such Indebtedness shall not exceed
the principal amount of such renewed, extended, refunded or
refinanced Indebtedness, and (B) the Indebtedness that renews,
extends, refinances or refunds such Indebtedness is scheduled
to mature no earlier than the Indebtedness being renewed,
extended, refunded or refinanced;
(iii) accounts payable (for the deferred purchase
price of Property or services) from time to time incurred in
the ordinary course of business and which are not in excess of
60 days past the invoice or billing date, or if in excess of
60 days past the invoice or billing date are being currently
contested in good faith by appropriate actions or proceedings
diligently conducted and, during the period beginning on the
Closing Date and ending on the date of nine months thereafter,
accounts payable incurred in connection with the purchase of
VCM from OxyChem which are not in excess of 90 days past the
invoice or billing date;
(iv) obligations for current taxes, assessments and
other governmental charges and taxes, assessments or other
governmental charges which are not yet due or
52
are being contested in good faith by appropriate action or
proceeding promptly initiated and diligently conducted, if
such reserve as shall be required by GAAP shall have been made
therefor;
(v) Capital Lease Obligations not to exceed $100,000
at any one time;
(vi) Indebtedness relating to personal injury or
property claims against the Company in an amount not to exceed
$1,000,000 in the aggregate unless and to the extent such
claims are covered by insurance;
(b) Liens. Create, incur, assume or suffer to exist any Lien
on any of its Property now owned or hereafter acquired to secure any
Indebtedness of any Person, other than:
(i) Liens existing on the date hereof and set out on
Schedule 5.04(b);
(ii) Liens securing the Lender Indebtedness;
(iii) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being
contested in good faith by appropriate action or proceedings
and with respect to which adequate reserves are being
maintained;
(iv) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen, repairmen,
workmen, and other Liens imposed by law created in the
ordinary course of business for amounts which are not past due
for more than 30 days or which are being contested in good
faith by appropriate proceedings and with respect to which
adequate reserves in accordance with GAAP are being
maintained;
(v) Liens (other than any inchoate Lien imposed by
ERISA) incurred or deposits or pledges made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, old
age or other similar obligations, or to secure the performance
of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(vi) easements, rights-of-way, restrictions,
servitudes, permits, reservations, exceptions, conditions,
covenants and other similar charges or encumbrances not
interfering with the ordinary conduct of the business of the
Company.
(vii) inchoate Liens arising under ERISA;
(viii) any obligations or duties affecting any of the
Property of the Company to any municipality or public
authority with respect to any franchise, grant, license or
permit which do not materially impair the use of such Property
for the purposes for which it is held;
53
(ix) defects, irregularities and deficiencies in
title of any rights of way or other Property of the Company
which in the aggregate do not materially impair the use of
such rights of way or other Property for the purposes for
which such rights of way and other Property are held by the
Company, and defects, irregularities and deficiencies in title
to any Property of the Company, which defects, irregularities
or deficiencies have been cured by possession under applicable
statutes of limitation;
(x) extensions, renewals or replacements of any Lien
referred to in Subsections 5.04(b)(i) through (ix), provided
that the principal amount of the Indebtedness or obligation
secured thereby is not increased and that any such extension,
renewal or replacement is limited to the Property originally
encumbered thereby.
(c) Mergers, Sales, etc. Merge into or with or consolidate
with any other Person, or sell, lease or otherwise dispose of (whether
in one transaction or in a series of transactions) all or any part of
its Property to any other Person, other than (i) with the consent of
the Agent, a merger of the Company with any other Person if the Company
is the surviving corporation, provided, however, that in each such
case, immediately thereafter and giving effect thereto, no event shall
have occurred and be continuing which constitutes a Default, or (ii)
sales, leases or other dispositions of all or any part of its Property
by the Company to any other Person not in excess of $250,000 in any
12-month period and not to exceed $500,000 cumulatively from the
Closing Date and provided further, that the Company receives fair
market consideration for any such sale, lease or disposition of such
Properties. Notwithstanding the foregoing limitations, the Company may
(A) sell inventory and other similar assets in the ordinary course of
business and (B) sell, transfer or otherwise dispose of personal
property (including, but not limited to, equipment, machinery and
vehicles) in the ordinary course of business or when, in the reasonable
judgment of the Company, such property is no longer used or useful in
the conduct of its business or the business.
(d) Dividends, etc. Declare or pay any dividend on its capital
stock (including, without limitation, its Class A Preferred Convertible
Stock), make any payment to purchase, redeem, retire or otherwise
acquire any of its capital stock (including, without limitation, its
Class A Preferred Convertible Stock) or any option, warrant, or other
right to acquire such capital stock (including, without limitation, its
Class A Preferred Convertible Stock), now or hereafter outstanding,
return any capital to its stockholders, make any distribution of its
assets, capital stock, warrants, rights, options, obligations or
securities to its stockholders, except that the Company may declare and
deliver dividends payable solely in shares of its capital stock or in
options, warrants or rights to purchase shares of capital stock.
(e) Investments, Loans, etc. Make or permit any loans
to or investments in any Person other than:
(i) investments, loans or advances, the material
details of which have been set forth in the Financial
Statements or are disclosed to the Agent in Schedule 4.07;
(ii) investments in direct obligations of the United
States of America or any agency thereof;
54
(iii) investments in certificates of deposit of
maturities less than one year, issued by commercial banks in
the United States having capital and surplus in excess of
$500,000,000;
(iv) investments in commercial paper of maturities
less than one year rated A1 or P1 by Standard & Poor's Ratings
Group or Xxxxx'x Investors Service, Inc., respectively, or any
equivalent rating from any other rating agency satisfactory to
the Agent;
(v) routine loans or advances to employees made in
the ordinary course of business not to exceed (A) $100,000 at
any one time outstanding to any one employee and (B) $250,000
in the aggregate;
(vi) investments in securities purchased by the
Company under repurchase obligations pursuant to which
arrangements are made with selling financial institutions
(being a financial institution having unimpaired capital and
surplus of not less than $500,000,000 and with a rating of A1
or P1 by Standard & Poor's Ratings Group or Xxxxx'x Investors
Service, Inc., respectively) for such financial institutions
to repurchase such securities within 30 days from the date of
purchase by the Company, and other similar short-term
investments made in connection with the Company's cash
management practices; and
(vii) the purchase, redemption or acquisition of
capital stock of the Company as permitted by Section 5.04(d).
(f) Lease Payments. Create, incur, assume or suffer to exist
any obligation for the payment of rent or hire of Property of any kind
whatsoever (real or personal), whether directly or as a guarantor, if,
after giving effect thereto, the aggregate amount of all payments
required to be made by the Company pursuant to such leases or lease
agreements (excluding Capital Lease Obligations) would exceed $350,000
in any fiscal year.
(g) Sales and Leasebacks. Enter into any arrangement, directly
or indirectly, with any Person whereby the Company shall sell or
transfer any Property, whether now owned or hereafter acquired, and
whereby the Company shall then or thereafter rent or lease as lessee
such Property or any part thereof or other Property which the Company
intends to use for substantially the same purpose or purposes as the
Property sold or transferred.
(h) Nature of Business. Permit any material change to be made
in the character of its business as carried on at the date hereof,
except as may be permitted pursuant to this Agreement.
(i) ERISA Compliance.
(i) Engage in, or permit any ERISA Affiliate to
engage in, any transaction in connection with which the
Company or any ERISA Affiliate could be subjected to either a
civil penalty assessed pursuant to subsections (c), (i) or (l)
of section 502 of ERISA or a tax imposed by section 4975 of
the Code;
55
(ii) Terminate, or permit any ERISA Affiliate to
terminate, any Benefit Plan in a manner, or take any other
action with respect to any Benefit Plan, which could result in
any liability of the Company or any ERISA Affiliate to the
PBGC;
(iii) Fail to make, or permit any ERISA Affiliate to
fail to make, full payment when due of all amounts which,
under the provisions of any Plan, agreement relating thereto
or applicable law, the Company or any ERISA Affiliate is
required to pay as contributions thereto;
(iv) Permit to exist, or allow any ERISA Affiliate to
permit to exist, any accumulated funding deficiency within the
meaning of section 302 of ERISA or section 412 of the Code,
whether or not waived, with respect to any Benefit Plan;
(v) Permit, or allow any ERISA Affiliate to permit,
the actuarial present value of the benefit liabilities under
any Benefit Plan maintained by the Company or any ERISA
Affiliate which is regulated under Title IV of ERISA to exceed
the current value of the assets on an ongoing basis of such
Benefit Plan allocable to such benefit liabilities. The term
"actuarial present value of the benefit liabilities" shall
have the meaning specified in section 4041 of ERISA;
(vi) Contribute to or assume an obligation to
contribute to, or permit any ERISA Affiliate to contribute to
or assume an obligation to contribute to, any Multiem ployer
Plan other than those listed on Schedule 4.10 attached hereto;
(vii) Acquire, or permit any ERISA Affiliate to
acquire, an interest in any Person that causes such Person to
become an ERISA Affiliate with respect to the Company or with
respect to any ERISA Affiliate of the Company if such Person
sponsors, maintains or contributes to, or at any time in the
six-year period preceding such acquisition has sponsored,
maintained, or contributed to, (A) any Multiemployer Plan, or
(B) any Benefit Plan that is subject to Title IV of ERISA
under which the actuarial present value of the benefit
liabilities under such Benefit Plan exceeds the current value
of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Benefit Plan
allocable to such benefit liabilities;
(viii) Incur, or permit any ERISA Affiliate to incur,
a liability to or on account of a Plan under sections 515,
4062, 4063, 4064, 4201 or 4204 of ERISA;
(ix) Except for a Plan maintained pursuant to the
requirements of any collective bargaining agreement,
contribute to or assume an obligation to contribute to, or
permit any ERISA Affiliate to contribute to or assume an
obligation to contribute to, any employee welfare benefit
plan, as defined in section 3(1) of ERISA, including, without
limitation, any such plan maintained to provide benefits to
former employees of such entities, that may not be terminated
by such entities in their sole discretion at any time without
any material liability;
56
(x) Amend, or permit any ERISA Affiliate to amend, a
Plan resulting in an increase in current liability such that
the Company or any ERISA Affiliate is required to provide
security to such Plan under section 401(a)(29) of the Code; or
(xi) Permit, or allow any ERISA Affiliate to permit,
the aggregate potential withdrawal liability with respect to
all Multiemployer Plans listed on Schedule 4.10 attached
hereto to exceed $1,000,000 in the event that the Company and
the ERISA Affiliates, as the case may be, were to completely
withdraw from such Multiemployer Plans.
