EXECUTION COPY
===============================================================================
CREDIT AGREEMENT
dated as of
September 30, 1997
among
HUNTSMAN PACKAGING CORPORATION,
as Borrower
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
-----------------------
CHASE SECURITIES INC.,
as Arranger
===============================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.1. Defined Terms...................................................... 1
SECTION 1.2. Classification of Loans and
Borrowings......................................................... 33
SECTION 1.3. Terms Generally.................................................... 33
SECTION 1.4. Accounting Terms; GAAP; Treatment of
Unrestricted Subsidiaries.......................................... 34
SECTION 1.5. Certain Interim Financial Calcula-
tions.............................................................. 34
ARTICLE II
The Credits
SECTION 2.1. Commitments........................................................ 36
SECTION 2.2. Loans and Borrowings............................................... 36
SECTION 2.3. Requests for Borrowings............................................ 37
SECTION 2.4. Swingline Loans.................................................... 38
SECTION 2.5. Letters of Credit.................................................. 40
SECTION 2.6. Funding of Borrowings.............................................. 47
SECTION 2.7. Interest Elections................................................. 47
SECTION 2.8. Termination and Reduction of Commit-
ments.............................................................. 50
SECTION 2.9. Repayment of Loans; Evidence of Debt............................... 51
SECTION 2.10. Amortization of Term Loans......................................... 52
SECTION 2.11. Prepayment of Loans................................................ 54
SECTION 2.12. Fees............................................................... 57
SECTION 2.13. Interest........................................................... 59
SECTION 2.14. Alternate Rate of Interest......................................... 60
SECTION 2.15. Increased Costs.................................................... 60
SECTION 2.16. Break Funding Payments............................................. 62
SECTION 2.17. Taxes.............................................................. 63
SECTION 2.18. Payments Generally; Pro Rata Treat-
ment; Sharing of Setoffs........................................... 64
SECTION 2.19. Mitigation Obligations; Replacement
of Lenders......................................................... 67
SECTION 2.20. Extension of Revolving Maturity Date............................... 68
i
ARTICLE III
Representations and Warranties
SECTION 3.1. Organization; Powers............................................... 68
SECTION 3.2. Authorization; Enforceability...................................... 69
SECTION 3.3. Governmental Approvals; No Conflicts............................... 69
SECTION 3.4. Financial Condition; No Material Ad-
verse Change....................................................... 70
SECTION 3.5. Properties......................................................... 71
SECTION 3.6. Litigation and Environmental Matters............................... 71
SECTION 3.7. Compliance with Laws and Agreements................................ 72
SECTION 3.8. Investment and Holding Company Sta-
tus................................................................ 72
SECTION 3.9. Taxes.............................................................. 72
SECTION 3.10. ERISA.............................................................. 73
SECTION 3.11. Disclosure......................................................... 73
SECTION 3.12. Subsidiaries....................................................... 73
SECTION 3.13. Insurance.......................................................... 74
SECTION 3.14. Labor Matters...................................................... 74
SECTION 3.15. Solvency........................................................... 74
SECTION 3.16. Security Documents................................................. 74
SECTION 3.17. Federal Reserve Regulations........................................ 76
SECTION 3.18. Existing Intercompany Indebtedness................................. 76
SECTION 3.19. Agreements and Business Status as of
Effective Date..................................................... 76
ARTICLE IV
Conditions
SECTION 4.1. Effective Date..................................................... 77
SECTION 4.2. Each Credit Event.................................................. 83
ARTICLE V
Affirmative Covenants
SECTION 5.1. Financial Statements and Other Infor-
mation............................................................. 84
SECTION 5.2. Notices of Material Events......................................... 86
SECTION 5.3. Information Regarding Collateral................................... 87
SECTION 5.4. Existence; Conduct of Business..................................... 88
SECTION 5.5. Payment of Obligations............................................. 88
SECTION 5.6. Maintenance of Properties.......................................... 88
SECTION 5.7. Insurance.......................................................... 88
SECTION 5.8. Casualty and Condemnation.......................................... 89
ii
SECTION 5.9. Books and Records; Inspection and
Audit Rights....................................................... 90
SECTION 5.10. Compliance with Laws............................................... 90
SECTION 5.11. Use of Proceeds and Letters of Cred-
it................................................................. 90
SECTION 5.12. Additional Subsidiaries............................................ 91
SECTION 5.13. Further Assurances................................................. 91
ARTICLE VI
Negative Covenants
SECTION 6.1. Indebtedness....................................................... 93
SECTION 6.2. Certain Equity Securities.......................................... 95
SECTION 6.3. Liens.............................................................. 96
SECTION 6.4. Fundamental Changes................................................ 97
SECTION 6.5. Investments, Loans, Advances, Guaran-
tees and Acquisitions.............................................. 98
SECTION 6.6. Asset Sales........................................................100
SECTION 6.7. Sale and Lease-Back Transactions...................................101
SECTION 6.8. Hedging Agreements.................................................102
SECTION 6.9. Restricted Payments; Certain Payments
of Indebtedness....................................................102
SECTION 6.10. Transactions with Affiliates.......................................102
SECTION 6.11. Restrictive Agreements.............................................103
SECTION 6.12. Amendment of Material Documents....................................104
SECTION 6.13. Capital Expenditures...............................................104
SECTION 6.14. Leverage Ratio.....................................................105
SECTION 6.15. Interest Coverage Ratio............................................105
SECTION 6.16. Minimum Net Worth..................................................105
SECTION 6.17. Designated Senior Debt.............................................106
ARTICLE VII
Events of Default.........................................106
ARTICLE VIII
The Administrative Agent......................................110
ARTICLE IX
Miscellaneous...........................................113
SECTION 9.1. Notices............................................................113
SECTION 9.2. Waivers; Amendments................................................114
SECTION 9.3. Expenses; Indemnity: Damage Waiver.................................116
SECTION 9.4. Successors and Assigns.............................................118
iii
SECTION 9.5. Survival...........................................................121
SECTION 9.6. Counterparts; Integration; Effective-
ness...............................................................122
SECTION 9.7. Severability.......................................................123
SECTION 9.8. Right of Setoff....................................................123
SECTION 9.9. Governing Law; Jurisdiction; Consent
to Service of Process..............................................123
SECTION 9.10. WAIVER OF JURY TRIAL...............................................124
SECTION 9.11. Headings...........................................................124
SECTION 9.12. Confidentiality....................................................125
SECTION 9.13. Interest Rate Limitation...........................................125
iv
SCHEDULES:
Schedule 1.01(a) Mortgaged Properties
Schedule 2.01 Commitments
Schedule 3.05 Owned or Leased Property
Schedule 3.12 Subsidiaries
Schedule 3.13 Insurance
Schedule 3.16(a) Actions to Pledge Stock of Foreign
Subsidiaries
Schedule 3.16(d) Mortgage Filing Offices
Schedule 3.19 Affiliate Agreements
Schedule 5.07 Insurance Levels
Schedule 6.01 Existing Indebtedness
Schedule 6.03 Existing Liens
Schedule 6.05 Existing Investments
Schedule 6.10 Affiliate Transactions
Schedule 6.11 Existing Restrictions
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B-1 Forms of Opinion of Borrower's Counsel
Exhibit B-2 Form of Opinion of Borrower's Utah
Counsel
Exhibit B-3 Form of Opinion of Local Counsel
Exhibit B-4 Form of Opinion of Foreign Counsel
Exhibit C Form of Guarantee Agreement
Exhibit D Form of Indemnity, Subrogation and
Contribution Agreement
Exhibit E Form of Pledge Agreement
Exhibit F Form of Security Agreement
v
CREDIT AGREEMENT dated as of September 30,
1997, among HUNTSMAN PACKAGING CORPORATION, a Utah
corporation, the LENDERS party hereto, and THE CHASE
MANHATTAN BANK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Alternate Base Rate.
"Acquisition Agreement" means the agreement or agreements
entered into in connection with the CT Film Acquisition.
"Adjusted Consolidated Net Worth" means, as of any date, the
capital stock and additional paid-in capital of the Borrower plus retained
earnings (or minus accumulated deficit) of the Borrower, plus Excluded Charges,
all determined as of such date on a consolidated basis in accordance with GAAP
(except that such determination shall be made without taking into account
Unrestricted Subsidiaries).
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in
its capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified. The Borrower acknowledges that Xxxxxxx Xxxxxx is an Affiliate of the
Borrower. Each of Xxx X. Xxxxxxxx and Huntsman (and their respective
Affiliates) shall be deemed to be an Affiliate of the Borrower for purposes of
Section 6.10.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Percentage" means, with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment. If the Revolving Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the
Revolving Commitments most recently in effect, giving effect to any
assignments.
"Applicable Rate" means, for any day with respect to any ABR
Loan or Eurodollar Loan that is a Revolving Loan or a Term Loan, or with
respect to the commitment fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption "ABR Spread",
"Eurodollar Spread" or "Commitment Fee Rate", as the case may be, based upon
the Leverage Ratio as of the most recent determination date; provided that
until the delivery to the Administrative Agent, pursuant to Section 5.01(b), of
the Borrower's consolidated financial statements for the Borrower's first full
fiscal quarter ending after the Effective Date, the "Applicable Rate" shall be
the applicable rate per annum
2
set forth below in Category 1:
===============================================================================================================
Leverage Ratio ABR Spread Eurodollar Spread Commitment Fee
Rate
---------------------------------------------------------------------------------------------------------------
Category 1 0.75% 2.00% 0.500%
----------
Equal to or greater than
4.00 to 1.00
---------------------------------------------------------------------------------------------------------------
Category 2 0.50% 1.75% 0.400%
----------
Less than 4.00 to 1.00 but
greater than 3.50 to 1.00
---------------------------------------------------------------------------------------------------------------
Category 3 0.25% 1.50% 0.375%
----------
Less than or equal to 3.50
to 1.00 but greater than
3.00 to 1.00
---------------------------------------------------------------------------------------------------------------
Category 4 0.00% 1.25% 0.350%
----------
Less than or equal to 3.00
to 1.00 but greater than
2.50 to 1.00
---------------------------------------------------------------------------------------------------------------
Category 4 0.00% 1.00% 0.300%
----------
Less than or equal to 2.50
to 1.00
===============================================================================================================
For purposes of the foregoing, (a) the Leverage Ratio shall
be determined as of the end of each fiscal quarter of the Borrower's fiscal
year based upon the Borrower's consolidated financial statements delivered
pursuant to Section 5.01(a) or (b) and (b) each change in the Applicable Rate
resulting from a change in the Leverage Ratio shall be effective during the
period commencing on and including the third day (such day, the "Applicable
Rate Determination Date") after the date of delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change; provided that the Leverage Ratio shall be deemed to be in Category 1
(i) at any time that an Event of Default has occurred and is continuing or (ii)
if the Borrower fails to deliver the consolidated financial statements required
to be delivered by it pursuant to Section 5.01(a) or (b), during the period
from the expiration of the time for delivery thereof until such consolidated
financial statements are delivered.
"Assessment Rate" means, for any day, the annual assessment
rate in effect on such day that is payable by a member of the Bank Insurance
Fund classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor
3
provision) to the Federal Deposit Insurance Corporation for insurance by such
Corporation of time deposits made in dollars at the offices of such member in
the United States; provided that if, as a result of any change in any law, rule
or regulation it is no longer possible to determine the Assessment Rate as
aforesaid, then the Assessment Rate shall be such annual rate as shall be
determined by the Administrative Agent to be representative of the cost of such
insurance to the Lenders.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an assignee (with the consent of any
party whose consent is required by Section 9.04), and accepted by the
Administrative Agent, in the form of Exhibit A or any other form approved by
the Administrative Agent and the Borrower.
"Base CD Rate" means the sum of (a) the Three-Month
Secondary CD Rate multiplied by the Statutory Reserve Rate plus (b) the
Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means Huntsman Packaging Corporation, a Utah
corporation.
"Borrower Amount" means, at any date, the sum of:
(a) the aggregate amount of Excess Cash Flow for each fiscal
year of the Borrower completed prior to such date for which financial
statements have been delivered pursuant to Section 5.01 (commencing
with the fiscal year ending December 31, 1998), less the sum of (i)
all prepayments of Term Borrowings required to be made pursuant to
Section 2.11(c) and (ii) all reductions of Revolving Commitments
required to be made pursuant to Section 2.08(d) in respect of such
Excess Cash Flow; plus
(b) the aggregate Net Proceeds received by the Borrower after
the Effective Date and prior to such date in respect of Prepayment
Events described in clause (c) of the definition of "Prepayment
Event", less the sum of (i) all prepayments of Term Borrowings
required to be made pursuant to clause
4
(ii) of Section 2.11(b) in respect of such Net Proceeds, (ii) all
reductions of Revolving Commitments required to be made pursuant to
Section 2.08(d) in respect of such Net Proceeds and (iii) any portion
of such Net Proceeds reserved for a Permitted Acquisition as provided
in clause (ii) of Section 2.11(e); minus
(c) the sum of all utilizations of the Borrower Amount
pursuant to any provisions of this Agreement permitting utilization of
the Borrower Amount.
Any provisions of this Agreement that permit an action to be taken by utilizing
the Borrower Amount shall be construed to permit such action only to the extent
that the Borrower Amount is a positive amount at that time.
"Borrowing" means (a) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans,
as to which a single Interest Period is in effect, or (b) a Swingline Loan.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday
or other day on which commercial banks in New York City are authorized or
required by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks generally are not open for dealings in dollar deposits in the London
interbank market. For purposes of this Agreement "Pioneer Day" as recognized
in the State of Utah shall not be a Business Day.
"Capital Expenditures" means, for any period, without
duplication, (a) the additions to property, plant and equipment and other
capital expenditures of the Borrower and its Restricted Subsidiaries that are
(or would be) set forth in a consolidated statement of cash flows of the
Borrower and its Restricted Subsidiaries for such period prepared in accordance
with GAAP and (b) Capital Lease Obligations incurred by the Borrower and its
Restricted Subsidiaries during such period.
5
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Interest Expense" means, for any period, Consolidated
Interest Expense for such period excluding any portion thereof in respect of
interest not required to be paid in cash during such period or within one year
thereafter.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq.
"Change in Control" means, at any time, (a) prior to an IPO,
the failure by the Control Group to collectively own and control at least a
sufficient amount of the outstanding voting capital stock of the Borrower to
elect at least a majority of the Board of Directors of the Borrower; (b) after
an IPO, the acquisition of beneficial ownership, directly or indirectly, by any
Person or group (within the meaning of the Securities Exchange Act of 1934 and
the rules of the Securities and Exchange Commission thereunder as in effect on
the date hereof) other than the Control Group, of shares representing more than
35% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Borrower; (c) occupation of a majority of the
seats (other than vacant seats) on the board of directors of the Borrower by
Persons who were neither (i) nominated by members of the Control Group or the
board of directors of the Borrower nor (ii) appointed by directors so
nominated; or (d) the acquisition of direct or indirect Control of the Borrower
by any Person or group other than the Control Group.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compli-
6
ance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by
any lending office of such Lender or by such Lender's or the Issuing Bank's
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans, Term Loans or Swingline Loans and, when used in reference to
any Commitment, refers to whether such Commitment is a Revolving Commitment
or Term Loan Commitment.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means any and all "Collateral", as defined in
any applicable Security Document.
"Collateral Agent" means The Chase Manhattan Bank, in its
capacity as collateral agent for the Secured Parties under the Security
Documents.
"Commitment" means a Revolving Commitment, Term Loan
Commitment, or any combination thereof (as the context requires).
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period, plus, without duplication and to the extent deducted
from revenues in determining Consolidated Net Income, the sum of (a) the
aggregate amount of Consolidated Interest Expense for such period, (b) the
aggregate amount of letter of credit fees paid during such period, (c) the
aggregate amount of income tax expense for such period, (d) all amounts
attributable to depreciation and amortization for such period, (e) all
extraordinary charges and losses during such period and any Excluded Charges
during such period, (f) for the period ended December 31, 1997, $9.5 million,
(g) for the period ended March 31, 1998, $7.0 million, (h) for the period ended
June 30, 1998, $4.5 million and (i) for the period ended September 30, 1998,
$2.0 million, and minus, without duplication and to the extent added to
revenues in determining Consolidated Net Income for such period, all
extraordinary gains during such
7
period, all as determined on a consolidated basis with respect to the Borrower
and the Restricted Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the
interest expense, both expensed and capitalized (including the interest
component in respect of Capital Lease Obligations), accrued or paid by the
Borrower and the Restricted Subsidiaries during such period (net of payments
made or received under interest rate protection agreements), determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, net income
or loss of the Borrower and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, provided that there
shall be excluded (a) the income of any Unconsolidated Subsidiary and any
Person in which any other Person (other than the Borrower or any of the
Restricted Subsidiaries or any director holding qualifying shares in compliance
with applicable law or any other third party holding a de minimus number of
shares in order to comply with other similar requirements) has a joint
interest, except to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any of its Restricted
Subsidiaries by such Person during such period, and (b) the income (or loss) of
any Person accrued prior to the date it becomes a Restricted Subsidiary or is
merged into or consolidated with the Borrower or any of its Restricted
Subsidiaries or the date that Person's assets are acquired by the Borrower or
any of its Restricted Subsidiaries.
"Control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Control Group" means Xxx X. Xxxxxxxx, his spouse, direct
descendants and their spouses, immediate family, any entities that are
Controlled by any of the foregoing individuals and/or by a trust of the type
described hereafter, and/or any trusts solely for the benefit of any of the
foregoing.
8
"CT Film Acquisition" means the acquisition by the Borrower
from Huntsman Polymers Corporation (formerly known as Xxxxxx Corporation) of
all or substantially all the assets comprising Huntsman Polymers Corporation's
CT Film Division.
"Default" means any event or condition that constitutes an
Event of Default or that upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"dollars" or "$" refers to lawful money of the
United States of America.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, handling, treatment, storage, disposal, Release or
threatened Release of any Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including, but not limited to, any liability for damages, natural
resource damage, costs of environmental remediation, administrative oversight
costs, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials
into the environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business
9
(whether or not incorporated) that, together with the Borrower, is treated as a
single employer under Section 414(b) or (c) of the Code or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA) , whether or
not waived; (c) the filing pursuant to Section 412(d) of the Code or Section
303(d) of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (d) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the Borrower or
any ERISA Affiliate of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to
be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Adjusted LIBO
Rate.
"Event of Default" has the meaning assigned to
such term in Article VII.
"Excess Cash Flow" means, for any period, the
sum (without duplication) of:
(a) Consolidated Net Income for such period,
10
adjusted to exclude any gains or losses attributable
to Prepayment Events; plus
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such Consolidated Net Income for such
period; plus
(c) the sum of (i) the amount, if any, by which Net Working
Capital decreased during such period plus (ii) the amount, if any, by
which the consolidated deferred revenues of the Borrower and its
consolidated Restricted Subsidiaries increased during such period plus
(iii) the aggregate principal amount of Capital Lease Obligations and
other Indebtedness incurred during such period to finance Capital
Expenditures and the investments referred to in clause (e) below, to
the extent that mandatory principal payments in respect of such
Indebtedness would not be excluded from clause (f) below when made;
minus
(d) the sum of (i) any non-cash gains included in determining
such Consolidated Net Income for such period plus (ii) the amount, if
any, by which Net Working Capital increased during such period plus
(iii) the amount, if any, by which the consolidated deferred revenues
of the Borrower and its consolidated Restricted Subsidiaries decreased
during such period; minus
(e) the sum of (i) Capital Expenditures for such period, (ii)
cash consideration paid in respect of Permitted Acquisitions during
such period, including cash generated by the issuance of Indebtedness,
and (iii) investments made in cash, including cash generated by the
issuance of Indebtedness, pursuant to clause (h) of Section 6.05
during such period; provided that amounts shall not be deducted
pursuant to this clause (e) in determining Excess Cash Flow to the
extent that such Capital Expenditures, Permitted Acquisitions or
investments are made (A) by utilizing the Borrower Amount, (B) by
utilizing Net Proceeds of an event that otherwise would be a
"Prepayment Event" as provided in the proviso to the definition of
"Prepayment Event" or (C) in reliance upon sub-clause (ii) of Section
2.11(e); minus
11
(f) the aggregate principal amount of Indebtedness repaid or
prepaid by the Borrower and its consolidated Restricted Subsidiaries
during such period, excluding (i) Indebtedness in respect of Revolving
Loans and Letters of Credit, (ii) Term Loans prepaid pursuant to
Section 2.11(b) or (c), (iii) repayments or prepayments of
Indebtedness financed by incurring other Indebtedness, to the extent
that mandatory principal payments in respect of such other
Indebtedness would, pursuant to this clause (f), be deducted in
determining Excess Cash Flow when made, (iv) Indebtedness referred to
in clauses (iii), (iv) and (ix) of Section 6.01 and (v) Indebtedness
referred to in clauses (v), (vi) and (viii) of Section 6.01, to the
extent but only to the extent that such Indebtedness was incurred by
utilizing the Borrower Amount.
"Excluded Charges" means (a) the non-recurring charges to be
incurred in respect of the restructurings, plant closings or similar actions
expected to be taken in connection with the Borrower's facilities in
Scunthorpe, U.K. and Birmingham, Alabama and the CT Film Acquisition, and (b)
any other such non-recurring charges incurred in respect of any restructurings,
plant closings or similar actions during the eighteen-month period commencing
on the Effective Date, provided that the cash portion of charges referred to in
this clause (b) shall be limited to $8,000,000.
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender, the Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) income
or franchise taxes imposed on (or measured by) its net income by the United
States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower is located and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.19(b)), any withholding tax that is imposed on
amounts payable hereunder to such Foreign Lender at the time such Foreign
Lender becomes a party to
12
this Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.17(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.17(a).
"Existing Intercompany Indebtedness" means all Indebtedness
owed by the Borrower and its Subsidiaries to Huntsman and its subsidiaries
(other than the Borrower and its Subsidiaries), together with accrued interest
thereon.
