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EXHIBIT 4.1
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U.S. $155,000,000
REVOLVING CREDIT AGREEMENT,
dated as of July 23, 1999,
among
STERLING CHEMICALS, INC.,
STERLING CANADA, INC.,
STERLING PULP CHEMICALS US, INC.,
STERLING PULP CHEMICALS, INC.,
STERLING FIBERS, INC.,
STERLING CHEMICALS ENERGY, INC., and
STERLING CHEMICALS INTERNATIONAL, INC.,
as the Borrowers,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent,
CREDIT SUISSE FIRST BOSTON,
as the Documentation Agent,
and
THE CIT GROUP/BUSINESS CREDIT, INC.
as the Administrative Agent.
LEAD ARRANGER AND BOOK MANAGER:
DLJ CAPITAL FUNDING, INC.
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TABLE OF CONTENTS
Section Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms...................................................................................3
1.2. Use of Defined Terms...........................................................................43
1.3. Cross-References...............................................................................43
1.4. Accounting and Financial Determinations........................................................44
ARTICLE II COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES, NOTES
AND LETTERS OF CREDIT
2.1. Commitments....................................................................................44
2.1.1. Loan Commitments...............................................................................44
2.1.2. Letter of Credit Commitment....................................................................44
2.1.3. Lenders Not Permitted or Required to Make Loans................................................45
2.2. Reduction of the Commitment Amounts............................................................46
2.2.1. Optional.......................................................................................46
2.2.2. Mandatory......................................................................................46
2.3. Borrowing Procedures and Funding Maintenance...................................................47
2.3.1. Current Assets Loans and Fixed Assets Loans....................................................47
2.3.2. Swing Line Loans...............................................................................48
2.4. Continuation and Conversion Elections..........................................................50
2.5. Funding........................................................................................50
2.6. Issuance Procedures............................................................................50
2.6.1. Other Lenders' Participation...................................................................51
2.6.2. Disbursements; Conversion to Current Assets Loans..............................................51
2.6.3. Reimbursement..................................................................................52
2.6.4. Deemed Disbursements...........................................................................52
2.6.5. Nature of Reimbursement Obligations............................................................53
2.7. Register, Reserves, Notes......................................................................53
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments; Application........................................................56
3.1.1. Repayments and Prepayments.....................................................................56
3.1.2. Application....................................................................................59
3.2. Interest Provisions............................................................................60
3.2.1. Rates..........................................................................................60
3.2.2. Post-Maturity Rates............................................................................60
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3.2.3. Payment Dates..................................................................................61
3.3. Fees...........................................................................................61
3.3.1. Commitment Fees................................................................................61
3.3.2. The Agents' Fees and the Lead Arranger's Fees..................................................62
3.3.3. Letter of Credit Fees..........................................................................62
ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful.....................................................................62
4.2. Deposits Unavailable...........................................................................62
4.3. Increased LIBO Rate Loan Costs, etc............................................................63
4.4. Funding Losses.................................................................................63
4.5. Increased Capital Costs........................................................................64
4.6. Taxes..........................................................................................64
4.7. Payments, Computations, etc....................................................................68
4.8. Sharing of Payments............................................................................69
4.9. Setoff.........................................................................................69
4.10. Guaranty Provisions............................................................................70
4.10.1. Guaranty.......................................................................................70
4.10.2. Guaranty Absolute, etc.........................................................................70
4.10.3. Reinstatement, etc.............................................................................71
4.10.4. Waiver, etc....................................................................................71
4.10.5. Postponement of Subrogation, etc...............................................................71
ARTICLE V CONDITIONS TO CREDIT EXTENSIONS
5.1. Initial Credit Extension.......................................................................72
5.1.1. Resolutions, etc...............................................................................72
5.1.2. Senior Secured Notes...........................................................................72
5.1.3. Issuance of Senior Secured Notes, etc..........................................................72
5.1.4. Consummation of Transaction, etc...............................................................72
5.1.5. Intercreditor Agreements.......................................................................73
5.1.6. Closing Date Certificate.......................................................................73
5.1.7. Delivery of Notes..............................................................................73
5.1.8. Payment of Outstanding Indebtedness, etc.......................................................73
5.1.9. Closing Fees, Expenses, etc....................................................................73
5.1.10. Financial Information, etc.....................................................................73
5.1.11. Borrowing Base Certificate.....................................................................74
5.1.12. Opinions of Counsel............................................................................74
5.1.13. Filing Agent, etc..............................................................................74
5.1.14. Intercreditor Amendment........................................................................75
5.1.15. Appraisals and Audit Analyses; Environmental Audit Report......................................75
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5.1.16. Pledge Agreements..............................................................................75
5.1.17. Security Agreements Filings, Lockboxes, etc....................................................76
5.1.18. Intellectual Property Security Agreements......................................................77
5.1.19. Insurance......................................................................................77
5.1.20. Mortgage.......................................................................................77
5.1.21. Cash Management Accounts.......................................................................78
5.1.22. Perfection Certificate.........................................................................78
5.1.23. Solvency, etc..................................................................................78
5.1.24. Required Consents and Approvals................................................................78
5.1.25. Statement of Sources and Uses..................................................................78
5.2. All Credit Extensions..........................................................................78
5.2.1. Compliance With Warranties, No Default, etc....................................................78
5.2.2. Credit Extension Request, etc..................................................................79
5.2.3. Satisfactory Legal Form........................................................................79
ARTICLE VI REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc..............................................................................79
6.2. Due Authorization, Non-Contravention, etc......................................................79
6.3. Government Approval, Regulation, etc...........................................................80
6.4. Validity, etc..................................................................................80
6.5. Financial Information..........................................................................80
6.6. No Material Adverse Change.....................................................................81
6.7. Litigation, Labor Controversies, etc...........................................................81
6.8. Subsidiaries...................................................................................81
6.9. Ownership of Properties........................................................................81
6.10. Taxes..........................................................................................81
6.11. Pension and Welfare Plans......................................................................82
6.12. Environmental Warranties.......................................................................82
6.13. Accuracy of Information........................................................................84
6.14. Regulations U and X............................................................................84
6.15. Year 2000......................................................................................84
6.16. Issuance of Subordinated Debt; Status of Obligations as Senior Debt, etc.......................85
6.17. Solvency.......................................................................................85
6.18. Intellectual Property Collateral...............................................................86
6.19. Ownership of Stock.............................................................................86
ARTICLE VII COVENANTS
7.1. Affirmative Covenants..........................................................................87
7.1.1. Financial Information, Reports, Notices, etc...................................................87
7.1.2. Maintenance of Existence; Compliance With Laws, etc............................................89
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7.1.3. Maintenance of Properties......................................................................89
7.1.4. Insurance......................................................................................90
7.1.5. Books and Records..............................................................................90
7.1.6. Foreign Employee Benefit Plan Compliance.......................................................90
7.1.7. Use of Proceeds................................................................................91
7.1.8. Future Borrowers, Security, etc................................................................91
7.1.9. Cash Management Accounts.......................................................................91
7.1.10. Environmental Covenant.........................................................................92
7.1.11. As to Intellectual Property Collateral.........................................................92
7.1.12. Future Real Estate Properties..................................................................93
7.1.13. Non-Consolidation of Unrestricted Subsidiaries.................................................93
7.1.15. ANEXCO Receivables.............................................................................94
7.2. Negative Covenants.............................................................................95
7.2.1. Business Activities............................................................................95
7.2.2. Indebtedness...................................................................................95
7.2.3. Liens..........................................................................................97
7.2.4. Excess Availability............................................................................98
7.2.5. Investments....................................................................................99
7.2.6. Restricted Payments, etc......................................................................101
7.2.7. Capital Expenditures, etc.....................................................................101
7.2.8. No Prepayment of Subordinated Debt or the Senior Secured Notes................................102
7.2.9. Capital Securities of Subsidiaries............................................................103
7.2.10. Consolidation, Merger, etc....................................................................103
7.2.11. Permitted Dispositions........................................................................103
7.2.12. Modification of Certain Agreements............................................................104
7.2.13. Transactions With Affiliates..................................................................104
7.2.14. Restrictive Agreements, etc...................................................................104
7.2.15. Sale and Leaseback............................................................................105
7.2.16. Transfer of the Fibers Business...............................................................105
7.2.17. Canadian Facility.............................................................................107
7.2.18. Attornment....................................................................................107
8.1. Listing of Events of Default..................................................................108
8.1.1. Non-Payment of Obligations....................................................................108
8.1.2. Breach of Warranty............................................................................108
8.1.3. Non-Performance of Certain Covenants and Obligations..........................................108
8.1.4. Non-Performance of Other Covenants and Obligations............................................108
8.1.5. Default on Other Indebtedness.................................................................109
8.1.6. Judgments.....................................................................................109
8.1.7. Pension Plans.................................................................................109
8.1.8. Change in Control.............................................................................109
8.1.9. Bankruptcy, Insolvency, etc...................................................................109
8.1.10. Impairment of Security, etc...................................................................110
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8.1.11. Failure of Subordination......................................................................110
8.1.12. Default Under Senior Secured Discount Notes...................................................111
8.2. Action if Bankruptcy..........................................................................111
8.3. Action if Other Event of Default..............................................................111
ARTICLE IX THE ADMINISTRATIVE AGENT
9.1. Actions.......................................................................................111
9.2. Funding Reliance, etc.........................................................................112
9.3. Exculpation...................................................................................112
9.4. Successor.....................................................................................113
9.5. Credit Extensions by Each Agent and Issuer....................................................114
9.6. Credit Decisions..............................................................................114
9.7. Copies, etc...................................................................................114
9.8. Reliance by Agents............................................................................114
9.9. Defaults......................................................................................115
9.10. The Documentation Agent.......................................................................115
ARTICLE X MISCELLANEOUS PROVISIONS
10.1. Waivers, Amendments, etc......................................................................115
10.2. Notices; Time.................................................................................117
10.3. Payment of Costs and Expenses.................................................................118
10.4. Indemnification...............................................................................119
10.5. Survival......................................................................................120
10.6. Severability..................................................................................120
10.7. Headings......................................................................................120
10.8. Execution in Counterparts, Effectiveness, etc.................................................120
10.9. Governing Law; Entire Agreement...............................................................121
10.10. Successors and Assigns........................................................................121
10.11. Sale and Transfer of Loans; Participations in Loans and Notes.................................121
10.11.1. Assignments...................................................................................121
10.11.2. Participations................................................................................123
10.12. Confidentiality...............................................................................124
10.13. Other Transactions............................................................................125
10.14. Forum Selection and Consent to Jurisdiction...................................................125
10.15. Waiver of Jury Trial..........................................................................126
10.16. Certain Collateral Matters....................................................................126
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Section Page
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SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages; LIBO Office; Domestic Office
SCHEDULE III - Account Obligor Schedule
EXHIBIT A-1 - Form of Current Assets Note
EXHIBIT A-2 - Form of Fixed Assets Note
EXHIBIT A-3 - Form of Swing Line Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Closing Date Certificate
EXHIBIT E - Form of Borrowers' Solvency Certificate
EXHIBIT F - Form of Borrowing Base Certificate
EXHIBIT G-1 - Form of Parent Pledge Agreement
EXHIBIT G-2 - Form of Obligor Pledge Agreement
EXHIBIT H-1 - Form of Current Assets Security Agreement
EXHIBIT H-2 - Form of Fixed Assets Security Agreement
EXHIBIT I - Form of Mortgage
EXHIBIT J - Form of Joinder Agreement
EXHIBIT K-1 - Form of Revolver Intercreditor Agreement
EXHIBIT K-2 - Form of Senior Debt Intercreditor Agreement
EXHIBIT L - Form of Lender Assignment Agreement
EXHIBIT M - Form of Perfection Certificate
EXHIBIT N - Form of Exemption Certificate
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of July 23, 1999, among
STERLING CHEMICALS, INC., a Delaware corporation (the "Company"), STERLING
CANADA, INC., a Delaware corporation, STERLING PULP CHEMICALS US, INC., a
Delaware corporation, STERLING PULP CHEMICALS, INC., a Georgia corporation,
STERLING FIBERS, INC., a Delaware corporation, STERLING CHEMICALS ENERGY, INC.,
a Delaware corporation, and STERLING CHEMICALS INTERNATIONAL, INC., a Delaware
corporation, and each other Person who becomes a party hereto pursuant to
Section 7.1.8 (each such Person, together with the Company, each individually a
"Borrower" and collectively the "Borrowers"), the various financial institutions
as are or may become parties hereto (collectively, the "Lenders"), DLJ CAPITAL
FUNDING, INC. ("DLJ"), as the syndication agent (the "Syndication Agent") for
the Lenders, CREDIT SUISSE FIRST BOSTON ("CSFB"), as the documentation agent
(the "Documentation Agent"), and THE CIT GROUP/BUSINESS CREDIT, INC. ("CIT"), as
the administrative agent and the collateral agent (the "Administrative Agent",
and, together with the Syndication Agent, sometimes referred to herein
collectively as the "Agents" and each as an "Agent") for the Lenders and DLJ, as
lead arranger and book manager (the "Lead Arranger").
W I T N E S S E T H:
WHEREAS, the Borrowers are Wholly-Owned Subsidiaries (such capitalized
term and other capitalized terms used in the preamble and in the recitals
without definition shall have the meanings provided for in Section 1.1) of
Sterling Chemicals Holdings, Inc., a Delaware corporation (the "Parent");
WHEREAS, the Borrowers have proposed a refinancing (the "Refinancing")
of certain of their existing Indebtedness, and approximately $349,302,500 will
be required to consummate such Refinancing, including fees and expenses related
to the Transaction (as defined below), which the Borrowers intend to finance
through:
(a) the issuance by the Company of its Series A 12 3/8 %
Senior Secured Notes Due 2006 (the "Senior Secured Notes") for gross
cash proceeds of $295,000,000;
(b) a Borrowing of approximately $50,393,800 of Fixed Assets
Loans hereunder; and
(c) the issuance of Letters of Credit in an aggregate amount
of approximately $3,908,700;
WHEREAS, such proceeds will be used:
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(a) to refinance approximately $50,204,200 of Indebtedness
outstanding under the Company's existing revolving credit facility
under that certain Amended and Restated Credit Agreement, dated as of
July 10, 1997, with Chase Bank of Texas, N.A., as administrative agent
thereunder (as amended, the "Existing Loan Agreement") including
accrued interest, commitment fees and letter of credit fees thereon;
(b) to refinance approximately $273,157,100 of term loan
Indebtedness outstanding under the Existing Loan Agreement including
accrued interest thereon;
(c) to refinance approximately $2,032,100 of employee stock
ownership plan term loan Indebtedness outstanding under the Existing
Loan Agreement including accrued interest thereon;
(d) to replace outstanding letters of credit in an aggregate
amount of approximately $3,908,700; and
(e) to pay fees and expenses associated with the Refinancing,
the issuance of the Senior Secured Notes, the financing contemplated
hereunder and all other transactions related thereto (collectively, the
"Transaction") in an amount not to exceed $20,000,000;
WHEREAS, in connection with the Transaction and the ongoing working
capital and general corporate needs of the Borrowers, the Borrowers desire to
obtain the following financing facilities from the Lenders:
(a) a Current Assets Loan Commitment (to include availability
for Current Assets Loans, Swing Line Loans and Letters of Credit)
pursuant to which Borrowings of Current Assets Loans, in a maximum
aggregate principal amount outstanding at any time (together with all
Swing Line Loans and Letter of Credit Outstandings) not to exceed the
lesser of (i) the Borrowing Base Amount less the Minimum Excess
Availability and (ii) the Current Assets Loan Commitment Amount, will
be made from time to time on and subsequent to the Closing Date but
prior to the Current Assets Loan Commitment Termination Date;
(b) a Letter of Credit Commitment sub-facility pursuant to
which the Issuer will issue Letters of Credit from time to time on and
subsequent to the Closing Date but prior to the Current Assets Loan
Commitment Termination Date in a maximum aggregate Stated Amount at any
one time outstanding not to exceed the Letter of Credit Commitment
Amount;
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(c) a Swing Line Loan Commitment sub-facility pursuant to
which Borrowings of Swing Line Loans, in an aggregate outstanding
principal amount not to exceed the Swing Line Loan Commitment Amount
outstanding at any time, will be made from time to time on and
subsequent to the Closing Date but prior to the Current Assets Loan
Commitment Termination Date; and
(d) a Fixed Assets Loan Commitment pursuant to which
Borrowings of Fixed Assets Loans, in a maximum aggregate principal
amount not to exceed the Fixed Assets Loan Commitment Amount
outstanding at any time, will be made from time to time on and
subsequent to the Closing Date but prior to the Fixed Assets Loan
Commitment Termination Date; and
WHEREAS, the Lenders and the Issuer are willing, on the terms and
subject to the conditions hereinafter set forth, to extend the Commitments and
make Loans to the Borrowers and issue (or participate in) Letters of Credit;
NOW, THEREFORE, the parties hereto agree as follows.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION I.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acceptable Account" means any Foreign Account for which the obligor
has long-term debt ratings, or is a Wholly-Owned Subsidiary of a Person having
long-term debt ratings, of at least A- and A3 or short-term debt ratings of at
least A2 and P2, in each case by S&P and Xxxxx'x, respectively.
"Account Obligor Schedule" means the Account Obligor Schedule attached
hereto as Schedule III, as it may be supplemented or otherwise modified from
time to time by the Borrowers upon, in the case of Items A and C, the written
consent of the Administrative Agent and in the case of Item B, written notice to
the Administrative Agent of the name of such account obligors that meet all of
the requirements set forth in the definition of "Acceptable Account."
"Additional Senior Subordinated Notes" means the Company's 11-1/4%
Senior Subordinated Notes Due 2007 in an original principal amount of
$150,000,000.
"Additional Senior Subordinated Notes Indenture" means the Indenture
dated as of April 7, 1997 between the Company and Fleet National Bank (now known
as State Street Bank and Trust Company), as trustee, that governs the terms of
the Additional Senior Subordinated
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Notes, as the same has heretofore been supplemented and may hereafter be
amended, supplemented, amended and restated or otherwise modified in accordance
with Section 7.2.12.
"Administrative Agent" is defined in the preamble and includes each
other Person appointed as the successor Administrative Agent pursuant to Section
9.4.
"Administrative Agent's Fee Letter" means the confidential fee letter,
dated July 23, 1999, among the Borrowers and CIT, as amended, supplemented,
amended and restated or otherwise modified from time to time.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. "Control" of a Person means
(a) the power, directly or indirectly, to vote 10% or more of
the securities (on a fully diluted basis) having ordinary voting power
for the election of directors, managing members or general partners (as
applicable);
(b) beneficial ownership of 10% or more of any class of the
Voting Stock of such Person or 10% or more of all outstanding Capital
Securities of such Person; or
(c) the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person (whether by
contract or otherwise).