(j) Sale or Discount of Receivables. Discount or sell (with or
without recourse), any of its notes receivable or accounts receivable.
(k) Proceeds of Loans. Use any proceeds of the Term Loans for
any purpose other than to finance the acquisition of the Burlington
South Plant or use any proceeds of the Revolving Credit Loans for any
purpose other than (i) to finance receivables and inventory or (ii) to
provide working capital for general corporate purposes. The Letters of
Credit shall not be used for any purpose other than as provided in
Section 2.03. No part of the proceeds of any Loan hereunder will be
used to buy or carry any Margin Stock (within the meaning of Regulation
U or X). Neither the Company nor any Person acting on behalf of the
Company will take any action which might cause the Notes or any of the
Financing Documents, including this Agreement, to violate Regulation U
or X or any other regulation of the Board of Governors of the Federal
Reserve System or to violate Section 7 of the Securities Exchange Act
of 1934, as amended, (or any successor thereto) or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect.
(l) Transactions with Affiliates. Enter into any transaction
or series of transactions with Affiliates of the Company which involve
an outflow of money or other Property from the Company to an Affiliate
of the Company, including but not limited to repayment of Indebtedness,
management fees, compensation, salaries, asset purchase payments or any
other type of fees or payments similar in nature, other than on terms
and conditions substantially as favorable to the Company as would be
obtainable by the Company in a reasonably comparable arm's-length
transaction with a Person other than such an Affiliate of the Company.
Notwithstanding the foregoing, the restrictions set forth in this
Section 5.04(l) shall not apply to: (i) the payment of reasonable and
customary fees to directors of the Company who are not employees of the
Company, (ii) routine loans or advances to employees made in the
ordinary course of business not to exceed $100,000 at any one time
outstanding to any one employee, or (iii) any other transaction with
any employee, officer or director of the Company pursuant to employee
benefit plans and compensation arrangements in amounts customary for
corporations similarly situated to the Company and entered into the
ordinary course of business and approved by the Board of Directors of
the Company or any committee thereof.
(m) Unconditional Purchase Obligations. Enter into or be a
party to any contract for the purchase of materials, supplies or other
property or services, if such contract requires that payment be made by
it regardless of whether or not delivery is ever made of such
materials, supplies or other property or services.
57
(n) Stock. Authorize, issue or permit to remain issued any
preferred stock other than (i) the issuance of non-redeemable preferred
stock to replace one or more of the Company's outstanding issues of
preferred stock and (ii) the issuance of 1000 shares of Class A
Preferred Convertible Stock to Pure Tech; provided, that the issuance
of such preferred stock does not otherwise result in a Default under
this Agreement.
(o) Capital Expenditures. Make Capital Expenditures in any
fiscal year in excess of $1,300,000.
(p) Preservation of Assigned Agreements. Without the written
consent of the Majority Lenders, terminate, assign, amend or modify any
of the Assigned Agreements in a manner that would materially and
adversely affect the Company's ability to perform its obligations under
the Financing Documents, including this Agreement. In addition, the
Company will not take any action or permit any action to be taken by
others that would release any Person from its obligations or
liabilities under the Assigned Agreements, or enter into any contract,
agreement or other undertaking other than the Assigned Agreements with
respect to the operation and maintenance of the Burlington South Plant
other than in the ordinary course of business and in accordance with
prudent industry practice.
(q) Subsidiaries and Partnerships. Create any Subsidiaries or
partnerships.
(r) Restoration Account. Make or request, or cause to be made
or requested, any withdrawals or transfers from the Restoration Account
except as expressly permitted herein or in the Security Agreement.
(s) Prepayment on Subordinated Note. Make any voluntary
prepayment on the term loan made pursuant to the Term Loan Agreement
dated as of August 18, 1995 between the Company and OxyChem, as the
same may be modified, amended, supplemented or replaced.
ARTICLE VI
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
specified events (each an "Event of Default"):
Section 6.01 Payments. (a) The Company shall fail to pay when due
(including, but not limited to, by mandatory prepayment required pursuant to
Section 2.09) any principal of any Loan or any Note, or any Reimbursement
Obligation; or (b) the Company shall fail to pay when due any interest on any
Loan or Note, any fee or any other amount payable hereunder;
Section 6.02 Covenants Without Notice. The Company shall fail to
observe or perform any covenant or agreement contained in Subsections 5.01(e),
(g) and (i), Section 5.03 or Section 5.04 (excluding Subsections 5.04(a)(iii)
and (iv));
58
Section 6.03 Other Covenants. The Company shall fail to observe or
perform any covenant or agreement contained in (a) Xxxxxxxxxxx 0.00(x), (x),
(x), (x), (x), (x), (x), (x), (x), (x), (x), (x) or (o), Subsections
5.04(a)(iii) or (iv), and, if capable of being remedied, such failure shall
remain unremedied for 10 days after the earlier of (i) the Company's obtaining
knowledge thereof, or (ii) written notice thereof shall have been given to the
Company by any Lender, the Issuing Bank or the Agent; and (b) this Agreement,
other than those referred to in Sections 6.01, 6.02, or clause (a) of this
Section 6.03, and, if capable of being remedied, such failure shall remain
unremedied for 30 days after the earlier of (i) the Company's obtaining
knowledge thereof, or (ii) written notice thereof shall have been given to the
Company by any Lender, the Issuing Bank or the Agent;
Section 6.04 Other Financing Document Obligations. Default is made in
the due observance or performance by the Company of any of the covenants or
agreements contained in any Financing Document other than this Agreement, and
such default continues unremedied beyond the expiration of any applicable grace
period which may be expressly allowed under such Financing Document;
Section 6.05 Representations. Any representation, warranty or statement
made or deemed to be made by the Company or any of such Company's officers
herein or in any other Financing Document, or in any certificate, request or
other document furnished pursuant to or under this Agreement or any other
Financing Document, shall have been incorrect in any material respect as of the
date when made or deemed to be made;
Section 6.06 Non-Payments of Other Indebtedness. The Company shall fail
to make any payment or payments of principal of or interest on any Indebtedness
of the Company in excess of $250,000 in the aggregate (other than (i) the Lender
Indebtedness and (ii) any trade account subject to a bona fide dispute and the
trade creditor has neither filed a lawsuit nor caused a Lien to be placed upon
any Property of the Company) when due (whether at stated maturity, by
acceleration, on demand or otherwise) after giving effect to any applicable
grace period;
Section 6.07 Defaults Under Other Agreements. The Company shall fail to
observe or perform any covenant or agreement contained in any agreement(s) or
instrument(s) relating to Indebtedness of $250,000 or more in the aggregate
within any applicable grace period, or any other event shall occur, if the
effect of such failure or other event is to accelerate, or to permit the holder
of such Indebtedness or any other Person to accelerate, the maturity of $250,000
or more in the aggregate of such Indebtedness; or $250,000 or more in the
aggregate of any such Indebtedness shall be, or if as a result of such failure
or other event may be, required to be prepaid (other than by a regularly
scheduled required prepayment) in whole or in part prior to its stated maturity;
Section 6.08 Bankruptcy. The Company shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled "Bankruptcy"
as now or hereafter in effect, or any successor thereto (the "Bankruptcy Code");
or an involuntary case is commenced against the Company and the petition is not
controverted within 10 days, or is not stayed or dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or any substantial part of the property
of the Company; or the Company commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Company or there is commenced against the
Company any such proceeding which remains unstayed or undismissed for a period
of 60 days; or the Company is adjudicated insolvent or
59
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Company suffers any appointment of any custodian
or the like for it or any substantial part of its Property to continue
undischarged or unstayed for a period of 60 days; or the Company makes a general
assignment for the benefit of creditors; or the Company shall fail to pay, or
shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or the Company shall by any act or failure to act
indicate its consent to, approval of or acquiescence in any of the foregoing; or
any corporate action is taken by the Company for the purpose of effecting any of
the foregoing;
Section 6.09 ERISA. A Plan shall fail to maintain the minimum funding
standard required by Section 412 of the Code for any plan year or a waiver of
such standard is sought or granted under Section 412(d), or a Plan is, shall
have been or is likely to be, terminated or the subject of termination
proceedings under ERISA, or the Company or an ERISA Affiliate has incurred or is
likely to incur a liability to or on account of a Plan under Section 515, 4062,
4063, 4064, 4201 or 4204 of ERISA, and there shall result from any such event or
events either a liability or a material risk of incurring a liability to the
PBGC or a Plan, which will have a Material Adverse Effect;
Section 6.10 Money Judgment. A judgment or order for the payment of
money in excess of $500,000 or that would otherwise have a Material Adverse
Effect shall be rendered against the Company and such judgment or order shall
continue unsatisfied in accordance with the terms of such judgment or order (in
the case of a money judgment) and in effect for a period of 30 days during which
execution shall not be effectively stayed or deferred (whether by action of a
court, by agreement or otherwise);
Section 6.11 Discontinuance of Business. The Company shall cease to
carry on its business as currently conducted or as contemplated to be conducted;
Section 6.12 Security Instruments. The material terms of the Security
Instruments after delivery thereof shall for any reason, except to the extent
permitted by the terms thereof, cease to be in full force and effect and valid,
binding and enforceable (except as enforceability may be limited as stated in
Section 4.03) in accordance with their terms, or cease to create a valid and
perfected Lien of the priority contemplated thereby on any of the collateral
purported to be covered thereby, or the Company (or any other Person who may
have granted or purported to grant such Lien) shall so state in writing;
Section 6.13 Change of Control. The occurrence of a Change of Control;
Section 6.14 Mandatory Prepayments. The Company shall fail to make any
mandatory prepayment required by Section 2.09; or
Section 6.15 Material Adverse Event. The occurrence of any event or
condition that the Majority Lenders believe in good faith to have resulted in a
Material Adverse Effect;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent, upon the written or telex request of the
Majority Lenders, shall, by written notice to the Company, take any or all of
the following actions, without prejudice to the rights of the Agent, any Lender
or the holder of any Note, to enforce its claims against the Company: (i)
declare the Revolving Credit Commitment and other lending obligations, if any,
terminated, whereupon the Revolving Credit Commitment and other lending
obligations, if any, of each Lender shall terminate immediately; or (ii) declare
the entire principal amount of and all accrued interest on all Lender
Indebtedness then
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outstanding to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest, notice of protest or dishonor, notice of
acceleration, notice of intent to accelerate or other notice of any kind, all of
which are hereby expressly waived by the Company, and thereupon take such action
as it may deem desirable under and pursuant to the Financing Documents;
provided, that, if an Event of Default specified in Section 6.08 shall occur,
the result which would occur upon the giving of written notice by the Agent to
the Company, as specified in clauses (i) and (ii) above, shall occur
automatically without the giving of any such notice.