"Existing Letters of Credit" means the following letters of
credit entered into by the Borrower and its Subsidiaries and outstanding as of
the Effective Date: (i) the Irrevocable Standby Letter of Credit dated July 30,
1996 issued by U.S. Bank of Utah in the amount of $378,000 to Huntsman United
Films Corporation on behalf of Old National Trust Company and (ii) the
Irrevocable Standby Letter of Credit dated December 16, 1996 issued by U.S.
Bank of Utah in the amount of $5,250,000 to Huntsman Packaging Corporation on
behalf of Fleet National Bank.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.
"Financing Transactions" means (i) the repayment by the
Borrower of the Existing Intercompany Indebtedness, (ii) the issuance by the
Borrower of the Senior
13
Subordinated Notes, and (iii) the execution, delivery and performance by each
Loan Party of the Loan Documents to which it is to be a party, the borrowing of
Loans, the use of the proceeds thereof and the issuance of Letters of Credit
hereunder.
"Foreign Assets" means the assets of or shares or other
ownership interests in the Foreign Subsidiaries.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than the United States of America, each State
thereof and the District of Columbia.
"Foreign Subsidiary" means any Subsidiary that is organized
under the laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia.
"GAAP" means, subject to Section 1.04, generally accepted
accounting principles in the United States of America.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial
14
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or other obligation or (d) as an
account party in respect of any letter of credit or letter of guaranty issued
to support such Indebtedness or obligation; provided that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary course
of business.
"Guarantee Agreement" means the Guarantee Agreement,
substantially in the form of Exhibit C, made by the Subsidiary Loan Parties in
favor of the Administrative Agent for the benefit of the Secured Parties.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law, including any material listed as a hazardous
substance under Section 101(14) of CERCLA.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price
hedging arrangement.
"Huntsman" mean Huntsman Corporation, a Utah
corporation.
"Immaterial Subsidiaries" mean, at any date, Restricted
Subsidiaries affected by one or more events described in clause (h), (i), (j)
or (k) of Article VII that (a) have (in the aggregate) consolidated assets
representing less than 5% of the consolidated assets of the Borrower and its
Restricted Subsidiaries as of such date, determined in accordance with GAAP,
and (b) had (in the aggregate) consolidated revenues and consolidated net
income, in each case for the period of four consecutive fiscal quarters of the
Borrower most recently ended as of such date for which financial statements
have been delivered pursuant to Section 5.01, representing less than 5% of the
revenues and consolidated net income, respectively, of the Borrower and its
Restricted Subsidiaries for
15
such period, determined in accordance with GAAP; provided that all Restricted
Subsidiaries affected by events described in such clauses of Article VII shall
be consolidated for purposes of determining compliance with clauses (a) and (b)
above.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding accounts payable incurred in the ordinary course of business that
are not overdue by more than 60 days, unless the payment thereof is being
contested in good faith), (e) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (f)
all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease
Obligations of such Person, (h) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (i) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor. Notwithstanding the foregoing, "Indebtedness"
shall not include (i) deferred taxes or (ii) unsecured indebtedness of the
Borrower or any Subsidiary to finance insurance premiums in a principal amount
not in excess of the casualty and other insurance premiums to be paid by the
Borrower or any Restricted Subsidiary for a three-year period beginning on the
date of any incurrence of such indebtedness.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
16
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit D, among the Borrower, the Subsidiary Loan Parties and the
Administrative Agent.
"Information Memorandum" means the Confidential Information
Memorandum dated July 1997 relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower
to convert or continue a Revolving Borrowing or Term Borrowing in accordance
with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR
Loan (other than a Swingline Loan), the last day of each March, June, September
and December, (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and,
in the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months' duration after the first day of such
Interest Period, and (c) with respect to any Swingline Loan, the day that such
Loan is required to be repaid.
"Interest Period" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the calendar month that is one, two, three
or six months thereafter, as the Borrower may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of
17
such Borrowing.
"IPO" means the issuance by the Borrower of shares of its
common stock to the public pursuant to a bona fide underwritten public
offering.
"Issuing Bank" means The Chase Manhattan Bank, in its
capacity as the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section 2.05(i) and such other financial
institutions as may become Issuing Banks as provided in Section 2.05(i). The
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of the Issuing Bank, subject to the consent of the
Borrower which shall not be unreasonably withheld, in which case the term
"Issuing Bank" shall include any such Affiliate with respect to Letters of
Credit issued by such Affiliate. In the event that there is more than one
Issuing Bank at any time, references herein and in the other Loan Documents to
the Issuing Bank shall be deemed to refer to the Issuing Bank in respect of the
applicable Letter of Credit or to all Issuing Banks, as the context requires.
Notwithstanding the foregoing, the U.S. Bank of Utah shall be deemed to be an
Issuing Bank with respect to the Existing Letters of Credit but shall not be
obligated to issue any additional Letters of Credit hereunder.
"LC Availability Period" means the period from and including
the Effective Date to but excluding the earlier of (a) the date that is five
Business Days prior to the Revolving Maturity Date and (b) the date of
termination of the Revolving Commitments.
"LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any
Revolving Lender at any time shall be its Applicable Percentage of the total LC
Exposure at such time.
"Lenders" means the Persons listed on Schedule
2.01 and any other Person that shall have become a party
18
hereto pursuant to an Assignment and Acceptance, other than any such Person
that ceases to be a party hereto pursuant to an Assignment and Acceptance.
Unless the context otherwise requires, the term "Lenders" includes the
Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant
to this Agreement. Each Existing Letter of Credit shall be deemed to constitute
a Letter of Credit issued hereunder on the Effective Date for all purposes of
the Loan Documents.
"Leverage Ratio" means, on any date, the ratio of (a) Total
Debt as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Borrower most recently ended as of such
date, all determined on a consolidated basis in accordance with GAAP.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO Rate"
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor
19
under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.
"Loan Documents" means this Agreement, the Guarantee
Agreement, the Indemnity, Subrogation and Contribution Agreement and the
Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan
Parties.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Margin Stock" shall have the meaning assigned to such term
in Regulation U.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Restricted Subsidiaries taken as a whole,
(b) the ability of any Loan Party to perform any of its obligations under any
Loan Document or (c) the rights of or benefits available to the Lenders under
any Loan Document.
"Material Indebtedness" means Indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and its Restricted Subsidiaries
in an aggregate principal amount exceeding $5,000,000. For purposes of
determining Material Indebtedness, the "principal amount" of the obligations of
the Borrower or any Restricted Subsidiary in respect of any Hedging Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or such Restricted Subsidiary would be required
to pay if such Hedging Agreement were terminated at such time.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of
leases and rents, leasehold mortgage or
20
other security document granting a Lien on any Mortgaged Property to secure the
Obligations. Each Mortgage shall be satisfactory in form and substance to the
Collateral Agent.
"Mortgaged Property" means, initially, each parcel of real
property and the improvements thereto owned by a Loan Party and identified on
Schedule 1.01(a), and includes each other parcel of real property and
improvements thereto with respect to which a Mortgage is granted pursuant to
Section 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash
proceeds received by the Borrower and the Restricted Subsidiaries in respect of
such event including (i) any cash received in respect of any non-cash proceeds,
but only as and when received, (ii) in the case of a casualty, insurance
proceeds, and (iii) in the case of a condemnation or similar event,
condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Borrower and the
Restricted Subsidiaries to third parties (other than to the Borrower or a
Subsidiary) in connection with such event, (ii) in the case of a sale, transfer
or other disposition of an asset (including pursuant to a sale and leaseback
transaction or a casualty or other insured damage or condemnation or similar
proceeding), the amount of all payments required to be made by the Borrower and
the Restricted Subsidiaries as a result of such event to repay Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event, and (iii) the amount of all taxes paid
(or reasonably estimated to be payable) by the Borrower and the Restricted
Subsidiaries, and the amount of any reserves established by the Borrower and
the Restricted Subsidiaries to fund contingent liabilities reasonably estimated
to be payable, in each case during the year that such event occurred or the
next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by the chief financial officer of the
Borrower).
"Net Working Capital" means, at any date, (a) the
consolidated current assets of the Borrower and its
21
consolidated Restricted Subsidiaries as of such date (excluding cash and
Permitted Investments) minus (b) the consolidated current liabilities of the
Borrower and its consolidated Restricted Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness). Net Working Capital
at any date may be a positive or negative number. Net Working Capital increases
when it becomes more positive or less negative and decreases when it becomes
less positive or more negative.
"Obligations" has the meaning assigned to such
term in the Security Agreement.
"Other Taxes" means any and all current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity performing similar
functions.
"Perfection Certificate" means a certificate in the form of
Annex 1 to the Security Agreement or any other form approved by the Collateral
Agent.
"Permitted Acquisition" means any acquisition (other than the
CT Film Acquisition) by the Borrower or a Restricted Subsidiary of the Borrower
of all or substantially all the assets of, or all the shares of capital stock
of or other equity interests in, a Person or division or line of business of a
Person if, immediately after giving effect thereto, (a) no Default has occurred
and is continuing or would result therefrom, (b) all transactions related
thereto are consummated in accordance with applicable laws, (c) each Subsidiary
formed for the purpose of or resulting from such acquisition shall be a
Restricted Subsidiary and all the capital stock of each such Subsidiary shall
be owned directly by the Borrower or a Restricted Subsidiary of the Borrower
and all actions required to be taken with respect to such acquired or newly
formed Subsidiary under Sections 5.12 and 5.13 have been taken, (d) the
Borrower and its Restricted Subsidiaries are in compliance, on a pro forma
basis after giving effect to such acquisition, with the
22
covenants contained in Sections 6.14, 6.15 and 6.16 recomputed as at the last
day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available, as if such acquisition (and any related
incurrence or repayment of Indebtedness, with any new Indebtedness being deemed
to be amortized over the applicable testing period in accordance with its
terms, and assuming that any Revolving Loans borrowed in connection with such
acquisition are repaid with excess cash balances when available) had occurred
on the first day of each relevant period for testing such compliance and (e)
the Borrower has delivered to the Administrative Agent an officers' certificate
to the effect set forth in clauses (a), (b), (c) and (d) above, together with
all relevant financial information for the Person or assets to be acquired. For
purposes of determining pro forma compliance with the covenants referred to in
clause (d) above and for purposes of Section 1.05 as provided therein, the
Borrower may give effect to synergistic benefits anticipated to be realized in
connection with the proposed acquisition to the extent (but only to the extent)
that the Borrower would be permitted to give effect to such benefits in pro
forma financial statements to be filed with the SEC and prepared in accordance
with Article 11 of Regulation S-X under the Securities Exchange Act of 1934, as
amended, and the applicable interpretations of the SEC, in each case as in
effect on the date of this Agreement.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are
not yet due or are being contested in compliance
with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
processors', landlords', repairmen's and other like Liens imposed by
law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
23
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII; and
(f) Liens disclosed on title policies delivered to the
Administrative Agent prior to the execution of this Agreement in
respect of any Mortgaged Property and easements, zoning restrictions,
rights-of-way and similar encumbrances on real property imposed by law
or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of
the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means (i) a marketable obligation,
maturing within two years after issuance thereof, issued or guaranteed by the
United States of America or an instrumentality or agency thereof, (ii) a
certificate of deposit or banker's acceptance, maturing within one year after
issuance thereof, issued by any Lender, or a national or state bank or trust
company or a European, Canadian or Japanese bank in each case having capital,
surplus and undivided profits of at least $100,000,000 and whose long-term
unsecured debt has a rating of "A" or better by S&P or A2 or better by Xxxxx'x
or the equivalent rating by any other nationally recognized rating agency
(provided that the aggregate face amount of all investments in certificates of
deposit or banker's acceptances issued by the principal offices of or branches
of such European or Japanese banks located outside the United States shall not
at an time exceed 33-1/3% of all investments described in this definition),
(iii) open market commercial paper, maturing within 270 days after issuance
thereof, which has a rating of A1 or better by S&P or P1 or better by Xxxxx'x,
or the equivalent rating by any other nationally recognized rating
24
agency, (iv) repurchase agreements and reverse repurchase agreements with a
term not in excess of one year with any financial institution which has been
elected a primary government securities dealer by the Federal Reserve Board or
whose securities are rated AA or better by S&P or Aa3 or better by Xxxxx'x or
the equivalent rating by any other nationally recognized rating agency relating
to marketable direct obligations issued or unconditionally guaranteed by the
United States of America or any agency or instrumentality thereof and backed by
the full faith and credit of the United States of America, (v) "Money Market"
preferred stock maturing within six months after issuance thereof or municipal
bonds issued by a corporation organized under the laws of any state of the
United States, which has a rating of "A" or better by S&P or Xxxxx'x or the
equivalent rating by any other nationally recognized rating agency and (vi) tax
exempt floating rate option tender bonds backed by letters of credit issued by
a national or state bank whose long-term unsecured debt has a rating of AA or
better by S&P or Aa2 or better by Xxxxx'x or the equivalent rating by any other
nationally recognized rating agency.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA, Section 412
of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" means the Pledge Agreement, substantially
in the form of Exhibit E, among the Borrower, the Subsidiaries party thereto
and the Collateral Agent for the benefit of the Secured Parties.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including
pursuant to a sale and leaseback transaction) of any property or asset
of the Borrower or any Restricted Subsidiary, other than (i) disposi-
25
tions described in clauses (a), (b), (c), (d), (e) and (h) of Section
6.06 and (ii) other dispositions resulting in aggregate Net Proceeds
not exceeding $1,000,000 during any fiscal year of the Borrower; or
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of the Borrower or any Restricted
Subsidiary, other than such events resulting in aggregate Net Proceeds
not exceeding $1,000,000 during any fiscal year of the Borrower; or
(c) the issuance by the Borrower or any Restricted Subsidiary
of any equity securities, or the receipt by the Borrower or any
Restricted Subsidiary of any capital contribution, other than (i) any
such issuance of equity securities to, or receipt of any such capital
contribution from, the Borrower or a Restricted Subsidiary and (ii)
the issuance by the Borrower of equity securities to officers and
directors of the Borrower and its Restricted Subsidiaries resulting in
aggregate Net Proceeds not exceeding $1,000,000 during any fiscal year
of the Borrower; or
(d) the incurrence by the Borrower or any Re-
stricted Subsidiary of any Indebtedness, other than
Indebtedness permitted by Section 6.01;
provided that, with respect to any event described in clause (a) or (b) above,
if the Borrower shall deliver a certificate of a Financial Officer to the
Administrative Agent at the time of such event (i) setting forth the Borrower's
or a Restricted Subsidiary's intent to use the Net Proceeds of such event to
repair the assets that are the subject of such event, or to use the Net
Proceeds to acquire other assets to be used in a line of business permitted
under Section 6.04(b), in each case within 360 days of receipt of such Net
Proceeds, or, in the case of Net Proceeds resulting from the disposition of
Foreign Assets, to finance a Permitted Acquisition in the United States or
Canada within 540 days of receipt of such Net Proceeds and (ii) certifying that
no Default has occurred and is continuing, then such event shall not constitute
a Prepayment Event except to the extent the Net Proceeds
26
therefrom are not so used at the end of such 360-day or 540-day period, as
applicable, at which time such event shall be deemed a Prepayment Event with
Net Proceeds equal to the Net Proceeds so remaining unused; provided further
that the provisions of the foregoing exception allowing Net Proceeds to be used
to finance Permitted Acquisitions in Canada shall be subject to the requirement
that all Subsidiaries resulting from any such Permitted Acquisitions must be
treated as Subsidiary Loan Parties for purposes of this Agreement.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly
announced as being effective.
"Register" has the meaning set forth in Section 9.04.
"Regulation G" shall mean Regulation G of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Related Parties" means, with respect to any specified
Person, such Person's Affiliates and the respective directors, officers,
employees, agents and advisors of such Person and such Person's Affiliates.
"Release" has the meaning set forth in Section
101(22) of CERCLA.
"Required Lenders" means, at any time, Lenders having
Revolving Exposures, Term Loans and unused Commitments representing more than
50% of the sum of the total Revolving Exposures, outstanding Term Loans and
unused Commitments at such time.
27
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower or any Restricted Subsidiary, or any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
the Borrower or any Restricted Subsidiary or any option, warrant or other right
to acquire any such shares of capital stock of the Borrower or any Restricted
Subsidiary.
"Restricted Subsidiary" means any Subsidiary that is not an
Unrestricted Subsidiary.
"Revolving Availability Period" means the period from and
including the Effective Date to but excluding the earlier of the Revolving
Maturity Date and the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender,
the commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04. The
initial amount of each Lender's Revolving Commitment is set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Revolving Commitment, as applicable. The initial aggregate
amount of the Lenders' Revolving Commitments is $150,000,000.
"Revolving Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment
or, if the Revolving Commitments have terminated or expired, a Lender with
Revolving Exposure.
"Revolving Loan" has the meaning set forth in
28
Section 2.01.
"Revolving Maturity Date" means September 30, 2004.
"S&P" means Standard & Poors.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" shall have the meaning assigned to such
term in the Security Agreement.
"Security Agreement" means the Security Agreement,
substantially in the form of Exhibit F, among the Borrower, the Subsidiary Loan
Parties and the Collateral Agent for the benefit of the Secured Parties.
"Security Documents" means the Security Agreement, the Pledge
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.12 or 5.13 to secure
any of the Obligations.
"Senior Subordinated Note Documents" means the Senior
Subordinated Notes, the indenture under which the Senior Subordinated Notes are
issued and all other documents evidencing, guaranteeing or otherwise governing
the terms of the Senior Subordinated Notes.
"Senior Subordinated Notes" means (i) the senior subordinated
notes in an aggregate principal amount not less than $100,000,000 and not more
than $125,000,000 issued by the Borrower in a Rule 144A or other private
placement (the "Initial Notes") and (ii) any senior subordinated notes with
substantially identical terms to the Initial Notes which are issued in exchange
for the Initial Notes following the issuance of the Initial Notes as
contemplated by the Senior Subordinated Note Documents.
"Split-Off" means the distribution of all the issued and
outstanding capital stock of the Borrower to Xxxxxxx Xxxxxx, the Christena
Xxxxx X. Xxxxxx Trust and Xxx X. Xxxxxxxx in exchange for some or all of the
capital stock of Huntsman owned by such Persons.
29
"Split-Off Documents" means all agreements and documents
providing for or to be entered into in connection with the Split-Off.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject (a) with respect to the Base CD Rate, for new negotiable nonpersonal
time deposits in dollars of over $100,000 with maturities approximately equal
to three months and (b) with respect to the Adjusted LIBO Rate, for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (b) that is, as of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.
"Subsidiary" means any subsidiary of the Bor-
30
rowers.
"Subsidiary Loan Party" means any Restricted Subsidiary;
provided that a Foreign Subsidiary shall not be a Subsidiary Loan Party if the
Borrower would suffer adverse tax consequences if such Foreign Subsidiary were
to be a Subsidiary Loan Party.
"Swingline Exposure" means, at any time, the aggregate
principal amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.
"Swingline Lender" means The Chase Manhattan Bank, in its
capacity as lender of Swingline Loans hereunder.
"Swingline Loan" has the meaning set forth in
Section 2.04.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"Term Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Term Loan hereunder on the
Effective Date, expressed as an amount representing the maximum principal
amount of the Term Loan to be made by such Lender hereunder, as such commitment
may be reduced pursuant to Section 2.08. The initial aggregate amount of the
Lenders' Term Commitments is $100,000,000. The initial amount of each Lender's
Term Commitment is set forth on Schedule 2.01.
"Term Loan" has the meaning set forth in Sec-
tion 2.01.
"Term Loan Lender" means a Lender with a Term
Commitment or an outstanding Term Loan.
"Term Loan Maturity Date" means September 30,
2005.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day
31
(or, if such day is not a Business Day, the next preceding Business Day) by the
Board through the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m., New York City time, on such day (or,
if such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Total Debt" means, as of any date of determination, without
duplication, the aggregate principal amount of Indebtedness of the Borrower and
the Restricted Subsidiaries outstanding as of such date, determined on a
consolidated basis in accordance with GAAP (other than the Indebtedness of the
type referred to in clause (h) of the definition of the term "Indebtedness",
except to the extent of any unreimbursed drawings thereunder).
"Transaction Costs" means the fees and expenses incurred by,
or required to be reimbursed or paid by, the Borrower and its Subsidiaries in
connection in the Transactions.
"Transactions" means the Split-Off and the
Financing Transactions.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Unrestricted Subsidiary" means (a) any Subsidiary organized
after the date of this Agreement for the purpose of acquiring the stock or
assets of another Person or for start-up ventures or activities and designated
as an Unrestricted Subsidiary by the Borrower by notice to the Administrative
Agent at or prior to the time of its organization and (b) any Subsidiary of any
Unrestricted Subsidiary. By notice to the Administrative
32
Agent, the Borrower may declare an Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that (i) no Default has occurred and is continuing or
would result from such declaration and (ii) the representations and warranties
of the Borrower herein would be true and correct on and as of the date of such
declaration (after giving effect to such declaration). The Borrower may not
declare a Restricted Subsidiary to be an Unrestricted Subsidiary.
"Wholly Owned Subsidiary" means a Subsidiary of which
securities (except for directors' qualifying shares or other de minimus shares)
or other ownership interests representing 100% of the equity are at the time
owned, directly or indirectly, by the Borrower.
"Withdrawal Liability" means liability of the Borrower or any
ERISA Affiliate to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.2. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type
(e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Borrowing").
SECTION 1.3. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth
33
herein), (b) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.4. Accounting Terms; GAAP; Treatment of
Unrestricted Subsidiaries. (a) Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided that, if the Borrower
notifies the Administrative Agent that the Borrower requests an amendment to
any provision hereof to eliminate the effect of any change occurring after the
date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies the Borrower that the
Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
(b) Except as otherwise expressly provided herein, all
accounting and financial calculations and determinations hereunder shall be
made without consolidating the accounts of Unrestricted Subsidiaries with those
of the Borrower or any Restricted Subsidiary, notwithstanding that such
treatment is inconsistent with GAAP.