"Agents" is defined in the preamble and includes each other Person
appointed as a successor Agent pursuant to Section 9.4.
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated or otherwise modified from time to time and
in effect on such date.
"Alternate Base Rate" means, for any day and with respect to all Base
Rate Loans, the higher of (a) 0.50% per annum above the latest Federal Funds
Rate and (b) the rate of interest in effect for such day as most recently
publicly announced or established by The Chase Manhattan Bank in New York, New
York (the "Reference Bank"), as its "Base Rate". (The "Base Rate" is a rate set
by the Reference Bank based upon various factors including the Reference Bank's
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above
or below such announced rate.) Any change in the Alternate Base Rate established
or announced by the Reference Bank shall take effect at the opening of business
on the day of such establishment or announcement.
"Amount Drawn" is defined in the definition of Applicable Commitment
Fee.
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"ANEXCO LLC Agreement" means the Limited Liability Company Agreement of
ANEXCO, as amended, supplemented, amended and restated or otherwise modified
from time to time pursuant to Section 7.1.15.
"ANEXCO" means ANEXCO, LLC, a Delaware limited liability company.
"Applicable Commitment Fee" means for (a) the Current Assets Loan
Commitment, 0.50%, and (b) the Fixed Assets Loan Commitment, the applicable
percentage set forth below corresponding to the sum of the average outstanding
daily principal amount of Fixed Assets Loans (the "Amount Drawn") during the
Fiscal Quarter ending on the applicable Quarterly Payment Date:
Amount of Fixed Assets Loans Drawn Applicable Commitment Fee
Greater than $50,000,000 0.75%
Less than or equal to $50,000,000 and greater 1.00%
than $25,000,000
Less than or equal to $25,000,000 1.25%
"Applicable Margin" means for (a) Current Assets Loans maintained as
(i) LIBO Rate Loans, 3.00%, and (ii) Base Rate Loans, 1.50%, and (b) Fixed
Assets Loans maintained as (i) LIBO Rate Loans, 3.75%, and (ii) Base Rate Loans,
2.25%.
"Assignee Lender" is defined in Section 10.11.1.
"Assignor Lender" is defined in Section 10.11.1.
"Authorized Officer" is defined in clause (b) of Section 5.1.1.
"Availability Reserve" means the sum of (without duplication), at the
Administrative Agent's election, reserves: (a) for any matters affecting the
priority of the Administrative Agent's Liens, including (i) rental payments or
similar charges for any Borrower's leased premises or other Current Assets
Collateral locations for which the Borrowers have not delivered to the
Administrative Agent a landlord's waiver or mortgagee's waiver or other similar
subordination agreement, as applicable, all in form and substance reasonably
satisfactory to the Administrative Agent, and (ii) estimated payments due by the
Borrowers to any applicable warehousemen or third party processor, for which the
Borrowers have not delivered to the Administrative Agent a waiver or some other
similar subordination agreement as determined by and in form and
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substance satisfactory to the Administrative Agent; provided, that any of the
foregoing amounts shall be adjusted from time to time hereafter upon (A)
delivery to the Administrative Agent of any such acceptable waiver or
subordination agreement, (B) the opening or closing of a Current Assets
Collateral location and/or (C) any change in the amount of rental, storage or
processor payments or similar charges; (b) upon the occurrence of a Material
Adverse Effect, in the good faith, reasonable judgment of the Administrative
Agent, the Administrative Agent shall have the right to reserve the lesser
amount of (i) 10% of the (Borrowing Base Amount minus the Minimum Excess
Availability) and (ii) $10 million; and (c) pursuant to the explicit terms of
this Agreement; provided, however, it is understood and agreed that no such
reserves shall be taken with respect to those items of Collateral already
excluded from the definitions of "Eligible Inventory" and "Eligible Accounts".
"Backed By Letter of Credit" means an account (a) that is backed by a
letter of credit (payable in Dollars) in form and substance reasonably
acceptable to the Administrative Agent and that is issued or confirmed by an
issuer having ratings of at least A2 or P2 by S&P and Xxxxx'x, respectively, or
a rating of at least A2 by International Bank Credit Analysis, Ltd. or at least
LC-1 by Thomson Bank Watch or (b) for which a guaranty agreement guaranteeing
the payment of such account has been executed by a U.S. corporation that is an
Affiliate of the account obligor both in form and substance and from a U.S.
corporation reasonably satisfactory to the Administrative Agent.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Borrower" and "Borrowers" are defined in the preamble.
"Borrowing" means a borrowing of Loans of the same type and, in the
case of LIBO Rate Loans, having the same Interest Period, made by all Lenders
required to make such Loans on the same Business Day and pursuant to the same
Borrowing Request in accordance with Section 2.1 or a continuation or conversion
thereof pursuant to Section 2.4.
"Borrowing Base Amount" shall mean at any time the amount equal to the
sum (without duplication) of (a) 85% of Eligible Accounts plus (b) a percentage
of Eligible Accounts that are Government Guaranteed where such percentage is
equal to the level of insurance coverage under the applicable guaranty net of
any deductibles plus (c) 65% of Eligible Inventory, provided, however, that the
amount available pursuant to clause (c) of this definition shall in no event
exceed $42,500,000. The Administrative Agent shall have the right to review such
computations and if, in its reasonable judgment, such computations have not been
computed in accordance with the terms of this Agreement, the Administrative
Agent shall have the right to correct such errors.
"Borrowing Base Certificate" means a certificate duly completed and
executed by the treasurer, assistant treasurer, chief accounting or financial
Authorized Officer of the Company,
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substantially in the form of Exhibit F hereto, together with such changes
thereto as the Administrative Agent may from time to time reasonably request for
the purpose of monitoring the Borrowers' compliance with the limitations on the
amount of Current Assets Loans that may be outstanding at any time hereunder.
"Borrowing Request" means a Loan request and certificate duly executed
by an Authorized Officer of the applicable Borrower, substantially in the form
of Exhibit B-1 hereto.
"BP" means BP Chemicals Inc., an Ohio corporation.
"BP Joint Venture Agreement" means the Joint Venture Agreement, dated
March 31, 1999, between ANEXCO and BP, as amended, supplemented, amended and
restated or otherwise modified from time to time pursuant to Section 7.1.15.
"BP Production Agreement" means the Amended and Restated Production
Agreement, dated as of March 31, 1998, between BP and the Company.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New
York, New York; and
(b) relative to the making, continuing, prepaying or repaying
of any LIBO Rate Loans, any day which is a Business Day described in
clause (a) above and which is also a day on which dealings in Dollars
are carried on in the London interbank eurodollar market.
"Canadian Facility" means a revolving loan and letter of credit
facility for loans and letters of credit for the account of any Canadian
Subsidiary in an amount not to exceed $15,000,000 U.S. Dollars or the Canadian
dollar equivalent thereof established in accordance with the terms of this
Agreement including Section 7.2.17.
"Canadian Subsidiary" means any Foreign Restricted Subsidiary that is
organized and existing under the laws of Canada or any province thereof.
"Capital Expenditures" means, for any period, the aggregate amount of
all expenditures of the Borrowers and the Foreign Restricted Subsidiaries for
fixed or capital assets made during such period which, in accordance with GAAP,
would be classified as capital expenditures.
"Capital Securities" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's equity (including any instruments
convertible into equity), whether now outstanding or issued after the Effective
Date.
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"Capitalized Lease Liabilities" means all monetary obligations of the
Borrowers or any of their Foreign Restricted Subsidiaries under any leasing or
similar arrangement which have been (or, in accordance with GAAP, should be)
classified as capitalized leases, and for purposes of each Loan Document, the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without payment
of a premium or a penalty.
"Cash Collateralize" means, with respect to a Letter of Credit, the
deposit of immediately available funds into a cash collateral account maintained
with (or on behalf of) the Administrative Agent on terms satisfactory to the
Administrative Agent in an amount equal to the Stated Amount of such Letter of
Credit.
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed
by) the United States of America or a State (or any agency or political
subdivision thereof, to the extent such obligations are supported by
the full faith and credit of the United States of America or a State)
maturing not more than one year after such time;
(b) commercial paper maturing not more than 270 days from the
date of issue, which is issued by
(i) a corporation (other than an Affiliate of any
Obligor) organized under the laws of any State and rated A-1
or higher by S&P or P-1 or higher by Xxxxx'x, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers
acceptance, maturing not more than one year after its date of issuance,
which is issued by either
(i) any bank organized under the laws of the United
States (or any State) and which has (x) a credit rating of P-1
or higher from Xxxxx'x or A-1 or higher from S&P and (y) a
combined capital and surplus greater than $500,000,000, or
(ii) any Lender;
(d) any repurchase agreement having a term of 30 days or less
entered into with any Lender or any commercial banking institution
satisfying the criteria set forth in clause (c)(i) which
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(i) is secured by a fully perfected security interest
in any obligation of the type described in clause (a), and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of such commercial banking institution
thereunder;
(e) any money market mutual fund with a daily right of
redemption and a net asset value of $1.00 per share substantially all
the assets of which are comprised of investments of the types described
in the preceding clauses (a) through (d); or
(f) participations in loans (for a tenor of not more than 90
days) to Persons having short term credit ratings of at least A-1 and
P-1 by S&P and Xxxxx'x, respectively.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) a "Change in Control", as defined in any Sub Debt
Document, Senior Secured Discount Notes Indenture or the Senior Secured
Note Indenture;
(b) a change resulting when any Unrelated Person or any
Unrelated Persons, other than the designated shareholders listed on
Item 1.1 of the Disclosure Schedule ("Designated Shareholders"), acting
together, which would constitute a Group (as defined in Section 13(d)
of the Exchange Act) together with any Affiliates or Related Persons
thereof (in each case also constituting Unrelated Persons) shall at any
time either (i) Beneficially Own (as defined in Rule 13d3 of the
Exchange Act) more than 30% of the aggregate voting power of all
classes of Voting Stock of Parent or (ii) succeed in having a
sufficient number of its or their nominees elected to the Board of
Directors of Parent such that such nominees, when added to any existing
director remaining on the Board of Directors of Parent after such
election who is an Affiliate or Related Person of such Person or Group
(as defined in Section 13(d) of the Securities Exchange Act), shall
constitute a majority of the Board of Directors of Parent. As used
herein (a) "Unrelated Person" shall mean at any time any Person other
than Parent or any of its Subsidiaries and other than any trust for any
employee benefit plan of Parent or any of its Subsidiaries and (b)
"Related Person" of any Person shall mean any other Person owning (i)
5% or more of the outstanding common stock of such Person or (ii) 5% or
more of the Voting Stock of such Person;
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(c) the failure of Parent at any time to directly own and
control beneficially and of record on a fully diluted basis 100% of the
outstanding Capital Securities of the Company, such Capital Securities
to be held free and clear of all Liens (other than Liens granted under
a Loan Document);
(d) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
of Parent or the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election by
the shareholders of Parent or the Company, as the case may be, was
approved by a majority of the directors of Parent or the Company, as
the case may be, then still in office who were either directors at the
beginning of such period or whose election or nomination for election
was previously so approved), cease for any reason to constitute a
majority of the Board of Directors of Parent or the Company, as the
case may be, then in office; or
(e) the failure of the Company at any time to directly or
indirectly own and control beneficially or of record on a fully diluted
basis 100% of the outstanding Capital Securities of each other Borrower
and each Foreign Restricted Subsidiary, such Capital Securities to be
held free and clear of all Liens (other than Liens granted under a Loan
Document or pursuant to clause (e) of Section 7.2.3), provided,
however, the Transfer of the Fibers Business shall not be deemed to be
a Change in Control.
"CIT" is defined in the preamble.
"Chem Systems Appraisal" is defined in clause (b) of Section 5.1.15.
"Closing Date" means the date of the initial Credit Extensions, not to
be later than July 30, 1999.
"Closing Date Certificate" means the closing date certificate executed
and delivered by each Borrower pursuant to the terms of this Agreement,
substantially in the form of Exhibit D hereto.
"Code" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"Collateral" has the meaning provided for such term in the Security
Agreements, the Mortgages, the Pledge Agreements and any other related documents
in which an Obligor grants a security interest in favor of the Administrative
Agent on behalf of the Secured Parties.
"Commitment" means, as the context may require, the Current Assets Loan
Commitment, the Fixed Assets Loan Commitment, the Letter of Credit Commitment or
the Swing Line Loan Commitment.
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"Commitment Amount" means, as the context may require, the Current
Assets Loan Commitment Amount, the Fixed Assets Loan Commitment Amount, the
Letter of Credit Commitment Amount or the Swing Line Loan Commitment Amount.
"Commitment Termination Date" means, as the context may require, the
Current Assets Loan Commitment Termination Date or the Fixed Assets Loan
Commitment Termination Date.
"Commitment Termination Event" means
(a) the occurrence of any Event of Default with respect to any
Borrower described in clauses (a) through (d) of Section 8.1.9; or
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of all or any portion of the
Loans to be due and payable pursuant to Section 8.3, or
(ii) the giving of notice by the Administrative
Agent, acting at the direction of the Required Lenders, to the
Company that the Commitments have been terminated pursuant to
Section 8.3.
"Commodity Hedging Agreements" means with respect to any Person, all
liabilities of such Person under exchange agreements, swap agreements, cap
agreements, future agreements, forward agreements and all other agreements or
arrangements (of a strictly non-speculative nature) designed to protect such
Person against fluctuations in commodity prices.
"Company" is defined in the preamble.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise, to assure a creditor against loss) the Indebtedness of any
other Person, or guarantees the payment of dividends or other distributions upon
the Capital Securities of any other Person; provided that the term "Contingent
Liability" shall not include endorsements for collection or deposits in the
ordinary course of the Borrowers' business. The amount of any Person's
obligation under any Contingent Liability shall (subject to any limitation set
forth therein) be deemed to be the outstanding principal amount of the debt,
obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
applicable Borrower (or the Company on behalf of such Borrower), substantially
in the form of Exhibit C hereto.
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"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with Parent,
the Company or any Subsidiary, are treated as a single employer under Section
414 of the Code or Section 4001 of ERISA.
"Copyright Security Agreement" means any Copyright Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit C to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Credit Extension" means, as the context may require,
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of
any Stated Expiry Date of any existing Letter of Credit or the increase
in the Stated Amount of any existing Letter of Credit, in each case by
the Issuer.
"CSFB" is defined in the preamble.
"Current Assets" means all Collateral of the Borrowers other than the
Collateral comprising Fixed Assets.
"Current Assets Lender" is defined in clause (a) of Section 2.1.1.
"Current Assets Loan Commitment" means, relative to any Current Assets
Lender, such Current Assets Lender's obligation (if any) to make Current Assets
Loans pursuant to clause (a) of Section 2.1.1.
"Current Assets Loan Commitment Amount" means, on any date,
$85,000,000, as such amount may be reduced from time to time pursuant to Section
2.2.
"Current Assets Loan Commitment Termination Date" means the earliest of
(a) July 23, 2004;
(b) the date on which the Current Assets Loan Commitment
Amount is terminated in full or reduced to zero pursuant to the terms
of this Agreement; and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in the preceding clauses, the Current
Assets Loan Commitments shall terminate automatically and without any further
action.
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"Current Assets Loan Percentage" means, relative to any Lender, the
applicable percentage set forth opposite its name on Schedule II hereto under
the Current Assets Loan Commitment column or set forth in a Lender Assignment
Agreement under the Current Assets Loan Commitment column, as such percentage
may be adjusted from time to time pursuant to Lender Assignment Agreements
executed by such Lender and its Assignee Lender and delivered pursuant to
Section 10.11.1. A Lender shall not have any Current Assets Loan Commitment if
its percentage under the Current Assets Loan Commitment column is zero.
"Current Assets Loans" is defined in clause (a) of Section 2.1.1.
"Current Assets Note" means a joint and several promissory note of each
Borrower payable to any Current Assets Lender, in the form of Exhibit A-1 hereto
(as such promissory note may be amended, endorsed or otherwise modified from
time to time), evidencing the joint and several aggregate Indebtedness of the
Borrowers to such Current Assets Lender resulting from outstanding Current
Assets Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"Current Assets Obligations" means all obligations (monetary or
otherwise, whether absolute or contingent, matured or unmatured) of each Obligor
arising under or in connection with the Current Assets Loans, this Agreement and
each other Loan Document which secures or guarantees the Current Assets
Obligations including obligations under a Rate Protection Agreement where the
counterparty is a Current Assets Lender (or its Affiliate).
"Current Assets Obligations Account" is defined in clause (c) of
Section 2.7.
"Current Assets Required Lenders" means, at any time, Current Assets
Lenders holding greater than 50% of the aggregate Current Assets Loan
Commitments.
"Current Assets Secured Parties" means collectively, the Current Assets
Lenders, the Agents, the Lead Arranger, each counterparty to a Rate Protection
Agreement that is (or at the time such Rate Protection Agreement was entered
into, was) a Current Assets Lender or an Affiliate thereof and (in each case),
each of their respective successors, transferees and assigns.
"Current Assets Security Agreement" means the Current Assets Security
Agreement executed and delivered by each Borrower pursuant to the terms of this
Agreement to secure the Current Assets Obligations, substantially in the form of
Exhibit H-1 hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Disbursement" is defined in Section 2.6.2.
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21
"Disbursement Date" is defined in Section 2.6.2.
"Disbursement Due Date" is defined in Section 2.6.2.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrowers with the prior written
consent of the Required Lenders.
"Disposition" (or similar words such as "Dispose") means any sale,
transfer, lease, contribution or other conveyance (including by way of merger)
of, or the granting of options, warrants or other rights to, any of any
Borrower's or any Foreign Restricted Subsidiary's assets (including accounts
receivables and Capital Securities of Foreign Restricted Subsidiaries) to any
other Person in a single transaction or series of transactions.
"Documentation Agent" is defined in the preamble and includes each
other Person appointed as the successor Documentation Agent pursuant to Section
9.4.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Account" means any account for which an obligor is subject to
the personal jurisdiction of federal or state courts in the United States of
America (and is subject to service of process in the U.S.).
"Domestic Office" means the office of a Lender designated as its
"Domestic Office" on Schedule II hereto or in a Lender Assignment Agreement, or
such other office within the United States as may be designated from time to
time by notice from such Lender to the Administrative Agent and the Company.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 10.8.