ARTICLE VII
THE AGENT
Section 7.01 Appointment of Agent. Each Lender and the Issuing Bank
hereby designate Texas Commerce Bank National Association, as Agent to act as
herein specified. Each Lender and the Issuing Bank hereby irrevocably authorizes
the Agent to take such action on its behalf under the provisions of this
Agreement, the Notes, and the other Financing Documents and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Agent may perform any of
its duties hereunder by or through its agents or employees.
Section 7.02 Nature of Duties of Agent. The Agent shall have no duties
or responsibilities except those expressly set forth with respect to the Agent
in this Agreement. Neither the Agent, nor any of its respective officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its gross
negligence or willful misconduct. The duties of the Agent shall be mechanical
and administrative in nature; the Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Lender; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein.
Section 7.03 Lack of Reliance on the Agent.
(a) Independent Investigation. Independently and without
reliance upon the Agent, each Lender, to the extent it deems
appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the
Company in connection with the taking or not taking of any action in
connection herewith, and (ii) its own appraisal of the creditworthiness
of the Company, and, except as expressly provided in this Agreement,
the Agent shall have no duty or responsibility, either initially or on
a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession
before the consummation of the transactions contemplated herein or at
any time or times thereafter.
(b) Agent Not Responsible. The Agent shall not be responsible
to any Lender or the Issuing Bank for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Notes,
the Letters of Credit or the other Financing Documents
61
or the financial condition of the Company or be required to make any
inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement, the Notes or the
other Financing Documents, or the financial condition of the Company,
or the existence or possible existence of any Default or Event of
Default.
Section 7.04 Certain Rights of the Agent. If the Agent shall request
instructions from the Majority Lenders with respect to any act or action
(including the failure to act) in connection with this Agreement, the Notes and
the other Financing Documents, the Agent shall be entitled to refrain from such
act or taking such action unless and until the Agent shall have received
instructions from the Majority Lenders; and the Agent shall not incur liability
to any Person by reason of so refraining. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting under this Agreement, the Notes
and the other Financing Documents in accordance with the instructions of the
Majority Lenders.
Section 7.05 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other documentary, teletransmission or telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person. The Agent may consult with legal counsel
(including counsel for the Company), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 7.06 INDEMNIFICATION OF AGENT. TO THE EXTENT THE AGENT IS NOT
REIMBURSED AND INDEMNIFIED BY THE COMPANY, EACH LENDER WILL REIMBURSE AND
INDEMNIFY THE AGENT, IN PROPORTION TO ITS PERCENTAGE SHARE, FOR AND AGAINST ANY
AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES (INCLUDING COUNSEL FEES AND DISBURSEMENTS) OR
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED
BY OR ASSERTED AGAINST THE AGENT IN PERFORMING ITS DUTIES HEREUNDER, IN ANY WAY
RELATING TO OR ARISING OUT OF THIS AGREEMENT; PROVIDED THAT NO LENDER SHALL BE
LIABLE TO THE AGENT FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS
RESULTING FROM THE AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Section 7.07 The Agent in its Individual Capacity. With respect to its
obligations under this Agreement, the Loans made by it and the Notes issued to
it, the Agent shall have the same rights and powers hereunder as any other
Lender or holder of a Note and may exercise the same as though it were not
performing the duties, if any, specified herein; and the terms "Lenders,"
"Majority Lenders," "holders of Notes" or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, trust, financial advisory or other business with
the Company or any affiliate of the Company as if it were not performing the
duties, if any, specified herein, and may accept fees and other consideration
from the Company for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.
Section 7.08 May Treat Lender as Owner. The Agent may deem and treat
each Lender as the owner of such Lender's Note for all purposes hereof unless
and until a written notice of the assignment
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or transfer thereof shall have been filed with the Agent. Any request, authority
or consent of any Person who at the time of making such request or giving such
authority or consent is the owner of a Note shall be conclusive and binding on
any subsequent owner, transferee or assignee of such Note or any promissory note
or notes issued in exchange therefor.
Section 7.09 Successor Agent.
(a) Agent Resignation. The Agent may resign at any time by
giving written notice thereof to the Lenders, the Issuing Bank and the
Company and may be removed at any time with or without cause by the
Majority Lenders. Upon any such resignation or removal, the Majority
Lenders shall have the right, upon five days' notice to the Company, to
appoint a successor Agent. If no successor Agent shall have been so
appointed by the Majority Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice
of resignation or the Majority Lenders' removal of the retiring Agent,
then, upon five days' notice to the Company, the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, which shall be a bank
which maintains an office in the United States, or a commercial bank
organized under the laws of the United States of America or of any
State thereof, or any Affiliate of such bank, having a combined capital
and surplus of at least $250,000,000.
(b) Rights, Powers, etc. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder
as Agent, the provisions of this Article VII shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including, telecopy or similar
teletransmission or writing) and shall be given to such party at its address or
telecopy number set forth on the signature pages hereof or such other address or
telecopy number as such party may hereafter specify by notice to the Agent and
the Company. Each such notice, request or other communication shall be effective
(i) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid, or (ii) if
given by any other means (including, but not limited to, by air courier), when
delivered at the address specified in this Section; provided that notices to the
Agent shall not be effective until received.
Section 8.02 Amendments, etc. Any provision of this Agreement or any
other Financing Document may be amended, modified or waived with the Company's
and the Majority Lenders' prior written consent; provided that (a) no amendment,
modification or waiver which extends the due date or maturity of the Loans, or
the Final Maturity Date, releases all or substantially all of the collateral,
reduces the interest rate applicable to the Loans or the fees payable to the
Lenders generally, releases the Company from its obligation to pay principal or
interest on the Loans, affects this Section 8.02 or
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Section 8.04 or modifies the definition of "Majority Lenders", shall be
effective without consent of all Lenders; (b) no amendment, modification or
waiver which increases the Commitment of any Lender shall be effective without
the consent of such Lender; (c) no amendment, modification or waiver which
modifies the rights, duties or obligations of the Agent shall be effective
without the consent of the Agent; and (d) no amendment, modification or waiver
which modifies the rights, duties or obligations of the Issuing Bank shall be
effective without the consent of the Issuing Bank. Notwithstanding anything in
this Section to the contrary, unless instructed to the contrary by the Majority
Lenders, the Issuing Bank shall extend each Letter of Credit prior to any
expiration date thereof pursuant to the terms of such Letter of Credit or its
related Application if a failure to so extend such Letter of Credit would result
in entitling the beneficiary thereof to draw thereon.
Section 8.03 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Company or the Agent or any Lender or any holder of any Note in
exercising any right or remedy under this Agreement or any other Financing
Document and no course of dealing between the Company and the Agent or any
Lender or any holder of any Note shall operate as a waiver thereof, nor shall
any single or partial exercise of any right or remedy under the Notes, this
Agreement or any other Financing Document preclude any other or further exercise
thereof or the exercise of any other right or remedy under the Notes, this
Agreement or any other Financing Document. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which the Company, the Agent or any Lender would otherwise have. No notice to or
demand on the Company not required under the Notes, this Agreement or any other
Financing Document in any case shall entitle the Company to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
Section 8.04 Payment of Expenses, Indemnities, etc. The Company agrees
to (and shall be liable for):
(a) Expenses. Whether or not the transactions hereby
contemplated are consummated, pay all reasonable out-of-pocket costs
and expenses of the Agent and the Issuing Bank in the administration
(both before and after the execution hereof and including advice of
counsel as to the rights and duties of the Agent and the Lenders with
respect thereto) of, and in connection with the preparation, execution
and delivery of, recording or filing of, preservation of rights under,
enforcement of, and, after a Default, refinancing, renegotiation or
restructuring of, this Agreement, the Notes, and the other Financing
Documents and any amendment, waiver or consent relating thereto
(including, but not limited to, the reasonable fees and disbursements
of counsel for the Agent and in the case of enforcement for any of the
Lenders) and promptly reimburse the Agent for all amounts expended,
advanced, or incurred by the Agent or the
Lenders to satisfy any obligation of the Company under this Agreement
or any other Financing Document;
(b) INDEMNIFICATION. INDEMNIFY THE AGENT, THE ISSUING BANK AND
EACH LENDER, EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS AND AFFILIATES FROM, HOLD EACH OF THEM HARMLESS
AGAINST, AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR,
ANY AND ALL ACTIONS, SUITS, PROCEEDINGS (INCLUDING ANY INVESTIGATIONS,
LITIGATION OR INQUIRIES), CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES
OR EXPENSES OF ANY KIND OR
64
NATURE WHATSOEVER WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR
INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY
THERETO) AS A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (I)
ANY ACTUAL OR PROPOSED USE BY THE COMPANY OF THE PROCEEDS OF ANY OF THE
LOANS; OR (II) ANY OTHER ASPECT OF THIS AGREEMENT, THE NOTES, AND THE
FINANCING DOCUMENTS, INCLUDING BUT NOT LIMITED TO THE REASONABLE FEES
AND DISBURSEMENTS OF COUNSEL (INCLUDING ALLOCATED COSTS OF INTERNAL
COUNSEL) AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH
INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT,
PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR
CLAIM, AND INCLUDING ALL ACTIONS, SUITS, PROCEEDINGS (INCLUDING ANY
INVESTIGATIONS, LITIGATION OR INQUIRIES), CLAIMS, COSTS, LOSSES,
LIABILITIES, DAMAGES OR EXPENSES ARISING BY REASON OF ORDINARY
NEGLIGENCE OF ANY OF THE AGENT, THE ISSUING BANK AND EACH LENDER, EACH
OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES,