SECTION 1.5. Certain Interim Financial Calculations. Prior to
September 30, 1998, solely for purposes of determining compliance with Sections
6.14 and 6.15 and for purposes of determining the Leverage Ratio, Consolidated
Net Income for the period of four consecu-
34
tive fiscal quarters ended (a) December 31, 1997, shall be deemed to be equal
to the product of (i) Consolidated Net Income for the fiscal quarter ended
December 31, 1997, multiplied by (ii) four, (b) March 31, 1998, shall be deemed
to be equal to the product of (i) Consolidated Net Income for the two
consecutive fiscal quarters ended March 31, 1998, multiplied by (ii) two and
(c) June 30, 1998, shall be deemed to be equal to the product of (i)
Consolidated Net Income for the three consecutive fiscal quarters ended June
30, 1998, multiplied by (ii) four-thirds. Related calculations for Cash
Interest Expense for the same periods shall be determined in the same manner.
If a Permitted Acquisition occurs, then prior to the end of
the period of four consecutive fiscal quarters commencing with the fiscal
quarter during which such Permitted Acquisition occurs (each such quarter
hereinafter referred to as an "Acquisition Fiscal Quarter"), solely for
purposes of determining compliance with Sections 6.14 and 6.15 and for purposes
of determining the Leverage Ratio, Consolidated Net Income for the trailing
four fiscal quarters, calculated at the end of each of the Acquisition Fiscal
Quarters, shall equal the sum of (a) Consolidated EBITDA for the trailing four
fiscal quarters and (b) with respect to the first Acquisition Fiscal Quarter,
Acquisition EBITDA multiplied by seven-eighths; (ii) with respect to the second
Acquisition Fiscal Quarter, Acquisition EBITDA multiplied by five-eighths;
(iii) with respect to the third Acquisition Fiscal Quarter, Acquisition EBITDA,
multiplied by three-eighths; and (iv) with respect to the fourth Acquisition
Fiscal Quarter, Adjusted EBITDA multiplied by one-eighth.
For purposes of the immediately preceding paragraph,
"Acquisition EBITDA" means, the sum of (i) the consolidated EBITDA of the
entity or business associated with the Permitted Acquisition for the four
fiscal quarters immediately preceding the date of effectiveness of the
Permitted Acquisition, calculated on the same basis as required in the
definition of "Consolidated EBITDA" as if calculated with respect to the
Borrower but without giving effect to clauses (f), (g), (h) and (i) and clause
(e) to the extent of Excluded Charges, and (ii) any synergistic benefits
permitted to be realized pursuant to the last sentence of the definition of
"Permitted Acquisition".
35
ARTICLE II
The Credits
SECTION 2.1. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees (a) to make a loan (a "Term Loan") to the
Borrower on the Effective Date in the principal amount of its Term Commitment
and (b) to make loans ("Revolving Loans") to the Borrower from time to time
during the Revolving Availability Period in an aggregate principal amount that
will not result in such Lender's Revolving Exposure exceeding such Lender's
Revolving Commitment (after giving effect to the application of any proceeds
being applied contemporaneously with the advance of such Revolving Loans).
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Revolving Loans. Amounts
repaid in respect of Term Loans may not be reborrowed.
SECTION 2.2. Loans and Borrowings. (a) Each Loan (other than
a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of
the same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing and
Term Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as
the Borrower may request in accordance herewith. Each Swingline Loan shall be
an ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of
the Borrower to repay such Loan in accordance with the terms of this Agreement
and shall not result in any increased costs under Section 2.15 or any
obligation by the Borrower to make any payment under Section 2.17 in excess of
the amounts, if any, that such Lender would be entitled to claim under Section
2.15 or 2.17, as applicable, without giving effect to such change
36
in lending office.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving Commitments or that
is equal to the amount required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.05(e). Each Swingline Loan shall be
in an amount that is an integral multiple of $10,000 and not less than $50,000.
Borrowings of more than one Type and Class may be outstanding at the same time;
provided that there shall not at any time be more than a total of 8 Eurodollar
Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Revolving Maturity Date or Term Loan Maturity Date, as
applicable.
SECTION 2.3. Requests for Borrowings. To request a Revolving
Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent
of such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 12:00 noon, New York City time, three Business Days before the date
of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later
than 1:00 p.m., New York City time, one Business Day before the date of the
proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving Borrowing
or a Term Borrowing;
37
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) subject to Section 2.02, whether such Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.4. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make loans
("Swingline Loans") to the Borrower from time to time during the Revolving
Availability Period, in an aggregate principal amount at any time outstanding
that will not result in (i) the aggregate principal amount of outstanding
Swingline Loans exceeding $5,000,000 or (ii) the sum of the total Revolving
Exposures exceeding the total Revolving Commitments; provided that the
Swingline Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify
the Administrative Agent of such request by telephone (confirmed by telecopy),
not later than 1:00 p.m., New York City time, on the day of a proposed
38
Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested
Swingline Loan. The Administrative Agent will promptly advise the Swingline
Lender of any such notice received from the Borrower. The Swingline Lender
shall make each Swingline Loan available to the Borrower by means of a credit
to the general deposit account of the Borrower with the Swingline Lender (or,
in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank)
by 2:00 p.m., New York City time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which Revolving
Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Revolving Lender,
specifying in such notice such Lender's Applicable Percentage of such Swingline
Loan or Loans. Each Revolving Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above, to pay to the Administrative
Agent, for the account of the Swingline Lender, such Lender's Applicable
Percentage of such Swingline Loan or Loans. Each Revolving Lender acknowledges
and agrees that its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Revolving Lender shall comply with its obligation
under this paragraph by making a wire transfer to the Administrative Agent for
the benefit of the Swingline Lender of immediately available funds, in the same
manner as provided in Section 2.06 with respect to Loans made by such Lender
(and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of
the Revolving Lenders), and the Administrative Agent shall promptly pay to the
Swingline Lender the amounts so received by it from the Revolving
39
Lenders. The Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this paragraph, and
thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Revolving
Lenders that shall have made their payments pursuant to this paragraph and to
the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.
SECTION 2.5. Letters of Credit. (a) General. Subject to the
terms and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the LC Availability Period. In the event of any inconsistency between
the terms and conditions of this Agreement and the terms and conditions of any
form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions. To request the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit), the
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance
of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit
40
is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary
thereof and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. If requested by the Issuing Bank, the
Borrower also shall submit a letter of credit application on the Issuing Bank's
standard form in connection with any request for a Letter of Credit. A Letter
of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed
$20,000,000 and (ii) the total Revolving Exposures shall not exceed the total
Revolving Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after
the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension) and
(ii) the date that is five Business Days prior to the Revolving Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees
to pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any
41
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
such LC Disbursement by paying to the Administrative Agent an amount equal to
such LC Disbursement not later than 12:00 noon, New York City time, on the date
that such LC Disbursement is made, if the Borrower shall have received notice
of such LC Disbursement prior to 10:00 a.m., New York City time, on such date,
or, if such notice has not been received by the Borrower prior to such time on
such date, then not later than 12:00 noon, New York City time, on (i) the
Business Day that the Borrower receives such notice, if such notice is received
prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the
Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time on the day of
receipt; provided that, if the Borrower does not otherwise elect by notice to
the Administrative Agent to make such payment, the Borrower shall be deemed to
have requested in accordance with Section 2.03 (but without regard to the
minimum borrowing amounts specified in Section 2.02) that such LC Disbursement
be financed with an ABR Revolving Borrowing in an amount equal to such LC
Disbursement, the Administrative Agent shall notify the Revolving Lenders
thereof, the Revolving Lenders shall (subject to the conditions to borrowing
herein) advance their respective ABR Revolving Loans (which shall be applied to
reimburse such LC Disbursement) and, to the extent such ABR Revolving Loans are
so advanced and applied, the Borrower's obligation to make such payment shall
be discharged and replaced by the resulting ABR Revolving Loans. If and to the
extent that the Borrower's obligation to make such payment is not fully
discharged and replaced by ABR Revolving Loans as aforesaid (whether as a
result of the failure to satisfy any condition to borrowing or otherwise) and
if the Borrower otherwise fails to make such payment when due, the
Administrative Agent shall notify each Revolving Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and
such Lender's Applicable Percentage thereof. Promptly follow-
42
ing receipt of such notice, each Revolving Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.06 with respect to Loans
made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the
payment obligations of the Revolving Lenders), and the Administrative Agent
shall promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this paragraph, the Administrative
Agent shall distribute such payment to the Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this paragraph to reimburse
the Issuing Bank, then to such Lenders and the Issuing Bank as their interests
may appear. Any payment made by a Revolving Lender pursuant to this paragraph
to reimburse the Issuing Bank for any LC Disbursement (other than the funding
of ABR Revolving Loans as contemplated above) shall not constitute a Loan and
shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of
any Letter of Credit or this Agreement, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower's obligations
hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irre-
43
spective of any of the circumstances referred to in the preceding sentence), or
any error, omission, interruption, loss or delay in transmission or delivery of
any draft, notice or other communication under or relating to any Letter of
Credit (including any document required to make a drawing thereunder), any
error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided that nothing in this
Section 2.05 shall be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank's failure to exercise care when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of gross
negligence or wilful misconduct on the part of the Issuing Bank, the Issuing
Bank shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such
LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make
any LC Disbursement, then, unless the Borrower
44
shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date that
the Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Revolving Loans; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section, then Section 2.13(c) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Bank, except that interest
accrued on and after the date of payment by any Revolving Lender pursuant to
paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank; Additional Issuing
Banks. The Issuing Bank may be replaced at any time by written agreement among
the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. One or more Lenders may be appointed as additional
Issuing Banks by written agreement among the Borrower, the Administrative Agent
(whose consent will not be unreasonably withheld) and the Lender that is to be
so appointed. The Administrative Agent shall notify the Lenders of any such
replacement of the Issuing Bank or any such additional Issuing Bank. At the
time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term "Issuing Bank" shall
be deemed to refer to such successor or to any previous Issuing Bank, or to
such successor and all previous Issuing Banks, as the context shall require.
After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank
shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit. If at any time there is more than one
Issuing Bank hereunder, the Borrower may, in its discretion, select which
Issuing Bank is to issue any particular
45
Letter of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to 105% of the LC Exposure
as of such date plus any accrued and unpaid interest thereon; that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (h) or (i) of Article VII. Each
such deposit shall be held by the Administrative Agent as collateral for the
payment and performance of the obligations of the Borrower under this
Agreement. The Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits, which investments shall be
made at the option and sole discretion of the Administrative Agent and at the
Borrower's risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys
in such account shall be applied by the Administrative Agent to reimburse the
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent
of Revolving Lenders with LC Exposure representing greater than 50% of the
total LC Exposure), be applied to satisfy other obligations of the Borrower
under this Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.
46
SECTION 2.6. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer
of immediately available funds by 12:00 noon, New York City time, to the
account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders; provided that Swingline Loans shall be made
as provided in Section 2.04. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in
like funds, to an account of the Borrower maintained with the Administrative
Agent in New York City and designated by the Borrower in the applicable
Borrowing Request; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received
notice from a Lender prior to the proposed date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender's share
of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.7. Interest Elections. (a) Each Revolving Borrowing and Term
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an
47
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Revolving Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of
a written Interest Election Request in a form approved by the Administrative
Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02 and
paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be specified
for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
48
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition
of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but
does not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof,
if an Event of Default has occurred and is continuing and the Administrative
Agent, at the request of the Required Lenders, so notifies the Borrower, then,
so long as an Event of Default is continuing (i) no outstanding Borrowing may
be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid,
each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or
continued as a Eurodollar Borrowing if after giving effect thereto (i) the
Interest Period therefor would commence before and end after a date on which
any principal of the Loans of such Class is scheduled to be repaid and (ii) the
sum of the aggregate principal amount of outstanding Eurodollar Borrowings of
such Class with Interest Periods ending on or prior to such scheduled repayment
date plus the aggregate principal amount of outstanding ABR Borrowings of such
Class would be less than the aggregate principal amount of Loans of such Class
required to be repaid on such scheduled repayment date.
49
SECTION 2.8. Termination and Reduction of Commitments. (a)
Unless previously terminated, (i) the Term Commitments shall terminate at 5:00
p.m., New York City time, on the Effective Date and (ii) the Revolving
Commitments shall terminate on the Revolving Maturity Date.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Revolving Commitments; provided that (i) each reduction of the
Revolving Commitments shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the sum of the Revolving Exposures would exceed the total Revolving
Commitments.
(c) If the estimated Net Proceeds from the issuance of the
Senior Subordinated Notes exceeds $100,000,000, then the Term Commitments shall
be reduced (effective prior to the open of business on the Effective Date) by
an amount equal to such excess. For purposes hereof, if the aggregate principal
amount of the Senior Subordinated Notes issued or to be issued on or prior to
the Effective Date exceeds $100,000,000, then the Borrower shall deliver to the
Administrative Agent, prior to the Effective Date, a certificate of a Financial
Officer setting forth a calculation of the estimated Net Proceeds therefrom
(rounded to the nearest $1,000,000) and the reduction of the Term Commitments
pursuant to this paragraph shall be made based upon such certificate.
(d) If any prepayment of a Term Borrowing would be required
pursuant to Section 2.11(b) or (c) at a time when there are not any Term
Borrowings outstanding, then the Revolving Commitments shall be reduced at such
time in an amount equal to the prepayment that would be required if Term
Borrowings were outstanding at such time.
(e) The Borrower shall notify the Administrative Agent of any
election or requirement to terminate or reduce the Commitments under paragraph
(b) or (d) of this Section at least three Business Days prior to the effective
date of such termination or reduction, specifying such election or requirement
and the effective date
50
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Revolving Commitments delivered by the Borrower under
paragraph (b) of this Section may state that such notice is conditioned upon
the effectiveness of other borrowings, in which case such notice may be revoked
by the Borrower (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied. Any termination
or reduction of the Commitments of any Class shall be permanent. Each reduction
of the Commitments of any Class shall be made ratably among the Lenders in
accordance with their respective Commitments of such Class.
SECTION 2.9. Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Maturity Date, (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Term Loan of such Lender as provided in Section 2.10 and (iii)
to the Administrative Agent for the account of the Swingline Lender the then
unpaid principal amount of each Swingline Loan on the earlier of the Revolving
Maturity Date and the first date after such Swingline Loan is made that is the
last day of a calendar month and is at least two Business Days after such
Swingline Loan is made; provided that on each date that a Revolving Borrowing
is made, the Borrower shall repay all Swingline Loans then outstanding.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become
51
due and payable from the Borrower to each Lender hereunder and (iii) the amount
of any sum received by the Administrative Agent hereunder for the account of
the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and
its registered assigns).
SECTION 2.10. Amortization of Term Loans. (a) Subject to
adjustment pursuant to paragraph (d) of this Section, the Borrower shall repay
Term Borrowings on each date set forth below in the aggregate principal amount
set forth opposite such date:
Date Amount
December 30, 1998 $1,250,000
March 31, 1999 1,250,000
June 30, 1999 1,250,000
September 30, 1999 l,250,000
December 30, 1999 1,875,000
March 31, 2000 1,875,000
June 30, 2000 1,875,000
September 30, 2000 1,875,000
December 30, 2000 2,500,000
52
March 31, 2001 2,500,000
June 30, 2001 2,500,000
September 30, 2001 2,500,000
December 30, 2001 4,375,000
March 31, 2002 4,375,000
June 30, 2002 4,375,000
September 30, 2002 4,375,000
December 30, 2002 4,375,000
March 31, 2003 4,375,000
June 30, 2003 4,375,000
September 30, 2003 4,375,000
December 30, 2003 4,375,000
March 31, 2004 4,375,000
June 30, 2004 4,375,000
September 30, 2004 4,375,000
December 30, 2004 6,250,000
March 31, 2005 6,250,000
June 30, 2005 6,250,000
September 30, 2005 6,250,000
(b) To the extent not previously paid, all Term Loans shall
be due and payable on the Term Loan Maturity Date.
(c) If the initial aggregate amount of the Lenders' Term
Commitments exceeds the aggregate principal amount of Term Loans that are made
on the Effective Date, then the scheduled repayments of Term Borrowings to be
made pursuant to this Section shall be reduced by an aggregate amount equal to
such excess in the chronological order in which such repayments are scheduled
to become due. Any prepayment of a Term Borrowing shall be applied to reduce
the subsequent scheduled repayments of the Term Borrowings to be made pursuant
to this Section ratably; provided that any prepayment made pursuant to Section
2.11(a) shall be applied, first, to reduce the next four scheduled repayments
of the Term Borrowings to be made pursuant to this Section (other than those
that have been reduced to zero by operation of this paragraph) unless and until
such next four scheduled repayments have been eliminated as a result of
reductions hereunder and, second, to reduce the remaining scheduled repayments
of the Term Borrowings to be made pursuant to this Section ratably.
(d) Prior to any repayment of any Term Borrowings hereunder,
the Borrower shall select the
53
Borrowing or Borrowings to be repaid and shall notify the Administrative Agent
by telephone (confirmed by telecopy) of such selection not later than 11:00
a.m., New York City time, three Business Days before the scheduled date of such
repayment; provided that each repayment of Term Borrowings shall be applied to
repay any outstanding ABR Term Borrowings before any other Borrowings. Each
repayment of a Borrowing shall be applied ratably to the Loans included in the
repaid Borrowing. Repayments of Term Borrowings shall be accompanied by accrued
interest on the amount repaid.
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall
have the right at any time and from time to time to prepay any Borrowing in
whole or in part, subject to the requirements of this Section.
(b) Subject to the provisions of Sections 2.11(e) and 5.08,
in the event and on each occasion that any Net Proceeds are received by or on
behalf of the Borrower or any Subsidiary in respect of any Prepayment Event,
the Borrower shall, within two Business Days after such Net Proceeds are
received, prepay Term Borrowings in an aggregate amount equal to (i) in the
case of a Prepayment Event described in clause (a), (b) or (d) of the
definition of "Prepayment Event", the entire amount of such Net Proceeds, and
(ii) in the case of a Prepayment Event described in clause (c) of the
definition of "Prepayment Event", 50% of such Net Proceeds.
(c) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending December 31, 1998, the Borrower shall
prepay Term Borrowings in an aggregate amount equal to 50% of Excess Cash Flow
for such fiscal year; provided that prepayments shall be required pursuant to
this paragraph (c) only until the outstanding principal amount of Term Loans is
reduced to an amount equal to or less than 50% of the aggregate principal
amount of Term Loans borrowed on the Effective Date. Each prepayment pursuant
to this paragraph shall be made on or before the date that is three Business
Days after the date on which financial statements are delivered pursuant to
Section 5.01 with respect to the fiscal year for which Excess Cash Flow is
being calculated (and in any event within 90 days after the end of such fiscal
year).
54
(d) If at any time the sum of the total Revolving Exposures
exceeds the total Revolving Commitments, the Borrowers shall immediately prepay
Revolving Borrowings and Swingline Loans to the extent necessary to eliminate
such excess. If any such excess remains after all Revolving Borrowings and
Swingline Loans are prepaid, the Borrower shall deposit cash collateral
pursuant to Section 2.05(j) in an amount equal to such remaining excess.
(e) Notwithstanding the foregoing provisions of
Section 2.11(b):
(i) in the case of a Prepayment Event described in clause (a)
or (b) of the definition of "Prepayment Event", the Borrower may, in
lieu of prepaying Term Borrowings, prepay Revolving Borrowings
(without reducing Revolving Commitments), or, in the case of a
Prepayment Event described in clause (a) of the definition of
"Prepayment Event" consisting of a disposition by a Foreign
Subsidiary, the Borrower may, in lieu of prepaying Term Borrowings,
permit such Foreign Subsidiary to retain the Net Proceeds of such
disposition; provided that (A) the Borrower notifies the
Administrative Agent that it is exercising such option, specifying the
Prepayment Event and the amount of the prepayment, at or prior to the
time that the prepayment is required, (B) the Borrower is in
compliance with Sections 6.14, 6.15 and 6.16 before and after giving
effect to such Prepayment Event and (C) the aggregate principal amount
of Revolving Borrowings pre-paid in lieu of Term Borrowings and Net
Proceeds retained by Foreign Subsidiaries pursuant to this clause (i)
shall not exceed $50,000,000 (on a cumulative basis) during the term
of this Agreement;
(ii) in the case of a Prepayment Event described in clause
(c) of the definition of "Prepayment Event", the Borrower may, at its
option, notify the Administrative Agent that the Borrower intends to
utilize all or a specified portion of the Net Proceeds of such
Prepayment Event to finance a Permitted Acquisition to be consummated
within 270 days after such Prepayment Event, in which case the
Borrower shall not be required to prepay Term Borrowings pursuant to
Section 2.11(b) to the extent
55
of the Net Proceeds so specified; provided that (A) the Borrower
delivers such notice, specifying the Prepayment Event and describing
the anticipated Permitted Acquisition in reasonable detail, at or
prior to the time of such Prepayment Event, (B) no Default has
occurred and is continuing at the time of such Prepayment Event and
(C) to the extent such Net Proceeds are not applied to finance such
Permitted Acquisition within the 270-day period after such Prepayment
Event, the Borrower shall prepay Term Borrowings (at the earlier of
(1) expiration of such period, (2) the date of abandonment of such
Permitted Acquisition or (3) the date of consummation of such
Permitted Acquisition) in an amount equal to such Net Proceeds that
are not so applied; and
(iii) in the case of a Prepayment Event described in clause
(c) of the definition of "Prepayment Event", if, as of the end of the
most recent fiscal quarter for which financial statements have been
delivered to the Administrative Agent pursuant to clause (a) or (b) of
Section 5.01 prior to such Prepayment Event, the Leverage Ratio was
less than 2.00 to 1.00, then no prepayment pursuant to Section 2.11(b)
shall be required in respect of such Prepayment Event.
(f) Prior to any optional or mandatory prepayment of
Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to
be prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (g) of this Section; provided that each prepayment of
Borrowings of any Class shall be applied to prepay ABR Borrowings of such Class
before any other Borrowings of such Class.