"Eligible Account" shall mean at any time the invoice or ledger amount
owing on each account of any Borrower, which shall mean (i) any "account" as
such term is defined in the U.C.C. , (ii) any receivable (including royalties)
arising out of the licensing of chlorine dioxide generator technology or other
technology related thereto, (iii) receivables arising out of the profit sharing
component of conversion or production contracts or cost reimbursement
obligations or other obligations to pay money under other contracts to the
extent the parties thereto have agreed in writing as to the amount thereof that
is subject to no further adjustment, or (iv) any "chattel paper" (as such term
is defined in the U.C.C.) of the Borrowers (so long as such chattel paper is
delivered to the Administrative Agent and the Administrative Agent has a
first-priority perfected Lien in any such "chattel paper"), in each case, net of
any reserves reasonably required by the Administrative Agent from time to time
in accordance with the Administrative Agent's
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customary practice, for which each of the following statements is accurate and
complete to the reasonable satisfaction of the Administrative Agent (and the
Company, by including an account in any computation of the Borrowing Base
Amount, shall be deemed to represent and warrant to the Agents, the Issuer and
each Lender the accuracy and completeness of such statements):
(a) Such account is a binding and valid obligation of the
obligor thereon and is in full force and effect and such account debtor
is not an Affiliate of any Borrower (other than Xxxx Industries, Inc.,
ANEXCO or BP or any of their respective Affiliates);
(b) Such account is bona fide;
(c) Payment of such account is less than 30 days past due (or
60 days past due in the case of any obligor listed in Item A of the
Account Obligor Schedule on payment terms consistent with past
practices of the Borrowers) as determined by the due date stated on the
invoice therefor (or if such account is not paid by reference to any
invoice in the ordinary course of business but instead by reference to
the terms of the agreements creating such account, such account has not
remained unpaid beyond 30 days (or 60 days past due in the case of any
obligor listed in Item A of the Account Obligor Schedule on payment
terms consistent with current practices) after the due date therefor);
(d) Such account is not subject to any dispute, setoff
(excluding any account payable setoff supported by a letter of credit
but including (i) any Exchange Inventory Payable and (ii) any accounts
payable amounts owing by any of the Borrowers to the third party which
owes an Exchange Inventory Receivable to such Borrower), counterclaim
or other claim or defense including rescission, cancellation or
avoidance, whether by operation of law or otherwise, on the part of the
account debtor or any other Person denying liability under such
account; provided, however, that any such account shall constitute an
Eligible Account to the extent it is not subject to any such dispute,
setoff, counterclaim or other claim or defense;
(e) In the case of an account owing to any Borrower, the
Administrative Agent, on behalf of the Current Assets Lenders, has a
first-priority perfected Lien covering such account and, on behalf the
Fixed Assets Lenders, has a second-priority perfected Lien covering
such account and such account is, and at all times will be, free and
clear of all other Liens;
(f) Such account arose in the ordinary course of business of
(i) any of the Borrowers or (ii) any Foreign Restricted Subsidiary
provided that such account arising in the ordinary course of business
of a Foreign Restricted Subsidiary has been duly transferred to a
Borrower and is reflected on the books and records of such Borrower,
and such Borrower is the legal owner of such account;
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23
(g) Such account is not payable by an obligor who is more than
30 days (or 60 days in the case of any obligor listed in Item A of the
Account Obligors Schedule on payment terms consistent with past
practices of the Borrowers) past due with regard to 20% or more of the
total accounts owed to the Borrowers by such obligor or any of its
Affiliates;
(h) All consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority required
to be obtained, effected or given in connection with the execution,
delivery and performance of such account by each party obligated
thereunder have been duly obtained, effected or given and are in full
force and effect;
(i) Such account is not an account as to which any United
States federal or State Governmental Authority is the account debtor,
except to the extent the applicable Borrower has complied with the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727;
41 U.S.C. Section 15), by delivering to the Administrative Agent a
notice of assignment in favor of the Administrative Agent under such
Act and in compliance with applicable provisions of 31 C.F.R. Section
7-103.8 and 41 C.F.R. Section 1-30.7, or with similar State law;
(j) The obligor on such account is not the subject of any
bankruptcy or insolvency proceeding, has not had a trustee or receiver
appointed for all or a substantial part of its property, has not made
an assignment for the benefit of creditors, nor admitted its inability
to pay its debts as they mature or suspended its business;
(k) With respect to any Foreign Account, such account is
(without duplication), (i) a Foreign Account which is Backed By Letter
of Credit, (ii) an Acceptable Account that is listed on Item B of the
Account Obligor Schedule, provided, however, that any such Acceptable
Account shall be included in Eligible Accounts up to an aggregate
amount not to exceed, at any time, 10% of the total balance due on all
accounts, (iii) a Foreign Account which is not Backed By Letter of
Credit, provided, however, that any such Foreign Account which is not
Backed By Letter of Credit shall be included in Eligible Accounts up to
an aggregate amount not to exceed, at any time, 15% of the total
balance due on all accounts, or (iv) the account debtor has previously
been approved in writing by the Current Assets Required Lenders as an
eligible foreign account debtor for purposes of this Agreement;
(l) In the case of the sale of goods, such goods have been
sold to an obligor on a true sale basis or open account, or subject to
contract, and not on consignment, on approval or on a "sale or return"
basis or subject to any other repurchase or return agreement (other
than for failure to meet specifications), no material part of such
goods has been returned, rejected, lost or damaged, and such account is
not evidenced by chattel
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paper or an instrument of any kind which has not been endorsed and
delivered to the Administrative Agent;
(m) Each of the representations and warranties set forth in
each Security Agreement with respect to such account is true and
correct in all material respects on such date;
(n) Such account otherwise meets the above qualifications and
is (i) due and owing from a Foreign Obligor to ANEXCO and (ii) owing
from ANEXCO to the Company pursuant to the ANEXCO LLC Agreement and the
BP Joint Venture Agreement, net of ANEXCO's operating costs; in each
case subject to the requirements of Section 7.1.15; and
(o) Such account has such other characteristics or criteria as
the Administrative Agent, in its reasonable discretion may specify from
time to time in accordance with the Administrative Agent's customary
practice;
provided that, if any Eligible Account, when added to all other accounts that
are obligations of the same obligor and its Affiliates, results in a total sum
that exceeds 15% (or 25% in the case of any obligor listed on Item C of the
Account Obligor Schedule) of the total balance then due on all Eligible Accounts
(without giving effect to any reduction in Eligible Accounts pursuant to this
clause), the amount of such account in excess of 15% (or 25% in the case of any
obligor listed on Item C of the Account Obligor Schedule) of such total balance
then due shall be excluded from Eligible Accounts.
"Eligible Assignee" is defined in clause (a) of Section 10.11.1.
"Eligible Inventory" shall mean, at any time, all inventory (as such
term is defined in the U.C.C.) of the Borrowers, net of any reserves reasonably
required by the Administrative Agent from time to time in accordance with the
Administrative Agent's customary practice and net of any accounts payable
amounts owing by any Borrower to BP provided that such amounts do not duplicate
those included in clause (d) of the definition of "Eligible Accounts", for which
each of the following statements is accurate and complete to the reasonable
satisfaction of the Administrative Agent and which at all times continue to be
acceptable to the Administrative Agent in the exercise of its reasonable
judgment (and the Company, by including such inventory in any computation of the
Borrowing Base Amount, shall be deemed to represent and warrant to the Agents,
each Issuer and each Lender, the accuracy and completeness of such statements):
(a) Such inventory shall be valued in accordance with GAAP and
(i) shall include raw materials and finished goods but (ii) shall not
include goods that are classified as "work-in-progress", "parts and
supplies" or "stores inventories";
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(b) Such inventory is in good condition, meets all standards
imposed by any Governmental Authority having regulatory authority over
it, its use and/or sale and is either currently usable, undamaged or
currently salable in the normal course of business of the Borrowers;
(c) Such inventory is an Exchange Inventory Receivable or such
inventory is in the possession of the Borrowers, or is in transit in
the ordinary course of business but in respect of which title remains
in the Borrowers and which is fully insured (subject to deductibles
consistent with prudent industry standards for similarly situated
companies) and is not (i) located outside the United States of America
or (ii) such inventory is an Exchange Inventory Receivable or is in the
possession or control of any warehouseman, bailee or any agent or
processor for or customer of the Borrowers unless, it is in any such
Person's possession, the Borrowers shall have notified (in a manner
that effectively under applicable law creates a valid and
first-priority perfected Lien in favor of the Administrative Agent, on
behalf of the Current Assets Lenders, in such inventory) such
warehouseman, bailee, agent, processor or customer of the
Administrative Agent's Lien and such warehouseman, bailee, agent,
processor or customer has subordinated or waived any Lien it may claim
therein and agreed to hold all such inventory for the Administrative
Agent's account subject to the Administrative Agent's instructions;
(d) Each of the representations and warranties set forth in
the applicable Security Agreement with respect to such inventory is
true and correct in all material respects on such date;
(e) In the case of inventory of the Borrowers, the
Administrative Agent, on behalf of the Current Assets Lenders, has a
first-priority perfected Lien covering such inventory and, on behalf of
the Fixed Assets Lenders, has a second-priority perfected Lien covering
such inventory (in each case, except for the Lien granted in connection
with the BP Production Agreement), and such inventory is, and at all
time will be, free and clear of all other Liens (other than inchoate
Liens permitted under Section 7.2.3 or with respect to which all rights
of the holder of such Liens have been waived or subordinated to the
satisfaction of the Administrative Agent);
(f) Such inventory does not include goods that are not owned
by the Borrowers or that are held by the Borrowers pursuant to any
consignment agreement;
(g) To the extent inventory includes any Exchange Inventory
Receivable (i) such Exchange Inventory Receivable shall be reduced by
any accounts payable amounts owing by any of the Borrowers to the third
party which owes such Exchange Inventory Receivable to such Borrower
and (ii) any such accounts payable amount shall be applied first to
clause (d)(ii) of the definition of Eligible Account and second to this
clause (g)(i), without duplication); and
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(h) Such inventory has such other characteristics or criteria
as the Administrative Agent, in its reasonable discretion, may specify
from time to time in accordance with the Administrative Agent's
customary practice.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"Equipment" is defined in the Fixed Assets Security Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to Sections of ERISA also refer to any successor Sections thereto.
"ERISA Affiliate" means any Person which is in the same Controlled
Group as any Borrower.
"ESOP" means the Sterling Chemicals ESOP as in existence on the Closing
Date.
"Event of Default" is defined in Section 8.1.
"Excess Availability" means, at any time of determination, the amount
which is
(a) the then existing Borrowing Base Amount
less
(b) the aggregate outstanding principal amount of all Current
Assets Loans and Swing Line Loans, together with the aggregate amount
of all Letter of Credit Outstandings.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Inventory" means any inventory which is subject to a swap,
exchange or similar agreement or arrangement between any of the Borrowers and a
third party.
"Exchange Inventory Payable" means the net amount of Exchange Inventory
owing by any of the Borrowers to a third party.
"Exchange Inventory Receivable" means the net amount of Exchange
Inventory owed to any Borrower by a third party.
"Exemption Certificate" is defined in clause (e) of Section 4.6.
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"Existing Loan Agreement" is defined in the third recital.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it.
"Fee Letter" means the confidential letter, dated July 23, 1999,
between DLJ and the Company, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Fibers Subsidiaries" means Sterling Fibers, Inc. and Sterling
Chemicals International, Inc., each of which is a Delaware corporation and a
Wholly-Owned Subsidiary of the Company.
"Filing Agent" is defined in Section 5.1.13.
"Filing Statements" is defined in Section 5.1.13.
"Fiscal Quarter" means a quarter ending on the last day of March, June,
September or December.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on September 30; references to a Fiscal Year with a number corresponding
to any calendar year (e.g., the "1999 Fiscal Year") refer to the Fiscal Year
ending on September 30 of such calendar year.
"Fixed Assets" means the real property, buildings, Equipment,
structures and other improvements to any of the foregoing, of the Borrowers and
to the extent any of the following items of property constitute fixtures and/or
equipment under applicable laws, all fixtures, fittings, appliances, apparatus,
Equipment, machinery, building and construction materials and other articles of
every kind and nature whatsoever (including the intellectual property and
technology necessary to operate such assets) and all replacements thereof, now
or hereafter affixed or attached to, placed upon or used in any way in
connection with the complete and comfortable use, enjoyment, occupation,
operation, development and/or maintenance of the real property of the Borrowers
or such buildings, structures and other improvements.
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"Fixed Assets Lender" is defined in clause (b) of Section 2.1.1.
"Fixed Assets Loans" is defined in clause (b) of Section 2.1.1.
"Fixed Assets Loan Commitment" means, relative to any Fixed Assets
Lender, such Fixed Assets Lender's obligation (if any) to make Fixed Assets
Loans pursuant to clause (b) of Section 2.1.1.
"Fixed Assets Loan Commitment Amount" means, on any date, $70,000,000,
as such amount may be reduced from time to time pursuant to Section 2.2.
"Fixed Assets Loan Commitment Termination Date" means the earliest of
(a) July 23, 2004;
(b) the date on which the Fixed Assets Loan Commitment Amount
is terminated in full or reduced to zero pursuant to the terms of this
Agreement; and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in the preceding clauses, the Fixed
Assets Loan Commitments shall terminate automatically and without any further
action.
"Fixed Assets Loan Percentage" means, relative to any Lender, the
applicable percentage set forth opposite its name on Schedule II hereto under
the Fixed Assets Loan Commitment column or set forth in a Lender Assignment
Agreement under the Fixed Assets Loan Commitment column, as such percentage may
be adjusted from time to time pursuant to Lender Assignment Agreements executed
by such Lender and its Assignee Lender and delivered pursuant to Section
10.11.1. A Lender shall not have any Fixed Assets Loan Commitment if its
percentage under the Fixed Assets Loan Commitment column is zero.
"Fixed Assets Note" means a joint and several promissory note of each
Borrower payable to any Fixed Assets Lender, in the form of Exhibit A-2 hereto
(as such promissory note may be amended, endorsed or otherwise modified from
time to time), evidencing the joint and several aggregate Indebtedness of the
Borrowers to such Fixed Assets Lender resulting from outstanding Fixed Assets
Loans, and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Fixed Assets Obligations" means all obligations (monetary or
otherwise, whether absolute or contingent, matured or unmatured) of each Obligor
arising under or in connection with the Fixed Assets Loans, this Agreement and
each other Loan Document which secures or guarantees the Fixed Assets
Obligations including obligations under a Rate Protection Agreement where the
counterparty is a Fixed Assets Lender (or its Affiliate).
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"Fixed Assets Obligations Account" is defined in clause (c) of Section
2.7
"Fixed Assets Required Lenders" means, at any time, Lenders holding
greater than 50% of the aggregate Fixed Assets Loan Commitments.
"Fixed Assets Security Agreement" means the Fixed Assets Security
Agreement executed and delivered by each Borrower to secure the Fixed Assets
Obligations pursuant to the terms of this Agreement substantially in the form of
Exhibit H-2 hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Fixed Assets Security Documents" means the Fixed Assets Security
Agreement, the Parent Pledge Agreement, the Obligor Pledge Agreement, each
Mortgage and each other Loan Document pursuant to which the Administrative Agent
is granted a Lien to secure the Fixed Assets Obligations.
"Fixed Assets Secured Parties" means, collectively, the Fixed Assets
Lenders, the Agents, the Lead Arranger, each counterparty to a Rate Protection
Agreement that is (or at the time such Rate Protection Agreement was entered
into, was) a Fixed Assets Lender or an Affiliate thereof and (in each case),
each of their respective successors, transferees and assigns.
"Foreign Account" means any account (a) for which the obligor is a
Foreign Obligor or (b) due and payable by a Foreign Obligor to ANEXCO.
"Foreign Employee Benefit Plan" means any employee benefit plan as
defined in Section 3(3) of ERISA which is maintained or contributed to for the
benefit of the employees of the Borrowers, any of its Subsidiaries or any of its
ERISA Affiliates, but which is not covered by ERISA pursuant to ERISA Section
4(b)(4).
"Foreign Obligor" means an obligor that is not subject to the
jurisdiction of federal or state courts in the United States of America.
"Foreign Pension Plan" means any employee benefit plan as defined in
Section 3(3) of ERISA which (i) is maintained or contributed to for the benefit
of employees of the Borrowers, any of its Subsidiaries or any of its ERISA
Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA,
and (iii) under applicable local law, is required to be funded through a trust
or other funding vehicle.
"Foreign Restricted Subsidiary" mean each Foreign Subsidiary listed on
Item 1.4 of the Disclosure Schedule that is not an Unrestricted Subsidiary.
"Foreign Subsidiary" means any Subsidiary that is not a Subsidiary
incorporated or organized in the United States or any State.
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"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" means generally accepted United States accounting principles,
applied on a consistent basis (except for changes made due to the implementation
of new or revised standards issued by the Financial Accounting Standards Board),
and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the accounting
principles observed in a current period are comparable in all material respects
to those accounting principles applied in a preceding period.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Government Guaranteed" means Eligible Accounts that are guaranteed by
the full faith and credit of a U.S. or Canadian Governmental Authority.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance (including any petroleum product)
within the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards
of conduct concerning any hazardous, toxic or dangerous waste,
substance or material, all as amended.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under currency exchange agreements, interest rate
swap agreements, interest rate cap agreements, Commodity Hedging Agreements and
interest rate collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates, currency
exchange rates or commodity prices.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in any Loan Document refer to such Loan Document as a whole and not to any
particular Section, paragraph or provision of such Loan Document.
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"Impermissible Qualification" means any qualification or exception to
the opinion or certification of any independent public accountant as to any
financial statement of the Borrowers:
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examinations of
matters due to limitations imposed by the Borrowers relevant to such
financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause the Borrowers to be in Default.
"including" and "include" means including, without limiting the
generality of any description preceding such term.
"Indebtedness" of any Person means (without duplication):
(a) all obligations of such Person for borrowed money or
advances and all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments and all Capital Securities
which have redemption provisions exercisable at the option of the
holder thereof at any time prior to the Termination Date (in the
absence of any contingency) in whole or in part in cash;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities of such Person;
(d) for purposes of Section 8.1.5 only, all other items which,
in accordance with GAAP, would be included as liabilities on the
liability side of the balance sheet of such Person as of the date at
which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services excluding trade accounts payable in the
ordinary course of business which are not overdue for a period of more
than 60 days or, if overdue for more than 60 days, as to which a
dispute exists and adequate reserves in conformity with GAAP have been
established on the books of such Person, and indebtedness of the types
otherwise referred to in this definition secured by (or for which the
holder of such indebtedness has an
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existing right, contingent or otherwise, to be secured by) a Lien on
property owned or being acquired by such Person (including indebtedness
arising under conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed by such Person
or is limited in recourse;
(g) obligations arising under Synthetic Leases; and
(h) all Contingent Liabilities of such Person in respect of
any of the foregoing.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership or joint venture in which such Person is a
general partner) to the extent such Person is liable therefor as a result of
such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness, ownership interest or other
relationship provide that such Person is not liable therefor.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Independent Financial Advisor" means a reputable nationally recognized
accounting, appraisal or investment banking firm that, in the reasonable good
faith judgment of the Board of Directors of the Company, is qualified to perform
the task for which such firm has been engaged and is independent in all respects
with respect to the Company and its Affiliates.