AGENTS AND AFFILIATES; PROVIDED, HOWEVER, THE PROVISIONS OF THIS
SECTION 8.04(B) SHALL NOT APPLY TO ANY ACTION, SUITS, PROCEEDINGS,
CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES, OR EXPENSES TO THE EXTENT,
BUT ONLY TO THE EXTENT, CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE PARTY SEEKING INDEMNIFICATION;
(c) ENVIRONMENTAL INDEMNIFICATION. INDEMNIFY AND HOLD HARMLESS
FROM TIME TO TIME THE AGENT, THE ISSUING BANK AND THE LENDERS, EACH
PERSON CLAIMING BY, THROUGH, UNDER OR ON ACCOUNT OF ANY OF THE
FOREGOING AND THE RESPECTIVE DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES,
AGENTS, SUCCESSORS AND ASSIGNS OF EACH OF THE FOREGOING FROM AND
AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH
RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE LETTERS OF CREDIT OR
ANY FINANCING DOCUMENT) TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT AND
INCLUDING ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH
RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE LETTERS OF CREDIT OR
ANY FINANCING DOCUMENT) ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF
THE AGENT, THE ISSUING BANK AND THE LENDERS, EACH PERSON CLAIMING BY,
THROUGH, UNDER OR ON ACCOUNT OF ANY OF THE FOREGOING AND THE RESPECTIVE
DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS
OF EACH OF THE FOREGOING (1) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO
THE COMPANY OR ANY OF ITS PROPERTIES, INCLUDING WITHOUT LIMITATION, THE
TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF ITS PROPERTIES,
(2) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY THE COMPANY WITH ANY
ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY, (3) DUE TO PAST OWNERSHIP
BY THE COMPANY OF ANY OF ITS PROPERTIES OR PAST ACTIVITY ON ANY OF ITS
PROPERTIES OR PAST ACTIVITY ON ANY OF ITS PROPERTIES WHICH, THOUGH
LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (4) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR
DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED
OR OPERATED BY THE COMPANY, OR (5) ANY OTHER ENVIRONMENTAL, HEALTH OR
SAFETY CONDITION IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY
OTHER FINANCING DOCUMENT; PROVIDED, HOWEVER, NO INDEMNITY SHALL BE
AFFORDED UNDER THIS SECTION 8.04(C) IN RESPECT OF ANY PROPERTY FOR ANY
OCCURRENCE ARISING SOLELY AND DIRECTLY FROM
65
THE ACTS OR OMISSIONS OF THE AGENT OR ANY LENDER DURING THE PERIOD
AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED
POSSESSION OF SUCH PROPERTY (WHETHER BY FORECLOSURE OR DEED IN LIEU OF
FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR OTHERWISE); AND
(d) ENVIRONMENTAL WAIVER. WITHOUT LIMITING THE FOREGOING
PROVISIONS, AND HEREBY DOES WAIVE, RELEASE AND COVENANT NOT TO BRING
AGAINST ANY OF THE PERSONS IDENTIFIED IN THIS SECTION 8.04 ANY DEMAND,
CLAIM, COST RECOVERY ACTION OR LAWSUIT THEY MAY NOW OR HEREAFTER HAVE
OR ACCRUE (WHICH RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE
LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) ARISING FROM (1) ANY
ENVIRONMENTAL LAW NOW OR HEREAFTER ENACTED (INCLUDING THOSE APPLICABLE
TO THE COMPANY) UNLESS THE ACTS OR OMISSIONS OF ANY SUCH PERSON OR
THEIR RESPECTIVE SUCCESSORS AND ASSIGNS ARE THE SOLE AND DIRECT CAUSE
OF THE CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, COST RECOVERY ACTION
OR LAWSUIT, (2) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR
DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED
OR OPERATED BY THE COMPANY, OR (3) THE BREACH OR NON-COMPLIANCE BY THE
COMPANY WITH ANY ENVIRONMENTAL LAW OR ENVIRONMENTAL COVENANT APPLICABLE
TO THE COMPANY, UNLESS THE ACTS OR OMISSIONS OF SUCH PERSON, ITS
SUCCESSORS AND ASSIGNS ARE THE SOLE AND DIRECT CAUSE OF THE
CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, CLAIM, COST RECOVERY ACTION
OR LAWSUIT.
If and to the extent that the obligations of the Company under this Section are
unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law. The Company's obligations under this Section
shall survive any termination of this Agreement and the payment of the Notes.
Section 8.05 Right of Setoff. In addition to and not in limitation of
all rights of offset that any Lender or the Issuing Bank may have under
applicable law, each Lender or other holder of a Note, or any other Lender
Indebtedness shall, upon the occurrence of any Event of Default and at any time
during the continuance thereof and whether or not such Lender, the Issuing Bank
or such holder has made any demand or the Company's obligations are matured,
have the right at any time and from time to time, without notice to the Company
(any such notice being expressly waived by the Company) to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by any Lender or the
Issuing Bank to or for the credit or the account of the Company against any and
all of the Lender Indebtedness then outstanding.
Section 8.06 Benefit of Agreement.
(a) Benefit of Parties. The Notes, this Agreement and the
other Financing Documents shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns
of the parties hereto, provided that the Company may not assign or
transfer any of its interest hereunder or thereunder without the prior
written consent of the Lenders. In the event that any Lender sells
participations in the Notes or other Lender Indebtedness of the Company
incurred or to be incurred pursuant to this Agreement, to other banks
or entities, each of such other banks or entities shall have the rights
of set-off against such
66
Lender Indebtedness and similar rights or Liens to the same extent as
may be available to the Agent or the Lenders.
(b) Branch Offices, Affiliates. Any Lender may make, carry or
transfer Loans at, to or for the account of, any of its branch offices
or the office of an Affiliate of such Lender.
Section 8.07 Assignments and Participations.
(a) No Company Assignments. The Company may not assign its
rights and obligations hereunder or under the Notes.
(b) Assignment by Lenders. Each Lender may, upon the written
consent of the Agent (which consent shall not be unreasonably
withheld), assign to one or more Eligible Transferees all or a portion
of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance Agreement substantially in the form of
Exhibit E (an "Assignment and Acceptance") provided, however, that (i)
any such assignment shall be in the aggregate amount of at least
$2,500,000 or such lesser amount to which the Company has consented (or
if the aggregate amount of any Lender's Loans and Commitments is less
than $2,500,000, then the entire amount of such Lender's Loans and
Commitments), and (ii) the assignee shall pay to the Agent a processing
and recordation fee of $2,500. Any such assignment will become
effective upon the recording by the Agent of such assignment in the
Register of the resultant effects thereof on the Commitment of the
assignor and assignee, and the principal amount outstanding of the
Loans owed to the assignor and assignee, the Agent hereby agreeing to
effect such recordation no later than five Business Days after its
receipt of an Assignment and Acceptance executed by all parties
thereto. Promptly after receipt of an Assignment and Acceptance
executed by all parties thereto, the Agent shall send to the Company a
copy of such executed Assignment and Acceptance. Upon receipt of such
executed Assignment and Acceptance, the Company, will, at its own
expense, execute and deliver new Notes to the assignor and/or assignee,
as appropriate, in accordance with their respective interests as they
appear on the Register. Upon the effectiveness of any assignment
pursuant to this subsection, the assignee shall be deemed automatically
to have become a party hereto, if not already a party hereto, and shall
become a "Lender," if not already a "Lender," for all purposes of this
Agreement and the other Financing Documents. The assignor shall be
relieved of its obligations hereunder to the extent of such assignment
(and if the assigning Lender no longer holds any rights or obligations
under this Agreement, such assigning Lender shall cease to be a
"Lender" hereunder). The Agent will prepare on the last Business Day of
each month during which an assignment has become effective pursuant to
this subsection a new schedule giving effect to all such assignments
effected during such month, and will promptly provide the same to the
Company, the Issuing Bank and each of the Lenders.
(c) Participations. Each Lender may transfer, grant or assign
participations in all or any part of such Lender's interests hereunder
pursuant to this subsection to any Person, provided that: (i) such
Lender shall remain a "Lender" for all purposes of this Agreement and
the transferee of such participation shall not constitute a "Lender"
hereunder; and (ii) no participant under any such participation shall
have rights to approve any amendment to or waiver of this Agreement,
the Notes or any Financing Document except to the extent such amendment
or waiver would (x) extend the Final Maturity Date of any of the
Commitments or Loans in which such participant is participating, (y)
reduce the interest rate (other than as a result of waiving the
applicability of any post-default increases in interest rates) or fees
applicable to any of the Commitments or Loans in which
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such participant is participating, or postpone the payment of any
thereof, or (z) release all or substantially all of the collateral or
guaranties (except as expressly provided in the Financing Documents)
supporting any of the Commitments or Loans in which such participant is
participating. In the case of any such participation, the participant
shall not have any rights under this Agreement or any of the Financing
Documents (the participant's rights against the granting Lender in
respect of such participation to be those set forth in the agreement
with such Lender creating such participation), and all amounts payable
by the Company hereunder shall be determined as if such Lender had not
sold such participation. In addition, each agreement creating any
participation must include an agreement by the participant to be bound
by the provisions of Section 8.15. Notwithstanding anything in this
Section 8.07(c) to the contrary, the purchase by each Lender of a
participation in the Letters of Credit on the Effective Date and any
subsequent assignment of all or any part of any such Lender's
Percentage Share in any Letter of Credit and its related Letter of
Credit Liabilities pursuant to Section 8.07(b) shall not be considered
a participation pursuant to this Section 8.07(c).
(d) Registration Statements; Blue Sky Laws. Notwithstanding
any other provisions of this Section 8.07, no transfer or assignment of
the interests or obligations of any Lender hereunder or any grant of
participations therein shall be permitted if such transfer, assignment
or grant would require the Company to file a registration statement
with the Securities and Exchange Commission or to qualify the Loans
under the "Blue Sky" laws of any state.
(e) Certain Representations. Each Lender initially party to
this Agreement hereby represents, and each Person that becomes a Lender
pursuant to an assignment permitted by subsection (b) above will, upon
its becoming party to this Agreement, represent that it is an Eligible
Transferee, and that it will make or acquire Loans only for its own
account in the ordinary course of its business; provided, however, that
subject to the preceding Subsections (b) through (d), the disposition
of any promissory notes or other evidences of or interests in Lender
Indebtedness held by such Lender shall at all times be within its
exclusive control.
(f) Assignees Treated as Lenders. The entries in the Register
shall be conclusive in the absence of manifest error and the Company,
the Agent, the Issuing Bank and the Lenders may treat each person whose
name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement and the other
Financing Documents. The Register shall be available for inspection by
the Company and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.