(g) The Borrower shall notify the Administrative Agent (and,
in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of prepayment, (ii) in the case
of pre-payment of an ABR Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City
56
time, on the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date, the principal amount of each Borrowing or
portion thereof to be prepaid and, in the case of a mandatory prepayment, a
reasonably detailed calculation of the amount of such prepayment; provided
that, if a notice of optional pre-payment is given in connection with a
conditional notice of termination of the Revolving Commitments as contemplated
by Section 2.08, then such notice of prepayment may be revoked if such notice
of termination is revoked in accordance with Section 2.08. Promptly following
receipt of any such notice (other than a notice relating solely to Swingline
Loans), the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount such
that the remaining amount of such Borrowing not so prepaid would be permitted
in the case of an advance of a Borrowing of the same Type as provided in
Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13.
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee,
which shall accrue at the Applicable Rate on the average daily unused amount of
the Revolving Commitment of such Lender during the period from and including
the Effective Date to but excluding the date on which such Commitment
terminates. Accrued commitment fees shall be payable in arrears on the last day
of March, June, September and December of each year and on the date on which
the Revolving Commitments terminate, commencing on the first such date to occur
after the date hereof. All commitment fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
commitment fees with respect to Revolving Commitments, a Revolving Commitment
of a Lender shall be deemed to be used to the extent of the outstanding
Revolving Loans and LC Exposure of such Lender (and the Swingline Exposure of
such Lender shall be disregarded for such purpose).
(b) The Borrower agrees to pay (i) to the
57
Administrative Agent for the account of each Revolving Lender a participation
fee with respect to its participations in Letters of Credit, which shall accrue
at the same Applicable Rate as interest on Eurodollar Revolving Loans on the
average daily amount of such Lender's LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date on
which such Lender's Revolving Commitment terminates and the date on which such
Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting
fee, which shall accrue at the rate or rates per annum separately agreed upon
between the Borrower and the Issuing Bank on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank's standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees accrued through and including the last day
of March, June, September and December of each year shall be payable on the
third Business Day following such last day, commencing on the first such date
to occur after the Effective Date; provided that all such fees shall be payable
on the date on which the Revolving Commitments terminate and any such fees
accruing after the date on which the Revolving Commitments terminate shall be
payable on demand. Any other fees payable to the Issuing Bank pursuant to this
paragraph shall be payable within 10 days after demand. All participation fees
and fronting fees shall be computed on the basis of a year of 365 days (or 366
days in a leap year) and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the
dates due, in immediately available funds, to the Administrative Agent (or
to the issuing Bank, in the case
58
of fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each
ABR Borrowing (including each Swingline Loan) shall bear interest at the
Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration
or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount,
2% plus the rate applicable to ABR Revolving Loans as provided in paragraph (a)
of this Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and, in the case of Revolving
Loans, upon termination of the Revolving Commitments; provided that (A)
interest accrued pursuant to paragraph (c) of this Section shall be payable on
demand, (B) in the event of any repayment or prepayment of any Loan (other than
a prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (C) in
the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of
a year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times
59
when the Alternate Base Rate is based on the Prime Rate shall be computed on
the basis of a year of 365 days (or 366 days in a leap year), and in each case
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day). The applicable Alternate Base Rate or Adjusted
LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If
prior to the commencement of any Interest Period for a
Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate
for such Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any
Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the
Issuing Bank; or
60
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit
or to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or the Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Bank's capital or
on the capital of such Lender's or the Issuing Bank's holding company, if any,
as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing Bank or
such Lender's or the Issuing Bank's holding company could have achieved but for
such Change in Law (taking into consideration such Lender's or the Issuing
Bank's policies and the policies of such Lender's or the Issuing Bank's holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender or the Issuing Bank, as the case may be, following
receipt by the Borrower of the certificate referred to in clause (c) below,
such additional amount or amounts as will compensate such Lender or the Issuing
Bank or such Lender's or the Issuing Bank's holding company for any such
reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as the case may be, as specified in paragraph
61
(a) or (b) of this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or the Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or
the Issuing Bank, as the case may be, notifies the Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender's or
the Issuing Bank's intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of
an Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Revolving Loan or Eurodollar Term Loan on the
date specified in any notice delivered pursuant hereto (regardless of whether
such notice may be revoked under Section 2.11(g) and is revoked in accordance
therewith), or (d) the assignment of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto as a result of a request by the
Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event. Such loss, cost or expense to any Lender shall be deemed to include an
amount reasonably determined by such Lender to be the excess, if any, of (i)
the amount of interest that would have accrued on the principal amount of such
Loan had such event not occurred, at the Adjusted LIBO Rate that would have
been applicable to such Loan, for the period
62
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest that would accrue on such principal amount for such period
at the interest rate that such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the Eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on
account of any obligation of the Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments,
then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section) the Administrative Agent, Lender or Issuing Bank
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in
accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent,
each Lender and the Issuing Bank, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on
63
or attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender
or the Issuing Bank, or by the Administrative Agent on its own behalf or on
behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest
error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed
by applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing
of Setoffs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest,
fees or reimbursement of LC Disbursements, or of amounts payable under Section
2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, New York City time, on
the date when due, in immediately available funds, without setoff or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, except payments to be made
64
directly to the Issuing Bank or Swingline Lender as expressly provided herein
and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall
be made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment under any Loan Document shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All
payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off
or counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Revolving Loans, Term Loans
and participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective
65
Revolving Loans, Term Loans and participations in LC Disbursements and
Swingline Loans; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders or the Issuing Bank, as the case may be, the amount due. In such
event, if the Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment
required to be made by it pursuant to Section
66
2.01(b), 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or 9.03(c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in
the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender
in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15,
or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section
2.17, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Borrower may, at its sole expense and effort, upon notice to such Lender
and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Commitment is being assigned, the Issuing Bank and
Swingline Lender), which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and
67
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.15 or payments required to be made pursuant to Section 2.17, such assignment
will result in a reduction in such compensation or payments. A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
SECTION 2.20. Extension of Revolving Maturity Date. (a) The
Borrower may, by notice to the Administrative Agent and the Revolving Lenders
given not less than 30 and not more than 60 days prior to the Revolving
Maturity Date, request that the Revolving Lenders extend the Revolving Maturity
Date for an additional one year period. Each Revolving Lender shall, by notice
to the Borrower and the Administrative Agent given not later than the 10th
Business Day after the date of receipt of the Borrower's notice, advise the
Borrower whether or not such Lender agrees to such extension (and any Lender
that does not so advise the Borrower on or before such day shall be deemed to
have advised the Borrower that it will not agree to such extension). The
approval of any such extension shall be at the sole discretion of each
Revolving Lender.
(b) If (and only if) all Revolving Lenders shall have agreed
to extend the Revolving Maturity Date as provided in paragraph (a) above, then
the Revolving Maturity Date shall be extended to September 30, 2005.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.1. Organization; Powers. Each of the Borrower
and its Restricted Subsidiaries is duly
68
organized, validly existing and, where applicable, in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business
in, and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.2. Authorization; Enforceability. The Transactions
to be entered into by each Loan Party are within such Loan Party's corporate
powers and have been duly authorized by all necessary corporate and, if
required, stockholder action. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document to
which any Loan Party is to be a party, when executed and delivered by such Loan
Party, will constitute, a legal, valid and binding obligation of the Borrower
or such Loan Party (as the case may be), enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in
equity or at law.
SECTION 3.3. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Loan Documents, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Restricted Subsidiaries
or any order of any Governmental Authority, (c) will not violate or result in a
default under any material indenture, agreement or other instrument binding
upon the Borrower or any of its Restricted Subsidiaries or its assets, or give
rise to a right thereunder to require any payment to be made by the Borrower or
any of its Restricted Subsidiaries, and (d) will not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Restricted
Subsidiaries, except Liens created under the Loan Documents.
69
SECTION 3.4. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders' equity and cash flows (i)
as of and for the fiscal year ended December 31, 1996, reported on by Deloitte
& Touche LLP, independent public accountants, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended June 30, 1997, certified by
its chief financial officer. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of the Borrower and its consolidated Subsidiaries, as of such dates and
for such periods in accordance with GAAP, subject to year-end audit adjustments
and the absence of footnotes in the case of the statements referred to in
clause (ii) above.
(b) The Borrower has heretofore furnished to the Lenders its
pro forma consolidated balance sheet as of June 30, 1997, prepared giving
effect to the Transactions as if the Transactions had occurred on such date.
Such pro forma consolidated balance sheet (i) has been prepared in good faith
based on the same assumptions used to prepare the pro forma financial
statements included in the Information Memorandum (which assumptions are
believed by the Borrower to be reasonable), (ii) is based on the best
information available to the Borrower after due inquiry, (iii) accurately
reflects all adjustments necessary to give effect to the Transactions and (iv)
presents fairly, in all material respects, the pro forma financial position of
the Borrower and its consolidated Subsidiaries as of June 30, 1997, as if the
Transactions had occurred on such date.
(c) The Borrower has heretofore furnished to the Lenders the
consolidated balance sheet and statements of income, stockholders' equity and
cash flows of Huntsman Polymer Corporation's CT Film Division as of and for the
fiscal year ended December 31, 1996, included in the report of Deloitte &
Touche LLP, independent public accountants. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the CT Film Division, as of such date and for such
period in accordance with GAAP.
(d) Since December 31, 1996, there has been no
70
material adverse change in the business, assets, operations, prospects or
condition, financial or otherwise, of the Borrower and its Restricted
Subsidiaries, taken as a whole (with the CT Film Acquisition being deemed to
have occurred on December 31, 1996, for the purposes of this representation).
SECTION 3.5. Properties. (a) Each of the Borrower and its
Restricted Subsidiaries has good title to, or valid leasehold interests in, all
its real and personal property material to its business (including its
Mortgaged Properties), except for minor defects in title that do not interfere
with its ability to conduct its business as currently conducted or to utilize
such properties for their intended purposes.
(b) Each of the Borrower and its Restricted Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, patents
and other intellectual property material to the business of the Borrower and
its Restricted Subsidiaries, taken as a whole, and the use thereof by the
Borrower and its Restricted Subsidiaries does not infringe upon the rights of
any other Person, except for any such infringements that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(c) Schedule 3.05 sets forth the address of each real
property that is owned or leased by the Borrower or any of its Subsidiaries as
of the Effective Date after giving effect to the Transactions.
(d) As of the Effective Date, neither the Borrower nor any of
its Subsidiaries has received notice of, or has knowledge of, any pending or
contemplated condemnation proceeding affecting any Mortgaged Property or any
sale or disposition thereof in lieu of condemnation. Neither any Mortgaged
Property nor any interest therein is subject to any right of first refusal,
option or other contractual right to purchase such Mortgaged Property or
interest therein.
SECTION 3.6. Litigation and Environmental Matters. (a) There
are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any of
71
its Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve any of the Loan Documents or the Transactions
(other than the Split-Off).
(b) Except with respect to any matters that, individually or
in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect, neither the Borrower nor any of its Subsidiaries (i) has failed
to comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii)
has become subject to any Environmental Liability or (iii) has received notice
of any claim with respect to any Environmental Liability.
SECTION 3.7. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.8. Investment and Holding Company Status. Neither
the Borrower nor any of its Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.9. Taxes. Each of the Borrower and its Subsidiaries
has timely filed or caused to be filed all Tax returns and reports required to
have been filed and has paid or caused to be paid all Taxes required to have
been paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
72
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse Effect. The present
value of all accumulated benefit obligations under each Plan (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $12,000,000 the fair market value
of the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of
the date of the most recent financial statements reflecting such amounts,
exceed by more than $12,000,000 the fair market value of the assets of all such
underfunded Plans.
SECTION 3.11. Disclosure. The Borrower has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to
which the Borrower or any of its Subsidiaries is subject, and all other matters
known to any of them, that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect. Neither the Information
Memorandum nor any of the other reports, financial statements, certificates or
other written information furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished), when made or
delivered, contained any material misstatement of fact or omitted to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name
of, and the ownership interest of the Borrower in, each Subsidiary of the
Borrower and identifies each Subsidiary that is a Subsidiary Loan Party, in
each case as of the Effective Date.
73
SECTION 3.13. Insurance. Schedule 3.13 sets forth a
description of all insurance maintained by or on behalf of the Borrower and its
Subsidiaries as of the Effective Date. As of the Effective Date, all premiums
that are due and payable in respect of such insurance have been paid.
SECTION 3.14. Labor Matters. As of the Effective Date, there
are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary
pending or, to the knowledge of the Borrower, threatened. All payments due from
the Borrower or any Restricted Subsidiary, or for which any claim may be made
against the Borrower or any Restricted Subsidiary, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of the Borrower or such Restricted
Subsidiary. The consummation of the Transactions will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which the Borrower or any Subsidiary is
bound.
SECTION 3.15. Solvency. Immediately after the consummation of
the Transactions to occur on the Effective Date and immediately following the
making of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
SECTION 3.16. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, a legal, valid and enforceable security interest
74
in the Collateral (as defined in the Pledge Agreement) and, when such
Collateral is delivered to the Collateral Agent, the Pledge Agreement shall
constitute a fully perfected first priority Lien on, and security interest in,
all right, title and interest of the pledgor thereunder in such Collateral,
in each case prior and superior in right to any other Person; provided that the
actions specified in Schedule 3.16(a) are required to be taken in connection
with the pledge of capital stock of Foreign Subsidiaries.
(b) The Security Agreement is effective to create in favor of
the Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as defined in the
Security Agreement) and, when financing statements in appropriate form are
filed in the offices specified on Schedule 6 to the Perfection Certificate, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in such
Collateral (other than the Intellectual Property (as defined in the Security
Agreement)), in each case prior and superior in right to any other Person,
other than with respect to Liens expressly permitted by Section 6.03.
(c) When the Security Agreement (or a summary thereof) is
filed in the United States Patent and Trademark Office and the United States
Copyright Office, the Security Agreement shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Loan
Parties in the Intellectual Property (as defined in the Security Agreement) in
which a security interest may be perfected by filing, recording or registering
a security agreement, financing statement or analogous document in the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable, in each case prior and superior in right to any other Person (it
being understood that subsequent recordings in the United States Patent and
Trademark Office and the United States Copyright Office may be necessary to
perfect a lien on registered trademarks, trademark applications and copyrights
acquired by the Loan Parties after the date hereof).
(d) The Mortgages are effective to create, subject to the
exceptions listed in each title insurance
75
policy covering such Mortgage, in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on
all of the Loan Parties' right, title and interest in and to the Mortgaged
Properties thereunder and the proceeds thereof, and when the Mortgages are
filed in the offices specified on Schedule 3.16(d), the Mortgages shall
constitute a Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Mortgaged Properties and the proceeds thereof, in
each case prior and superior in right to any other Person, other than with
respect to the rights of Persons pursuant to Liens expressly permitted by
Section 6.03.
SECTION 3.17. Federal Reserve Regulations. (a) Neither the
Borrower nor any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of
Credit will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation of the
provisions of the Regulations of the Board, including Regulation G, U or X.
SECTION 3.18. Existing Intercompany Indebtedness. As of June
30, 1997, there was $198,300,000 of the Existing Intercompany Indebtedness
(including accrued and unpaid interest as of such date). During the period from
June 30, 1997, to and including the Effective Date, the Existing Intercompany
Indebtedness has increased and decreased only as a result of borrowings,
repayments and accrual of interest, in each case in the ordinary course of
business and in accordance with past practice.
SECTION 3.19. Agreements and Business Status as of Effective
Date. (a) During the period from the date of the most recent financial
statements referred to in Section 3.04(a) to and including the Effective Date,
(i) the business of the Borrower and its Subsidiaries has been conducted in the
ordinary course in accordance with past practice and (ii) the Borrower and its
Subsidiaries have not engaged in any transaction (other than the Split-Off)
that would have violated Section 6.10 if this Agreement had been in effect
during such period.
76
(b) Schedule 3.19 identifies each agreement or other document
to which the Borrower or any Subsidiary is a party or by which it is bound as
of the Effective Date that will remain in effect after the Effective Date (i)
that relates to the Split-Off or (ii) to which any Person (other than the
Borrower or a Subsidiary of the Borrower) that is an Affiliate of the Borrower
is a party. True and correct copies of all such agreements and documents have
been delivered to the Lenders.
ARTICLE IV
Conditions
SECTION 4.1. Effective Date. The obligations of the Lenders
to make Loans and of the Issuing Bank to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of each of (i) Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel for the Borrower, substantially in the
form of Exhibit X-0, (xx) Xxx Xxxx, Xxxxxx, Xxxxxxxx & XxXxxxxx, Utah
counsel for the Borrower, substantially in the form of Exhibit B-2,
(iii) local counsel in each jurisdiction where a Mortgaged Property is
located, substantially in the form of Exhibit B-3 with such changes as
are approved by the Administrative Agent, and (iv) local counsel in
Canada and the United Kingdom, substantially in the form of Exhibit
B-4 with such changes as are approved by the Administrative Agent and,
in the case of each such opinion required by this
77
paragraph, covering such other matters relating to the Loan Parties,
the Loan Documents or the Transactions as the Administrative Agent
shall reasonably request. The Borrower hereby requests such counsel to
deliver such opinions.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and
good standing of each Loan Party, the authorization of the
Transactions and any other legal matters relating to the Loan Parties,
the Loan Documents or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by any Loan
Party hereunder or under any other Loan Document.
(f) The Collateral Agent shall have received counterparts of
the Pledge Agreement signed on behalf of the Borrower and each
Subsidiary Loan Party, together with stock certificates representing
all the outstanding shares of capital stock of each Subsidiary owned
by or on behalf of any Loan Party as of the Effective Date after
giving effect to the Transactions (except that such delivery of stock
certificates representing shares of common stock of a Foreign
Subsidiary that is not a Subsidiary Loan Party may be limited to 65%
of the outstanding shares of common stock of such Foreign Subsidiary),
promissory notes evidencing all intercompany Indebtedness owed to any
Loan Party by the Borrower or any Subsidiary as of the Effective Date
after giving effect to the Transactions and stock powers and
78
instruments of transfer, endorsed in blank, with respect to such stock
certificates and promissory notes. The Collateral Agent shall have
received evidence that all actions specified in Schedule 3.16(a) shall
have been taken.
(g) The Collateral Agent shall have received counterparts of
the Security Agreement signed on behalf of the Borrower and each
Subsidiary Loan Party, together with the following:
(i) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded to create or perfect the Liens
intended to be created under the Security Agreement; and
(ii) a completed Perfection Certificate dated the
Effective Date and signed by an executive officer or
Financial Officer of the Borrower, together with all
attachments contemplated thereby, including the results of a
search of the Uniform Commercial Code (or equivalent) filings
made with respect to the Loan Parties in the jurisdictions
contemplated by the Perfection Certificate and copies of the
financing statements (or similar documents) disclosed by such
search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such
financing statements (or similar documents) are permitted by
Section 6.03 or have been released.
(h) The Collateral Agent shall have received (i) counterparts
of a Mortgage with respect to each Mortgaged Property signed on behalf
of the record owner of such Mortgaged Property, (ii) a policy or
policies of title insurance issued by a nationally recognized title
insurance company, insuring the Lien of each such Mortgage as a valid
first Lien on the Mortgaged Property described therein, free of any
other Liens except as permitted by Section 6.03, in form and substance
reasonably acceptable to the Collateral Agent, together with such
endorsements, coinsurance and reinsurance as the Collateral Agent
79
or the Required Lenders may reasonably request, (iii) copies of all
existing surveys and such other information and documents with respect
to the Mortgaged Properties as shall be necessary for the aforesaid
title insurance policies to be issued without a survey exception and
(iv) such other customary documentation with respect to the Mortgaged
Properties as the Administrative Agent may reasonably require.
(i) The Administrative Agent shall have received (i)
counterparts of the Guarantee Agreement signed on behalf of each
Subsidiary Loan Party and (ii) counterparts of the Indemnity,
Subrogation and Contribution Agreement signed on behalf of the
Borrower and each Subsidiary Loan Party.
(j) The Administrative Agent shall have received evidence
satisfactory to it that the insurance required by Section 5.07 is in
effect.
(k) All actions related to the Split-Off (other than
consummating the Split-Off), to the extent completed at such time,
shall have been completed on terms consistent in all material respects
with the information, including pro forma financial statements and
projections, furnished to the Lenders prior to the date of this
Agreement.
(l) The CT Film Acquisition and the transactions related
thereto shall have been consummated for aggregate consideration
consisting of $70,000,000 in cash and other consideration satisfactory
to the Lenders, and otherwise on terms consistent in all material
respects with the information, including pro forma financial
statements and projections, furnished to the Lenders prior to the date
of this Agreement. The Lenders shall have received copies of the CT
Film Acquisition Agreement prior to the Effective Date and shall be
reasonably satisfied with the terms thereof.
(m) The Lenders shall have received (i) audited consolidated
balance sheets and related statements of income, stockholders' equity
and cash flows of the Borrower for the 1995 and 1996 fiscal years and
(ii) unaudited consolidated balance sheets and
80
related statements of income, stockholders' equity and cash flows of
the Borrower for (A) the 1997 fiscal quarters preceding the Effective
Date for which financial statements are available and (B) each fiscal
month after the most recent 1997 fiscal quarter for which financial
statements were received by the Lenders as described above and ended
30 days before the Effective Date.
(n) The Lenders shall be reasonably satisfied in all respects
with the tax position and the contingent tax and other liabilities of,
and with any tax sharing agreements involving, the Borrower and its
Subsidiaries after giving effect to the Transactions and the other
transactions contemplated hereby, and with the plans of the Borrower
with respect thereto.
(o) The Lenders shall have received appraisals, satisfactory
in form and substance to the Administrative Agent (which may include
copies of recent existing appraisals, from appraisers satisfactory to
the Administrative Agent, of the material real property, personal
property and other assets of the Borrower and its Subsidiaries.
(p) The Lenders shall have received (i) copies of all
existing environmental reports prepared with respect to the Mortgaged
Property and any Environmental Liabilities that may be attributable to
such properties or operations thereon and (ii) such other materials
and reviews relating to the Borrower's compliance with Environmental
Laws and actual or potential Environmental Liabilities as shall be
reasonably specified by the Administrative Agent, all of which shall
be satisfactory to the Administrative Agent.