"Initial Syndication" is defined in clause (a) of Section 10.11.1.
"Intellectual Property Collateral" has the meaning provided for such
term in the Security Agreements.
"Intercreditor Agreements" means, as applicable, the Revolver
Intercreditor Agreement, the Parent Intercreditor Agreement and/or the Senior
Debt Intercreditor Agreement.
"Intercreditor Amendment" is defined in Section 5.1.14.
"Interest Period" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Sections 2.3 or
2.4 and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three, six or nine months thereafter, or, if available in the
Administrative Agent's reasonable determination and available to all of the
Lenders, either twelve months thereafter or such other time period less than one
month as may be requested by the Borrowers (a "Non-Standard Period") (or, if
such month has no numerically corresponding day, on the last Business Day of
such month), as the applicable Borrower may select in its relevant notice
pursuant to Sections 2.3 or 2.4; provided, however, that:
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(a) such Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than ten different dates;
(b) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day); and
(c) no Interest Period for any Loan may end later than the
Stated Maturity Date for such Loan.
"Investment" means, relative to any Person,
(a) any loan, advance or extension of credit made by such
Person to any other Person, including the purchase by such Person of
any bonds, notes, debentures or other debt securities of any other
Person;
(b) any Contingent Liability of such Person incurred in
connection with loans or advances made by others to any other Person;
and
(c) any Capital Securities held by such Person in any other
Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
"ISP98 Rules" is defined in Section 10.9.
"Issuance Request" means a Letter of Credit request duly executed by an
Authorized Officer of the applicable Borrower, substantially in the form of
Exhibit B-2 hereto.
"Issuer" means, collectively, The Chase Manhattan Bank or the Person
issuing the Letters of Credit hereunder, as designated by the Administrative
Agent in its capacity as Issuer of the Letters of Credit and any other Lender
designated by any Borrower that issues a Letter of Credit with the consent of
the Administrative Agent which consent shall not be unreasonably withheld.
"Joinder Agreement" means a Joinder Agreement, substantially in the
form of Exhibit J hereto, executed and delivered by each Person who is required
to become (or otherwise becomes, pursuant to the terms of this Agreement) a
Borrower in accordance with Section 7.1.8.
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"Joint Venture Contribution" means any Disposition of the Capital
Securities of the Fibers Subsidiaries or all or substantially all of the assets
of the Fibers Subsidiaries to a Person in which the Company and its Affiliates
will, immediately after giving effect to such transaction, beneficially own or
hold any Capital Securities in such Person to which such contribution is made,
including any such contribution made through any Merger or any agreement to
operate all or substantially all of the assets of the Fibers Subsidiaries under
any similar arrangement, in each case, made in accordance with the terms of this
Agreement.
"Lead Arranger" is defined in the preamble.
"Lender Assignment Agreement" means an assignment agreement
substantially in the form of Exhibit L hereto.
"Lenders" is defined in the preamble and includes any Person that
becomes a Lender pursuant to Section 10.11.1.
"Lender's Environmental Liability" means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages),
disbursements or expenses of any kind or nature whatsoever (including reasonable
attorneys' fees at trial and appellate levels and experts' fees and
disbursements and expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against any Agent, any Lender
or the Issuer or any of such Person's Affiliates, shareholders, directors,
officers, employees, and agents in connection with or arising from:
(a) any Hazardous Material on, in, under or affecting all or
any portion of any property of the Company or any of its Subsidiaries,
the groundwater thereunder, or any surrounding areas thereof to the
extent caused by Releases from the Company's or any of its
Subsidiaries' or any of their respective predecessors' properties;
(b) any misrepresentation, inaccuracy or breach of any
warranty, contained or referred to in Section 6.12;
(c) any violation or claim of violation by the Company or any
of its Subsidiaries of any Environmental Laws; or
(d) the imposition of any Lien for damages caused by or the
recovery of any costs for the cleanup, release or threatened release of
Hazardous Material by the Company or any of its Subsidiaries, or in
connection with any property owned or formerly owned by the Company or
any of its Subsidiaries.
"Letter of Credit" is defined in clause (a) of Section 2.1.2.
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"Letter of Credit Commitment" means, with respect to the Issuer, the
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1.2 and,
with respect to each Current Assets Loan Lender, the obligations of each such
Lender to participate in such Letters of Credit pursuant to Section 2.6.1.
"Letter of Credit Commitment Amount" means, on any date, a maximum
amount of $20,000,000, as such amount may be permanently reduced from time to
time pursuant to Section 2.2.
"Letter of Credit Outstandings" means, on any date, an amount equal to
the sum of (a) the then aggregate amount which is undrawn and available under
all issued and outstanding Letters of Credit, and (b) the then aggregate amount
of all unpaid and outstanding Reimbursement Obligations.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans,
the rate per annum equal to the rate at which Dollar deposits are offered for
such Interest Period as set forth on the Telerate Screen LIBO Page, at or about
12:00 noon, New York City time, two Business Days prior to the beginning of such
Interest Period for delivery on the first day of such Interest Period, and in an
amount approximately equal to the amount of the LIBO Rate Loan and for a period
approximately equal to such Interest Period; provided, however, that if there
shall at any time no longer exist a Telerate Screen LIBO Page, "LIBO Rate" shall
mean, with respect to each day during each Interest Period pertaining to a LIBO
Rate Loan, the rate per annum equal to the rate at which the Administrative
Agent or its designee is offered Dollar deposits at or about 12:00 noon, New
York City time, two Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of LIBO Rate Loans are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the LIBO Rate
Loan to be outstanding for a period approximately equal to such Interest Period.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded, if necessary, to the nearest 1/16 of 1%)
determined pursuant to the following formula:
LIBO Rate LIBO Rate
(Reserve
Adjusted) = 1.00 - LIBOR Reserve Percentage
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The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.
"LIBOR Office" means the office of a Lender designated as its "LIBOR
Office" on Schedule II hereto or in a Lender Assignment Agreement, or such other
office designated from time to time by notice from such Lender to the Company
and the Administrative Agent, whether or not outside the United States, which
shall be making or maintaining the LIBO Rate Loans of such Lender.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of or including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment for security purposes, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property, or other
priority or preferential arrangement of any kind or nature whatsoever, to secure
payment of a debt or performance of an obligation.
"Loan Documents" means collectively this Agreement, each Letter of
Credit, each Rate Protection Agreement, each Note, each Security Agreement, each
Joinder Agreement, each Mortgage, each Copyright Security Agreement, each Patent
Security Agreement, each Trademark Security Agreement, each Pledge Agreement,
each Intercreditor Agreement, each Lockbox Agreement, the Fee Letter, each
agreement pursuant to which the Administrative Agent is granted a Lien to secure
the Obligations and each other agreement, certificate, document or instrument
delivered in connection with any Loan Document (including the agreements
executed from time to time pursuant to Section 7.1.8 and the agreements executed
from time to time by the Borrowers pursuant to Section 7.1.12), whether or not
specifically mentioned herein or therein.
"Loans" means, as the context may require, a Current Assets Loan, a
Fixed Assets Loan, or a Swing Line Loan of any type.
"Lockbox" means any lockbox established at a Lockbox Bank for
collection of payments in respect of receivables or other Collateral.
"Lockbox Account" means any lockbox account established at a Lockbox
Bank.
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"Lockbox Agreements" means the deposit account agreements, blocked
account agreements, lockbox agreements or similar agreements, executed by and
among the Borrowers, the Administrative Agent and the financial institutions at
which the relevant accounts are being maintained, each in form and substance
reasonably satisfactory to the Administrative Agent, as such agreements may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Lockbox Bank" means each bank identified as such in the Perfection
Certificate that has executed a Lockbox Agreement and has been confirmed by the
Administrative Agent not to be in uncertain financial condition, at which the
Borrowers, or any of their Foreign Restricted Subsidiaries, deposit proceeds of
Collateral.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Company or the Company and its Subsidiaries taken
as a whole, (b) the rights and remedies of any Secured Party under any Loan
Document or (c) the ability of the Company or the Company and the other
Obligors, taken as a whole, to perform their Obligations under the Loan
Documents.
"Maximum Capital Expenditure Amount" is defined in Section 7.2.7.
"Merge" is defined in Section 7.2.10.
"Minimum Excess Availability" means (a) $12,000,000, as such amount may
be reduced by the Administrative Agent from time to time pursuant to Section
7.2.4, plus (b) any Availability Reserve (as adjusted from time to time pursuant
to clause (e) of Section 2.7).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means each mortgage, deed of trust or agreement executed and
delivered by any Borrower in favor of the Administrative Agent for the benefit
of the Secured Parties pursuant to the requirements of this Agreement in
substantially the form of Exhibit I hereto, as applicable, under which a Lien is
granted on the real property and fixtures, or the Obligor's leasehold interest
in the real property and fixtures, described therein, in each case as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Net Debt Proceeds" means, with respect to the incurrence, sale or
issuance by Parent, the Borrowers or any Foreign Restricted Subsidiary of any
Indebtedness after the Effective Date (other than Indebtedness permitted by
Section 7.2.2), the excess of (a) the gross cash proceeds received by Parent,
the Borrowers or any Foreign Restricted Subsidiary from such incurrence, sale or
issuance, less (b) the sum (without duplication) of all reasonable and customary
underwriting commissions and legal, investment banking, brokerage and accounting
and other professional fees, sales commissions and disbursements and all other
reasonable fees, expenses
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(including any State filing taxes) and charges, in each case actually incurred
in connection with such incurrence, sale or issuance.
"Net Disposition Proceeds" means, with respect to any Disposition after
the Effective Date, other than either a Permitted Disposition or an issuance or
sale of such Person's own Capital Securities or warrants or options thereon, the
excess of (a) the gross cash proceeds received by Parent, the Borrowers or any
Foreign Restricted Subsidiary from any such Disposition and any cash payments
received in respect of promissory notes or other non-cash consideration
delivered to Parent, the Borrowers or any Foreign Restricted Subsidiary in
respect thereof, less (b) the sum (without duplication) of (i) all reasonable
and customary fees and expenses with respect to legal, investment banking,
brokerage, accounting and other professional fees, sales commissions and
disbursements and all other reasonable fees, expenses and charges, in each case
actually incurred in connection with such Disposition, (ii) all Taxes and other
governmental costs and expenses actually paid or estimated by Parent, the
Borrowers or any Foreign Restricted Subsidiary (in good faith) to be payable in
cash in connection with such Disposition, and (iii) payments made by Parent, the
Borrowers or any Foreign Restricted Subsidiary to retire Indebtedness (other
than the Credit Extensions) of Parent, the Borrowers or any Foreign Restricted
Subsidiary where payment of such Indebtedness is required in connection with
such Disposition; provided, however, that if, after the payment of all Taxes
with respect to such Disposition, the amount of estimated Taxes, if any,
pursuant to clause (b)(ii) above exceeded the Tax amount actually paid in cash
in respect of such Disposition, the aggregate amount of such excess shall be
immediately payable, pursuant to clause (d) of Section 3.1.1, as Net Disposition
Proceeds.
"Net Equity Proceeds" means with respect to the sale or issuance by
Parent, any Borrower or any of their Subsidiaries to any Person of its own
Capital Securities, warrants or options or the exercise of any such warrants or
options, the excess of:
(a) the gross cash proceeds received by such Person from such
sale, exercise or issuance, less
(b) all reasonable and customary underwriting commissions and
legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements actually
incurred (including any State filing Taxes) in connection with such
sale or issuance which have not been paid to Affiliates of Parent or
such Borrower in connection therewith.
"No Less Favorable Terms and Conditions" means, with respect to any
refinancing of any Indebtedness permitted hereunder, terms and conditions which
are no less favorable to the continuing Lenders and evidenced by documentation
which shall not (a) increase the principal amount of or interest rate on such
outstanding Indebtedness, (b) reduce either the tenor or the average life of
such Indebtedness, (c) change the respective primary obligor(s) on the
refinancing Indebtedness (other than a change from any Borrower to Parent or any
other Borrower or a Foreign Restricted Subsidiary or a change from any Foreign
Restricted Subsidiary to Parent or
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any other Foreign Restricted Subsidiary), (d) change the security, if any, for
the refinancing Indebtedness (except to the extent that less security is granted
to holders of such refinancing Indebtedness) and (e) afford the holders of such
refinancing Indebtedness other covenants, defaults, rights or remedies, taken as
a whole, more burdensome to the obligor(s) than those contained in such
Indebtedness (and in the case of Subordinated Debt, none of the subordination
provisions contained in the refinancing Indebtedness shall be less favorable to
the Lenders, the Issuer, and the Agents than the Indebtedness so refinanced).
"Non-Excluded Taxes" means any Taxes other than net income and
franchise taxes imposed with respect to any Secured Party by (a) any
jurisdiction (or political subdivision thereof) of which such Secured Party is a
citizen or resident, (b) any jurisdiction (or political subdivision thereof) in
which such Secured Party is presently engaged in the active conduct of its
banking business through an office, branch or other permanent establishment, or
(c) the jurisdiction (or any political subdivision thereof) under the laws of
which such Secured Party is organized or in which it maintains its applicable
lending office.
"Non-Standard Period" is defined in the definition of "Interest
Period."
"Non-U.S. Lender" means any Lender that is not a "United States
person", as defined under Section 7701(a)(30) of the Code.
"Note" means, as the context may require, a Current Assets Note, a
Fixed Assets Note, or a Swing Line Note.
"Obligation Accounts" is defined in clause (c) of Section 2.7
"Obligations" means all Current Assets Obligations, all Fixed Assets
Obligations and all other obligations (monetary or otherwise, whether absolute
or contingent, matured or unmatured) of each Obligor arising under or in
connection with this Agreement, each Note and each other Loan Document.
"Obligor" means, as the context may require, Parent, each Foreign
Restricted Subsidiary, each Borrower and each other Person (other than a Secured
Party) obligated under any Loan Document.
"Obligor Pledge Agreement" means the Pledge Agreement executed and
delivered by an Authorized Officer of each Borrower that owns a Pledged
Subsidiary, substantially in the form of Exhibit G-2 hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Offering Memorandum" means the offering memorandum of the Company,
dated July 19, 1999, used in connection with the offer and sale of the Senior
Secured Notes.
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"Organic Document" means, with respect to any Obligor, as applicable,
its certificate of incorporation, by-laws, certificate of partnership,
partnership agreement, certificate of formation, limited liability company
agreement and all shareholder agreements, voting trusts and similar arrangements
applicable to any of such Obligor's partnership interests, limited liability
company interests or authorized shares of Capital Securities.
"Other Taxes" means any and all stamp, documentary or similar taxes, or
any other excise or property taxes or similar levies that arise on account of
any payment made or required to be made under any Loan Document or from the
execution, delivery, registration, recording or enforcement of any Loan
Document.
"Overadvance Amount" means an amount, determined at the sole discretion
of the Administrative Agent and subject to any additional terms the
Administrative Agent deems necessary, which is no more than the lesser of (a)
10% of ((i) the Borrowing Base Amount less (ii) $12,000,000) or (b) $5,000,000;
provided, however, that in no event shall (x) the Overadvance Amount when added
to the outstanding Current Assets Loan and Swing Line Loans, together with all
Letter of Credit Outstandings exceed the Current Assets Loan Commitment Amount
or (y) any Overadvance Amount be outstanding for more than 30 days except with
consent of the Required Lenders.
"Overadvance Rate" means, with respect to any Overadvance Amount, an
interest rate equal to 0.5% per annum plus the Applicable Margin for Current
Assets Loans of the type of Loan for which such Overadvance Amount is
maintained.
"Parent" is defined in the first recital.
"Parent Intercreditor Agreement" means the Intercreditor Agreement,
dated as of August 21, 1996, between Texas Commerce Bank, National Association
(now known as Chase Bank of Texas, N.A.) and the trustee under the Senior
Secured Discount Notes Indenture as amended by the Intercreditor Amendment and
as amended, supplemented, amended and restated or otherwise modified from time
to time.
"Parent Pledge Agreement" means the Pledge Agreement executed and
delivered by an Authorized Officer of Parent, substantially in the form of
Exhibit G-1 hereto, as amended and restated or otherwise modified from time to
time.
"Participant" is defined in Section 10.11.2.
"Patent Security Agreement" means any Patent Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit A to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
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"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which
Parent or the Company or any corporation, trade or business that is, along with
Parent or the Company, a member of a Controlled Group, may have liability,
including any liability by reason of having been a substantial employer within
the meaning of Section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under Section
4069 of ERISA.
"Percentage" means, as the context may require, any Lender's Current
Assets Loan Percentage or Fixed Assets Loan Percentage.
"Perfection Certificate" means the Perfection Certificate executed and
delivered by an Authorized Officer of each Obligor that is a party to a Security
Agreement pursuant to the terms of this Agreement, substantially in the form of
Exhibit M hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Permitted Consideration" means (a) the express assumption of
Indebtedness of any Borrower and the release of such Borrower from all liability
on such Indebtedness in connection solely with the Transfer of the Fibers
Business and (b) securities received by any Borrower that are converted by such
Borrower into cash within 90 days of the receipt of such securities.
"Permitted Disposition" means any Disposition that is:
(a) a Disposition of inventory, accounts receivable or any
other assets Disposed of in the ordinary course of business;
(b) the Disposition of personal property (including pipe,
equipment, machinery and vehicles) in the ordinary course of business
or when, in the reasonable judgment of the Company, such property is
worn out or obsolete or no longer used or useful in the conduct of its
business or the business of its Subsidiaries;
(c) a Disposition from a Borrower or a Foreign Restricted
Subsidiary to another Borrower;
(d) a Disposition of assets in exchange for or in connection
with the purchase of replacement assets or assets useful in the
ordinary course of any business meeting all the requirements of Section
7.2.1; provided, that if the Disposition is by a Borrower, such
Disposition shall only be a Permitted Disposition if the replacement
assets are acquired by a Borrower;
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(e) a Disposition that constitutes a Lien which is a Permitted
Lien; provided, however, this shall not include any Lien that secures
any Indebtedness;
(f) the granting of leases (including subleases) and grounds
leases of any underutilized or vacant properties of any Borrower or any
Foreign Restricted Subsidiary to third parties with which such Borrower
or Foreign Restricted Subsidiary has a production, co-production,
co-generation, operating or other agreement or to third party providers
of energy or raw materials in the ordinary course of business, provided
such leases do not materially interfere with the operation of the
business of any Borrower or any Foreign Restricted Subsidiary or
materially diminish the value of any of the Collateral;
(g) sales of the Capital Securities of any Unrestricted
Subsidiary; and
(h) a Disposition of all or substantially all of the Assets of
any Borrower or any Foreign Restricted Subsidiary expressly permitted
under Section 7.2.10.