(g) Assignment to Federal Reserve Bank. Notwithstanding
anything in this Section 8.07 to the contrary, any Lender may assign
and pledge all or any of its Notes to any Federal Reserve Bank or the
United States Treasury as collateral security pursuant to Regulation A
of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve System and/or such
Federal Reserve Bank. No such assignment and/or pledge shall release
the assigning and/or pledging Lender from its obligations hereunder.
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Section 8.08 Governing Law; Submission to Jurisdiction; Etc.
(a) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND UNDER THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE
OF NEW JERSEY AND TO THE EXTENT CONTROLLING, LAWS OF THE UNITED STATES
OF AMERICA.
(b) SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE OTHER FINANCING
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW JERSEY OR OF
THE UNITED STATES OF AMERICA FOR THE DISTRICT OF NEW JERSEY, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY ACCEPTS
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY
HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, BUT NOT LIMITED TO,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) Designation of Agent. The Company hereby irrevocably
designates CT Corporation System located at Trenton, New Jersey, as the
designee, appointee and agent of the Company to receive, for and on
behalf of the Company, service of process in such respective
jurisdictions in any legal action or proceeding with respect to this
Agreement, the Notes, or the other Financing Documents. It is
understood that a copy of such process served on such agent will be
promptly forwarded by mail to the Company at its address set forth
opposite its signature below, but the failure of the Company to receive
such copy shall not affect in any way the service of such process. The
Company further irrevocably consents to the service of process of any
of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to the Company at its said address, such service to become
effective 30 days after such mailing.
(d) Service of Process. Nothing herein shall affect the right
of the Agent or any Lender or any holder of a Note to serve process in
any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Company in any other jurisdiction.
Section 8.09 Independent Nature of Lenders' Rights. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out
of this Agreement, and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
Section 8.10 Invalidity. In the event that any one or more of the
provisions contained in the Notes, this Agreement or in any other Financing
Document shall, for any reason, be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of the Notes, this Agreement or any other Financing Document.
Section 8.11 Satisfaction Requirement. If any agreement, certificate,
instrument or other writing, or any action taken or to be taken, is by the terms
of this Agreement required to be satisfactory
69
to any party, the determination of such satisfaction shall be made by such party
in its sole and exclusive judgment exercised reasonably and in good faith.
Section 8.12 Renewal, Extension or Rearrangement. All provisions of
this Agreement and of any other Financing Documents relating to the Notes or
other Lender Indebtedness shall apply with equal force and effect to each and
all promissory notes hereafter executed which in whole or in part represent a
renewal, extension for any period, increase or rearrangement of any part of the
Lender Indebtedness originally represented by the Notes, or of any part of such
other Lender Indebtedness.
Section 8.13 Interest. It is the intention of the parties hereto to
conform strictly to usury laws applicable to the Agent, the Issuing Bank and the
Lenders (collectively, the "Financing Parties") and the Transactions.
Accordingly, if the Transactions would be usurious as to any Financing Party
under laws applicable to it, then, notwithstanding anything to the contrary in
the Notes, this Agreement or in any other Financing Document or agreement
entered into in connection with the Transactions or as security for the Notes,
it is agreed as follows: (i) the aggregate of all consideration which
constitutes interest under law applicable to any Financing Party that is
contracted for, taken, reserved, charged or received by such Financing Party
under the Notes, this Agreement or under any of such other Financing Documents
or agreements or otherwise in connection with the Transactions shall under no
circumstances exceed the maximum amount allowed by such applicable law, (ii) in
the event that the maturity of the Notes is accelerated for any reason, or in
the event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to any Financing Party may never
include more than the maximum amount allowed by such applicable law, and (iii)
excess interest, if any, provided for in this Agreement or otherwise in
connection with the Transactions shall be cancelled automatically by such
Financing Party and, if theretofore paid, shall be credited by such Financing
Party on the principal amount of such Financing Party's Indebtedness (or, to the
extent that the principal amount of such Financing Party's Indebtedness shall
have been or would thereby be paid in full, refunded by such Financing Party to
the Company). The right to accelerate the maturity of the Notes does not include
the right to accelerate any interest which has not otherwise accrued on the date
of such acceleration, and the Financing Parties do not intend to collect any
unearned interest in the event of acceleration. All sums paid or agreed to be
paid to the Financing Parties for the use, forbearance or detention of sums
included in the Lender Indebtedness shall, to the extent permitted by law
applicable to such Financing Party, be amortized, prorated, allocated and spread
throughout the full term of the Notes until payment in full so that the rate or
amount of interest on account of the Lender Indebtedness does not exceed the
applicable usury ceiling, if any. As used in this Section, the terms "applicable
law" or "laws applicable to any Financing Party" shall mean the law of any
jurisdiction whose laws may be mandatorily applicable notwithstanding other
provisions of this Agreement, or law of the United States of America applicable
to any Financing Party and the Transactions which would permit such Financing
Party to contract for, charge, take, reserve or receive a greater amount of
interest than under such jurisdiction's law.
Section 8.14 Taxes, etc. Any taxes (excluding income taxes) payable or
ruled payable by federal or state authority in respect of the Notes, this
Agreement or the other Financing Documents shall be paid by the Company,
together with interest and penalties, if any.
Section 8.15 Confidential Information. The Agent and each Lender agree
that all documentation and other information made available by the Company to
the Agent or such Lender under the terms of this Agreement shall (except to the
extent such documentation or other information is
70
publicly available or hereafter becomes publicly available other than by action
of the Agent or such Lender, or was theretofore known or hereinafter becomes
known to the Agent or such Lender independent of any disclosure thereto by the
Company) be held in the strictest confidence by the Agent or such Lender and
used solely in the administration and enforcement of the Loans from time to time
outstanding from such Lender to the Company and in the prosecution of defense of
legal proceedings arising in connection herewith; provided that (i) the Agent or
such Lender may disclose documentation and information to the Agent and/or to
any other Lender which is a party to this Agreement or any Affiliates thereof
and (ii) the Agent or such Lender may disclose such documentation or other
information to any other bank or other Person to which such Lender sells or
proposes to make an assignment or sell a participation in its Loans hereunder if
such other bank or Person, prior to such disclosure, agrees in writing to be
bound by the terms of the confidentiality statement customarily employed by the
Agent in connection with such potential transfers. Notwithstanding the
foregoing, nothing contained herein shall be construed to prevent the Agent or a
Lender from (a) making disclosure of any information (i) if required to do so by
applicable law or regulation or accepted banking practice, (ii) to any
governmental agency or regulatory body having or claiming to have authority to
regulate or oversee any aspect of such Lender's business or that of such
Lender's corporate parent or affiliates in connection with the exercise of such
authority or claimed authority, (iii) pursuant to any subpoena or if otherwise
compelled in connection with any litigation or administrative proceeding, (iv)
to correct any false or misleading information which may become public
concerning such Person's relationship to the Company, or (v) to the extent the
Agent or such Lender or its counsel deems necessary or appropriate to effect or
preserve its security for any Lender Indebtedness or to enforce any remedy
provided in the Financing Documents, the Notes or this Agreement or otherwise
available by law; or (b) making, on a confidential basis, such disclosures as
such Lender reasonably deems necessary or appropriate to its legal counsel or
accountants (including outside auditors). If the Agent or such Lender is
compelled to disclose such confidential information in a proceeding requesting
such disclosure, the Agent or such Lender shall seek to obtain assurance that
such confidential treatment will be accorded such information; provided,
however, that the Lender shall have no liability for the failure to obtain such
treatment.
Section 8.16 ENTIRE AGREEMENT. THE NOTES, THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE
AGENT, THE ISSUING BANK OR THE LENDERS AND THE OTHER RESPECTIVE PARTIES HERETO
AND THERETO AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 8.17 Attachments. The exhibits, schedules and annexes attached
to this Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail.
Section 8.18 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original but all of
which shall together constitute one and the same instrument.
Section 8.19 Survival of Agreements. The Company's obligations under
Sections 2.12, 2.14 and 8.04 shall survive the payment in full of the Loans and
the Letter of Credit Liabilities. All representations and warranties of the
Company or any other Person herein or in the other Financing
71
Documents, and all covenants and agreements herein not fully performed before
the Effective Date, shall survive such date or dates.
Section 8.20 Headings Descriptive. The headings of the several sections
and subsections of this Agreement, and the Table of Contents, are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
Section 8.21 Effectiveness. This Agreement shall not be effective until
executed by all signatories hereto and delivered to the Agent.
Section 8.22 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF
THE TERMS OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS; THAT IT HAS IN
FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE
OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN
REPRESENTED BY LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS; AND HAS
RECEIVED THE ADVICE OF ITS ATTORNEYS IN ENTERING INTO THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF
THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS RESULT IN ONE PARTY ASSUMING
THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE
OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES
AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY
EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS ON THE
BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE
PROVISION IS NOT "CONSPICUOUS."
72
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first above written.
COMPANY: BURLINGTON RESINS, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Address: Xxxx X. Xxxxxxx
President and Chief Executive Officer
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
[Signature Page - 1]
AGENT AND ISSUING BANK TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
Individually, as Issuing Bank and as Agent
By: /s/ P. Xxxx Xxxxx
------------------------------------
Address: P. Xxxx Xxxxx
Vice President
000 Xxxxxx Xxxxxx
0xx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: P. Xxxx Xxxxx
[Signature Page - 2]
ANNEX I
COMMITMENTS
Revolving Term
Credit Loan Total
Commitment Commitment Commitments
Texas Commerce Bank National Association $5,500,000 $5,500,000 $11,000,000
Annex I - 1
EXHIBIT A
FORM OF REVOLVING CREDIT NOTE
$__________ ___________, 1995
BURLINGTON RESINS, INC., a Delaware corporation (the "Company"), for
value received, promises and agrees to pay to ______________________ (the
"Lender"), or order, at the Payment Office of TEXAS COMMERCE BANK NATIONAL
ASSOCIATION (the "Agent"), at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, the
principal sum of ___________________________________ DOLLARS
($___________________), or such lesser amount as shall equal the aggregate
unpaid principal amount of the Revolving Credit Loans made by Lender hereunder
to the Company under the Credit Agreement, as hereafter defined, in lawful money
of the United States of America and in immediately available funds, on the dates
and in the principal amounts provided in the Credit Agreement referred to below,
and to pay interest on the unpaid principal amount as provided in the Credit
Agreement for such Revolving Credit Loans made by the Lender to the Company
under the Credit Agreement, at such office, in like money and funds, for the
period commencing on the date of each such Revolving Credit Loan until such
Revolving Credit Loan shall be paid in full, at the rates per annum and on the
dates provided in the Credit Agreement.