(q) There shall be no litigation or administrative proceeding
that would reasonably be expected to have a Material Adverse Effect,
or a material adverse effect on the ability of the parties to
consummate the Transactions or the other transactions contemplated
hereby (other than the Split-off).
(r) The Administrative Agent shall be satisfied with
the arrangements for the retention of
81
existing management of the Borrower.
(s) The Senior Subordinated Notes shall have been issued on
terms and conditions (including but not limited to terms and
conditions relating to the interest rate, fees, amortization,
maturity, subordination, covenants, events of default and remedies)
satisfactory to the Lenders in all respects, the Lenders shall have
received copies of the Senior Subordinated Note Documents, which shall
be satisfactory in form and substance to the Lenders, and the Borrower
shall have received gross cash proceeds of not less than $100,000,000
from the issuance of the Senior Subordinated Notes.
(t) The Lenders shall be reasonably satisfied with (i) the
Split-off Documents and any waivers or amendments thereto, (ii) the
capitalization, structure and equity ownership of the Borrower and the
Subsidiaries after giving effect to the Transactions, to the extent
inconsistent with that set forth in the Information Memorandum and
(iii) all legal, tax and accounting matters relating to the
Transactions.
(u) The Lenders shall be reasonably satisfied with the
sufficiency of amounts available under this Agreement to meet the
ongoing working capital requirements of the Borrower and the
Subsidiaries following consummation of the Transactions.
(v) All consents and approvals required to be obtained from
any Governmental Authority or other Person in connection with the
Transactions (other than the Split-Off) shall have been obtained, all
applicable waiting periods and appeal periods shall have expired, in
each case without the imposition of any burdensome conditions and
there shall be no action by any Governmental Authority, actual or
threatened, that has a reasonable Likelihood of restraining,
preventing or imposing burdensome conditions on the Transactions or
the other transactions contemplated hereby (other than the Split-
off). The Administrative Agent shall have received copies of the
Split-off Documents and any certificates, opinions and other documents
delivered thereunder, certified by a Financial Officer as complete
82
and correct.
(w) The Lenders shall have received a pro forma consolidated
balance sheet of the Borrower as of the Effective Date, reflecting all
adjustments to give effect to the Transactions (including the
Split-Off) and such pro forma consolidated balance sheet shall be in
form and substance reasonably satisfactory to the Lenders. As of the
Effective Date, after giving effect to the Financing Transactions,
neither the Borrower nor any of its Subsidiaries shall have
outstanding any shares of preferred stock or any Indebtedness, other
than (i) Indebtedness incurred under the Loan Documents and the Senior
Subordinated Notes and (ii) Indebtedness set forth on Schedule 6.01.
The Lenders shall be satisfied with the terms and conditions of all
Indebtedness set forth on Schedule 6.01. The aggregate amount of
Transaction Costs (including underwriting discounts and commissions in
respect of the Senior Subordinated Notes) shall not exceed $8,000,000.
(x) The Administrative Agent shall have received a solvency
certificate, in form and substance reasonably satisfactory to the
Lenders, executed by a senior financial officer of the Borrower, with
respect to the solvency of the Loan Parties on a consolidated basis
after giving effect to the Financing Transactions.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on
October 31, 1997 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
SECTION 4.2. Each Credit Event. The obligation of each
Lender to make a Loan on the occasion of any Borrowing, and of the issuing Bank
to issue, amend, renew or extend any Letter of Credit, is subject to the satis-
83
faction of the following conditions:
(a) The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to
such Borrowing or the issuance, amendment, renewal or extension of
such Letter of Credit, as applicable, no Default shall have occurred
and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter
of Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall
have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:
SECTION 5.1. Financial Statements and Other Information.
The Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, its audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of
the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all
reported on by Deloitte & Touche LLP or other independent public
accountants of recognized national standing (without a "going
84
concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit other than as
to Unrestricted Subsidiaries) to the effect that such consolidated
financial statements present fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, its consolidated
balance sheet and related statements of operations, stockholders'
equity and cash flows as of the end of and for such fiscal quarter and
the then elapsed portion of the fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Borrower (i) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii)
setting forth reasonably detailed calculations with respect to
compliance with Sections 6.13, 6.14, 6.15 and 6.16, (iii) setting
forth a reasonably detailed calculation of the Borrower Amount, (iv)
stating whether any change in GAAP or in the application thereof has
occurred since the date of the Borrower's audited financial statements
referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements
accompanying such certificate and (v) if any Unrestricted Subsidiary
exists (or existed at any time during the period covered by such
financial state-
85
ments), attaching consolidating balance sheets and income statements
as of the same dates and covering the same periods, certified as true,
correct and complete;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(e) at least 30 days prior to the commencement of each fiscal
year of the Borrower, a detailed consolidated budget for such fiscal
year (including a projected consolidated balance sheet and related
statements of projected operations and cash flow as of the end of and
for such fiscal year) and, promptly when available, any significant
revisions of such budget;
(f) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other
materials filed by the Borrower or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to
any or all of the functions of said Commission, or with any national
securities exchange, as the case may be; and
(g) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the
terms of any Loan Document, as the Administrative Agent or any Lender
may reasonably request.
SECTION 5.2. Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of
the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action,
suit or proceeding by or before any arbitrator or
86
Governmental Authority against or affecting the Borrower or any
Affiliate thereof that, if adversely determined, would reasonably be
expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, would reasonably be
expected to result in liability of the Borrower and its Subsidiaries
in an aggregate amount exceeding $5,000,000; and
(d) any other development that results in, or
would reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.
SECTION 5.3. Information Regarding Collateral. The Borrower
will furnish to the Administrative Agent prompt written notice of any change
(i) in any Loan Party's corporate name or in any trade name used to identify it
in the conduct of its business or in the ownership of its properties, (ii) in
the location of any Loan Party's chief executive office, its principal place of
business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by
it is located (including the establishment of any such new office or facility),
(iii) in any Loan Party's identity or corporate structure or (iv) in any Loan
Party's Federal Taxpayer Identification Number. The Borrower agrees not to
effect or permit any change referred to in the preceding sentence unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral; provided that the Administrative Agent shall take any
action reasonably requested by the Borrower to maintain a valid, legal and
perfected security interest in all the Collateral.
87
SECTION 5.4. Existence; Conduct of Business. The Borrower
will, and will cause each of its Restricted Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names material to the conduct of the
business of the Borrower and its Restricted Subsidiaries, taken as a whole;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.4.
SECTION 5.5. Payment of Obligations. The Borrower will, and
will cause each of its Subsidiaries to, pay its Indebtedness and other
obligations, including Tax liabilities, before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate procedures or proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien securing
such obligation and (d) the failure to make payment pending such contest would
not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.6. Maintenance of Properties. The Borrower will,
and will cause each of its Restricted Subsidiaries to, keep and maintain all
property material to the conduct of the business of the Borrower and its
Restricted Subsidiaries taken as a whole in good working order and condition,
ordinary wear and tear excepted.
SECTION 5.7. Insurance. The Borrower will, and will cause
each of its Restricted Subsidiaries to, maintain, with financially sound and
reputable insurers, insurance with respect to its material properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons. Such insurance shall be maintained with financially sound and
reputable insurers, except that a portion of such insurance program (not to
exceed that which is customary in the case of companies engaged in the same or
similar business or having similar properties
88
similarly situated) may be effected through self-insurance, provided adequate
reserves therefor, in accordance with GAAP, are maintained. All insurance
policies or certificates (or certified copies thereof) with respect to such
insurance (A) shall be endorsed to the Collateral Agent's reasonable
satisfaction for the benefit of the Lenders (including, without limitation, by
naming the Collateral Agent as loss payee or additional insured, as
appropriate); and (B) shall state that such insurance policy shall not be
canceled or revised without thirty days' prior to written notice thereof by the
insurer to the Administrative Agent and (iii) furnish to the Administrative
Agent, on the Effective Date and on the date of delivery of each annual
financial statement, full information as to the insurance carried. At any time
that insurance at levels described in Schedule 5.07 is not being maintained by
or on behalf of the Borrower of any of its Restricted Subsidiaries, the
Borrower will notify the Lenders in writing within two Business Days thereof
and, if thereafter notified by the Administrative Agent or the Required Lenders
to do so, the Borrower or any such Restricted Subsidiary, as the case may be,
shall obtain insurance at such levels at least equal to those set forth on
Schedule 5.07.
SECTION 5.8. Casualty and Condemnation. (a) The Borrower will
furnish to the Administrative Agent and the Lenders prompt written notice of
any casualty or other insured damage to any portion of any Collateral or the
commencement of any action or proceeding for the taking of any Collateral or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding, where the aggregate fair market value of
the Collateral so affected in connection with casualty events or condemnations
is, in the aggregate, at least $2,500,000.
(b) If any event described in paragraph (a) of this Section
results in Net Proceeds (whether in the form of insurance proceeds,
condemnation award or otherwise), the Collateral Agent is authorized to collect
such Net Proceeds and, if received by the Borrower or any Subsidiary, such Net
Proceeds shall be paid over to the Collateral Agent; provided that (i) if the
aggregate Net Proceeds in respect of such event (other than proceeds of
business interruption insurance) are less than $5,000,000, such Net Proceeds
shall be paid over to the
89
Borrower unless a Default has occurred and is continuing, and (ii) all proceeds
of business interruption insurance shall be paid over to the Borrower unless a
Default has occurred and is continuing. All such Net Proceeds retained by or
paid over to the Collateral Agent shall be held by the Collateral Agent and
released from time to time to pay the costs of repairing, restoring or
replacing the affected property in accordance with the terms of the applicable
Security Document, subject to the provisions of the applicable Security
Document regarding application of such Net Proceeds during a Default.
(c) If any Net Proceeds retained by or paid over to the
Collateral Agent as provided above continue to be held by the Collateral Agent
on the date that is 365 days after the receipt of such Net Proceeds, then such
Net Proceeds shall be applied to prepay Term Borrowings as provided in Section
2.11(b), subject to Section 2.11(e).
SECTION 5.9. Books and Records; Inspection and Audit Rights.
The Borrower will, and will cause each of its Subsidiaries to, keep proper
books of record and account in which full, true and correct entries are made in
all material respects of all dealings and transactions in relation to its
business and activities. The Borrower will, and will cause each of its
Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants (and the Borrower shall be provided the opportunity to participate
in any such discussions with such independent accountants), all at such
reasonable times and as often as reasonably requested.
SECTION 5.10. Compliance with Laws. The Borrower will, and
will cause each of its Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.11. Use of Proceeds and Letters of Credit. The
proceeds of the Term Loans, together with a
90
portion of the net proceeds of the Senior Subordinated Notes, will be used
solely to (a) repay in full the principal amount of, and all accrued interest
with respect to, the Existing Intercompany Indebtedness and (b) pay a portion
of the Transaction Costs. The proceeds of the Revolving Loans and Swingline
Loans will be used solely for (a) general corporate purposes, (b) in an amount
not to exceed $70,000,000, to finance the CT Film Acquisition and to pay
related transaction costs and (c) to pay a portion of the Transaction Costs. No
part of the proceeds of any Loan will be used, whether directly or indirectly,
for any purpose that entails a violation of any of the Regulations of the
Board, including Regulations G, U and X. Letters of Credit will be issued only
for general corporate purposes.
SECTION 5.12. Additional Subsidiaries. If any additional
Subsidiary is formed or acquired after the Effective Date, the Borrower will
notify the Administrative Agent and the Lenders thereof and (a) if such Sub-
sidiary is a Subsidiary Loan Party, the Borrower will cause such Subsidiary to
become a party to the Guarantee Agreement, the Indemnity, Subrogation and
Contribution Agreement and each applicable Security Document in the manner
provided therein within three Business Days after such Subsidiary is formed or
acquired and promptly take such actions to create and perfect Liens on such
Subsidiary's assets to secure the Obligations as the Administrative Agent or
the Required Lenders shall reasonably request and (b) if such Subsidiary is a
Restricted Subsidiary and any shares of capital stock or Indebtedness of
such Subsidiary are owned by or on behalf of any Loan Party, the Borrower will
cause such shares and promissory notes evidencing such Indebtedness to be
pledged pursuant to the Pledge Agreement within three Business Days after such
Subsidiary is formed or acquired (except that, if such Subsidiary is a Foreign
Subsidiary and is not a Subsidiary Loan Party, shares of common stock of such
Subsidiary that are owned by or on behalf of the Borrower or a Subsidiary Loan
Party and that are to be pledged pursuant to the Pledge Agreement may be
limited to 65% of the outstanding shares of common stock of such Subsidiary).
SECTION 5.13. Further Assurances. (a) The Borrower will, and
will cause each Subsidiary Loan Party to, execute any and all further
documents, financing
91
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
mortgages, deeds of trust and other documents), that may be required under any
applicable law, or which the Administrative Agent or the Required Lenders may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Loan Parties. The Borrower also agrees
to provide to the Administrative Agent, from time to time upon request,
evidence reasonably satisfactory to the Administrative Agent as to the
perfection and priority of the Liens created or intended to be created by the
Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Borrower or
any Subsidiary Loan Party after the Effective Date (other than assets
constituting Collateral under the Security Agreement that become subject to the
Lien of the Security Agreement upon acquisition thereof), the Borrower will
notify the Administrative Agent and the Lenders thereof, and, if requested by
the Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Loan Parties to take, such actions as shall be necessary
or reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties, provided that the following property shall not be
covered by this Section 5.13(b): (i) intellectual property a security interest
in which would require filings or recordations under laws other than the laws
of the United States or any jurisdiction thereof, (ii) owned real estate or
leasehold interests with an aggregate fair market value of less than
$2,500,000, and (iii) other tangible personal property with an aggregate fair
market value of less than $2,500,000.
(c) Within 60 days after the Effective Date, the
Administrative Agent shall have received counterparts of a Mortgage with
respect to the Mortgaged Properties located in Chippewa Falls, Wisconsin and
Xxxxxxxxxx,
92
Delaware signed on behalf of the record owner of such Mortgaged Property and
all other documents required by Section 4.1(b)(iii) and clauses (ii), (iii) and
(iv) of Section 4.10(h).
(d) Within 60 days of the Effective Date, the Administrative
Agent shall have received an as-built survey of each Mortgaged Property, in
form and substance satisfactory to the Administrative Agent and endorsements to
the title policies required by Section 4.1(h) or 5.13(c), as applicable,
providing survey, access, ALTA 9, contiguity and tax lot coverage.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees
with the Lenders that:
SECTION 6.1. Indebtedness. The Borrower will not, and will
not permit any Restricted Subsidiary to, create, incur, assume or permit to
exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness existing on the date hereof and set forth
in Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof;
(iii) Indebtedness of the Borrower to any Restricted
Subsidiary and of any Restricted Subsidiary to the Borrower or any
other Restricted Subsidiary; provided that Indebtedness of any
Restricted Subsidiary that is not a Loan Party to the Borrower or any
Subsidiary Loan Party shall be subject to Section 6.05;
93
(iv) Guarantees by the Borrower of Indebtedness of any
Restricted Subsidiary, joint venture or Unrestricted Subsidiary and by
any Restricted Subsidiary of Indebtedness of the Borrower, any other
Restricted Subsidiary, any joint venture or any Unrestricted
Subsidiary; provided that (i) Guarantees by the Borrower or any
Subsidiary Loan Party of Indebtedness of any Restricted Subsidiary
that is not a Loan Party, and Guarantees by the Borrower or any
Restricted Subsidiary of Indebtedness of a joint venture or an
Unrestricted Subsidiary, in each case shall be subject to Section 6.5
and (ii) any Guarantee of the Senior Subordinated Notes by a
Restricted Subsidiary shall be subordinated on the same terms as the
Senior Subordinated Notes, shall be given only by a Restricted
Subsidiary that is a Subsidiary Loan Party;
(v) Indebtedness of the Borrower or any Restricted Subsidiary
incurred to finance the acquisition, construction or improvement of
any fixed or capital assets, including Capital Lease Obligations and
any Indebtedness assumed in connection with the acquisition of any
such assets or secured by a Lien on any such assets prior to the
acquisition thereof, including Capital Lease Obligations incurred
pursuant to transactions permitted by Section 6.7, and extensions,
renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof or result in an
earlier maturity date or decreased weighted average life thereof;
provided that (A) such Indebtedness is incurred prior to or within 90
days after such acquisition or the completion of such construction or
improvement and (B) the aggregate principal amount of Indebtedness
permitted by this clause (v) and clause (vi) below shall not exceed
$15,000,000 at any time outstanding;
(vi) Indebtedness of any Person that becomes a Restricted
Subsidiary after the date hereof (other than pursuant to the CT Film
Acquisition); provided that (A) such Indebtedness exists at the time
such Person becomes a Restricted Subsidiary and is not created in
contemplation of or in connection with such Person becoming a
Restricted Subsidiary and (B) the aggregate principal amount of
Indebtedness
94
permitted by this clause (vi) and clause (v) above shall not exceed
$15,000,000 at any time outstanding;
(vii) the Senior Subordinated Notes in an aggregate principal
amount not exceeding the principal amount thereof issued on or prior
to the Effective Date;
(viii) unsecured Indebtedness representing the deferred
purchase price for Permitted Acquisitions; provided that (a) no
Restricted Subsidiary shall be liable (pursuant to a Guarantee or
otherwise) for any such Indebtedness incurred in connection with any
Permitted Acquisition other than any Restricted Subsidiary resulting
from such Permitted Acquisition (b) any financial covenants relating
to such Indebtedness shall be no more restrictive to the Borrower and
its Subsidiaries than, and the other material terms with respect to
such Indebtedness shall be no more restrictive to the Borrower and its
Restricted Subsidiaries, taken as a whole, than, the equivalent such
covenants and terms contained in this Agreement and (c) the aggregate
principal amount of Indebtedness permitted by this clause (ix) shall
not exceed $10,000,000 at any time outstanding; and
(ix) other Indebtedness (including borrowings under overdraft
facilities) in an aggregate principal amount not exceeding $10,000,000
at any time outstanding; provided that (a) the aggregate principal
amount of Indebtedness of the Borrower's Restricted Subsidiaries
permitted by this clause (x) shall not exceed $5,000,000 at any time
outstanding and (b) all such Indebtedness shall be unsecured, except
that overdraft facilities may be secured to the extent permitted by
clause (f) of Section 6.3.
SECTION 6.2. Certain Equity Securities. The Borrower will
not, nor will it permit any Restricted Subsidiary to, issue any preferred stock
or be or become liable in respect of any obligation (contingent or otherwise)
to purchase, redeem, retire, acquire or make any other payment in respect of
any shares of capital stock of the Borrower or any Restricted Subsidiary or any
option, warrant or other right to acquire any such shares of capital stock,
except for actions otherwise permitted
95
under Section 6.9. Notwithstanding the foregoing, the Borrower may issue
preferred stock that is not subject to any mandatory right of redemption or any
right to require the purchase thereof prior to September 30, 2006, and any
Restricted Subsidiary may issue preferred stock to the Borrower or to any other
Restricted Subsidiary.
SECTION 6.3. Liens. The Borrower will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or any
Restricted Subsidiary existing on the date hereof and set forth in
Schedule 6.03; provided that (i) such Lien shall not apply to any
other property or asset of the Borrower or any Restricted Subsidiary
and (ii) such Lien shall secure only those obligations that it secures
on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;
(d) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on
any property or asset of any Person that becomes a Subsidiary after
the date hereof prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary,
as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Restricted Subsidiary and
(iii) such Lien shall secure only those obligations that it secures on
the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal
amount thereof;
96
(e) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Restricted Subsidiary; provided that
(i) such Liens secure Indebtedness permitted by clause (v) of Section
6.1, (ii) such Liens and the Indebtedness secured thereby are incurred
prior to or within 90 days after such acquisition or the completion of
such construction or improvement, (iii) the Indebtedness secured
thereby does not exceed 100% of the cost of acquiring, constructing or
improving such fixed or capital assets and (iv) such security
interests shall not apply to any other property or assets of the
Borrower or any Restricted Subsidiary other than property directly
related to such fixed or capital assets and of a type customarily
covered by such Liens, except that such security interests may not
apply to any accounts receivable or inventory; and
(f) Liens securing Indebtedness under (i) the Borrower's
domestic overdraft facilities in an amount not exceeding $5,000,000
and (ii) foreign overdraft facilities of Foreign Subsidiaries in an
amount not exceeding $5,000,000; provided that Liens permitted by
clause (ii) shall apply only to properties and assets of Foreign
Subsidiaries.
SECTION 6.4. Fundamental Changes. (a) The Borrower will not
and will not permit any Restricted Subsidiary to, merge into or consolidate
with any other Person, or permit any other Person to merge into or consolidate
with it, or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing (i) any Restricted Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
Restricted Subsidiary may merge into any Subsidiary Loan Party in a transaction
in which the surviving entity is a Subsidiary Loan Party, (iii) any Restricted
Subsidiary that is not a Loan Party may merge into any Restricted Subsidiary
that is not a Loan Party and (iv) any Restricted Subsidiary may liquidate or
dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders; provided that any such merger involving a
Person that is not a Wholly Owned Subsidiary
97
immediately prior to such merger shall not be permitted unless also permitted
by Section 6.5.
(b) The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, engage to any material extent in any business other
than businesses of the type conducted by the Borrower and its Subsidiaries on
the date of execution of this Agreement and businesses reasonably related
thereto.