"Permitted Investment" is defined in Section 7.2.5.
"Permitted Liens" is defined in Section 7.2.3.
"Permitted Parent Dividends" means any of the following, to the extent
permitted by clause (d) of Section 7.2.6:
(a) cash dividends payable to Parent in any Fiscal Year not to
exceed $2,000,000; and
(b) cash dividends to Parent so long as Parent promptly, and
in any event within five Business Days, utilizes the full amount of
such cash dividends for the sole purpose of paying cash interest as and
when due with respect to the Senior Secured Discount Notes then
outstanding to the extent required to be made in accordance with the
terms of the Senior Secured Discount Notes as in effect on August 21,
1996 and without giving effect to any amendment or modification thereof
unless agreed to in writing by the Required Lenders; provided that (i)
the amount of such cash dividends paid pursuant to this clause (b)
shall not exceed the amount necessary to make such required cash
interest payment in accordance with the terms of the Senior Secured
Discount Notes, (ii) no such payment shall be made at any time when the
payment of cash interest on the Senior Secured Discount Notes is not
required to be made pursuant to the provisions thereof and (iii) no
such payment shall be made at any time prior to August 21, 2001.
"Permitted Real Estate Liens" means:
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(a) minor irregularities in title, boundaries or other survey
defects, easements, rights-of-way, restrictions, servitudes, permits,
reservations, exceptions, zoning regulations, conditions, covenants,
mineral or royalty rights or reservations of oil, gas or mineral
leases, rights of others in any property of any Borrower or any Foreign
Restricted Subsidiary for streets, roads, bridges, pipes, pipelines,
railroads, electric transmission and distribution lines, telegraph and
telephone lines, the removal of oil, gas or other minerals or other
similar purposes, flood control, water rights, rights of others with
respect to navigable waters, sewage and drainage rights and other
similar charges or encumbrances existing as of the Effective Date and
disclosed in a Mortgage or shown in the survey (or granted by any
Borrower or any Foreign Restricted Subsidiary in the ordinary course of
business) that do not, in the aggregate, materially impair the value or
ability to sell of the property of any Borrower and the occupation, use
and enjoyment by any Borrower or any Foreign Restricted Subsidiary of
any of their respective properties in the normal course of business:
(b) Liens securing Indebtedness neither created, assumed nor
guaranteed by any Borrower or any of their Foreign Restricted
Subsidiaries upon lands over which easements or similar rights are
acquired by any Borrower or any of their Foreign Restricted
Subsidiaries in the ordinary course of business of any Borrower or any
of their Foreign Restricted Subsidiaries;
(c) terminable or short term leases or permits for occupancy,
which leases or permits expressly grant to any Borrower or any Foreign
Restricted Subsidiary the right to terminate them at any time on not
more than six months' notice and which occupancy does not interfere
with the operation of the business of any Borrower or any of their
Foreign Restricted Subsidiaries;
(d) any obligations or duties affecting any of the property of
any Borrower or any of their Foreign Restricted Subsidiaries to any
municipal or public authority with respect to any franchise, grant,
license or permit that do not materially impair the use of such
property for the purpose for which it is held;
(e) Liens on any property in favor of any Governmental
Authority to secure partial, progress, advance or other payments
pursuant to any contract or statute, not yet due and payable;
(f) Liens with respect to the so-called "greenbelt" or "buffer
zone" properties, for as long as those properties are used solely for
"greenbelt" or "buffer zone" purposes;
(g) leases and ground leases of underutilized or vacant
properties of any Borrower or any Foreign Restricted Subsidiary to
third parties with which such Borrower or such Foreign Restricted
Subsidiary has a production, co-production, co-generation, operating or
other arrangement or to third party providers of energy or raw
materials in
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the ordinary course of business of such Borrower or such Foreign
Restricted Subsidiary, provided such leases do not materially interfere
with the operations, of any Borrower or any Foreign Restricted
Subsidiary, provided such leases do not materially interfere with the
operations of any Borrower or any Foreign Restricted Subsidiary or
materially diminish the value of any Collateral;
(h) easements, rights-of-way, restrictions and other similar
charges or encumbrances granted to others, in each case incidental to,
and not interfering with, the ordinary conduct of the business of any
Borrower or any Foreign Restricted Subsidiary, provided that such Liens
are not violated by the existing property and do not, in the aggregate,
materially diminish the value or ability to sell the Collateral;
(i) the burdens of any law or governmental regulation or
permit requiring any Borrower or any Foreign Restricted Subsidiary to
maintain certain facilities or perform certain acts as a condition of
its occupancy of or interference with any public lands or any river or
stream or navigable waters;
(j) with respect to property located in Canada, reservations,
limitations, provisos and conditions in any original grant from the
Crown or any freehold lessor of any of the properties of any Borrowers
and its Foreign Restricted Subsidiaries; and
(k) and any extensions, renewals, modifications or
replacements thereof.
Notwithstanding the foregoing, no such Permitted Real Estate Liens
shall in any way materially impair the value of or ability to sell any
Collateral or materially impact the occupation, right or enjoyment of the
relevant property by the Borrowers or any Foreign Restricted Subsidiary.
"Person" means any natural person, corporation, limited liability
company, partnership, joint venture, association, trust or unincorporated
organization, Governmental Authority or any other legal entity, whether acting
in an individual, fiduciary or other capacity.
"Pledge Agreement" means, as the context may require, the Parent Pledge
Agreement or the Obligor Pledge Agreement.
"Pledged Subsidiary" means each Subsidiary in respect of which the
Administrative Agent has been granted a security interest in or a pledge of any
of the Capital Securities of such Subsidiary.
"Quarterly Payment Date" means the last day of March, June, September
and December, or, if any such day is not a Business Day, the next succeeding
Business Day.
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"Rate Protection Agreement" means, collectively, any interest rate
swap, cap, collar or similar agreement entered into by a Borrower under which
the counterparty of such agreement is (or at the time such agreement was entered
into, was) a Lender or an Affiliate of a Lender.
"Refinancing" is defined in the second recital.
"Refunded Swing Line Loans" is defined in clause (b) of Section 2.3.2.
"Register" is defined in clause (b) Section 2.7.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of July 23, 1999, among the Borrowers, Credit Suisse First
Boston Corporation and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, as
the same may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"Reimbursement Obligation" is defined in Section 2.6.3.
"Related Fund" means, with respect to any Lender which is a fund that
invests in loans, any other fund that invests in loans and is controlled by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"Release" means a "release", as such term is defined in CERCLA.
"Required Lenders" means, at any time, the Current Assets Required
Lenders and the Fixed Assets Required Lenders.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
"Restricted Payment" means the declaration or payment of any dividend
(other than dividends payable solely in Capital Securities of the Company) on,
or the making of any payment or distribution on account of, or setting apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of any class of Capital Securities
of the Borrowers or any Foreign Restricted Subsidiary or any warrants or options
to purchase any such Capital Securities, whether now or hereafter outstanding,
or the making of any other distribution in respect thereof, either directly or
indirectly, whether in cash or property, obligations of the Borrowers or any
Foreign Restricted Subsidiary or otherwise other than any such dividends,
payments or distributions that are payable to any Borrower or any Foreign
Restricted Subsidiary (so long as such dividend, payment or distribution payable
to a Foreign Restricted Subsidiary is not payable from a Borrower) or any such
dividends, payments or distributions made by a Foreign Restricted Subsidiary
(solely from such Foreign Restricted Subsidiary's assets) that is not a Wholly
Owned Subsidiary to minority stockholders (or owners
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of an equivalent interest in the case of a Foreign Restricted Subsidiary that is
an entity other than a corporation).
"Return of Capital" means, with respect to any Capital Securities, any
sums paid on or in respect of such Capital Securities (a) as a return, in whole
or in part, of the capital of the issuer of such Capital Securities as
constituted immediately following the consummation of a Transfer of the Fibers
Business pursuant to which such Capital Securities were issued to any Borrower
or either of the Fibers Subsidiaries, (ii) in redemption of, or in exchange for,
such Capital Securities or (iii) in connection with a partial or total
liquidation or dissolution of the issuer of such Capital Securities.
"Revolver Intercreditor Agreement" means the Intercreditor Agreement
executed and delivered pursuant to the terms of this Agreement by the
Administrative Agent and each Lender, and acknowledged by the Company,
substantially in the form of Exhibit K-1 hereto, as amended, supplemented,
amended and restated or otherwise modified from time to time.
"S&P" means Standard & Poor's Rating Services, a division of
XxXxxx-Xxxx, Inc.
"Sale of the Fibers Business" means any Disposition of the Capital
Securities of the Fibers Subsidiaries or all or substantially all of the assets
of the Fibers Subsidiaries (other than pursuant to a Joint Venture
Contribution), including, in either case, any such Disposition made through any
Merger.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" means, collectively, the Lenders, the Issuer, the
Agents, the Lead Arranger, each counterparty to a Rate Protection Agreement that
is (or at the time such Rate Protection Agreement was entered into, was) a
Lender or an Affiliate thereof and (in each case) each of their respective
successors, transferees and assigns to the extent permitted by this Agreement.
"Security Agreement" means, as the context may require, the Current
Assets Security Agreement and the Fixed Assets Security Agreement.
"Senior Debt Intercreditor Agreement" means the Intercreditor Agreement
executed and delivered pursuant to the terms of this Agreement by the
Administrative Agent and the Trustee under the Senior Secured Note Indenture,
and acknowledged by the Company, substantially in the form of Exhibit K-2
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.
"Senior Secured Discount Notes" means Parent's 13-1/2% Senior Secured
Discount Notes Due 2008 in an original stated amount of $191,751,000.
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"Senior Secured Discount Notes Indenture" means the Indenture dated as
of August 15, 1996 between Parent and Fleet National Bank (now known as State
Street Bank and Trust Company), as trustee, that governs the terms of the Senior
Secured Discount Notes, as the same has heretofore been supplemented and may
hereafter be amended, supplemented, amended and restated or otherwise modified
in accordance with Section 7.2.12.
"Senior Secured Note Documents" means, collectively, the Senior Secured
Note Indenture, the Senior Secured Notes and each of the other loan agreements,
indentures, note purchase agreements, promissory notes, guarantees, and other
instruments and agreements executed and delivered in connection with the
issuance of the Senior Secured Notes other than the Registration Rights
Agreement and the Senior Secured Note Purchase Agreement, and evidencing the
terms thereof, as amended, supplemented, amended, restated and otherwise
modified from time to time in accordance with Section 7.2.12.
"Senior Secured Note Indenture" means the Indenture, dated as of July
23, 1999, among the Borrowers and the Trustee, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with Section 7.2.12.
"Senior Secured Note Purchase Agreement" means the Purchase Agreement,
dated as of July 19, 1999, among the Borrowers, Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation and Credit Suisse First Boston Corporation, as amended,
supplemented, amended, restated and otherwise modified from time to time.
"Senior Secured Notes" is defined in the second recital.
"Senior Subordinated Notes" means the Company's 11 3/4% Senior
Subordinated Notes Due 2006 in an original principal amount of $275,000,000.
"Senior Subordinated Notes Indenture" means the Indenture dated as of
August 15, 1996 between the Company and Fleet National Bank (now known as State
Street Bank and Trust Company), as trustee, that governs the terms of the Senior
Subordinated Notes, as the same has heretofore been supplemented and may
hereafter be amended, supplemented, amended and restated or otherwise modified
in accordance with Section 7.2.12.
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person and its
Subsidiaries on a consolidated basis is greater than the total amount of
liabilities, including Contingent Liabilities, of such Person and its
Subsidiaries on a consolidated basis, (b) the present fair salable value of the
assets of such Person and its Subsidiaries on a consolidated basis, is not less
than the amount that will be required to pay the probable liability of such
Person and its Subsidiaries on a consolidated basis on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not believe
that it or its Subsidiaries will, on a consolidated basis, incur debts or
liabilities beyond the ability of such Person and its Subsidiaries on a
consolidated basis to pay as such debts and liabilities
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mature, and (d) such Person and its Subsidiaries on a consolidated basis are not
engaged in business or a transaction, and such Persons and its Subsidiaries on a
consolidated basis are not about to engage in business or a transaction, for
which the property of such Person and its Subsidiaries would constitute an
unreasonably small capital. The amount of Contingent Liabilities at any time
shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, can reasonably be expected to become an
actual or matured liability.
"Standby Purchase Agreements" means the Standby Purchase Agreements,
between the Parent and Xxxxxx X. Xxxx, Xxxxxxx X. XxXxxx, Xxxxx Xxxxx, Xxxxx X.
Xxxxxx, Xxxxx X. Xxxxxxxx, Xxxx Capital Services, Inc., each dated as of
December 15, 1998.
"State" means the several states of the United States of America,
including the District of Columbia, and their political subdivisions.
"Stated Amount" means, on any date and with respect to a particular
Letter of Credit, the total amount then available to be drawn under such Letter
of Credit.
"Stated Expiry Date" is defined in Section 2.6.
"Stated Maturity Date" means with respect to all Loans, July 23, 2004.
"Sub Debt Documents" means, collectively, the Additional Senior
Subordinated Notes Indenture, the Additional Senior Subordinated Notes, the
Senior Subordinated Notes Indenture, the Senior Subordinated Notes, each other
document executed in connection therewith and any other loan agreements,
indentures, note purchase agreements, promissory notes, guarantees, and other
instruments and agreements evidencing the terms of Subordinated Debt, as
amended, supplemented, amended and restated or otherwise modified in accordance
with Section 7.2.12.
"Subordinated Debt" means the Indebtedness evidenced by the Additional
Senior Subordinated Notes, the Senior Subordinated Notes and any other
Indebtedness of any Borrower or any Foreign Restricted Subsidiaries subordinated
in right of payment to the Obligations pursuant to documentation containing
redemption and other prepayment events, maturities, amortization schedules,
covenants, events of default, remedies, acceleration rights, subordination
provisions and other material terms satisfactory to the Agents.
"Subsidiary" means, with respect to any Person, (a) any corporation,
limited liability company, partnership or other entity of which more than 50% of
the Voting Stock is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more other Subsidiaries of such Person,
or by one or more other Subsidiaries of such Person or (b) any partnership,
joint venture or other entity as to which such Person, such Person and one or
more of its Subsidiaries or one or more Subsidiaries of such Person owns more
than a 50% ownership, equity or similar interest or has power to direct or cause
the direction of management and
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policies (directly or indirectly), or the power to elect the managing partner
(or the equivalent), of such partnership, joint venture or other entity, as the
case may be. Unless the context otherwise specifically requires, the term
"Subsidiary" shall be a reference to a Subsidiary of the Company.
"Swing Line Lender" means the Administrative Agent (or another Lender
designated by the Administrative Agent with the consent of the Company (such
consent not to be unreasonably withheld), if such Lender agrees to be the Swing
Line Lender hereunder), in such Person's capacity as the maker of Swing Line
Loans.
"Swing Line Loans" is defined in clause (c) of Section 2.1.1.
"Swing Line Loan Commitment" is defined in clause (c) of Section 2.1.1.
"Swing Line Loan Commitment Amount" means, on any date, $10,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.
"Swing Line Note" means a joint and several promissory note of each
Borrower payable to the Swing Line Lender, in the form of Exhibit A-3 hereto (as
such promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the joint and several aggregate Indebtedness of the Borrowers
to the Swing Line Lender resulting from outstanding Swing Line Loans, and also
means all other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"Syndication Agent" is defined in the preamble and includes each other
Person appointed as the successor Syndication Agent pursuant to Section 9.4.
"Synthetic Lease" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (a) that is not a capital lease in accordance
with GAAP and (b) in respect of which the lessee retains or obtains ownership of
the property so leased for federal income tax purposes, other than any such
lease under which that Person is the lessor.
"Tax Benefit" is defined in clause (d) of Section 4.6.
"Tax Sharing Agreement" means the tax sharing agreement among Parent,
the Company and certain Subsidiaries of the Company delivered pursuant to the
terms of this Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with Section 7.2.12.
"Taxes" means any and all income, stamp or other taxes, duties, levies,
imposts, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, and all
interest, penalties or similar liabilities with respect thereto.
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"Telerate Screen LIBO Page" means the display designated as "Page 3750"
on the Telerate System Incorporated Service (or such other page as may replace
Page 3750 on the service or such other service as may be nominated by the
British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association interest settlement rates for Dollar
deposits).
"Termination Date" means the date on which all Obligations have been
paid in full in cash, all Letters of Credit have been terminated, expired or
Cash Collateralized, all Rate Protection Agreements have been terminated and all
Commitments have been permanently terminated.
"Toronto Office" means the corporate office building located at 0 Xxxxx
Xxxx, Xxxxxxx, Xxxxxxx, Xxxxxx.
"Trademark Security Agreement" means any Trademark Security Agreement
executed and delivered by any Obligor substantially in the form of Exhibit B to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Transaction" is defined in the second recital.
"Transfer of the Fibers Business" means any Joint Venture Contribution
or any Sale of the Fibers Business or any combination thereof consummated in
accordance with the terms of this Agreement.
"Trustee" means Xxxxxx Trust Company of New York, as trustee under the
Senior Secured Note Indenture.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"U.C.C." means the Uniform Commercial Code as may be amended and in
effect from time to time in the State of New York; provided, that, if, with
respect to any Filing Statement or by reason of any provision of law, the
perfection or the effect of perfection or non-perfection of the security
interests granted to the Administrative Agent pursuant to the applicable Loan
Document is governed by the Uniform Commercial Code as in effect in a
jurisdiction of the United States other than New York, U.C.C. means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions of each Loan Document and any Filing Statement
relating to such perfection or effect of perfection or non-perfection.
"United States" or "U.S." means the United States of America and all
States.
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"Unrestricted Subsidiary" means (a) any Subsidiary of the Company which
is listed on Item 1.2 of the Disclosure Schedule and (b) (i) any other
Subsidiary of the Company designated as an Unrestricted Subsidiary by the
Company, and (ii) any Subsidiary created or acquired by another Unrestricted
Subsidiary or designated as such pursuant to the terms of this Agreement;
provided, that, in each case, with respect to any designation under clause
(b)(i), at the time of such designation such Unrestricted Subsidiary (A) has not
acquired any property of the Borrowers or any of their Foreign Restricted
Subsidiaries in excess of $10,000 since the Effective Date, except as
specifically permitted by this Agreement, (B) has no Indebtedness which is
recourse to any of the Borrowers or any of the Foreign Restricted Subsidiaries
and (C) does not own any Capital Securities of the Borrowers or any Foreign
Restricted Subsidiary. Notice of any such designation shall be delivered to the
Administrative Agent by the Company by promptly filing with the Administrative
Agent a copy of the resolutions of the Board of Directors of the Company
approving such designation and a certificate of an Authorized Officer certifying
that such designation complies with the requirements of this definition. Such
designation shall become effective upon receipt by the Administrative Agent of
the foregoing. Each Unrestricted Subsidiary shall continue as such until the
Company delivers a copy of the resolutions of the Board of Directors of the
Company redesignating such Unrestricted Subsidiary as a Foreign Restricted
Subsidiary or a Borrower and the Company, such Borrower and/or such Subsidiary
shall comply with the requirements of Section 7.1.8; provided that at the time
of such redesignation no Default has occurred and is continuing or would result
therefrom.