In addition to and cumulative of any payments required to be made
against this note pursuant to the Credit Agreement, this note, including all
principal and accrued interest then unpaid, shall be due and payable on the
Final Maturity Date. All payments shall be applied first to accrued interest and
the balance to principal, except as otherwise expressly provided in the Credit
Agreement. Prepayments on this note shall be applied in the manner set forth in
the Credit Agreement.
This note is one of the Revolving Credit Notes referred to in the
Credit Agreement dated as of the 18th day of August, 1995, by and among the
Company and Texas Commerce Bank National Association, individually, as Issuing
Bank and as Agent, and financial institutions parties thereto (including the
Lender) (such Credit Agreement, together with all amendments or supplements
thereto, being the "Credit Agreement"). This note evidences the Revolving Credit
Loans made by the Lender thereunder and shall be governed by the Credit
Agreement. Capitalized terms used but not defined in this note and which are
defined in the Credit Agreement shall have the meanings herein as are assigned
in the Credit Agreement.
The Lender is hereby authorized by the Company to endorse on Schedule A
(or a continuation thereof) attached to this note, the amount and date of each
payment or prepayment of principal of each Revolving Credit Loan received by the
Lender, and interest rates applicable to each Revolving Credit Loan, provided
that any failure by the Lender to make any such endorsement shall not affect the
obligations of the Company under the Credit Agreement or under this note in
respect of such Revolving Credit Loans.
Except only for any notices which are specifically required by the
Credit Agreement or the other Financing Documents, the Company and any and all
co-makers, endorsers, guarantors and sureties severally waive notice (including
but not limited to notice of intent to accelerate and notice of
A-1
acceleration, notice of protest and notice of dishonor), demand, presentment for
payment, protest, diligence in collecting and the filing of suit for the purpose
of fixing liability, and consent that the time of payment hereof may be extended
and re-extended from time to time without notice to any of them. Each such
person agrees that his, her or its liability on or with respect to this note
shall not be affected by any release of or change in any guaranty or security at
any time existing or by any failure to perfect or maintain perfection of any
lien against or security interest in any such security or the partial or
complete enforceability of any guaranty or other surety obligation, in each case
in whole or in part, with or without notice and before or after maturity.
The Credit Agreement provides for the acceleration of the maturity of
this note upon the occurrence of certain events and for prepayment of Revolving
Credit Loans upon the terms and conditions specified therein. Reference is made
to the Credit Agreement for all other pertinent purposes.
This note is issued pursuant to and is entitled to the benefits of the
Credit Agreement and is secured by the Security Instruments.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW JERSEY AND THE UNITED STATES OF AMERICA FROM TIME TO
TIME IN EFFECT.
BURLINGTON RESINS, INC.
By:______________________________
Name:
Title:
A-2
SCHEDULE A
This Note evidences Revolving Credit Loans made by the Lender under the
within-described Credit Agreement to the Company, in the principal amounts set
forth below, which Revolving Credit Loans are at the Interest Rate and were made
on the dates set forth below, subject to the payments of principal set forth
below:
Principal
Amount of Date of Amount Balance
Date Revolving Interest Maturity Payment or Paid or Out-
Made Credit Loan Rate Date Prepayment Prepaid Standing
---- ----------- -------- -------- ---------- ------- --------
A-3
EXHIBIT B
FORM OF TERM NOTE
$__________ ______________, 1994
BURLINGTON RESINS, INC., a Delaware corporation (the "Company"), for value
received, promises and agrees to pay to _______________________ (the "Lender"),
or order, at the Payment Office of TEXAS COMMERCE BANK NATIONAL ASSOCIATION, at
000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, the principal sum of
___________________________________ DOLLARS ($___________________), in lawful
money of the United States of America and in immediately available funds, in
installments on the dates and in the principal amounts provided in the Credit
Agreement referred to below, and to pay interest on the unpaid principal amount
of the Term Loans made by the Lender to the Company under the Credit Agreement,
at such office, in like money and funds, for the period commencing on the date
of each such Term Loan until such Term Loan shall be paid in full, at the rates
per annum and on the dates provided in the Credit Agreement.
In addition to and cumulative of any payment required to be made against
this note pursuant to the Credit Agreement, this note, including all principal
and accrued interest then unpaid, shall be due and payable on the Final Maturity
Date. All payments shall be applied first to accrued interest and the balance to
principal, except as otherwise expressly provided in the Credit Agreement.
Prepayments on this note shall be applied in the manner set forth in the Credit
Agreement.
This note is one of the Term Notes referred to in the Credit Agreement
dated as of the 18th day of August, 1995, by and among the Company and Texas
Commerce Bank, individually, as Issuing Bank, and as Agent, and the financial
institutions parties thereto (including the Lender) (such Credit Agreement,
together with all amendments or supplements thereto, being the "Credit
Agreement"). This note evidences the Term Loans made by the Lender thereunder
and shall be governed by the Credit Agreement. Capitalized terms used but not
defined in this note and which are defined in the Credit Agreement shall have
the meanings herein as are assigned in the Credit Agreement.
The Lender is hereby authorized by the Company to endorse on Schedule A (or
a continuation thereof) attached to this note, the amount and date of each
payment or prepayment of principal of each Term Loan received by the Lender and
the interest rates applicable to each Term Loan, provided that any failure by
the Lender to make any such endorsement shall not affect the obligations of the
Company under the Credit Agreement or under this note in respect of such Term
Loans.
Except only for any notices which are specifically required by the Credit
Agreement or the other Financing Documents, the Company and any and all
co-makers, endorsers, guarantors and sureties severally waive notice (including
but not limited to notice of intent to accelerate and notice of acceleration,
notice of protest and notice of dishonor), demand, presentment for payment,
protest, diligence in collecting and the filing of suit for the purpose of
fixing liability, and consent that the time of payment hereof may be extended
and re-extended from time to time without notice to any of them. Each such
person agrees that his, her or its liability on or with respect to this note
shall not be affected by any release of or change in any guaranty or security at
any time existing or by any failure to perfect
B-1
or maintain perfection of any lien against or security interest in any such
security or the partial or complete enforceability of any guaranty or other
surety obligation, in each case in whole or in part, with or without notice and
before or after maturity.
The Credit Agreement provides for the acceleration of the maturity of this
note upon the occurrence of certain events and for prepayment of Term Loans upon
the terms and conditions specified therein. Reference is made to the Credit
Agreement for all other pertinent purposes.
This note is issued pursuant to and is entitled to the benefits of the
Credit Agreement and is secured by the Security Instruments.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF NEW JERSEY AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN
EFFECT.
BURLINGTON RESINS, INC.
By:______________________________
Name:
Title:
B-2
SCHEDULE A
This Note evidences Term Loans made by the Lender under the within-described
Credit Agreement to the Company, in the principal amounts set forth below, which
Term Loans are at the Interest Rate and were made on the dates set forth below,
subject to the payments of principal set forth below:
Principal
Amount of Date of Amount Balance
Date Term Interest Maturity Payment or Paid or Out-
Made Loan Rate Date Prepayment Prepaid Standing
---- ----------- -------- -------- ---------- ------- --------
B-3
EXHIBIT C-1
FORM OF BORROWING REQUEST FOR REVOLVING CREDIT LOANS
____________, 19__
BURLINGTON RESINS, INC., a Delaware corporation (the "Company"), hereby
requests a Borrowing on the date and in the amount as follows:
$_______________ under the Revolving Credit Notes
Requested funding date: ________________
pursuant to the Credit Agreement dated as of August 18, 1995 (as the same may be
amended or supplemented, the "Credit Agreement") among the Company, Texas
Commerce Bank National Association, individually, as Issuing Bank, and as Agent,
and the financial institutions now or hereafter parties thereto. The undersigned
certifies that he is the ______________ of the Company, and that as such he is
authorized to execute this certificate on behalf of the Company. The undersigned
further certifies, represents and warrants on behalf of the Company that (i) the
Company is entitled to receive the requested Revolving Credit Loan or the
issuance of the requested Letter of Credit under the terms and conditions of the
Credit Agreement, (ii) the calculation made on the date hereof and set forth
below is accurate and complete, and (iii) after giving effect to any requested
Revolving Credit Loan or the issuance of any requested Letter of Credit, the
aggregate principal amount of outstanding Revolving Credit Loans and the
outstanding Letter of Credit Liabilities (computed on line (1) below) will not
exceed the Maximum Available Amount (computed on line (3) below).
A. Principal amount of all Revolving Credit Loans and Letter of
Credit Liabilities outstanding (after giving effect to the
requested Revolving Credit Loan or the issuance of the
requested Letter of Credit). $____________(1)
B. Maximum Revolving Credit Loan Available Amount:
The lesser of the Aggregate Revolving Credit
Commitment $____________(2)
or the eligible Borrowing Base
Maximum Available Amount after giving effect $____________(3)
to the requested Revolving
Credit Loan or the issuance of the requested
Letter of Credit) (Line 2 minus Line 1)
BURLINGTON RESINS, INC.
By:___________________________________
Name:
Title:
(C-1)-1
EXHIBIT C-2
FORM OF BORROWING REQUEST FOR THE TERM LOAN
__________________, 199__
BURLINGTON RESINS, INC., a Delaware corporation (the "Company"), hereby
requests a Borrowing on the date and in the amount as follows:
$___________________ under the Term Notes
Initial Funding Date: ________________, 199__
pursuant to the Credit Agreement dated as of August 18, 1995 (as the same may be
amended or supplemented, the "Credit Agreement") among the Company, Texas
Commerce Bank National Association, individually, as Issuing Bank, and as Agent,
and the financial institutions now or hereafter parties thereto. The undersigned
certifies that he is the __________________ of the Company, and that as such he
is authorized to execute this certificate on behalf of the Company. The
undersigned further certifies, represents and warrants on behalf of the Company
that (i) the Company is entitled to receive the requested Term Loan under the
terms and conditions of the Credit Agreement and (ii) after giving effect to the
requested Term Loan, the principal amount of the Term Loan made by each Lender
will not exceed the amount set forth opposite such Lender's name under the
caption "Term Loan Commitment" on Annex I to the Credit Agreement.