SECTION 6.5. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a Wholly Owned Subsidiary prior to such merger)
any capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person,
or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit,
except:
(a) Permitted Investments;
(b) investments existing on the date hereof and set forth on
Schedule 6.05, to the extent such investments would not be permitted
under any other clause of this Section;
(c) investments by the Borrower and its Restricted
Subsidiaries in the capital stock of their respective Restricted
Subsidiaries; provided that any such shares of capital stock shall be
pledged pursuant to the Pledge Agreement (subject to the limitations
applicable to common stock of a Foreign Subsidiary that is not a
Subsidiary Loan Party, referred to in Section 5.12) and the amount of
such investments by the Borrower in Restricted Subsidiaries that are
not Loan Parties, plus the amount of all loans and advances referred
to in clause (d) below that are made by Loan Parties to Restricted
Subsidiaries that are not Loan Parties, plus the amount of
Indebtedness referred to in clause (e) below of Restricted
Subsidiaries that are not Loan
98
Parties that is Guaranteed by any Loan Party, shall not exceed
$10,000,000 in the aggregate at any time outstanding;
(d) loans or advances made by the Borrower to any Restricted
Subsidiary and made by any Restricted Subsidiary to the Borrower or
any other Restricted Subsidiary; provided that any such loans and
advances made by a Loan Party shall be evidenced by a promissory note
pledged pursuant to the Pledge Agreement and the amount of all such
loans and advances by Loan Parties to Subsidiaries that are not Loan
Parties shall not exceed the limitations set forth in clause (c)
above;
(e) Guarantees constituting Indebtedness permitted by Section
6.1; provided that (i) the amount of Indebtedness of Restricted
Subsidiaries that are not Loan Parties that is Guaranteed by any Loan
Party shall not exceed $5,000,000 in the aggregate at any time
outstanding and (ii) the amount of Indebtedness of joint ventures and
Unrestricted Subsidiaries that is Guaranteed by the Borrower or any
Restricted Subsidiary shall be subject to the limitations of clause
(h) below;
(f) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(g) Permitted Acquisitions; provided that (i) the
consideration for each Permitted Acquisition shall consist solely of
cash, shares of common stock of the Borrower, the assumption of
Indebtedness of the acquired Person or encumbering the acquired
assets, Indebtedness referred to in clause (viii) of Section 6.1 or a
combination thereof and (ii) at the time of and after giving effect to
the consummation of any Permitted Acquisition the sum of the unused
Revolving Commitments and the Borrower's and Restricted Subsidiaries'
Permitted Investments and cash balances shall not be less than
$20,000,000;
(h) investments in joint ventures and Unrestricted
Subsidiaries in an aggregate amount, on a
99
cumulative basis during the term of this Agreement, not exceeding the
sum of (i) $5,000,000, plus (ii) the aggregate amount of dividends,
interest, principal payments and returns of capital received from time
to time during the term of this Agreement by the Borrower and its
Restricted Subsidiaries in respect of investments made under this
clause (h), plus (iii) the unutilized portion of the Borrower Amount
as of the date of investment, provided that (A) the aggregate amount
invested in joint ventures and in Unrestricted Subsidiaries during the
term of this Agreement (excluding amounts invested in reliance upon
clause (ii) above) shall not at any time exceed $10,000,000, (B) if an
Unrestricted Subsidiary is declared to be a Restricted Subsidiary,
compliance with the foregoing limitations shall thereafter be
determined as though such Subsidiary had never been an Unrestricted
Subsidiary and (C) for purposes of determining compliance with the
foregoing limitations, any Guarantee by the Borrower or any Restricted
Subsidiary of Indebtedness or other monetary obligations of a joint
venture or Unrestricted Subsidiary shall be deemed to constitute an
investment therein in an amount equal to the Indebtedness or other
monetary obligations so Guaranteed;
(i) other loans, advances and investments not
in excess of $5,000,000 outstanding at any time; and
(j) notes or other evidence of Indebtedness acquired as
consideration in connection with a sale, transfer, lease or other
disposition of any asset by the Borrower or any of the Restricted
Subsidiaries.
SECTION 6.6. Asset Sales. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, sell, transfer, lease or
otherwise dispose of any asset, including any capital stock, nor will the
Borrower permit any of it Restricted Subsidiaries to issue any additional
shares of its capital stock or other ownership interest in such Restricted
Subsidiary, except:
(a) sales of inventory, used or surplus equipment and
Permitted Investments in the ordinary course of business;
100
(b) sales, transfers and dispositions to the Borrower or a
Restricted Subsidiary; provided that any such sales, transfers or
dispositions involving a Restricted Subsidiary that is not a Loan
Party shall be made in compliance with Section 6.10;
(c) leases and licenses entered into in the ordinary course
of business;
(d) sales in connection with sale-leasebacks
permitted under Section 6.7;
(e) sales of investments referred to in clauses (a), (b)
and (h) of Section 6.5;
(f) sales, transfers and dispositions of assets (other than
capital stock of a Subsidiary) that are not permitted by any other
clause of this Section; provided that the aggregate fair market value
of all assets sold, transferred or otherwise disposed of in reliance
upon this clause (f) shall not, in the aggregate, exceed $30,000,000
during the term of this Agreement; and
(g) sales, transfers and dispositions of Foreign Assets;
and
(h) transfers and dispositions constituting
investments permitted under Section 6.5;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clause (b) above) shall be made for fair
value and for at least 80% cash consideration (except that those permitted by
clause (a) above shall be made on terms that are customary in the ordinary
course).
SECTION 6.7. Sale and Lease-Back Transactions. The Borrower
will not, and will not permit any Restricted Subsidiary to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred, except for any
such sale of fixed or capital
101
assets that is consummated within 90 days after the date the Borrower or such
Restricted Subsidiary acquires or finishes construction of such fixed or
capital asset.
SECTION 6.8. Hedging Agreements. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, enter into any Hedging
Agreement, other than Hedging Agreements entered into in the ordinary course of
business to hedge or mitigate risks to which the Borrower or any Restricted
Subsidiary is or expects to be exposed in the conduct of its business or the
management of its liabilities.
SECTION 6.9. Restricted Payments; Certain Payments of
Indebtedness. (a) The Borrower will not, and will not permit any Restricted
Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except (i) Wholly Owned Subsidiaries may
declare and pay dividends with respect to their capital stock and Restricted
Subsidiaries that are not Wholly Owned Subsidiaries may declare and pay
dividends ratably with respect to their capital stock, (ii) the Borrower may
make Restricted Payments, not exceeding $2,000,000 during any fiscal year,
pursuant to and in accordance with stock option plans or other benefit plans
for management or employees of the Borrower and its Restricted Subsidiaries,
and (iii) the Borrower may, subject to Section 6.2, make dividends consisting
solely of shares of its capital stock.
(b) The Borrower will not, and will not permit any Subsidiary
to, make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect
of principal of or interest on any Senior Subordinated Note, or any payment or
other distribution (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Senior Subordinated
Note, except payment of regularly scheduled interest payments as and when due
in respect of the Senior Subordinated Notes.
SECTION 6.10. Transactions with Affiliates. The Borrower will
not, and will not permit any Restricted Subsidiary to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise
102
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates (including any Subsidiary), except (a)
transactions in the ordinary course of business that are at prices and on terms
and conditions not less favorable to the Borrower or such Restricted Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties,
(b) transactions between or among the Borrower and the Subsidiary Loan Parties
not involving any other Affiliate, (c) any Restricted Payment permitted by
Section 6.9, and (d) transactions expressly contemplated by Schedule 6.10.
SECTION 6.11. Restrictive Agreements. The Borrower will not
and will not permit any Restricted Subsidiary to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any Restricted Subsidiary to create, incur or permit to exist any
Lien upon any of its property or assets, or (b) the ability of any Restricted
Subsidiary to pay dividends or other distributions with respect to any shares
of its capital stock or to make or repay loans or advances to the Borrower or
any other Restricted Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Restricted Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document,
(ii) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 6.11 (but shall apply to any extension,
renewal, amendment or modification expanding the scope of, any such restriction
or condition), (iii) the foregoing shall not apply to customary restrictions
and conditions contained in agreements relating to the sale of a Subsidiary or
assets pending such sale, provided such restrictions and conditions apply only
to the Subsidiary or assets that are to be sold and such sale is permitted
hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted
by this Agreement if such restrictions or conditions apply only to the property
or assets securing such Indebtedness, (v) clause (a) of the foregoing shall not
apply to customary provisions in contracts restricting the assignment thereof
and (vi) the foregoing shall not apply to restrictions imposed by any agreement
relating to Indebtedness of a Foreign Subsidiary that applies only to such
Foreign
103
Subsidiary and its assets.
SECTION 6.12. Amendment of Material Documents. The Borrower
will not, and will not permit any Subsidiary to, amend, modify or waive any of
its rights under (a) its certificate of incorporation, by-laws or other
organizational documents (other than amendments and modifications that are not
adverse to the interests of the Lenders and do not impair the exercise of
remedies under any Security Document), (b) the Senior Subordinated Notes or any
Senior Subordinated Note Document, (c) any Split-Off Document (other than
amendments and modifications made after the Split-Off that are not materially
adverse to the interests of the Lenders) or (d) any agreement or document
identified on Schedule 3.19 or relating to any transaction referred to on
Schedule 6.10; provided that the Borrower or any Subsidiary may amend, modify
or waive any of its rights under any agreement or document referred to in
clause (d) above if such amendment, modification or waiver (i) is on terms no
less favorable to the Borrower and its Subsidiaries than would be obtained on
an arm's length basis from unrelated third parties and (ii) could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 6.13. Capital Expenditures. The Borrower will not
make, and will not permit its Restricted Subsidiaries to make, Capital
Expenditures other than Capital Expenditures made by the Borrower and its
Restricted Subsidiaries in any fiscal year of the Borrower in an amount greater
than (a) $30,000,000 plus, for each fiscal year following the Effective Date
(commencing with the 1998 fiscal year), an amount equal to the excess, if any,
of $30,000,000 over the aggregate amount of Capital Expenditures made in the
immediately preceding fiscal year (including, with respect to 1997, those
capital expenditures of Huntsman Polymers Corporation's CT Film Division that
would qualify as "Capital Expenditures" under this Agreement if made by the
Borrower and its Restricted Subsidiaries), plus (b) amounts available from time
to time to be invested in joint ventures and Unrestricted Subsidiaries under
clause (h) of Section 6.5; provided that, to the extent that Capital
Expenditures are made in reliance upon clause (b) above, amounts available to
be invested in joint ventures and Unrestricted Subsidiaries under clause (h) of
Section 6.5 shall be deemed utilized thereunder for purposes of
104
determining compliance therewith.
SECTION 6.14. Leverage Ratio. The Borrower will not permit
the Leverage Ratio as of any date during any period set forth below (inclusive
of the specified first and last day of such period) to be in excess of the
ratio set forth below opposite such period:
Period Ratio
------ -----
Effective Date-September 30, 1997 6.00 to 1.00
October 1, 1998-March 31, 1999 5.50 to 1.00
April 1, 1999-September 30, 1999 5.00 to 1.00
October 1, 1999-September 30, 2000 4.50 to 1.00
October 1, 2000-September 30, 2001 4.00 to 1.00
October 1, 2001 and thereafter 3.50 to 1.00
SECTION 6.15. Interest Coverage Ratio. The Borrower will not
permit the ratio of Consolidated EBITDA to Cash Interest Expense for any period
of four consecutive fiscal quarters ending during any period set forth below
(inclusive of the specified first and last day of such period) to be less than
the ratio set forth below opposite such period:
Period Ratio
------ -----
December 31, 1997-September 30, 1998 1.50 to 1.00
October 1, 1998-March 31, 1999 1.75 to 1.00
April 1, 1999-September 30, 1999 2.00 to 1.00
October 1, 1999-September 30, 2000 2.25 to 1.00
October 1, 2000-September 30, 2001 2.50 to 1.00
October 1, 2001-September 30, 2002 2.75 to 1.00
October 1, 2002 and thereafter 3.00 to 1.00
SECTION 6.16. Minimum Net Worth. The Borrower will not permit
its Adjusted Consolidated Net Worth at the end of any fiscal quarter to be less
than the sum of (a) $60,400,000 plus (b) 50% of consolidated net income of the
Borrower and its consolidated Restricted Subsidiaries for each fiscal quarter
of the Borrower ending after the Effective Date and on or prior to such date
for which such consolidated net income is positive plus (c), 50% of the amount
by which Adjusted Consolidated Net worth shall have been increased during the
period from the Effective Date to such date as a result of the issuance by the
Borrower of additional shares of its capital
105
stock or any capital contribution to the Borrower.
SECTION 6.17. Designated Senior Debt. The Borrower shall
not designate any Indebtedness (other than Indebtedness under the Loan
Documents) as "Designated Senior Debt" for purposes of and as defined in the
Senior Subordinated Note Documents.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan
or any fee or any other amount (other than an amount referred to in clause (a)
of this Article) payable under this Agreement or any other Loan Document, when
and as the same shall become due and payable, and such failure shall continue
unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or
on behalf of the Borrower or any Subsidiary in or in connection with any Loan
Document or any amendment or modification thereof or waiver thereunder, or in
any report, certificate, financial statement or other document furnished
pursuant to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been incorrect
when made or deemed made in any material respect;
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.04 (with respect
to the existence of the Borrower) or 5.11 or in Article VI;
106
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other than
those specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Borrower (which notice will be given at the request
of any Lender);
(f) the Borrower or any Restricted Subsidiary shall fail to
make any payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due and
payable and following the expiration of any applicable grace period;
(g) any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Borrower or any Restricted Subsidiary (other
than Immaterial Subsidiaries) or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Restricted Subsidiary (other than Immaterial
Subsidiaries) or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;
(i) the Borrower or any Restricted Subsidiary
(other than Immaterial Subsidiaries) shall (i) voluntari-
107
ly commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii)
consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or petition described in clause (h) of this Article,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or
any Restricted Subsidiary (other than Immaterial Subsidiaries) or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any proceeding described in
clause (h) of this Article, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing;
(j) the Borrower or any Restricted Subsidiary (other than
Immaterial Subsidiaries) shall become unable, admit in writing its inability or
fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 (net of amounts covered by insurance
as to which the insurer has not denied liability) shall be rendered against the
Borrower, any Restricted Subsidiary (other than Immaterial Subsidiaries) or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of the Borrower or any Restricted Subsidiary (other than Immaterial
Subsidiaries) to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion
of the Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in liability of the
Borrower and its Subsidiaries in an aggregate amount exceeding (i) $2,500,000
in any year or (ii) $5,000,000 for all periods;
(m) any Lien purported to be created under any
Security Document shall cease to be, or shall be asserted by any Loan
Party not to be, a valid and perfected Lien
108
on any Collateral, with the priority required by the applicable Security
Document, except (i) as a result of the sale or other disposition of the
applicable Collateral in a transaction permitted under the Loan Documents, (ii)
as a result of (x) the Collateral Agent's failure to take any action reasonably
requested by the Borrower in order to maintain a valid and perfected Lien on
any Collateral or (y) any action taken by the Collateral Agent to release any
lien on any Collateral or (iii) Liens on Collateral with an aggregate fair
market value not exceeding $1,000,000; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h)or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either
or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower;
and in case of any event with respect to the Borrower described in clause (h)
or (i) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
109
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether
a Default has occurred and is continuing, (b) the Administrative Agent shall
not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.2), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by
it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in
110
Section 9.2) or in the absence of its own gross negligence or wilful
misconduct. The Administrative Agent shall not be deemed not to have knowledge
of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any
Loan Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activi-
111
ties as Administrative Agent.
Subject to the appointment and acceptance of a successor the
Administrative Agent as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower. Upon any such resignation, the Required Lenders shall have the right,
in consultation with the Borrower, to appoint a successor. If no successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Administrative
Agent that shall be a bank with an office in New York, New York, or an
Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.3 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or related agreement or any document
furnished hereunder or thereunder.
112
The provisions of this Article shall apply to the Collateral
Agent as though named herein as the Administrative Agent.
ARTICLE IX
Miscellaneous
SECTION 9.1. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 000 Xxxxxxxx Xxx, Xxxx Xxxx
Xxxx 00000, Attention of Xxxxxxx X. Xxxxxx (Telecopy No. (000) 000-0000), with
a copy to Xxxxxx X. Xxxxxxx (Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent or the Collateral Agent,
to The Chase Manhattan Bank, Loan and Agency Services Group, One Chase
Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx Xxxxxx
(Telecopy No. (000) 000-0000, with a copy to The Chase Manhattan Bank, 000 Xxxx
Xxxxxx, Xxx Xxxx 00000, Attention of Xxxxxx Xxxxx (Telecopy No. (212)
270-1355);
(c) if to the Issuing Bank, to The Chase Manhattan Bank, Loan
and Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention of Xxxxx Xxxxxx (Telecopy No. (000) 000-0000) with a copy
to The Chase Manhattan Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Xxxxxx Xxxxx (Telecopy No. (000) 000-0000);
(d) if to the Swingline Lender, to The Chase Manhattan Bank,
Loan and Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention of Xxxxx Xxxxxx (Telecopy No. (000) 000-0000) with a
copy to The Chase Manhattan Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Xxxxxx Xxxxx (Telecopy No. (000) 000-0000); and
(e) if to any other Lender, to it at its ad-
113
dress (or telecopy number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
SECTION 9.2. Waivers; Amendments. (a) No failure or delay by
the Administrative Agent, the Issuing Bank or any Lender in exercising any
right or power hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Issuing Bank and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Admin-
istrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor
any provision hereof or thereof may be waived, amended or modified except, in
the case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent or Collateral Agent, as applicable, and the
Loan Party or Loan Parties that are parties thereto, in each case with the
consent of the Required Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the
114
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any
Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the
written consent of each Lender affected thereby, (iv) change Section 2.18(b) or
(c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section or the definition of the term "Required Lenders" or
any other provision of any Loan Document specifying the number or percentage of
Lenders (or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (or each Lender of such Class, as the case
may be), (vi) release any Subsidiary Loan Party from its Guarantee under the
Guarantee Agreement (except as expressly provided in the Guarantee Agreement),
or limit its liability in respect of such Guarantee, without the written
consent of each Lender, (vii) release all or any substantial part of the
Collateral from the Liens of the Security Documents (except as expressly
provided therein), without the written consent of each Lender or (viii) change
any provisions of any Loan Document in a manner that by its terms adversely
affects the rights in respect of payments due to Lenders holding Loans of any
Class differently than those holding Loans of any other Class, without the
written consent of Lenders holding a majority in interest of the outstanding
Loans and unused Commitments of each affected Class; provided further that (A)
no such agreement shall amend, modify or otherwise affect the rights or duties
of the Administrative Agent, the Collateral Agent, the Issuing Bank or the
Swingline Lender without the prior written consent of the Administrative Agent,
the Collateral Agent, the Issuing Bank or the Swingline Lender, as the case may
be, and (B) any waiver, amendment or modification of this Agreement that by its
terms affects the rights or duties under this Agreement of the Revolving
Lenders (but not the Term Loan Lenders) or the Term Loan Lenders (but not the
Revolving Lenders) may be effected by an agreement or agreements in writing
entered
115
into by the Borrower and the percentage in interest of the affected Class of
Lenders that would be required to consent thereto under this Section if such
Class of Lenders were the only Class of Lenders hereunder at the time.
SECTION 9.3. Expenses; Indemnity: Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent and their respective Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent and the Collateral Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of the Loan Documents or any amendments, modifications or
waivers of the provisions thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administrative Agent,
the Collateral Agent, the Issuing Bank and each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called an "Indemni-
tee") against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the fees, charges
and disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of any Loan Document or any other agreement or
instrument contemplated hereby, the performance by the parties to the Loan
Documents of their respective obliga-
116
tions thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any Mortgaged Property or any other property currently or
formerly owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is
a party thereto; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses resulted from the gross negligence or wilful misconduct of
such Indemnitee or any Affiliate of such Indemnitee (or of any officer,
director, employee, advisor or agent of such Indemnitee or any such
Indemnitee's Affiliates).
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Collateral Agent,
the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, the
Collateral Agent, the Issuing Bank or the Swingline Lender, as the case may be,
such Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Collateral Agent, the Issuing Bank or the
Swingline Lender in its capacity as such. For purposes hereof, a Lender's "pro
rata share" shall be determined based upon its share of the sum of the total
Revolving Exposures, outstanding Term Loans and unused Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower
shall not assert, and each hereby waives,
117
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement
or any agreement or instrument contemplated hereby, the Transactions, any Loan
or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall
be payable promptly after written demand therefor.
SECTION 9.4. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (in-
cluding any Affiliate of the Issuing Bank that issues any Letter of Credit),
except that the Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each Lender (and
any attempted assignment or transfer by the Borrower without such consent shall
be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Collateral Agent, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate of a
Lender, each of the Borrower and the Administrative Agent (and, in the case of
an assignment of all or a portion of a Revolving Commitment or any Lender's
obligations in respect of its LC Exposure or Swingline Exposure, the Issuing
Bank and the Swingline Lender) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's
118
Commitment or Loans, the amount of the Commitment or Loans cf the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, except that
this clause (iii) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender's rights and obligations in
respect of one Class of Commitments or Loans, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent and the Borrower an Administrative Questionnaire; and
provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required if an Event of Default under clause (h) or (i)
of Article VII has occurred and is continuing. Subject to acceptance and
recording thereof pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each
119
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative 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, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent, the Issuing Bank and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment,
120
modification or waiver of any provision of the Loan Documents; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.2(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 9.8
as though it were a Lender, provided such Participant agrees to be subject to
Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any
greater payment under Section 2.15 or 2.17 than the applicable Lender would
have been entitled to receive with respect to the Loans or Commitments with
respect to which such participation has been sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were
a Lender shall not be entitled to the benefits of Section 2.17 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
SECTION 9.5. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be
121
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender may
have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on
any Loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not expired or terminated. The provisions of Sections
2.15, 2.16, 2.17 and 9.3 and Article VIII shall survive and remain in full
force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.6. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Document and any separate letter agreements with respect to fees
payable to the Administrative Agent or the Issuing Bank constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating
to the subject matter hereof. Except as provided in Section 4.1, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
that, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
122
SECTION 9.7. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
SECTION 9.8. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under
this Agreement and although such obligations may be unmatured. The rights of
each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender may have.