"Vancouver Release Parcel" means the parcel described in Item 1.3 of
the Disclosure Schedule.
"Voting Stock" means, with respect to any Person, Capital Securities of
any class or kind ordinarily having the power to vote (directly or indirectly)
for the election of directors, managers, representatives or other voting members
of the governing body of such Person.
"Welfare Plan" means a "welfare plan", as such term is defined in
Section 3(1) of ERISA.
"Wholly-Owned Subsidiary" means any Subsidiary, all of the outstanding
Capital Securities of which (other than any director's qualifying shares or
investments by foreign nationals mandated by applicable laws) are owned directly
or indirectly by the Company, Parent or one or more other Wholly-Owned
Subsidiaries.
SECTION I.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document and the
Disclosure Schedule.
SECTION I.3. Cross-References. Unless otherwise specified, references
in a Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
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SECTION I.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used in each Loan Document shall be interpreted,
and all accounting determinations and computations hereunder or thereunder shall
be made, in accordance with GAAP. Unless otherwise expressly provided, all
financial covenants and defined financial terms shall be computed on a
consolidated basis for the Parent and its Subsidiaries, in each case without
duplication. All financial information provided on a consolidating basis shall
be prepared consistently with the financial information delivered pursuant to
Section 5.1.10.
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION II.1. Commitments. On the terms and subject to the conditions
of this Agreement (including Article V), the Lenders and the Issuer severally
agree to make Credit Extensions as set forth below.
SECTION II.1.1. Loan Commitments. From time to time on any Business Day
occurring from and after the Effective Date but prior to the applicable
Commitment Termination Date,
(a each Lender that has a Current Assets Loan Commitment
(referred to as a "Current Assets Lender"), agrees that it will make
loans (relative to such Lender, its "Current Assets Loans") to each
Borrower requesting Current Assets Loans equal to such Lender's Current
Assets Loan Percentage of the aggregate amount of each Borrowing of
Current Assets Loans requested by such Borrower to be made on such day;
(b each Lender that has a Fixed Assets Loan Commitment
(referred to as a "Fixed Assets Lender") agrees that it will make loans
(relative to such Lender, its "Fixed Assets Loans") to each Borrower
requesting Fixed Assets Loans equal to such Lender's Fixed Assets Loan
Percentage of the aggregate amount of each Borrowing of Fixed Assets
Loans requested by such Borrower on such day; and
(c the Swing Line Lender agrees that it will make loans (its
"Swing Line Loans") to each Borrower requesting Swing Line Loans equal
to the principal amount of the Swing Line Loan requested by such
Borrower to be made on such day. The Commitment of the Swing Line
Lender described in this clause is herein referred to as its "Swing
Line Loan Commitment".
On the terms and subject to the conditions hereof, each Borrower may from time
to time borrow, repay and reborrow Loans.
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SECTION II.1.2. Letter of Credit Commitment. From time to time on any
Business Day occurring from and after the Effective Date but prior to the
Current Assets Loan Commitment Termination Date, the Issuer agrees that it will
(a issue one or more documentary or standby letters of credit
(a "Letter of Credit") for the account of any Borrower in the Stated
Amount requested by such Borrower on such day; or
(b extend the Stated Expiry Date of an existing standby Letter
of Credit previously issued hereunder.
No Stated Expiry Date shall extend beyond the earlier of (i) the Current Assets
Loan Commitment Termination Date and (ii) unless otherwise agreed to by the
Issuer in its sole discretion, one year from the date of such extension. The
Issuer shall not be permitted or required to issue any Letter of Credit if,
after giving effect thereto, (A) the aggregate amount of all Letter of Credit
Outstandings would exceed the Letter of Credit Commitment Amount or (B) the sum
of the aggregate amount of all Letter of Credit Outstandings plus the aggregate
principal amount of all Current Assets Loans and Swing Line Loans then
outstanding would exceed the lesser of (x) the then existing Borrowing Base
Amount less the Minimum Excess Availability and (y) the Current Assets Loan
Commitment Amount.
SECTION II.1.3. Lenders Not Permitted or Required to Make Loans.
(a No Current Assets Lender shall be required to, and no
Borrower shall request any Current Assets Lender to, make any Current
Assets Loan if, after giving effect thereto, the aggregate outstanding
principal amount of all the Current Assets Loans and Swing Line Loans
(i of all the Current Assets Lenders, together with
the aggregate amount of all Letter of Credit Outstandings,
would exceed the lesser of (A) the then existing Borrowing
Base Amount less the Minimum Excess Availability and (B) the
Current Assets Loan Commitment Amount; or
(ii of such Current Assets Lender, together with such
Current Assets Lender's Percentage of the aggregate amount of
all Swing Line Loans and Letter of Credit Outstandings, would
exceed such Current Assets Lender's Percentage of the lesser
of (A) the then existing Borrowing Base Amount less the
Minimum Excess Availability and (B) the Current Assets Loan
Commitment Amount.
(b The Swing Line Lender shall not be required to, and no
Borrower shall request the Swing Line Lender to, make any Swing Line
Loan if after giving effect thereto, (a) the aggregate outstanding
principal amount of all the Swing Line Loans would exceed the then
existing Swing Line Loan Commitment Amount or (b) the aggregate
outstanding principal amount of all the Current Assets Loans and Swing
Line Loans, together with the
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aggregate amount of all Letter of Credit Outstandings, would exceed the
lesser of (i) the then existing Borrowing Base Amount less the Minimum
Excess Availability and (ii) the Current Assets Loan Commitment Amount.
(c No Fixed Assets Lender shall be permitted or required to,
and no Borrower shall request any Fixed Assets Lender to, make any
Fixed Assets Loan if, after giving effect thereto, the aggregate
outstanding principal amount of all the Fixed Assets Loans
(i of all the Fixed Assets Lenders would exceed the
Fixed Assets Loan Commitment Amount; or
(ii of such Fixed Assets Lender would exceed such
Fixed Assets Lender's Percentage of the Fixed Assets Loan
Commitment Amount.
SECTION II.2. Reduction of the Commitment Amounts. The Commitment
Amounts are subject to reduction from time to time pursuant to this Section 2.2.
SECTION II.2.1. Optional. The Company may, from time to time on any
Business Day occurring after the Closing Date, voluntarily reduce the amount of
any Commitment Amount on the Business Day so specified by the Company, provided,
however, that all such reductions shall require at least one Business Day's
prior notice to the Administrative Agent and be permanent, and any partial
reduction of any Commitment Amount shall be in a minimum amount of $1,000,000
and in an integral multiple of $500,000. Any optional reduction of the Current
Assets Loan Commitment Amount pursuant to the terms of this Agreement which
reduces the Current Assets Loan Commitment Amount below the sum of (i) the Swing
Line Loan Commitment Amount and (ii) the Letter of Credit Commitment Amount
shall result in an automatic and corresponding reduction of the Swing Line Loan
Commitment Amount and/or Letter of Credit Commitment Amount (as directed by the
Company in a notice to the Administrative Agent delivered together with the
notice of such voluntary reduction in the Current Assets Loan Commitment Amount)
to an aggregate amount not in excess of the Current Assets Loan Commitment
Amount, as so reduced, without any further action on the part of the Swing Line
Lender or the Issuer.
SECTION II.2.2. Mandatory. The Commitment Amounts shall be reduced as
set forth below.
(a Upon the receipt of mandatory prepayments made pursuant to
clauses (d), (e) and (f) of Section 3.1.1, the Fixed Assets Loan
Commitment Amount will be reduced as specified in clauses (b) and (c)
of Section 3.1.2.
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(b Commencing on September 30, 2002, and on each subsequent
Quarterly Payment Date set forth below, the Fixed Assets Loan
Commitment Amount will be permanently reduced in an amount set forth
opposite such period (subject to adjustment for any commitment
reductions occurring subsequent to the Effective Date applied to
recurring quarterly payments on a pro rata basis):
Period Amount of Reduction
------ -------------------
September 30, 2002 $ 2,000,000
December 31, 2002 $ 4,000,000
March 31, 2003 $ 5,000,000
June 30, 2003 $10,000,000
September 30, 2003 $12,250,000
December 31, 2003 $12,250,000
March 31, 2004 $12,250,000
June 30, 2004 $12,250,000
Each Commitment Amount shall, without any further action, automatically
and permanently be reduced on the applicable Commitment Termination Date so that
the applicable reduced Commitment Amount equals $0. Prior to the applicable
Commitment Termination Date, any mandatory reduction of the Current Assets Loan
Commitment Amount which reduces the Current Assets Loan Commitment Amount below
the sum of (i) the Letter of Credit Commitment Amount and (ii) the Swing Line
Loan Commitment Amount shall result in an automatic and corresponding reduction
of the Letter of Credit Commitment Amount and/or the Swing Line Loan Commitment
Amount (as specified by the Company) to an aggregate amount not in excess of the
Current Assets Loan Commitment Amount, as so reduced, without any further action
on the part of the Issuer or the Swing Line Lender.
SECTION II.3. Borrowing Procedures and Funding Maintenance. Current
Assets Loans and Fixed Assets Loans shall be made by the applicable Lenders in
accordance with Section 2.3.1, and Swing Line Loans shall be made by the Swing
Line Lender in accordance with Section 2.3.2.
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SECTION II.3.1. Current Assets Loans and Fixed Assets Loans. In the
case of Loans (other than Swing Line Loans), by delivering a Borrowing Request
to the Administrative Agent on or before 12:00 noon (and following such
Borrowing Request, the Administrative Agent shall promptly notify each
applicable Lender of such Borrowing Request), New York City time, on a Business
Day, any Borrower may from time to time irrevocably request, on the same
Business Day's notice (in the case of Base Rate Loans) or three Business Days'
notice (in the case of LIBO Rate Loans with an Interest Period of one, two,
three, six or nine months) nor more than five Business Days' notice (in the case
of any Loans (other than Swing Line Loans) and on five Business Day's notice (in
the case of LIBO Rate Loans with an Interest Period of twelve months subject to
the definition of "Interest Period"), that a Borrowing be made in an aggregate
amount of $500,000 or any larger integral multiple of $100,000 or in the unused
amount of the applicable Loan Commitment Amount; provided, that all initial
Loans on the Closing Date will be made as Base Rate Loans. No Borrowing Request
shall be required, and the minimum aggregate amounts specified under this
Section 2.3.1 shall not apply, in the case of Current Assets Loans deemed made
under Section 2.6.2 in respect of unreimbursed Disbursements or made under
clause (b) of Section 2.3.2 to refund Refunded Swing Line Loans. On the terms
and subject to the conditions of this Agreement, each Borrowing shall be
comprised of the type of Loans, and shall be made on the Business Day, specified
in such Borrowing Request. On or before 1:00 p.m., New York City time, on such
Business Day each Lender with a Commitment to lend the Loans requested shall
deposit with the Administrative Agent same day funds in an amount equal to such
Lender's Percentage of the requested Borrowing. Such deposit will be made to an
account which the Administrative Agent shall specify from time to time by notice
to the Lenders. To the extent funds are received from the Lenders, the
Administrative Agent shall promptly and in any event prior to 3:00 p.m., New
York City time, make such funds available to such Borrower by wire transfer to
the accounts such Borrower shall have specified in its Borrowing Request. In the
event that only one Lender fails to fund its Percentage of Loans as required
above prior to 3:00 p.m., New York City time, the Administrative Agent shall
advance such Loans required to be funded by such Lender and such Loan shall be
deemed to be a Swing Line Loan in the amount of such advance. No Lender's
obligation to make any Loan shall be affected by any other Lender's failure to
make any Loan.
SECTION 2.3.2. Swing Line Loans. (a) By telephonic notice, promptly
followed (within one Business Day) by the delivery of a confirming Borrowing
Request, to the Swing Line Lender and the Administrative Agent on or before
12:00 noon, New York City time, on the Business Day the proposed Swing Line Loan
is to be made, any Borrower may from time to time irrevocably request that a
Swing Line Loan be made by the Swing Line Lender in a minimum principal amount
of $100,000 or any larger integral multiple of $10,000. All Swing Line Loans
shall be made as Base Rate Loans and shall not be entitled to be converted into
LIBO Rate Loans. The proceeds of each Swing Line Loan shall be made available by
the Swing Line Lender, by 3:00 p.m., New York City time, on the Business Day
telephonic notice is received by it as provided in this clause (a), to such
Borrower by wire transfer to the account such Borrower shall have specified in
its notice therefor.
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(b If (i) any Swing Line Loan, (A) shall be outstanding for more than
four Business Days or (B) is or will be outstanding on a date when any Borrower
requests that a Current Assets Loan be made or (ii) any Default shall occur and
be continuing, each Current Assets Lender (other than the Swing Line Lender)
irrevocably agrees that it will, at the request of the Swing Line Lender (and at
the discretion of the Swing Line Lenders) and upon notice from the
Administrative Agent, make a Current Assets Loan (which shall initially be
funded as a Base Rate Loan) in an amount equal to such Current Assets Lender's
Percentage of the aggregate principal amount of all such Swing Line Loans then
outstanding (such outstanding Swing Line Loans hereinafter referred to as the
"Refunded Swing Line Loans"). On or before 12:00 noon, New York City time on the
first Business Day following receipt by each Current Assets Lender of a request
to make Current Assets Loans as provided in the preceding sentence, each such
Current Assets Lender shall deposit in an account specified by the Swing Line
Lender the amount so requested in same day funds and such funds shall be applied
by the Swing Line Lender to repay the Refunded Swing Line Loans. At the time the
Current Assets Lenders make the above referenced Current Assets Loans, the Swing
Line Lender shall be deemed to have made, in consideration of the making of the
Refunded Swing Line Loans, a Current Assets Loan in an amount equal to the Swing
Line Lender's Percentage of the aggregate principal amount of the Refunded Swing
Line Loans. Upon the making (or deemed making, in the case of the Swing Line
Lender) of any Current Assets Loans pursuant to this clause (b), the amount so
funded shall become outstanding under such Lender's Current Assets Loans and
shall no longer be owed under the Swing Line Lender's Swing Line Loans. All
interest payable with respect to any Current Assets Loans made (or deemed made,
in the case of the Swing Line Lender) pursuant to this clause (b) shall be
appropriately adjusted to reflect the period of time during which the Swing Line
Lender had outstanding Swing Line Loans in respect of which such Current Assets
Loans were made.
(c If, at any time prior to the making of Current Assets Loans to
replace any outstanding Swing Line Loans pursuant to clause (b) above, any
Default of the nature set forth in Section 8.1.9 shall have occurred, each
Current Assets Lender with a Current Assets Loan Commitment (other than the
Swing Line Lender) irrevocably agrees that it will, at the request of the Swing
Line Lender and upon notice from the Administrative Agent, purchase an undivided
participation interest in all such Swing Line Loans in an amount equal to its
Percentage of the aggregate outstanding amount of such Swing Line Loans and
transfer immediately to an account identified by the Swing Line Lender, in
immediately available funds, the amount of its participation. The Swing Line
Lender will deliver to each such Current Assets Lender, promptly following
receipt of such funds, a participation certificate, dated the date of receipt of
such funds and in the amount of such Current Assets Lender's participation if
requested to do so by such Current Assets Lender.
(d Each Borrower expressly agrees that, in respect of each Current
Assets Lender's funded participation interest in any Swing Line Loan, such
Current Assets Lender shall be deemed to be in privity of contract with each
Borrower and have the same rights and remedies
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against each Borrower under the Loan Documents as if such funded participation
interest in such Swing Line Loan were a Current Assets Loan.
(e Each Current Assets Lender's obligation to make Current Assets Loans
or purchase participation interests in Swing Line Loans, as contemplated by
clause (b) or (c) above, shall be absolute and unconditional and without
recourse to the Swing Line Lender and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other right
which such Current Assets Lender may have against the Swing Line Lender, each
Borrower or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse Effect,
(iii) the acceleration or maturity of any Loans or the termination of any
Commitment after the making of any Swing Line Loan, (iv) any breach of this
Agreement or any other Loan Document by any Person, or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
SECTION II.4. Continuation and Conversion Elections. By delivering a
Continuation/ Conversion Notice to the Administrative Agent on or before 12:00
noon, New York City time, on a Business Day, the Company may from time to time
irrevocably elect, on not less than one Business Day's notice (in the case of a
conversion of LIBO Rate Loans to Base Rate Loans) or three Business Days' notice
(in the case of a continuation of LIBO Rate Loans or a conversion of Base Rate
Loans into LIBO Rate Loans) nor more than five Business Days' notice (in the
case of any Loans) that all, or any portion in a minimum amount of $500,000 or
an integral multiple of $100,000, of any Loans be, in the case of Base Rate
Loans, converted into LIBO Rate Loans or, in the case of LIBO Rate Loans, be
converted into Base Rate Loans or continued as LIBO Rate Loans (in the absence
of delivery of a Continuation/Conversion Notice with respect to any LIBO Rate
Loan at least three Business Days (but not more than five Business Days) before
the last day of the then current Interest Period with respect thereto, such LIBO
Rate Loan shall, on such last day, automatically be continued as a LIBO Rate
Loan having a one month Interest Period); provided, however, that (a) each such
conversion or continuation shall be pro rated among the applicable outstanding
Loans of all Current Assets Lenders or Fixed Assets Lenders, as applicable, and
(b) no portion of the outstanding principal amount of any Loans may be continued
as, or be converted into, LIBO Rate Loans when any Default has occurred and is
continuing.
SECTION II.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the joint and several obligation of the
Borrowers to repay such LIBO Rate Loan shall nevertheless be to such Lender for
the account of such foreign branch, Affiliate or international banking facility.