BURLINGTON RESINS, INC.
By:___________________________________
Name:
Title:
(C-2)-1
EXHIBIT D
FORM OF OPINION OF
XXXXXXX, XXXXX & XXXXXX
[TO COME]
D-1
EXHIBIT E
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated: , 199
Reference is made to the Credit Agreement dated as of August 18, 1995
(as restated, amended, modified, supplemented and in effect from time to time,
the "Credit Agreement"), among BURLINGTON RESINS, INC., a Delaware corporation,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, individually, as Issuing Bank and as
Agent, and the financial institutions parties thereto (the "Lenders").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement. This Assignment and Acceptance,
between the Assignor (as defined and set forth on Schedule I hereto and made a
part hereof) and the Assignee (as defined and set forth on Schedule I hereto and
made a part hereof) is dated as of the Effective Date (as set forth on Schedule
I hereto and made a part hereof).
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date, an undivided interest (the "Assigned Interest") in and to all
the Assignor's rights and obligations under the Credit Agreement respecting the
credit facilities contained in the Credit Agreement as set forth on Schedule I
(herein referred to as the "Assigned Loans"), in a principal amount for each
Assigned Loan as set forth on Schedule I.
2. The Assignor (i) represents and warrants that it owns the Assigned
Interest free and clear from any lien or adverse claim; (ii) other than the
representation and warranty set forth in clause (i) above, makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other instrument, document or agreement delivered in
connection therewith, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, or any other
instrument or document furnished pursuant thereto, other than that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or the performance or observance by the
Company of any of its obligations under the Credit Agreement, or any other
instrument or document furnished pursuant thereto; and (iv) attaches the Notes
held by it evidencing the Assigned Loans and requests that the Agent exchange
such Note(s) for a new Note or Notes payable to the Assignor (if the Assignor
has retained any interest in the Assigned Loans) and new Notes payable to the
Assignee in the respective amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date).
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance and that it is an
Eligible Transferee under of the Credit Agreement; (ii) confirms that it has
received a copy of the Credit Agreement, together with copies of the Financial
Statements, or if later, the most recent financial statements delivered pursuant
to Section 5.02 thereof, and such other documents and information as it has
deemed appropriate to make its own credit analysis;
E-1
(iii) agrees that it will, independently and without reliance upon the Agent,
the Assignor or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will be bound by the provisions of the Credit Agreement and
will perform in accordance with its terms all the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Lender and
hereby makes the Lender representations set forth in Section 2.14(f) of the
Credit Agreement; and (vi) if the Assignee is organized under the laws of a
jurisdiction outside the United States, attaches the forms prescribed by the
Internal Revenue Service of the United States and required pursuant to Section
2.14 of the Credit Agreement certifying as to the Assignee's exemption from
United States withholding taxes with respect to all payments to be made to the
Assignee under the Credit Agreement or such other documents as are necessary to
indicate that all such payments are subject to such tax at a rate reduced by an
applicable tax treaty.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent and the Company for acceptance by each of them and
recording by the Agent pursuant to Section 8.07(b) of the Credit Agreement,
effective as of the Effective Date (which Effective Date shall, unless otherwise
agreed to by the Agent, be at least five Business Days after the execution of
this Assignment and Acceptance).
5. Upon acceptance and recording by the Agent, all payments under the
Credit Agreement in respect of the Assigned Interest (including without
limitation, all payments of principal, interest and fees with respect thereto)
for the period up to, but not including, the Effective Date, shall be made to
the Assignor, and for the period from and after the Effective Date shall be made
to the Assignee. Assignor and Assignee hereby agree that if Assignor receives
any of the payments referred to in the preceding sentence which should have been
made to Assignee, or if Assignee receives any of the payments referred to in the
previous sentence which should have been made to Assignor, such payments shall
promptly be paid by Assignor to Assignee, or by Assignee to Assignor, as the
case may be, in full.
6. From and after the Effective Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance and Section 8.07 of the Credit Agreement, have the rights and
obligations of a Lender thereunder, and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance and Section 8.07 of the Credit
Agreement, relinquish its rights and be released from its obligations under the
Credit Agreement.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW JERSEY.
E-2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on
Schedule I hereto.
--------------------------------
as Assignor
By:
------------
Name:
Title:
--------------------------------
as Assignee
By:
------------
Name:
Title:
ACCEPTED:
BURLINGTON RESINS, INC.
By:
------------
Name:
Title:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Agent
By:
------------
Name:
Title:
E-3
SCHEDULE I TO ASSIGNMENT AND ACCEPTANCE
RESPECTING THE CREDIT AGREEMENT,
DATED AS XX XXXXXX 00, 0000 XXXXX
XXXXXXXXXX RESINS, INC. AND
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
INDIVIDUALLY AS AGENT AND AS ISSUING BANK,
AND THE LENDERS PARTIES THERETO
Assignor:
--------------------------------------------------
Assignee:
--------------------------------------------------
Effective Date of Assignment: , 199
------------------------------ ----
Percentage Assigned (to at
Principal Amount (sum least 8 decimals) shown as a
Assigned Loans of Commitment and percentage of aggregate
and outstanding amounts) original principal amount
Commitments Assigned of all Lenders
Term Loans $ %
Revolving Credit Loans
and Commitments $ %
Total $ %
Assignee's Base Rate Address for Notice:
Lending Office
-------------------------- --------------------------
-------------------------- --------------------------
-------------------------- --------------------------
Telex No.:
-----------------------
Telecopy No.:
------------
E-4
EXHIBIT F
FORM OF BORROWING BASE REPORT
Pursuant to subsection 5.02(h) of the Credit Agreement dated as of August 18,
1995, 1995, among Burlington Resins, Inc., Texas Commerce Bank National
Association, individually, as Issuing Bank and as Agent, and the other financial
institutions parties thereto (as amended, restated, modified or supplemen ed and
in effect from time to time the "Credit Agreement", defined terms from which
being used herein with the meanings assigned to such terms in the Credit
Agreement), the undersigned hereby certifies to the Agent and the Lenders that
the inventory and accounts have been valued in accordance with the terms of the
Credit Agreement.
I. The Borrowing Base as of __________________________ was $________________
computed as follows:
A. Eligible Accounts
1. Eligible Accounts
(see Schedule I) $______________
2. 80% of Line I.A.1 $______________
B. Eligible Inventory
1. Eligible Inventory
(see Schedule II) $______________
2. [70% (during the period
from the Closing Date
through the 120th day
following such date)]
[50% (thereafter)] of Line I.B.1 $______________
BORROWING BASE (Sum of Lines 1.A.2 and I.B.2) $______________
Certified as of the ______ day of _________________________.
BURLINGTON RESINS, INC.
By:_____________________________________
Printed Name:___________________________
Title:___________________________________
F-1
EXHIBIT G
FORM OF
CONSENT AND AGREEMENT
Dated as of , 1994
made by
OCCIDENTAL CHEMICAL CORPORATION
G-1
The undersigned, OCCIDENTAL CHEMICAL CORPORATION, a corporation
organized and existing under the laws of the State of New York (the "Company"),
BURLINGTON RESINS, INC., a corporation organized and existing under the laws of
the State of Delaware (the "Borrower"), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as agent on behalf of the Lenders (in such capacity, together with
its successors, the "Agent"), hereby agree as follows:
RECITALS
A. Ozite Corporation, a corporation organized and existing under the
laws of the State of Delaware ("Ozite"), and the Company have entered into the
Assigned Agreements (as defined below).
B. Ozite has assigned its rights, titles, interests and obligations
under the Assigned Agreements to the Borrower pursuant to an Assignment and
Assumption Agreement dated as of _______________, 1995.
In consideration of the mutual covenants and agreements contained
herein, the Company, the Agent and the Borrower hereby agree as follows:
1. Definitions. Each capitalized term used in this Agreement and not
otherwise defined herein shall have the definition assigned to such term
(whether by reference to another agreement or otherwise) as specified in Exhibit
"A" hereto. Unless otherwise stated, references herein to any Person shall
include its permitted successors and assigns.
2. Representations and Warranties. The Company hereby represents and
warrants, subject to Section 3(d) hereof, that:
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of New York. The Company is in good standing in all
jurisdictions where necessary in light of the business it
conducts or the properties it owns and the transactions
contemplated by the Assigned Agreements (as defined below).
The Company has the full power, authority and legal right to
conduct its business as it is presently conducted, and to
execute, deliver and perform its obligations under (i) (A) the
Asset Transfer Agreement dated as of September 29, 1994
between the Company and Ozite, as amended by the First
Amendment to Asset Transfer Agreement dated as of September
26, 1994 and the Second Amendment to Asset Transfer Agreement
dated as of October 15, 1994 (the "Asset Transfer Agreement"),
(B) the VCM Supply Agreement dated as of __________ between
the Company and Ozite, (C) the VAM Supply Agreement dated as
of ____________ between the Company and Ozite, and (D) the AFA
Chemical Supply and License Agreement dated as of ________
between the Company and Ozite (collectively, as amended,
supplemented or modified as permitted hereby and in effect
from time to time the "Assigned Agreements") and (ii) this
Agreement.
G-2
(b) The execution, delivery and performance by the
Company of this Agreement and the Assigned Agreements have
been duly authorized by all necessary corporate action, and do
not and will not (i) require any consent or approval of the
board of directors of the Company or any shareholders of the
Company or of any other Person which has not been obtained and
each such consent and approval that has been obtained is in
full force and effect, (ii) result in a breach of or
constitute a default under any provision of the certificate of
incorporation or by-laws of the Company, or any agreement
relating to the management or affairs of the Company or any
indenture or loan or credit agreement or any other material
agreement, lease or instrument to which the Company is a
party, or by which the Company or its properties or assets may
be bound or (iii) result in, or require, the creation or
imposition of any mortgage, deed of trust, pledge, lien,
security interest or other charge or encumbrance of any nature
(other than as may be contemplated by this Agreement, the
Assigned Agreements, the Credit Agreement or the Security
Agreement) upon or with respect to any of the properties or
assets of the Company now owned or hereafter acquired. In
addition, the execution, delivery, and performance by the
Company of the Assigned Agreements do not and will not violate
any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award.
(c) Each of this Agreement and the Assigned
Agreements has been duly executed and delivered by the
Company, is in full force and effect and constitutes the
legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as
the enforceability thereof may be limited by the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and by
general principles of equity.