SECTION 9.9. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be
123
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against the Borrower or
its properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each
of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.1. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this
124
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative
Agent, the Collateral Agent, the Issuing Bank and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to Whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those
of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach
of this Section or (ii) becomes available to the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than the Borrower. For the purposes of this Section,
"Information" means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
on a nonconfidential basis prior to disclosure by the Borrower. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any
125
time the interest rate applicable to any Loan, together with all fees, charges
and other amounts that are treated as interest on such Loan under applicable
law (collectively the "Charges"), shall exceed the maximum lawful rate (the
"Maximum Rate") that may be contracted for, charged, taken, received or
reserved by the Lender holding such Loan in accordance with applicable law, the
rate of interest payable in respect of such Loan hereunder, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate and,
to the extent lawful, the interest and Charges that would have been payable in
respect of such Loan but were not payable as a result of the operation of this
Section shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall
have been received by such Lender.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
HUNTSMAN PACKAGING
CORPORATION,
by
----------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
by
----------------------
Name:
Title:
000
XXXX XX XXXXXXXX,
by
----------------------
Name: Xxxx X. Xxxxxx
Title: Director
000
XXX XXXX XX XXX XXXX,
by
----------------------
Name: Xxxx Xxxxx
Title: Vice President
000
XXX XXXX XX XXXX XXXXXX,
by
----------------------
Name: A.S. Xxxxxxxxxx
Title: Sr. Team Leader -
Loan Operations
129
BANK OF TOKYO MITSUBISHI
TRUST COMPANY,
by
-------------------------
Name: Xxxxx X. XxXxxxxxxx
Title: Vice President
130
BANK ONE, UTAH, N.A.,
by
--------------------
Name:
Title:
131
BANQUE PARIBAS,
by
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Associate
by
-----------------------
Name: Xxxxx X. Xxxxxxx
Title: Director
132
BHF-BANK AKTIENGESELLSCHAFT,
by
---------------------
Name: Xxxxxxx Xxxxxx
Title: AT
by
---------------------
Name: Xxxx Xxxxx
Title: AVP
133
CIBC INC.,
by
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
CIBC Wood Gundy
Securities Corp.,
as Agent
by
--------------------
Name:
Title:
134
CREDIT LYONNAIS LOS
ANGELES BRANCH,
by
----------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
and Manager
000
XXXXXXXX XXXX XX, XXX XXXX
BRANCH AND GRAND CAYMAN
BRANCH,
by
----------------------
Name: Xxxx X. Xxxxxxx
Title: Assistant Vice
President
by
---------------------
Name: Brigitte Sacin
Title: Assistant
Treasurer
136
THE FIRST NATIONAL BANK
OF CHICAGO,
by
-------------------------
Name: Xxxxxx
Title: Vice President
137
THE FUJI BANK, LIMITED,
LOS ANGELES AGENCY,
by
----------------------
Name: Nasahito Fukuda
Title: Asst. General
Manager
138
HIBERNIA NATIONAL BANK,
by
----------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
139
KEYBANK NATIONAL ASSOCIATION,
by
--------------------
Name: X.X. Xxxxxx
Title: Assistant Vice
President
140
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., LOS ANGELES
AGENCY,
by
-------------------------
Name: T. Xxxxxx Xxxxxxx XX
Title: Deputy General Manager
by
--------------------------
Name: Xxxxx Read
Title: Vice President
141
MELLON BANK, N.A.,
by
-------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
142
THE MITSUBISHI TRUST AND
BANKING CORPORATION,
LOS ANGELES AGENCY,
by
-----------------------
Name: Yasushi Satomi
Title: Senior Vice President
143
NATEXIS BANQUE-BFCE,
by
------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
by
------------------------
Name: Xxxxxx Touffer
Title: First VP and Regional
Manager
144
NATIONAL CITY BANK,
by
------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
by
------------------------
Name:
Title:
000
XXXXXXXXXXX XX XXXXX, X.X.,
by
----------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice
President
by
-----------------------
Name:
Title:
146
PNC BANK, NATIONAL ASSOCIATION,
by
-----------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice
President
147
THE SUMITOMO BANK, LIMITED,
by
------------------------
Name: Xxxx Xxxxx
Title: Joint General
Manager
by
-------------------------
Name:
Title:
148
U.S. BANK NATIONAL ASSOCIATION,
by
-------------------------
Name: Xxxxxxxx Lower
Title: Vice President
149
(Credit Agreement)
SCHEDULE 1.01(a)
Mortgaged Property
------------------
1. Birmingham, Alabama
2. Carrollton, Ohio (partially owned and partially leased)
3. Danville, Kentucky
4. Xxxxxxxxx, Xxxxxxxxxxxxx
0. Xxxxxxxxx, Xxxxxxxxx
0. Merced, California
7. Seattle, Washington
8. Chippewa Falls, Wisconsin (CT Film Facility)*
9. Xxxxxxxxxx, Delaware (CT Film Facility)*
---------------------------------
* to be completed within 60 days
150
Schedule 2.01
COMMITMENTS
-----------
=======================================================================================================================
Lender Contact Person Commitments
-----------------------------------------------------------------------------------------------------------------------
The Chase Manhattan Bank Xxxxxx Xxxxx Term: $4,166,667
000 Xxxx Xxxxxx Tel: 000-000-0000 Revolving: $8,333,333
Xxx Xxxx, XX 00000 Fax: 000-000-0000
------------------------------------------------------------------------------------------------------------------------
Bank of Montreal Xxxxxx X. Xxxxxxxx Term: $3,166,667
000 Xxxxx Xxxxxxxx Xxxxxx Tel: 000-000-0000 Revolving: $6,333,333
Suite 4900 Fax: 000-000-0000
Xxx Xxxxxxx, XX 00000
For Administrative Mat-
ters:
Xxxxx Xxxxxxxxxx
000 X. Xx Xxxxx, 00xx
Xxxxx
Xxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------
The Bank of New York Xxxxxxxx Xxxxxx Term: $3,166,667
00000 Xxxxxxxx Xxxx., Tel: 000-000-0000 Revolving: $6,333,333
Suite 1125 Fax: 000-000-0000
Xxx Xxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------
The Bank of Nova Scotia Bryan Belawa Term: $3,666,667
000 Xxxxxxxxx Xxxxxx, 0000 Xxxxxxxxx Street, Revolving: $7,333,333
N.E. Suite 3000
Suite 2700 Houston, TX 77002
Xxxxxxx, XX 00000 Tel: 000-000-0000
Fax: 000-000-0000
------------------------------------------------------------------------------------------------------------------------
Bank of Tokyo Mitsubishi Xxxxx X. XxXxxxxxxx Term: $3,166,667
Trust Company Tel: 000-000-0000 Revolving: $6,333,333
0000 Xxxxxx of the Fax: 000-000-0000
Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000 For Administrative Mat-
ters:
Xxxxxxx Xx
Tel: 000-000-0000
Fax: 000-000-0000
---------------------------------------------------------------------
151
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Bank One, Utah, N.A. Xxxxxxx X. Xxxxxx Term: $3,166,667
00 Xxxx Xxxxxxxx, #000 Tel: 000-000-0000 Revolving: $6,333,333
Xxxx Xxxx Xxxx, XX 00000 Fax: 000-000-0000
------------------------------------------------------------------------------------------------------------------------
Banque Paribas Xxxxx X. Xxxxxx Term: $3,166,667
0000 Xxxxxxx Xxxx Xxxx, Tel: 000-000-0000 Revolving: $6,333,333
Suite 3900 Fax: 000-000-0000
Xxx Xxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------
BHF-Bank Xxxx Xxxxxxxxx Term: $3,166,667
Aktiengesellschaft 000 Xxxx Xxxxx Xxxx., Revolving: $6,333,333
000 Xxxxxxx Xxxxxx Xxxxx 0000
Xxx Xxxx, XX 00000 Xxxx Xxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
For Administrative Mat-
ters:
Xxxxxx Boston
Tel: 000-000-0000
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------------------
CIBC Inc. Xxxxxxx Xxxxx Term: $3,166,667
0000 Xxxxx Xxxxx Xxxx 000 Xxxxxxxxx Xxxxxx Revolving: $6,333,333
Xxxxx 0000 Xxx Xxxx, XX 00000
2 Paces West, Building 2 Tel: 000-000-0000
Xxxxxxx, XX 00000 Fax: 000-000-0000
For Administrative Mat-
ters:
Xxxxxx Xxxxxx
(same as listed Georgia
address)
Tel: 000-000-0000
Fax: 000-000-0000
------------------------------------------------------------------------------------------------------------------------
Credit Lyonnais Xxxxx Xxxxxx Term: $3,166,667
Los Angeles Branch Tel: 000-000-0000 Revolving: $6,333,333
000 Xx. Xxxxxx Xxxxxx, Fax: 000-000-0000
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------
152
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Dresdner Bank AG, Xxx Xxxxx Term: $3,166,667
New York Branch & Grand 000 Xxxxx Xxxxx Xxxxxx Revolving: $6,333,333
Cayman Branch Suite 1700
00 Xxxx Xxxxxx Xxx Xxxxxxx, XX 00000
Xxx Xxxx, XX 00000 Tel: 000-000-0000
Fax: 000-000-0000
------------------------------------------------------------------------------------------------------------------------
The First National Bank Xxxxxx Xxxxxxx Term: $3,166,667
of Chicago Tel: 000-000-0000 Revolving: $6,333,333
One First National Plaza Fax: 000-000-0000
Xxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------
The Fuji Bank, Limited. Xxxxx Xxx Term: $3,166,667
Los Angeles Agency Tel: 000-000-0000 Revolving: $6,333,333
000 Xxxxx Xxxx Xxxxxx, Fax: 000-000-0000
Xxxxx 0000
Xxx Xxxxxxx, XX 00000 For Administrative Mat-
ters:
Xx. Xxxxxxxx Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
Hibernia National Bank Xxxxx Xxxxxx Term: $3,166,667
000 Xxxxxxxxxx Xxxxxx, Tel: 000-000-0000 Revolving: $6,333,333
Suite 1300 Fax: 000-000-0000
Xxx Xxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------
Key Bank National Associ- X.X. Xxxxxx Term: $3,166,667
ation Tel: 000-000-0000 Revolving: $6,333,333
000 Xxxxx Xxx, 00xx Xx. Fax: 000-000-0000
Xxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------
The Long-Term Credit Bank Xxxxx Xxxx Term: $3,166,667
of Japan, Ltd. Tel: 000-000-0000 Revolving: $6,333,333
Los Angeles Agency Fax: 000-000-0000
000 Xxxxx Xxxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------------------------
Mellon Bank, N.A. Xxxx X. Xxxxx Term: $1,666,667
One Mellon Bank Center, Tel: 000-000-0000 Revolving: $3,333,333
Xxxx 0000 Fax: 000-000-0000
Xxxxxxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------------------------
153
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
The Mitsubishi Trust Xxxx Xxxxx Term: $3,166,667
Banking Corporation, Tel: 000-000-0000 Revolving: $6,333,333
Los Angeles Agency Fax: 000-000-0000
000 Xxxxx Xxxxxxxx Xx.,
Xxxxx 000
Xxx Xxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------
Natexis Banque-BFCE Xx. Xxxx Xxxxx Term: $3,166,667
000 Xxxxx Xxxxxx Xxx Xxxxxxx Representa- Revolving: $6,333,333
Xxx Xxxx, XX 00000 tive Xxxxxx
000 Xx. Xxxxxxxx Xx.,
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
National City Bank Xxxxxx X. Xxxxxxxx Term: $3,166,667
0000 Xxxx Xxxxx Xxxxxx Tel: 000-000-0000 Revolving: $6,333,333
Xxxxxxxxx, Xxxx 00000 Fax: 000-000-0000
For Administrative Mat-
ters:
Xxxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
NationsBank of Texas, Xxxxxxxx Xxxx Term: $3,666,666
N.A. Tel: 000-000-0000 Revolving: $7,333,333
000 Xxxx Xxxxxx, 00xx Xx. Fax: 000-000-0000
Xxxxxx, XX 00000
For Administrative Mat-
ters:
Xxxxxx Xxxxx
Tel: 000-000-0000
Fax: 000-000-0000
------------------------------------------------------------------------------------------------------------------------
PNC Bank, National Asso- Xxxxxx X. Xxxxxxxxx Term: $3,166,667
ciation Tel: 000-000-0000 Revolving: $6,333,333
000 Xxxxx Xxxxxx Fax: 000-000-0000
Xxxxxxxxxx, XX 00000
For Administrative
Matters:
Xxxxx Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
-----------------------------------------------------------------------------------------------------------------------
154
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
The Sumitomo Bank, Xxxx Xxxx Term: $3,166,667
Limited Tel: 000-000-0000 Revolving: $6,333,333
000 Xxxxx Xxxxxxxx Xx., Fax:
Xxxxx 0000
Xxx Xxxxxxx, XX 00000 For Administrative
Matters:
Xxxxxx Xxxxxxx
Tel: 000-000-0000
------------------------------------------------------------------------------------------------------------------------
U.S. Bank, National Asso- Xxxxxxx Xxxxxx Term: $1,666,667
ciation 000 Xxxxxx Xxxxxx Xxxxx Revolving: $3,333,333
000 Xxxxx Xxxx Xxxxxx, (MPFP 0804)
3rd Floor Minneapolis, MN 55402
Xxxx Xxxx Xxxx, XX 00000 Tel: 000-000-0000
Fax: 000-000-0000
==========================================================================================================================
155
(Credit Agreement)
SCHEDULE 3.05
Address of Real Property
1. Huntsman Packaging Corporation
------------------------------
Chief Executive Xxxxxx
000 Xxxxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
Administration Office/R&D Facility
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Calhoun Plant
0000 Xxxxxxx 00 X.X.
Xxxxxxx, Xxxxxxx 00000
Merced Plant
000 Xxxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
*Bowling Green Plant
0 Xxxxxxx Xxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Carrollton Plant
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Birmingham Plant
0000 0xx Xxxxxx, Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Rochester Plant
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000-0000
--------
*Property is still owned by plant but was shut down and is
being sold.
156
Lewisburg Plant
000 Xxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Seattle Plant
0000 X. 000xx Xxxxxx
Xxxx, Xxxxxxxxxx
2. Huntsman Film Products of Canada, Ltd.
--------------------------------------
Chief Executive Xxxxxx
000 Xxxxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
Toronto Plant
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
3. Huntsman United Films Corporation
---------------------------------
Chief Executive Xxxxxx
000 Xxxxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
Office
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Odon Plant
County Road
0000 Xxxxx Xxxxx Xxxxx #0
X.X. Xxx 000
Xxxx, Xxxxxxx 00000
Bloomington Plant
0000 Xxxxxxx Xxxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxx 00000
4. Huntsman Packaging International Corporation
--------------------------------------------
Chief Executive Xxxxxx
000 Xxxxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
157
5. Huntsman Packaging Georgia, Inc.
--------------------------------
Chief Executive Xxxxxx
000 Xxxxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
6. Huntsman Deerfield Films Corporation
------------------------------------
(f/k/a Deerfield Plastics Co., Inc.)
Chief Executive Xxxxxx
000 Xxxxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
Deerfield Plant
00 Xxxxxxxxxx Xxxx
Xxxxx Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Danville Plant
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
7. Huntsman Container Company France
---------------------------------
Guegon Plant
Zone Industrialle de la Croix Xxxxxxx
Guegon, 56120 Josselin
Guegon, France
8. Huntsman Film Products GmbH
---------------------------
Philippsburgh Plant
BoschtraBe 2
D-6833 Waghausel 1
Philippsburgh, Germany
9. Huntsman Film Products Pty. Ltd.
--------------------------------
Melbourne Plant
00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx
Xxxxxxxxx 3072
158
10. Huntsman Container Company Ltd.
Huntsman Film Products UK Ltd.
------------------------------
Skelmersdale Plant
0 Xxxxxxx Xxxxx
Xxxxxxxxxxxx
Xxxxxxxxxx XX00XX
Xxxxxxx, U.K.
CT Film Facilities
------------------
11. Chippewa Falls Plant*
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxx 00000
12. Dalton Plant*
000 Xxxx-Xxx Xxxxx
Xxxxxx, Xxxxxxx 00000
13. Harrington Plant*
Xxxxx 0 Xxx 00
000 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
14. Xxxxxxxx Xxxxxxxx Xxxxxx*
Xxxxxxxx X -0
Xxxxxxxxx, Xxxx 00000-0000
---------------------------------------------------------
* will be acquired by Huntsman Packaging Corporation from
Huntsman Polymers Corporation (f/k/a Xxxxxx Corporation).
159
(Credit Agreement)
SCHEDULE 3.12
Subsidiaries
------------
Jurisdiction of Percentage
Name of Subsidiary Incorporation Interest
------------------ ---------------- -----------
1. Huntsman Deerfield Films Corporation1 Massachusetts 100
2. Huntsman United Films Corporation1 Georgia 100
3. Huntsman Preparatory Inc.1 Utah 100
4. Huntsman Container Corporation
International1 Utah 100
5. Huntsman Packaging Georgia, Inc.1 Georgia 100
6. Huntsman Film Products of Mexico, Inc.1 Utah 100
7. Huntsman Film Products of Canada Ltd.1 Canada 100
8. Huntsman Film Products Pty Ltd.1 Australia 98
9. Huntsman Film Products GmbH1 Germany 100
10. Huntsman Bulk Packaging Corporation1 Utah 100
11. Huntsman Film Products UK Ltd.2 U.K. 100
12. Huntsman Container Company Ltd.2 U.K. 99
13. Huntsman Container Company France2 France 98
14. Huntsman/Ipex3 50
--------
1 Owned by Huntsman Packaging Corporation
2 Owned by Huntsman Container Corporation International
3 Owned by Huntsman Bulk Packaging Corporation
160
(Credit Agreement)
SCHEDULE 3.13
Insurance
---------
161
NOTE:
INSERT DOC #s 140508/S7A
and Schedule 3.16(a)
Schedule 3.16(b)
Schedule 3.19
Schedule 5.07
Schedule 6.01
Schedule 6.03 from Doc #139521.06/S7A
and 137401.04
and Schedule 6.05
Schedule 6.10
Schedule 6.11 from Doc #139521.06/S7A
162
HUNTSMAN CORPORATION RECORD OF INSURANCE 1997/1998
==================================================================================================================================
COMPANY & POLICY POLICY ESTIMATED
COVERAGE LIMITS NUMBER PERIOD PREMIUM
HUNTSMAN PACKAGING - COMMERCIAL PROPERTY; BOILER
& MACHINERY. RMAX & HUNTSMAN CORPORATION HEAD-
QUARTERS BUILDING; BOILER & MACHINERY.
PROPERTY OF ALL DESCRIPTIONS AND TYPES, INCLUDING Zurich Insurance 07-01-97
BUSINESS INTERRUPTION PPR819546300 07-01-98 $459,701 + Taxes
and Fire Levies
of $33,494
Perils: Risks of direct physical loss including
the perils of earthquake and flood
Subject to company terms, conditions and exclu-
sions.
PROPERTY LOSS LIMIT $200,000,000
Blanket any one
occ.
Earthquake $100,000,000
Flood $100,000,000
California Earthquake $5,000,000
Newly Acquired Property (Subject to 120 day re-
porting) $5,000,000
Builders Risk $5,000,000
Misc. Unscheduled Locations $2,500,000
Service Interruption $5,000,000
Demolition & Increased Cost of Construction $5,000,000
Valuable Papers and Accounts Receivable $5,000,000
----------------------------------------------------------------------------------------------------------------------------------
163
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Debris Removal $5,000,000
Tenants & Neighbors Liability $5,000,000
Foreign Tax Liability $1,000,000
Contingent BI & Extra Expense $10,000,000
Errors and Emissions $500,000
Fine Arts $2,000,000
B&M SUBLIMITS- $100,000
Ammonia Contamination $100,000
Water Damage $100,000
Consequential Damage $100,000
DEDUCTIBLES:
Combined PD/BI - Property $50,000
Combined PD/BI - Boiler $50,000
California Earthquake 5% of PD/BI
Values or
$100,000
Minimum 24
Hours
Service Interruption 60 Days Extend-
Business Income ed Period of
Indemnity
Loss of
Earnings
12 Month period
of Indemnity
Loss Profits
24 Hours Ser-
vice Inter-
ruption
-----------------------------------------------------------------------------------------------------------------------------------
164
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
EMPLOYEE DISHONESTY
Federal Ins. Co. 07-01-97
Employee Theft Coverage $15,000,000 8141-4999 07-01-98 $96,270
Premises Coverage $15,000,000
Transit Coverage $15,000,000
Depositor's Forgery $15,000,000
DEDUCTIBLE $250,000
Federal Ins. Co. 07-01-97 Included
FIDUCIARY LIABILITY
Fiduciary Dishonesty - Applicable $10,000,000 8141-4999 07-01-98
to Employee Benefit Plans
Coverage Territory is Worldwide $250,000
& Includes Pension & Profit
Sharing Plans
Limit: (Each Loss/Each Year) $10,000,000
DEDUCTIBLE $250,000
DIRECTORS AND OFFICERS LIABILITY Gulf Insurance Co. 04-21-96/99 $619,490
XX0000000
Limit per Occurrence $15,000,000
RETENTIONS:
INDIVIDUAL D & O $0
AGGREGATE D & O $0
CORPORATE REIMBURSEMENT $150,000
Retro Date: 9-07-90
Extended Reporting Period -
1 Year @ 75% Additional
Premium
-----------------------------------------------------------------------------------------------------------------------------------
165
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
SPECIAL CONTINGENCY COVERAGE $5,000,000 Reliance Ins. 09-15-95/ $7,500
NFK1394480 09-15-2000 5 year prepaid
MARINE OPEN CARGO POLICY
07-01-97/98 $290,395
Coverages: Marine/War Cargo, S.R.
& C.C. where applicable limits
are per:
Any one Vessel per occurrence $5,000,000 MH2094585
Any one Barge per occurrence $1,000,000 Zurich Insurance Co.
ATC 81 Barge per shipment $13,000,000
Includes containerized shipments
Any one Conveyance - Huntsman $2,000,000 $15,000
Packaging Ocean Movement
Inland Shipments for Huntsman $1,000,000
Packaging Operations - Any one
Common Carrier
DEDUCTIBLE: 1/2 OF 1% OF VALUE
SHIPPED
No deductible applies to
Containerized shipments
Huntsman Packaging Ocean & Inland
Shipment Deductible $1,000
per occurrence
Rates:All bulk per
SP13C=.0425 per
$100 values shipped
ATC81 bulk rate per
SP13C=.0595 per $100
values shipped
Containerized shipments
=.051 per $100
values shipped
Guaranteed Outturn-
(must request prior
to shipment)=.1445
per $100 values shipped.