SECTION II.6. Issuance Procedures. By delivering to the Issuer (if
applicable) and the Administrative Agent an Issuance Request on or before 12:00
noon, New York City time, on a
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Business Day, any Borrower may, from time to time irrevocably request, on not
less than three nor more than ten Business Days' notice (or such shorter or
longer notice as may be acceptable to the Issuer), in the case of an initial
issuance of a Letter of Credit, and not less than three nor more than ten
Business Days' notice (unless a shorter or longer notice period is acceptable to
the Issuer) prior to the then existing Stated Expiry Date of a Letter of Credit,
in the case of a request for the extension of the Stated Expiry Date of a Letter
of Credit, that the Issuer issue, or extend the Stated Expiry Date of, as the
case may be, an irrevocable Letter of Credit on behalf of such Borrower in such
form as may be requested by such Borrower and approved by the Issuer; provided,
however, that no extension of the Stated Expiry Date of an outstanding Letter of
Credit may provide for a Stated Expiry Date subsequent to the earlier of (a) the
Current Assets Loan Commitment Termination Date and (b) one year from the date
of such extension. Notwithstanding anything to the contrary contained herein or
in any separate application for any Letter of Credit, each Borrower hereby
jointly and severally acknowledges and agrees that it shall be obligated to
reimburse the Issuer upon each Disbursement paid under a Letter of Credit, and
it shall be deemed to be the obligor for purposes of each such Letter of Credit
issued hereunder (whether the account party on such Letter of Credit is the
Company or any other Borrower). Upon receipt of an Issuance Request, the
Administrative Agent shall promptly notify the Issuer and each Lender thereof
and shall cause: (i) the Letter of Credit requested by the Issuance Request to
be issued and (ii) the Issuer to (A) comply with the terms and conditions of
this Agreement relating to the Letter of Credit and (B) to fulfill the duties
and obligations of the Issuer hereunder. Each Letter of Credit shall by its
terms be stated to expire on a date (its "Stated Expiry Date") no later than the
earlier to occur of (a) the Current Assets Loan Commitment Termination Date or
(b) one year from the date of its issuance.
SECTION II.6.1. Other Lenders' Participation. Upon the issuance of each
Letter of Credit issued by the Issuer pursuant hereto, and without further
action, each Lender (other than the Issuer) that has a Current Assets Loan
Commitment shall be deemed to have irrevocably purchased from the Issuer, to the
extent of its Current Assets Loan Percentage in respect of Current Assets Loans,
and the Issuer shall be deemed to have irrevocably granted and sold to such
Current Assets Lender a participation interest in such Letter of Credit
(including the Contingent Liability and any Reimbursement Obligation and all
rights with respect thereto), and such Current Assets Lender shall, to the
extent of its Current Assets Loan Percentage, be responsible for reimbursing
promptly (and in any event within one Business Day) the Issuer for Reimbursement
Obligations which have not been reimbursed by the Borrowers in accordance with
Section 2.6.3. In addition, such Lender shall, to the extent of its Current
Assets Loan Percentage, be entitled to promptly receive a ratable portion of the
Letter of Credit fees payable pursuant to Section 3.3.3 with respect to each
Letter of Credit and of interest payable pursuant to Section 3.2 with respect to
any Reimbursement Obligation. To the extent that any Current Assets Lender has
reimbursed the Issuer for a Disbursement as required by this Section, such
Lender shall be entitled to receive its ratable portion of any amounts
subsequently received (from the Borrowers or otherwise) in respect of such
Disbursement.
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SECTION II.6.2. Disbursements; Conversion to Current Assets Loans. The
Issuer will notify the Company and the Administrative Agent promptly (but in any
event on the same Business Day) of the presentment for payment of any drawing
under any Letter of Credit issued by the Issuer, together with notice of the
date (the "Disbursement Date") such payment shall be made (each such payment, a
"Disbursement"). Subject to the terms and provisions of such Letter of Credit
and this Agreement, the Issuer shall make such payment to the beneficiary (or
its designee) of such Letter of Credit. Prior to 12:00 noon, New York City time,
on the Business Day following the Disbursement Date (the "Disbursement Due
Date"), the Borrowers will jointly and severally reimburse the Administrative
Agent, for the account of the Issuer, for all amounts which the Issuer has
disbursed under such Letter of Credit, together with interest thereon at the
rate per annum otherwise applicable to Current Assets Loans (made as Base Rate
Loans) from and including the Disbursement Date to but excluding the
Disbursement Due Date and, thereafter (unless such Disbursement is converted
into a Base Rate Loan on the Disbursement Due Date), at a rate per annum equal
to the rate per annum then in effect with respect to overdue Current Assets
Loans (made as Base Rate Loans) pursuant to Section 3.2.2 for the period from
the Disbursement Due Date through but excluding the date of such reimbursement;
provided, however, that if no Default shall have then occurred and be continuing
and the Borrowers are able to represent and warrant to the Current Assets
Lenders that the statements set forth in Section 5.2.1 are true and correct,
unless such Borrower has notified the Administrative Agent no later than one
Business Day prior to the Disbursement Due Date that it will reimburse the
Issuer for the applicable Disbursement, then the amount of the Disbursement
shall be deemed to be a Borrowing of Current Assets Loans constituting Base Rate
Loans and following the giving of notice thereof by the Administrative Agent to
the Lenders, each Lender with a Current Assets Loan Commitment (other than the
Issuer) will deliver to the Issuer on the Disbursement Due Date immediately
available funds in an amount equal to such Lender's Current Assets Loan
Percentage of such Borrowing. Each conversion of Disbursement amounts into
Current Assets Loans shall constitute a representation and warranty by each
Borrower that on the date of the making of such Current Assets Loans all of the
statements set forth in Section 5.2.1 are true and correct.
SECTION II.6.3. Reimbursement. The joint and several obligation (a
"Reimbursement Obligation") of the Borrowers under Section 2.6.2 to reimburse
the Issuer with respect to each Disbursement (including interest thereon) not
converted into Current Assets Loans constituting a Base Rate Loan pursuant to
Section 2.6.2, and, upon such Borrower failing or electing not to reimburse the
Issuer and the giving of notice thereof by the Administrative Agent to the
Current Assets Lenders, each Current Assets Lender's obligation under Section
2.6.1 to reimburse the Issuer or fund its Percentage of any Disbursement
converted into a Base Rate Loan, shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or defense to
payment which any Borrower or such Current Assets Lender, as the case may be,
may have or have had against the Issuer or any such Current Assets Lender,
including any defense based upon the failure of any Disbursement to conform to
the terms of the applicable Letter of Credit (if, in the Issuer's good faith
opinion, such Disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the
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proceeds of such Letter of Credit; provided, however, that after paying in full
its Reimbursement Obligation hereunder, nothing herein shall adversely affect
the right of any Borrower or such Current Assets Lender, as the case may be, to
commence any proceeding against the Issuer for any wrongful Disbursement made by
the Issuer under a Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on the part of the Issuer.
SECTION II.6.4. Deemed Disbursements. Upon the occurrence and during
the continuation of any Event of Default of the type described in clauses (a)
through (d) of Section 8.1.9 or, with notice from the Administrative Agent
acting at the direction of the Current Assets Required Lenders pursuant to
Section 8.3, upon the occurrence and during the continuation of any other Event
of Default,
(a an amount equal to that portion of all Letter of Credit
Outstandings attributable to the then aggregate amount which is undrawn
and available under all Letters of Credit issued and outstanding shall,
without demand upon or notice to any Borrower or any other Person, be
deemed to have been paid or disbursed by the Issuer under such Letters
of Credit (notwithstanding that such amount may not in fact have been
so paid or disbursed); and
(b each Borrower shall be immediately jointly and severally
obligated to reimburse the Issuer for the amount deemed to have been so
paid or disbursed by the Issuer.
Any amounts so payable by any Borrower pursuant to this Section shall be
deposited in cash with the Administrative Agent and held as collateral security
for the Reimbursement Obligations in connection with the Letters of Credit
issued by the Issuer. At such time as the Event of Default giving rise to the
deemed disbursements hereunder shall have been cured or waived, the
Administrative Agent shall return to the applicable Borrower all amounts then on
deposit with the Administrative Agent pursuant to this Section, together with
accrued interest at the Federal Funds Rate, which have not been applied to the
satisfaction of such Reimbursement Obligations.
SECTION II.6.5. Nature of Reimbursement Obligations. Each Borrower and,
to the extent set forth in Section 2.6.1, each Lender with a Current Assets Loan
Commitment, shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuer (except to the extent of
its own gross negligence or willful misconduct) shall not be responsible for (a)
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
Letter of Credit or any document submitted by any party in connection with the
application for and issuance of a Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged, (b) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or the proceeds
thereof in whole or in part, which may prove to be invalid or ineffective for
any reason, (c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter
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of Credit, (d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, facsimile or
otherwise, or (e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a Letter of
Credit. None of the foregoing shall affect, impair or prevent the vesting of any
of the rights or powers granted to the Issuer or any Current Assets Lender. In
furtherance and extension and not in limitation or derogation of any of the
foregoing, any action taken or omitted to be taken by the Issuer in good faith
(and not constituting gross negligence or willful misconduct) shall be binding
upon each Borrower and each such Current Assets Lender, and shall not put the
Issuer under any resulting liability to any Borrower or any such Current Assets
Lender, as the case may be.
SECTION II.7. Register, Reserves, Notes.
(a Each Lender may maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder. In the
case of a Lender that does not request, pursuant to clause (b)(ii) below,
execution and delivery of a Note evidencing the Loans made by such Lender to the
Borrowers, such account or accounts shall, to the extent not inconsistent with
the notations made by the Administrative Agent in the Register, be conclusive
and binding on each Borrower absent manifest error; provided, however, that the
failure of any Lender to maintain such account or accounts shall not limit or
otherwise affect any Obligations of any Borrower.
(b) (i) Each Borrower hereby designates the Administrative Agent to
serve as such Borrower's agent, solely for the purpose of this clause (b), to
maintain a register (the "Register") on which the Administrative Agent will
record each Lender's Commitment, the Loans made by each Lender and each
repayment in respect of the principal amount of the Loans of each Lender and
annexed to which the Administrative Agent shall retain a copy of each Lender
Assignment Agreement delivered to the Administrative Agent pursuant to Section
10.11.1. Failure to make any recordation, or any error in such recordation,
shall not affect any Borrower's obligation in respect of such Loans. The entries
in the Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Administrative Agent and the Lenders shall treat each Person in
whose name a Loan (and as provided in clause (ii) the Note evidencing such Loan,
if any) is registered as the owner thereof for all purposes of this Agreement,
notwithstanding notice or any provision herein to the contrary. A Lender's
Commitment and the Loans made pursuant thereto may be assigned or otherwise
transferred in whole or in part only by registration of such assignment or
transfer in the Register. Any assignment or transfer of a Lender's Commitment or
the Loans made pursuant thereto shall be registered in the Register only upon
delivery to the Administrative Agent of a Lender Assignment Agreement duly
executed by the Assignor thereof. No assignment or transfer of a Lender's
Commitment or the Loans made pursuant thereto shall be effective unless such
assignment or transfer shall have been recorded in the Register by the
Administrative Agent as provided in this Section 2.7.
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(ii) Each Borrower agrees that, upon the written request to the
Administrative Agent by any Lender, each Borrower will execute and deliver to
such Lender, as applicable, a Note evidencing the Loans made by such Lender.
Each Borrower hereby irrevocably authorizes each Lender to make (or cause to be
made) appropriate notations on the grid attached to such Lender's Notes (or on
any continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of, the outstanding principal amount of, and the interest rate
and Interest Period applicable to the Loans evidenced thereby. Such notations
shall, to the extent not inconsistent with the notations made by the
Administrative Agent in the Register, be conclusive and binding on the Borrowers
absent manifest error; provided, however, that the failure of any Lender to make
any such notations shall not limit or otherwise affect any Obligations of any
Borrower. The Loans evidenced by any such Note and interest thereon shall at all
times (including after assignment pursuant to Section 10.11.1) be payable to the
order of the payee named therein and its registered assigns. Subject to the
provisions of Section 10.11.1, a Note and the obligation evidenced thereby may
be assigned or otherwise transferred in whole or in part only by registration of
such assignment or transfer of such Note and the obligation evidenced thereby in
the Register (and each Note shall expressly so provide). Any assignment or
transfer of all or part of an obligation evidenced by a Note shall be registered
in the Register only upon surrender for registration of assignment or transfer
of the Note evidencing such obligation, accompanied by a Lender Assignment
Agreement duly executed by the assignor thereof and the compliance by the
parties thereto with the other requirements of Section 10.11.1, and thereupon,
if requested by the assignee, one or more new Notes shall be issued to the
designated assignee and the old Note shall be returned by the Administrative
Agent to the Company marked "exchanged". No assignment of a Note and the
obligation evidenced thereby shall be effective unless it shall have been
recorded in the Register by the Administrative Agent as provided in this
Section.
(c) In order to utilize the collective borrowing powers of the
Borrowers in the most efficient and economical manner, and in order to
facilitate the handling of the accounts of the Borrowers on the Administrative
Agent's books, the Borrowers have requested, and the Administrative Agent has
agreed to handle accounts of the Borrowers on the Administrative Agent's books
on a combined basis, all in accordance with the following provisions: (i) In
lieu of maintaining separate accounts on the Administrative Agent's books in the
name of each of the Borrowers, the Administrative Agent shall maintain (A) one
account under the name of the Company (the "Fixed Assets Obligations Account")
and (B) one other account under the name of the Company (the "Current Assets
Obligations Account", together with the Fixed Assets Obligations Account, the
"Obligation Accounts"). Credit Extensions made by the Lenders or the Issuer to
any of the Borrowers will be charged to the applicable Obligation Account, along
with any and all fees, charges, expenses, indemnities or any other monies due
under any Loan Document. The applicable Obligation Account will be credited with
all amounts received by the Administrative Agent from any of the Borrowers or
from others for their account, including all amounts received by the
Administrative Agent in payment of the applicable Obligations. (ii) Each month
the Administrative Agent will render to the Borrowers one extract of each
Obligation Account, which shall be deemed to be an account stated as to each of
the Borrowers and which will be deemed correct and accepted by all of the
Borrowers unless the Administrative
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Agent receives a written statement of exceptions from them within 30 days after
such extract has been rendered by the Administrative Agent. Each of the
Borrowers agrees that the Administrative Agent, and the Lenders as applicable,
shall have no obligation to account separately to any of the Borrowers. (iii)
Requests for Loans may be made by the Company as agent for the Borrowers and the
Administrative Agent is hereby authorized and directed to accept, honor and rely
on such instructions and requests, subject to the limitation and provisions set
forth in this Agreement. Each of the Borrowers agrees that the Administrative
Agent shall have no responsibility to inquire into the correctness of the
apportionment, allocation or disposition of (A) any Credit Extensions made to
any of the Borrowers or (B) any of the Administrative Agent's or Lender's
expenses and charges relating thereto. All Credit Extensions are made for the
applicable Obligation Account. (iv) It is understood that the handling of the
accounts of the Borrowers in a combined fashion is done solely as an
accommodation to the Borrowers and at their request, and that the Administrative
Agent shall incur no liability to the Borrowers as a result hereof. (v) The
foregoing request was made because the Borrowers are engaged in an integrated
operation that requires financing on a basis permitting the availability of
credit from time to time to each of the Borrowers as required for the continued
successful operation of each of the Borrowers. Each of the Borrowers expects to
derive benefit, directly or indirectly, from such availability since the
successful operation of each of the Borrowers is dependent on the continued
successful performance of the functions of the integrated group.
(d) Each of the Borrowers hereby authorizes the Administrative Agent to
charge the applicable Obligation Account with the amount of all payments due
hereunder as such payments become due. Each Borrower confirms that any charges
which the Administrative Agent may so make to such Obligation Account will be
made as an accommodation to the Borrowers and solely at the Administrative
Agent's discretion.
(e) Without limiting any other rights and remedies of the
Administrative Agent or any of the Secured Parties under any Loan Document, all
Current Assets Loans and Letters of Credit otherwise available to the Borrowers
shall be subject to the Administrative Agent's continuing right, in its
reasonable discretion, to establish an Availability Reserve.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION III.1. Repayments and Prepayments; Application. Each Borrower
agrees that the Loans shall be repaid and prepaid pursuant to the following
terms.
SECTION III.1.1. Repayments and Prepayments. The Borrowers shall
jointly and severally repay in full the unpaid principal amount of each Loan
upon the applicable Stated Maturity Date therefor. Prior thereto, payments and
prepayments of Loans shall or may be made as set forth below.
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(a) From time to time on any Business Day, any Borrower may
make a voluntary prepayment, in whole or in part, of the outstanding
principal amount of any
(i) Loans (other than Swing Line Loans); provided,
however, that (A) any such prepayment of the Loans shall be
made among Current Assets Loans and Fixed Assets Loans as
specified by such Borrower in the notice of voluntary
prepayment, and pro rata among Current Assets Loans and Fixed
Assets Loans of the same type and, if applicable, having the
same Interest Period of all Lenders that have made such
Current Assets Loans or Fixed Assets Loans; (B) all such
voluntary prepayments shall require at least one but no more
than five Business Days' prior written notice to the
Administrative Agent; and (C) all such voluntary partial
prepayments shall be, in the case of LIBO Rate Loans, in an
aggregate minimum amount of $500,000 and an integral multiple
of $100,000 and, in the case of Base Rate Loans, in an
aggregate minimum amount of $100,000 and an integral multiple
of $10,000; and
(ii) Swing Line Loans; provided, that (A) all such
voluntary prepayments shall require prior telephonic notice to
the Swing Line Lender on or before 1:00 p.m., New York City
time, on the day of such prepayment (such notice to be
confirmed in writing within 24 hours thereafter); and (B) all
such voluntary partial prepayments shall be in an aggregate
minimum amount of $100,000 and an integral multiple of
$10,000.
(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Current Assets Loans and Swing Line Loans and
(ii) the aggregate amount of all Letter of Credit Outstandings exceeds
the lesser of (A) the Current Assets Loan Commitment Amount (as it may
be reduced from time to time pursuant to this Agreement) and (B) the
then applicable Borrowing Base Amount less the Minimum Excess
Availability, the Borrowers shall make a mandatory prepayment of
Current Assets Loans or Swing Line Loans or, if necessary, Cash
Collateralize all Letter of Credit Outstandings, as specified by the
applicable Borrower, in an aggregate amount equal to such excess.
(c) On each date when the aggregate outstanding principal
amount of all Fixed Assets Loans exceeds the Fixed Assets Loan
Commitment Amount (as it may be reduced from time to time pursuant to
this Agreement), the Borrowers shall make a mandatory prepayment of
Fixed Assets Loans in an aggregate amount equal to such excess.