(d) No suits or proceedings at law or in equity or by
or before any governmental or regulatory authority or agency
are pending against the Company or any of its properties,
rights or assets which, if adversely determined, individually
or in the aggregate, could reasonably be expected to have a
material and adverse effect on its ability to perform its
obligations hereunder or under the Assigned Agreements.
(e) The Company is not in default of any material
covenant or obligation under the Assigned Agreements. To the
best knowledge of the Company, the Borrower and Ozite are not
in default under any material covenant or obligation under the
Assigned Agreements and no such default has occurred prior to
the date hereof.
(f) The representation and warranty made by the
Company to the Borrower in Section 5.10 of the Asset Transfer
Agreement is incorporated herein by reference as if set forth
in full herein and is hereby made to the Agent for the benefit
of the Lenders.
3. Agreement of Company. Subject to Section 6(a) and Section
3(d) hereof, the Company hereby acknowledges that:
(a) The Company has received a copy of the Security
Agreement. Upon the occurrence of an Event of Default by the
Borrower under the Security Agreement, the Agent may, to the
extent provided for in the Security Agreement, attempt to
exercise any
G-3
and all rights of the Borrower under the Assigned Agreements.
In such event, the Company shall not oppose the exercise of
such rights or the assignment of the Assigned Agreements to
the Agent. The Borrower agrees that the Company is authorized
to act in accordance with the Agent's or any assignee's
exercise of the Borrower's rights in accordance with this
Section 3(a) and that the Company shall bear no liability to
the Borrower in connection therewith.
(b) Except as otherwise provided in the Assigned
Agreements, the Company will not agree with the Borrower to
terminate any Assigned Agreement (unless required by any
governmental or state agency) without the prior written
consent of the Agent, which consent shall not be unreasonably
withheld.
(c) The Company shall provide to the Agent the same
rights as the Borrower shall have under and pursuant to the
Assigned Agreements or any applicable law, regulation or
order, to (i) receive notice, (ii) cure any default or breach
thereunder and (iii) participate before governmental or
regulatory agencies.
(d) In the event that the Agent succeeds to the
Borrower's interest under any Assigned Agreement, whether by
foreclosure or otherwise, the Agent shall assume liability for
all of the Borrower's obligations under such Assigned
Agreement including the payment of all amounts due and owing
to the Company in connection with the production of polyvinyl
chloride resin (other than damages incurred by the Borrower
that are not expressly provided for in the Assigned
Agreements), in accordance with the Assigned Agreements (such
amounts due and owing, the "Amounts Due").
(e) Upon the exercise by the Agent of any of its
remedies against the Borrower, if the Agent attempts to assign
or assigns its rights and interests and the rights and
interests of the Borrower under any Assigned Agreement to any
purchaser or transferee of the Burlington South Plant, the
Company will not oppose such assignment so long as such
purchaser or transferee shall (i) assume all of the
obligations of the Borrower under such Assigned Agreement and
(ii) be at least as capable of performing the services
required by such Assigned Agreement as the Borrower is on the
date hereof.
(f) In the event that the Agent or its designee(s),
or any purchaser or transferee of the interests of the Agent
or its designee(s) in the Burlington South Plant shall assume
or be liable under any Assigned Agreement, liability in
respect of any and all obligations of any such party under
such Assigned Agreement shall be limited solely to such
party's interest in the Burlington South Plant (and no
officer, director, employee, shareholder, or agent thereof
shall have any liability with respect thereto).
(g) Without the written consent of the Agent, the
Company will not unilaterally terminate the Union Carbide
Contract prior to December 31, 1997.
(h) In the event of a default by the Borrower in the
performance of any of its obligations under the Assigned
Agreements, or upon the occurrence or non-occurrence of any
other event or condition under the Assigned Agreements which
would immediately or with the passage of any applicable grace
period or the giving of notice,
G-4
or both, enable the Company to terminate or suspend its
obligations under any Assigned Agreement (hereinafter a
"default"), the Company will not terminate or suspend the
performance of its obligations under the Assigned Agreement
until it first gives prompt written notice specifying the
nature of such default to the Agent and its designees and
affords each such party a period of at least 60 days from
receipt of such notice to cure such default.
4. Agreement of Agent and Borrower. The Agent agrees:
(a) The Agent will not exercise any of its rights
under the Security Agreement in connection with any Assigned
Agreement if the exercise thereof would cause a violation of
any law, rule, regulation, order, writ, judgment, injunction,
decree, determination, award, or certificate of public
convenience and necessity, now or in the future.
(b) The Agent will not assign any Assigned Agreement
to a third party if such assignment would cause a violation of
any law, rule, regulation, order, writ, judgment, injunction,
decree, determination, award or certificate of public
convenience and necessity, now or in the future.
5. Arrangements Regarding Payments. After receipt by the
Company of written notice from the Agent requesting payments be made directly to
the Agent, all payments to be made by the Company to the Borrower under the
Assigned Agreements shall be made in lawful money of the United States of
America, directly to the Agent, for deposit into the Cash Collateral Account
designated by the Agent, at the office of the Agent at 000 Xxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxx, Xxxxx 00000-0000, or to such other Person and/or at such other
address as the Agent may from time to time specify in writing to the Company.
6. Miscellaneous.
(a) This Agreement and the obligations specified
herein shall terminate and be of no further force and effect
on the date on which the Company shall have received notice in
writing from the Agent that all of the Secured Obligations
shall have been paid or performed in full, that the
Commitments shall have been terminated and that the security
interests granted pursuant to the Security Instruments shall
have been extinguished.
(b) No amendment or waiver of any provisions of this
Agreement nor consent to any departure by any party herefrom
shall in any event be effective unless the same shall be in
writing and signed by each of the other parties hereto and
then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it
was given. No amendment or waiver of any provision of this
Agreement or consent to any departure herefrom shall in any
event be effective against the remaining parties hereto unless
the same shall be in writing and signed by the remaining
parties hereto and then such amendment or waiver shall be
effective only in the specific instance and for the specific
purpose for which it was given.
G-5
(c) THE RIGHTS, OBLIGATIONS, AND REMEDIES OF THE
PARTIES AS SPECIFIED IN THIS AGREEMENT SHALL BE INTERPRETED
AND GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF NEW
JERSEY, EXCEPT, HOWEVER, ANY CONFLICT OF LAWS RULES WHICH
APPLY THE LAWS OF ANOTHER JURISDICTION.
(d) If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired.
(e) The parties hereto expressly agree that in the
event the assignment by the Borrower of any Assigned Agreement
as contained within the Security Agreement is determined to
violate any law, rule, regulation, order, writ, judgment,
injunction, decree, determination, award or certificate of
public convenience and necessity, this Agreement and all
provisions herein shall be deemed to be void ab initio unless
such violation (i) can be and is cured within a reasonable
time after discovery thereof and (ii) could not reasonably be
expected to have a material adverse effect upon the validity
or enforceability of any Assigned Agreements (in the
reasonable judgment of the Company).
(f) The headings used in this Agreement are for
convenience only and will not affect the construction of any
of the terms of this Agreement.
(g) This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
and the same instrument, and any of the parties hereto may
execute this Agreement by signing any such counterpart;
provided, however, this Agreement shall not be enforceable
unless and until fully executed by all parties set forth
below.
(h) In the event of a conflict between the terms of
any Assigned Agreement and the terms of this Agreement, the
terms of this Agreement shall control.
(i) All notices, requests and other communications to
any party hereunder shall be in writing (including, telecopy
or similar teletransmission or writing) and shall be given to
such party at its address or telecopy number set forth on the
signature pages hereof or such other address or telecopy
number as such party may hereafter specify by notice to the
Agent, the Borrower and the Company. Each such notice, request
or other communication shall be effective (i) if given by
mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as
aforesaid, or (ii) if given by any other means (including, but
not limited to, by air courier), when delivered at the address
specified in this clause; provided that notices to the Agent
shall not be effective until received.
G-6
IN WITNESS WHEREOF, the undersigned by its officer duly
authorized has caused this Consent and Agreement to be duly executed and
delivered as of this 18th day of August, 1995.
OCCIDENTAL CHEMICAL CORPORATION
By
-----------------------------
Title:
Name:
ADDRESS FOR NOTICES:
Occidental Tower
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Vice President and General Counsel
AGREED TO AND ACCEPTED THIS AGREED TO AND ACCEPTED THIS
18th DAY OF AUGUST, 1995 18th DAY OF AUGUST, 1995
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, as Agent BURLINGTON RESINS, INC.
By: By:
------------------ -----------------------------
P. Xxxx Xxxxx Name:
Vice President Title:
ADDRESS FOR NOTICES: ADDRESS FOR NOTICES:
000 Xxxx Xxxxxx, 0xx Xxxxx 000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000 Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: P. Xxxx Xxxxx Attention: Xxxx X. Xxxxxxx
G-7
EXHIBIT "A"
to the
AGREEMENT
among
OCCIDENTAL CHEMICAL COMPANY
BURLINGTON RESINS
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Agent
"Agent" shall mean Texas Commerce Bank National Association,
in its capacity as agent for the Lenders under the Credit Agreement, together
with its successors and assigns in such capacity.
"Agreement" shall mean the Consent and Agreement dated as of
August 18, 1995 among the Company, the Borrower and the Agent.
"Commitments" shall mean, as to each Lender, the obligation of
such Lender to make loans under and on the terms and conditions of the Credit
Agreement.
"Credit Agreement" shall mean the Credit Agreement dated as of
August 18, 1995, as amended or supplemented from time to time, among the
Borrower, the Lenders and the Agent.
"Lenders" shall mean the banks or financial institutions that
are or may from time to time become party to the Credit Agreement.
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust, unincorporated
organization or government or any agency, instrumentality or political
subdivision thereof, or any other form of entity.
"Burlington South Plant" shall mean the buildings, equipment,
facilities and real estate interests constituting the specialty polyvinyl
chloride resin production facility located at Burlington, New Jersey.
"Security Agreement" shall mean that certain Security
Agreement of even date with the Credit Agreement among the Borrower and the
Agent as amended, supplemented or modified and in effect from time to time.
"Secured Obligations" shall have the meaning assigned such
term in the Security Agreement.
"Union Carbide Contract" shall mean that certain vinyl acetate
monomer conversion agreement dated January 1, 1993 between the Company and Union
Carbide Corporation.
G-8