Rates are inclusive of War, Strikes,
Riots, and Civil Commotion
----------------------------------------------------------------------------------------------------------------------------------
166
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
UMBRELLA/EXCESS LIABILITY
1st Umbrella layer of $22,000,000 I.R.I.C. 07-01-97/98 $1,351,648
US$22,000,000 XS of Annual
a primary - AIG
SELF-INSURED RETENTION OF Per Occurrence National Union
US$3,000,000 EACH
OCCURRENCE
Worldwide Coverage $44,000,000 #BE9322509 Term: 3 $48,840 Annual
Per Aggregate Cert #CE-365-01-78 Years from (EPL)
7-1-96
$791,209 Annual
Clash
Includes:
Clash Coverage
Per Occurrence $70,000,000
RETENTION ON
PROPERTY/CASUALTY $5,000,000
Employment Practices
Liability AISLIC
RETENTION EACH CLAIM $3,000,000 #CLM818-60-98
RETENTION EACH CLASS ACTION
SUIT $5,000,000
Retro Date: 7/1/96
COMMENTS TO LIABILITY:
Cigna/XL Risk Solutions layer
$100,000,000 excess of
$25,000,000 (including
deductibles) contains
the following provisions:
-----------------------------------------------------------------------------------------------------------------------------------
167
-----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
1. Layer limit of $100,000,000
is available in the event of
liability only losses. In case
of single occurrence producing
both significant property and
liability losses, the underlying
liability limit available could
drop to as low as $75,000,000.
In such event, overlying
reinsurers will drop-down and
attach in excess of reduced Risk
Solutions recoverables.
2. Consult policy for full
explanation of mandatory and
optional limit reinstatement.
3. Does not include Xxxxxx Acquisition.
All layers exclude Xxxxxx
Acquisition except for AIG and
Swiss Re which include.
4. Limit reinstatement premium, if
any, subject to installments.
5. L.O.C. required to secure one-half
of third year premium.
6. Co-insurance penalties apply if
cancelled by reinsured/original
insured.
2nd Excess Layer Cigna/XL Reinsurance $100,000,000 I.R.I.C. 07-01-97/98
US$100,000,000 XS of Per Claim & Agg X.L./Cigna (Risk $1,960,440
US$25,000,000 Claims made Solutions Annual
coverage
$50,000,000 Clash cover in TBD $604,396 Annual
the event of a combined Clash
property & casualty loss
3rd Excess Layer Starr Reinsurance $100,000,000 I.R.I.C. 07-01-97/98
US$100,000,000 XS of Per Claim & Agg Starr Excess $900,000 Annual
US$100,000,000 Claims made
coverage
XS of US$125,000,000 in TBD
the event of a mono-line
casualty loss
-----------------------------------------------------------------------------------------------------------------------------------
168
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
4th Excess Layer OCIL Reinsurance $75,000,000 I.R.I.C. 07-01-97/98
US$100,000,000 XS of Per Claim & Agg Oil Casualty $416,000 Annual
US$200,000,000 Claims
made coverage
XS of US$225,000,000 in TBD
the event of a mono-line
casualty loss
5th Excess Layer Swiss Re Reinsurance $100,000,000 I.R.I.C. 07-01-97/98
US$100,000,000 XS of Per Claim & Agg Swiss Re $1,009,616
US$275,000,000 Claims Annual
made coverage
XS of US$300,000,000 in TBD
the event of a mono-line
casualty loss
6th Excess Layer ACE Reinsurance $200,000,000 I.R.I.C. 07-01-97/98
US$200,000,000 XS of Per Claim & Agg ACE Insurance $950,000 Annual
US$375,000 Claims made
coverage
XS of US$400,000,000 in TBD
the event of a mono-line
casualty loss
$529,755 +
GENERAL/AUTO LIABILITY - FOREIGN American Guarantee & 07-01-97/98 Applicable Local
Country Taxes
General Aggregate $3,000,000 Liability Ins. Co.
Products/Completed Operations Aggregate $3,000,000 CGL804-9302-03
Each Occurrence $3,000,000
Fire Legal Liability $100,000
Premises Medical Payments $10,000
Subject to policy territory Worldwide
excluding US & its territories, Canada,
Cuba, North Korea
Hired & Non-Owned Autos/Excess & DIC $3,000,000
-----------------------------------------------------------------------------------------------------------------------------------
169
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Employee Benefits ($1,000 Deductible) $1,000,000 Each
Employee
$1,000,000
Aggregate
WORKER'S COMPENSATION - FOREIGN American Guarantee & 07-01-97/98 $20,356
Liability Ins. Co.
Coverage A Statutory WC804-9317-03
US Hires &/or US Citizens State of Hire
Country of Hire
or origin
Repatriation Limit $5,000
3rd Country Nationals
Local Nationals Coverage B:
Employer's Liability Only Excess & DIC $1,000,000
Excludes: UK, Ireland, USA & Australia
Foreign Underlyers where required by law
POLLUTION LEGAL LIABILITY Commerce & Industry 7-1-97/98 $329,670 Annual
Covering S&A/Gradual Pollution 22,000,000 Each
Incident
$44,000,000
Coverage Sec-
tion Agg. Limit
$44,000,000
Policy Agg.
RETENTION $3,000,000
Coverages and Limits:
Coverage D - Third Party Claims for
On-Site Cleanup of New
Conditions - See Policy
for Modifications.
-----------------------------------------------------------------------------------------------------------------------------------
170
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Coverage E - Third Party Claims for On-Site
Property Damage
Coverage F - Third Party Claims for On-Site
Bodily Injury
Coverage H - Third Party Claims for Off-Site
Cleanup of New
Conditions - See Policy
for Modifications.
Coverage I - Third Party Claims for Off-Site
Property Damage
Coverage J - Third Party Claims for Off-Site
Bodily Injury
Coverage K - Third Party Claims for Bodily
Injury, Property Damage or
Cleanup Costs - Non-Owned
Locations - See Policy for
Modifications.
Coverage M - To be Provided Upon Declarations
Coverage N - Third Party Claims from
Transportation of the Named
Insured's Product or Waste - See
Policy for Modifications
POLLUTION: CLOSURE/POST CLOSURE
American Interna- 07-01-97/98 $1,150,293*
tional
Coverage provided to site specific locations in Specialty Lines
Texas regulated by Texas Natural Resource Insurance Company
Conservation Commission (TNRCC) - Regulations #8189435
require demonstration of financial responsibility
with respect to these sites for both third party
legal liability and closure/post closure costs.
-----------------------------------------------------------------------------------------------------------------------------------
171
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Coverage A - third Party Legal Liability $4,000,000 Each
Loss
$8,000,000
Aggregate
Coverage B - Closure/Post Closure $5,426,526
*Policy is fronted, collateralized and a portion
of premium prefunds closure costs.
AUTOMOBILE LIABILITY - USA
Zurich Ins. 07-01-97/98 $33,488 Annual
Combined Single Limit $3,000,000 BAP0820986601 -
Uninsured Motorist State Minimum All Other
Personal Injury Protection Statutory TAP0820986701 -
Medical Payments $5,000 Texas
Deductible $3,000,000 MA0820986801 - Mass.
Loss Fund $20,000 9992864FM7 - Canada
WORKER'S COMPENSATION - US
Zurich Ins. 07-01-97/98 $417,945 Annual
Except Maine WC8210091000 - AOS
Coverage A Statutory WC821009000 - Calif.
Coverage B - Employer's Liability State of Hire WC821009200 - G/C
Each Accident $3,000,000
Each Employee Disease $3,000,000
Policy Limit Disease $3,000,000
Loss Limit Each Occurrence $3,000,000
Loss Fund $150,000
-----------------------------------------------------------------------------------------------------------------------------------
172
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
GENERAL LIABILITY Zurich Ins. 07-01-97/98 $110,462 Annual
GL0820980801 -
Occurrence Form $3,000,000
General Aggregate $3,000,000
Products/Completed Operations Aggregate $3,000,000
Personal & Advertising Injury Limit $3,000,000
Medical Expense Limit $50,000
Fire Legal Damage $1,000,000
Deductible - Each Occurrence $3,000,000
Loss Fund $30,000
===================================================================================================================================
173
(Credit Agreement)
SCHEDULE 3.16(a)
Actions to pledge stock of Foreign Subsidiaries
-------------------------------------------------
1. England
-------
Place charge over shares in U.K. Share certificates together with
stock transfer forms are to be deposited with The Chase Manhattan Bank
in New York.
2. Canada
------
Enter into a pledge agreement. Deliver share certificates to The Chase
Manhattan Bank in New York. The Board of Directors will authorize the
pledge of shares to The Chase Manhattan Bank.
3. Germany
-------
Execute Notarial Deed in Germany. There is no registration
nor are there any share certificates.
4. France
------
Enter into a pledge agreement. Transfer of the pledged stock to a
special account in the name of the stockholder. There are no share
certificates. Delivery by the pledged account holder of a pledge
declaration (declaration de nantissement). Delivery by the corporate
records' keeper of a signed certificate of perfection of pledge
(attestation de nantissement de compte).
174
(Credit Agreement)
SCHEDULE 3.16(d)
Mortgage Filing Offices
-----------------------
State County Name of Company
---------------------------------------------------------------------
1. Alabama Xxxxxxxxx Xxxxxxxx Packaging Corporation
2. California Xxxxxx Xxxxxxxx Packaging Corporation
3. Kentucky Xxxxx Huntsman Deerfield Films
Corporation
4. Massachusetts Xxxxxxxx Xxxxxxxx Deerfield Films
Corporation
5. Ohio Xxxxxxx Xxxxxxxx Packaging Corporation
6. Tennessee Xxxxxxxx Xxxxxxxx Packaging Corporation
7. Washington King Huntsman Packaging Corporation
175
(Credit Agreement)
SCHEDULE 3.19
Affiliate Agreements
--------------------
1. Huntsman Packaging Corporation ("Huntsman Packaging") leases its
headquarters office space from Huntsman Headquarters Corporation, an indirect
wholly-owned subsidiary of Huntsman Corporation. Huntsman Packaging is
obligated to pay rent calculated as a pro-rata portion (based on its percentage
occupancy) of the mortgage loan on the headquarters facility. The term lease
expires on December 31, 2005, with an option to extend until December 31, 2015.
2. In connection with the $125,000,000 offering of its 9 1/8% Senior
Subordinated Notes due 2007, Huntsman Packaging will repay all outstanding
inter-company indebtedness owed to Huntsman Corporation. As of September 30,
1997, this indebtedness amounted to $195,846,462.19 in principal and accrued
but unpaid interest. Xxx X. Xxxxxxxx and his family own approximately 99.6% of
the outstanding capital stock of Huntsman Corporation.
3. Huntsman Packaging is a licensee under a license agreement with Huntsman
Group Intellectual Property Holdings Corporation to use the "HUNTSMAN"
tradename and trademark. It is anticipated that subsequent to the consummation
of the Split-Off, Huntsman Packaging will terminate this license agreement.
Huntsman Corporation owns all of the outstanding common stock of Huntsman Group
Intellectual Property Holdings Corporation. The preferred stock is owned by
various affiliates of Huntsman Corporation, including Huntsman Packaging.
4. Huntsman Packaging is a party to agreements with certain affiliates of
Huntsman Corporation including, but not limited to, Huntsman Chemical
Corporation for the purchase of polystyrene and Huntsman Polymers for the
purchase of various resins. All such agreements provide for the purchase of
materials or services at prevailing market prices.
5. Huntsman Packaging obtains some of its insurance coverage under policies of
Huntsman Corporation. Huntsman Packaging is party to an agreement with Huntsman
Corporation that provides for reimbursement of insurance premiums paid by
Huntsman Corporation on behalf of Huntsman Packaging. The reimbursement
payments are based on premium allocations which are determined in cooperation
with Huntsman Corporation's independent insurance broker. It is
176
anticipated that Huntsman Packaging will continue to carry some or all of its
insurance coverage under Huntsman Corporation's policies.
6. In connection with the Split-Off, Huntsman Packaging anticipates entering
into a services agreement with Huntsman Corporation or certain of its
Affiliates covering the provision of tax, finance, treasury and other
administrative services. These services will be provided to Huntsman Packaging
at prices that would be payable to an unaffiliated third party.
177
(Credit Agreement)
SCHEDULE 5.07
Insurance Levels
----------------
1. Insurance described on Schedule 3.13 will be maintained at levels described
therein to the extent such levels are economically feasible and to the extent
such insurance is customary and prudent within the industry.
178
(Credit Agreement)
SCHEDULE 6.01
Existing Indebtedness
---------------------
1. Existing Letters of Credit in the aggregate amount of
$5,628,100 with the U.S. Bank National Association (f/k/a U.S.
Bank of Utah).*
2. 3,222,000 British pounds Sterling guarantees issued by ABN
AMRO Manchester in favor of Huntsman Container Company Ltd.
3. Capital Leases
Current Maturity Interest
Balance Date Rate
-------- -------- --------
x. Xxxxxxxx Packaging
Corporation in Roches-
ter
1. Wide Bag Machine $44,502 4/1/98 6.01%
FMC Corp.
x. Xxxxxxxx United Films
Corporation
1. Odon Building - $265,161 10/1/06 10.5%
NDR, Inc.
2. Odon Line #2 - $285,053 4/1/98 14.5%
Equipment Credit
Services
4. Long term Intercompany notes from Huntsman Packaging Corpo-
ration (f/k/a Huntsman Film Products Corporation) to:
1. Huntsman Film Products of Canada Ltd. for US$3,904,533
2. Huntsman Film Products GmbH for US$5,020,000
--------------------------------------------
* May be deemed to be issued under the Credit Agreement
179
(Credit Agreement)
SCHEDULE 6.03
Existing Liens
--------------
180
===================================================================================================================================
Debtor Jurisdiction No. Date Secured Party Description of Collateral
Filed
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- XXX, XX 000000 1/4/94 X.X. Xxxxxx De Single Head Drill SHD-32. 1001 8
ucts Corporation Nemours & Co. Drawer Dryer. 3001 Processor
Optisol Upgrade. PRI PV-200
OPTISOL HEATEK/
CHILLER.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- XXX, XX 000000 7/1/94 Crown Credit Crown Lift Trucks, Model RS-3020-
ucts Corporation Company 40-268.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- Xxxxx County, 94-32 1/10/94 X.X. Xxxxxx De Single Head Drill SHD-32. 1001 8
ucts Corporation NY Nemours & Co. Drawer Dryer. 3001 Processor
Optisol Upgrade.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- Xxxxx County, 25755 6/6/95 Bank One, Utah, Cash Receipts, Inventory, Ac-
ucts Corporation OH National Asso- counts, Receivables, Trademarks,
ciation General Intangibles and Products
and Proceeds of the foregoing.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- Dep't of Li- 00-000-0000 4/3/95 Banc One Arizo- One (1) Vision Flexographic
ucts Corporation censing, WA na Leasing Printing Press, Eight Color, 29"
Corp., Assign- Wide.
ee; Bank One,
Utah, NA
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- Dep't of Li- 00-000-0000 8/9/95 Banc One Arizo- (Change Lessor's Name from Hunts-
ucts Corporation censing, WA Amendment of na Leasing man Packaging Products Corpora-
00-000-0000 Corp., Assign- tion to Huntsman Design Products
ee; Bank One, Corporation).
Utah, NA
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- Dep't of Li- 00-000-0000 11/13/95 Banc One Arizo- Add to other Equipment listed on
ucts Corporation censing, WA Amendment of na Leasing Exhibit A attached thereto.
00-000-0000 Corp., Assign-
ee; Bank One,
Utah, NA
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- Dep't of Li- 95/002/0149 6/2/96 Banc One Arizo- Equipment listed on Exhibit A
ucts Corporation censing, WA na Leasing attached thereto pursuant to
Corp. Equipment Lease.
-----------------------------------------------------------------------------------------------------------------------------------
181
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- King County, WA 9504040478 4/4/95 Banc One Arizo- (1) Vision Flexographic Printing
ucts Corporation na Leasing Press, Eight Color, 29" Wide.
Corp.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- King County, WA 9507181153 7/18/95 Banc One Arizo- Amend to change name from Hunts-
ucts Corporation Amendment of na Leasing man Packaging Products Corpora-
9504040478 Corp. tion to Huntsman Design Products
Corporation.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- King County, WA 9507181153 7/18/95 Banc One Arizo- Amend to change name from Hunts-
ucts Corporation Amendment of na Leasing man Packaging Products Corpora-
9504040478 Corp. tion to Huntsman Design Products
Corporation.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Design Prod- King County, WA 9511161526 11/16/95 Banc One Arizo- Amend to add other equipment
ucts Corporation Amendment of na Leasing listed on Exhibit A attached
9504040478 Corp. thereto.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging SOS, CA 92253417 11/30/92 Meridian Leas- All Equipment leased under Sup-
Corporation (f/k/a ing Corp. plement No. 1 dated Sept. 23,
Huntsman Film Prod- 1992, to Master Lease Agreement,
ucts Corporation) dated Sept. 12, 1992, as de-
scribed in Exhibit A thereto.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging SOS, CA Assignment 8/11/93 Meridian Leas- All Equipment leased under Sup-
Corporation (f/k/a of 92253417 ing Corp. Xx- xxxxxxx Xx. 0 dated Sept. 23,
Huntsman Film Prod- signed to the 1992, to Master Lease Agreement,
ucts Corporation) CIT Group/ dated Sept. 12, 1992, as de-
Equipment Fi- scribed in Exhibit A thereto.
nancing, Inc.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging XXX, XX XX00000 10/15/92 Oakcreek Fund- (2) 3196-A10 Displays S/N DX642,
Corporation (f/k/a ing Corp. DX745 and (1) 5394-01B Control
Huntsman Film Prod- Unit S/N 9050812 pursuant to
ucts Corporation) Lease No. 356 Schedule A.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging XXX, XX XX00000 1/25/93 Liquid Carbonic (1) 0000 Xxxxxx XX Vessel #11717
Corporation (f/k/a I/M Corp. pursuant to lease.
Huntsman Film Prod-
ucts Corporation)
-----------------------------------------------------------------------------------------------------------------------------------
182
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging XXX, XX XX00000 5/11/93 Toyota Motor (1) New Toyota Forklift Truck,
Corporation (f/k/a Credit Corp. Model 42-5FG20-Serial Number
Huntsman Film Prod- 76858 and
ucts Corporation) () New Toyota Forklift Trucks,
Model 5FGC20-Serial Numbers
76722 and 76753.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging XXX, XX XX00000 4/11/94 XXX Xxxxxxxxxxx 1 HX3-51-16C, 2 32MB E45 Array,
Corporation (f/k/a and 1 Remote Maintenance Proces-
Huntsman Film Prod- sor.
ucts Corporation)
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging XXX, XX 000000 4/14/95 IBM Credit Cor- IBM Equipment pursuant to IBM Sup
Corporation (f/k/a poration #210097 dated 11/7/95.
Huntsman Film Prod-
ucts Corporation)
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging XXX, XX 000000 2/9/96 Yale Financial (3) New Yale Forklift ERPO4OT
Corporation (f/k/a Services, Inc. Pursuant to Lease
Huntsman Film Prod-
ucts Corporation)
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging Xxxxxx County, 802269 11/29/93 Xxxxxxx Chemi- KODAFLEX Plasticizer Dioctyl
Corporation (f/k/a GA cal Company Adipate.
Huntsman Film Prod-
ucts Corporation)
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging Xxxxxx County, Amendment of 3/1/94 Xxxxxxx Chemi- KODAFLEX Plasticizer Dioctyl
Corporation (x/x/x XX 000000 cal Company, as Adipate.
Huntsman Film Prod- DE Corp.
ucts Corporation)
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging Xxxxxx County, 119486 6/28/96 Yale Financial (3) New Yale Forklifts ERP040T
Corporation (f/k/a KY Services, Inc. pursuant to Equipment Lease.
Huntsman Film Prod-
ucts Corporation)
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging Xxxxxx County, 120223 10/24/96 Yale Trucks (1) New Blue Giant Walkie BGS15-
Corporation (f/k/a KY Kentuckiana, 100.
Huntsman Film Prod- Inc.
ucts Corporation)
-----------------------------------------------------------------------------------------------------------------------------------
183
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging Xxxxxxx County, 49586 5/6/94 XXX Xxxxxxxxxxx (1) HX3-51-16C; (2) 32MB E45 Ar-
Corporation (f/k/a OH ray. (1) Remote Maintenance Pro-
Huntsman Film Prod- cessor.
ucts Corporation)
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging Xxxxxxx County, 48706 5/4/93 Toyota Motor (1) New Toyota Forklift Truck,
Corporation (f/k/a OH Credit Corp. Model 42-5FG20, Serial Number
Huntsman Film Prod- 76858.
ucts Corporation) (2) New Toyota Forklift Trucks,
Model 5FG020, Serial Number 76722
and 76753.
-----------------------------------------------------------------------------------------------------------------------------------
Huntsman Packaging Div. of Corps 96-527867 7/15/96 Xxxxxx-XxXxxxx (2) New Yale Motorized Hand
Corporation and Comm Code, Equipment, Trucks MPB040A, and all acces-
UT Inc., assigned sions, additions, replacements
to Yale Xxxxx- and substitutions thereto.
cial Services,
Inc.
===================================================================================================================================
184
(Credit Agreement)
SCHEDULE 6.05
Existing Investments
1. 50% interest in Huntsman/Ipex through Huntsman Bulk Packag-
ing Corporation.
185
(Credit Agreement)
SCHEDULE 6.10
Affiliate Transactions
----------------------
(See Schedule 3.19)
186
(Credit Agreement)
SCHEDULE 6.11
Existing Restrictions
---------------------
1. Indenture, dated as of September 30, 1997, among Huntsman Packaging
Corporation, as Issuer, each of the Guarantors named therein and the Bank of
New York, as Trustee and the 9 1/8% Senior Subordinated Notes due 2007 issued
therein.
187