(d) Concurrently with the receipt of any Net Disposition
Proceeds by any Borrower or any Foreign Restricted Subsidiary, the
Company shall deliver to the Administrative Agent a calculation of the
amount of such Net Disposition Proceeds and make a mandatory prepayment
of the Loans in an amount equal to 100% of such Net Disposition
Proceeds, to be applied as set forth in Section 3.1.2; provided,
however, that
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solely with respect to Net Disposition Proceeds received in connection
with a Transfer of the Fibers Business no such mandatory prepayment of
the Loans shall be required under this clause to the extent that the
Company (i) notifies the Administrative Agent no later than three days
following the receipt of such Net Disposition Proceeds that it is the
Company's good faith intention to apply such Net Disposition Proceeds
toward the acquisition of other assets or property used in connection
with the business of any Borrower or any Foreign Restricted Subsidiary
or any business reasonably related thereto, (ii) places the proceeds
of such Disposition in an escrow account maintained by the
Administrative Agent pending such application (which proceeds shall be
invested in Cash Equivalent Investments at all times during which they
are deposited in such escrow account), (iii) the Company in fact so
uses such Net Disposition Proceeds within 365 days following the
receipt by such Person of Net Disposition Proceeds, with the amount of
Net Disposition Proceeds unused after such 365 day period being applied
to prepay the Fixed Assets Loans pursuant to this clause to be applied
as set forth in clause (b) of Section 3.1.2 and (iv) the Company (or,
if applicable, the Fibers Subsidiaries) shall legally and effectively
grant the Administrative Agent, on behalf of the Fixed Assets Lenders,
a first priority Lien in any non-cash proceeds received by the Company
(or the Fibers Subsidiaries) in such Transfer of the Fibers Business,
including any Capital Securities, as additional security for the
repayment of the Fixed Assets Obligations, and provided further that a
mandatory prepayment of the Loans shall not be required under this
clause in the case of the sale of the Toronto Office and the Vancouver
Release Parcel except for that portion (if any) of such Net Disposition
Proceeds that, in the aggregate, exceed $5,000,000.
(e) Concurrently with the receipt of any Net Debt Proceeds by
Parent, any Borrower or any Foreign Restricted Subsidiary, the Company
shall deliver to the Administrative Agent a calculation of the amount
of such Net Debt Proceeds and make a mandatory prepayment of the Loans
in an amount equal to 100% of such Net Debt Proceeds, to be applied as
set forth in clause (c) of Section 3.1.2.
(f) Concurrently with the receipt of any Net Equity Proceeds
by Parent, any Borrower or any Foreign Restricted Subsidiary, the
Company shall deliver to the Administrative Agent a calculation of the
amount of such Net Equity Proceeds (satisfactory to the Administrative
Agent) and Parent, such Borrower or such Foreign Restricted Subsidiary
shall make a mandatory prepayment of the Loans in an amount equal to
50% of such Net Equity Proceeds, to be applied as set forth in clause
(c) of Section 3.1.2, provided, however, that a mandatory prepayment of
the Loans shall not be required under this clause, in the case of (i)
any exercise of warrants or options outstanding prior to the Effective
Date, (ii) the issuance or exercise of any options granted pursuant to
any stock option, compensation or similar plan of Parent, any Borrower
or any Foreign Restricted Subsidiary, (iii) the sale or issuance of any
Capital Securities to any employee stock ownership plan of Parent, any
Borrower or any Foreign Restricted Subsidiary, (iv) the issuance of any
Capital Securities by way of dividend or
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other distribution, subdivision or split on or of any Capital
Securities of Parent, any Borrower or any Foreign Restricted Subsidiary
and (v) the issuance and sale by Parent of its Capital Securities to an
Unrestricted Subsidiary to the extent that the proceeds received from
such Unrestricted Subsidiary are used solely to pay interest that is
currently due and payable on the Senior Secured Discount Notes within
180 days of the receipt of such proceeds provided that to the extent
that any proceeds received from such Unrestricted Subsidiary are not so
applied, 50% of such unapplied proceeds shall be applied as set forth
in clause (c) of Section 3.1.2.
(g) Immediately upon any acceleration of the Stated Maturity
Date of any Loans pursuant to Section 8.2 or Section 8.3, the Borrowers
shall jointly and severally repay all the Loans, unless, pursuant to
Section 8.3, only a portion of all the Loans is so accelerated (in
which case the portion so accelerated shall be so repaid).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4.
SECTION III.1.2. Application. Amounts prepaid pursuant to Section 3.1.1
shall be applied as set forth in this Section.
(a) Subject to clause (b), each prepayment or repayment of the
principal of the Loans shall be applied, to the extent of such
prepayment or repayment, first, to the principal amount thereof being
maintained as Base Rate Loans, and second, subject to the terms of
Section 4.4, to the principal amount thereof being maintained as LIBO
Rate Loans.
(b) Each prepayment of Loans pursuant to clause (d) of Section
3.1.1 shall be applied (i) in the case of a Disposition of assets that
are Fixed Assets to a mandatory prepayment of the outstanding Fixed
Assets Loans until all outstanding Fixed Assets Loans have been repaid
in full and immediately upon the Administrative Agent's receipt of such
Net Disposition Proceeds, the Fixed Assets Loan Commitment Amount shall
be reduced by the aggregate amount of (A) Net Disposition Proceeds used
to prepay the outstanding principal amount of such Fixed Assets Loans
plus (B) any additional amount of such Net Disposition Proceeds
remaining after the outstanding amount of Fixed Assets Loans have been
reduced to zero; provided that the first $2,500,000 of Net Disposition
Proceeds prepaid pursuant to a Disposition permitted under clause (d)
of Section 7.2.11 in any Fiscal Year shall not result in a reduction of
the Fixed Assets Loan Commitment Amount and (ii) in the case of a
Disposition of assets other than Fixed Assets, first, to a mandatory
prepayment of the outstanding Current Assets Loans until all
outstanding Current Assets Loans have been repaid in full and second,
to a mandatory prepayment of the outstanding Fixed Assets Loans until
all outstanding Fixed Assets Loans have been repaid in full provided
that any such prepayment pursuant to this clause (b) (ii) will not
automatically result in a reduction of the Fixed Assets Loan Commitment
Amount or the
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Current Assets Loan Commitment Amount. Upon any Disposition of assets
that are not Current Assets, an amount equal to the Net Disposition
Proceeds minus the aggregate amount required to repay all outstanding
Fixed Assets Obligations may be paid to the Trustee to hold in escrow
pending any offer to purchase the Senior Secured Notes required under
the Senior Secured Note Indenture in connection with such Disposition.
(c) Each prepayment of Loans made pursuant to clauses (e) and
(f) of Section 3.1.1 shall be applied (i) first, pro rata based on the
aggregate Commitment Amount to a mandatory prepayment of the
outstanding principal amount of all Current Assets Loans and all Fixed
Assets Loans until the outstanding principal amount of all Fixed Assets
Loans is equal to zero, (ii) second, if (A) the outstanding principal
amount of Fixed Assets Loans is equal to zero, then to a mandatory
prepayment of the outstanding principal amount of all Current Assets
Loans with a corresponding permanent reduction in the Fixed Assets Loan
Commitment Amount by the amount of such Net Equity Proceeds or Net Debt
Proceeds which would have otherwise been applied pro rata based on the
aggregate Commitment Amount to the outstanding principal amount of all
Fixed Assets Loans until the outstanding principal amount of all such
Current Assets Loans has been reduced to zero or (B) the outstanding
principal amount of Current Assets Loans has been reduced to zero, the
remaining amount of Net Equity Proceeds or Net Debt Proceeds shall be
applied to the prepayment of the outstanding principal amount of all
Fixed Assets Loans until the outstanding principal amount of all Fixed
Assets Loans is equal to zero and (iii) third, once the outstanding
principal amount of all Current Assets Loans has been reduced to zero,
the Fixed Assets Loan Commitment Amount shall be reduced by the amount
of such Net Equity Proceeds or Net Debt Proceeds prepaid pursuant to
clauses (i) and (ii) above and the amount of such Net Equity Proceeds
or Net Debt Proceeds remaining unapplied.
SECTION III.2. Interest Provisions. Interest on the outstanding
principal amount of Loans shall accrue and be payable in accordance with the
terms set forth below.
SECTION III.2.1. Rates. Subject to Section 2.3.2, pursuant to an
appropriately delivered Borrowing Request or Continuation/Conversion Notice, any
Borrower may elect that Loans comprising a Borrowing accrue interest at a rate
per annum:
(a) (i) on that portion (other than the Overadvance Amount)
maintained from time to time as a Base Rate Loan, equal to the sum of
the Alternate Base Rate from time to time in effect plus the Applicable
Margin, and (ii) on that portion that is the Overadvance Amount
maintained as a Base Rate Loan, equal to the sum of the Alternate Base
Rate from time to time in effect plus the Overadvance Rate; provided
that all Swing Line Loans shall always accrue interest at the then
effective Applicable Margin for Current Assets Loans maintained as Base
Rate Loans; and
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(b) (i) on that portion (other than the Overadvance Amount)
maintained as a LIBO Rate Loan, during each Interest Period applicable
thereto, equal to the sum of the LIBO Rate (Reserve Adjusted) for such
Interest Period plus the Applicable Margin, and (ii) on that portion
that is the Overadvance Amount maintained as a LIBO Rate Loan, during
each Interest Period applicable thereto, equal to the sum of the LIBO
Rate (Reserve Adjusted) for such Interest Period plus the Overadvance
Rate.
All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate applicable to such LIBO Rate Loan.
SECTION III.2.2. Post-Maturity Rates. After the date any principal
amount of any Loan or Reimbursement Obligation is due and payable (whether on
the Stated Maturity Date, upon acceleration or otherwise), or after any other
monetary Obligation of the Borrowers shall have become due and payable, the
Borrowers shall jointly and severally pay, but only to the extent permitted by
law, interest (after as well as before judgment) on such amounts at a rate per
annum equal to the Alternate Base Rate from time to time in effect plus the
Applicable Margin for Fixed Assets Revolving Loans plus, a margin of 2%.
SECTION III.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan on the principal amount so
paid or prepaid;
(c) with respect to Base Rate Loans, on each Quarterly Payment
Date occurring after the Closing Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the date occurring on each three-month interval
occurring after the first day of such Interest Period);
(e) with respect to any Base Rate Loans converted into LIBO
Rate Loans on a day when interest would not otherwise have been payable
pursuant to clause (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
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Interest accrued on Loans or other monetary Obligations after the date such
amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
SECTION III.3. Fees. Each Borrower agrees to pay the fees set forth
below. All such fees shall be non-refundable.
SECTION III.3.1. Commitment Fees. The Borrowers agree to pay, jointly
and severally, to the Administrative Agent for the account of each Lender, for
the period (including any portion thereof when any of its Commitments are
suspended by reason of the Borrowers' inability to satisfy any condition of
Article V) commencing on the Effective Date and continuing through the
applicable Commitment Termination Date, a commitment fee in an aggregate amount
equal to the Applicable Commitment Fee, in each case on such Lender's Percentage
of the sum of the average daily unused portion of the applicable Commitment
Amount (less Letter of Credit Outstandings, in the case of the Current Assets
Loan Commitment Amount). All commitment fees payable pursuant to this Section
shall be calculated on a year comprised of 360 days and payable by the Borrowers
in arrears on the Effective Date and thereafter on each Quarterly Payment Date,
commencing with the first Quarterly Payment Date following the Effective Date,
and (a) with respect to the Current Assets Loan Commitment, on the Current
Assets Loan Commitment Termination Date, and (b) with respect to the Fixed
Assets Loan Commitment, on the Fixed Assets Loan Commitment Termination Date.
The making of Swing Line Loans shall not constitute usage of the Current Assets
Loan Commitment with respect to the calculation of commitment fees to be paid by
the Borrowers to the Lenders.
SECTION III.3.2. The Agents' Fees and the Lead Arranger's Fees. The
Borrowers agree to pay, jointly and severally, to each of the Syndication Agent,
the Administrative Agent and the Lead Arranger, for each such Person's own
account, an aggregate amount equal to the fees set forth in the Fee Letter and
the Administrative Agent's Fee Letter, in each case in accordance with their
respective terms.
SECTION III.3.3. Letter of Credit Fees. The Borrowers agree to pay,
jointly and severally, to the Administrative Agent, for the pro rata account of
the Issuer and each Current Assets Loan Lender, an aggregate Letter of Credit
fee on the daily average Stated Amount of each Letter of Credit, in each case
for the period from and including the date of issuance of such Letter of Credit
to and excluding the date expiration or termination of such Letter of Credit
computed at a per annum rate for each day equal to the then effective Applicable
Margin for Current Assets Loans maintained as LIBO Rate Loans in effect on such
day, such fees being payable quarterly in arrears on each Quarterly Payment Date
and on the Current Assets Loan Commitment Termination Date. The Borrowers
further agree to pay, jointly and severally, to the Issuer quarterly in arrears
on each Quarterly Payment Date following the date of issuance of a Letter of
Credit until the earlier of the expiration of such Letter of Credit and the
Current Assets Loan Commitment Termination Date, an issuance fee as specified in
the Administrative Agent's Fee Letter or as otherwise agreed to by the Borrowers
and the Issuer.
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ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION IV.1. LIBO Rate Lending Unlawful. If any Lender shall
reasonably determine (which determination shall, in the absence of manifest
error and upon notice thereof to the Company and the Administrative Agent, be
conclusive and binding on each Borrower) that the introduction of or any change
in or in the interpretation of any law makes it unlawful, or any Governmental
Authority asserts that it is unlawful, for such Lender to make or continue any
Loan as, or to convert any Loan into, a LIBO Rate Loan, the obligations of such
Lender to make, continue or convert any such LIBO Rate Loan shall, upon such
determination, forthwith be suspended until such Lender shall notify the
Administrative Agent that the circumstances causing such suspension no longer
exist, and all outstanding LIBO Rate Loans payable to such Lender shall
automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.
SECTION IV.2. Deposits Unavailable. If the Administrative Agent shall
have determined that
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to it in its relevant
market; or
(b) by reason of circumstances affecting it's relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans;
then, upon notice from the Administrative Agent to the Company and the Lenders,
the obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the Company
and the Lenders that the circumstances causing such suspension no longer exist;
provided that, in such case, the Lenders shall use their reasonable efforts to
obtain funding of the Loans at a rate comparable with the LIBO Rate (Reserve
Adjusted) in other Eurodollar markets.
SECTION IV.3. Increased LIBO Rate Loan Costs, etc. Each Borrower
agrees, jointly and severally, to reimburse each Lender and Issuer for any
increase in the cost to such Lender or Issuer of, or any reduction in the amount
of any sum receivable by such Secured Party in respect of, such Secured Party's
Commitments and the making of Credit Extensions hereunder (including the making,
continuing or maintaining (or of its obligation to make or continue) any Loans
as, or of converting (or of its obligation to convert) any Loans into, LIBO Rate
Loans) that arise in connection with any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in after the
date hereof of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority, except
for such changes with respect to increased capital costs and
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Taxes which are governed by Sections 4.5 and 4.6, respectively. Each affected
Secured Party shall promptly notify the Administrative Agent and the Company in
writing of the occurrence of any such event, stating the reasons therefor and
the additional amount required fully to compensate such Secured Party for such
increased cost or reduced amount. Such additional amounts shall be payable by
the Borrowers directly to such Secured Party within five days of its receipt of
such notice, and such notice shall, in the absence of manifest error, be
conclusive and binding on the Borrowers.
SECTION IV.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make or continue any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
not recovered in connection with the redeployment of such funds (and excluding
any loss of anticipated profits) as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to
Article III or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor (unless due to the responsibility
of the Lender or inability of the Lender to fund in accordance with the
terms hereof); or
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/Conversion Notice
therefor (unless due to the responsibility of the Lender or inability
of the Lender to fund in accordance with the terms hereof);
then, upon the written notice of such Lender to the Company (with a copy to the
Administrative Agent), the Borrowers shall, jointly and severally, within five
days of its receipt thereof, pay directly to such Lender such amount as will (in
the reasonable determination of such Lender) reimburse such Lender for such loss
or expense. Such written notice shall set forth the basis for requesting such
amounts and shall, in the absence of manifest error, be conclusive and binding
on each Borrower.
SECTION IV.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(having the force of law) of any Governmental Authority affects or would affect
the amount of capital required or expected to be maintained by any Secured Party
or any Person controlling such Secured Party, and such Secured Party determines
(in good faith but in its sole and absolute discretion) that the rate of return
on its or such controlling Person's capital as a consequence of the Commitments
or the Credit Extensions made, or the Letters of Credit participated in, by such
Secured Party is reduced to a level below that which such Secured Party or such
controlling Person could have achieved but for the occurrence of any such
circumstance, then upon notice from time to time by such Secured Party to the
Company, the Borrowers shall, within five days following receipt of such notice
(which notice shall be sent to the Company promptly (but in no event later than
180 days) after obtaining actual knowledge by such Lender of any such amounts
owed by the Borrowers and the amount shall be conclusively determined by such
Lender), jointly and severally, pay directly to such Secured Party additional
amounts sufficient to compensate such Secured
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Party or such controlling Person for such reduction in rate of return to the
extent allocable to such Lender's Commitments or the Credit Extensions made, or
the Letters of Credit participated in by such Lender. A statement of such
Secured Party as to any such additional amount or amounts shall, in the absence
of manifest error, be conclusive and binding on each Borrower. In determining
such amount, such Secured Party may use any method of averaging and attribution
that it (in its sole and absolute discretion) shall deem applicable, provided
that the determination of such amount is made in good faith and in a manner
generally consistent with such Secured Party's standard practice therefor.
SECTION IV.6. Taxes. Each Borrower covenants and agrees as follows with
respect to Taxes.
(a) Any and all payments by the Borrowers under each Loan
Document shall be made without setoff, counterclaim or other defense,
and free and clear of, and without deduction or withholding for or on
account of, any Taxes. In the event that any Taxes are required by law
to be deducted or withheld from any payment required to be made by the
Borrowers to or on behalf of any Secured Party under any Loan Document,
then:
(i) subject to clause (f), if such Taxes are
Non-Excluded Taxes, the amount of such payment shall be
increased as may be necessary such that such payment is made,
after withholding or deduction for or on account of such
Taxes, in an amount that is not less than the amount provided
for in such Loan Document; and
(ii) the Borrowers shall withhold the full amount of
such Taxes from such payment (as increased pursuant to clause
(a) (i)) and shall pay such amount to the Governmental
Authority imposing such Taxes in accordance with applicable
law.
(b) In addition, the Borrowers shall pay any and all Other
Taxes imposed to the relevant Governmental Authority imposing such
Other Taxes in accordance with applicable law.
(c) As promptly as practicable after the payment of any Taxes
or Other Taxes, and in any event within 45 days of any such payment
being due, the Borrowers shall furnish to the Administrative Agent a
copy of an official receipt (or a certified copy thereof) evidencing
the payment of such Taxes or Other Taxes. The Administrative Agent
shall make copies thereof available to any Lender upon request
therefor.
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(d) Subject to clause (f), each Borrower, on a joint and
several basis, shall indemnify each Secured Party for any Non-Excluded
Taxes and Other Taxes levied, imposed or assessed on (and whether or
not paid directly by) such Secured Party. Promptly upon having
knowledge that any such Non-Excluded Taxes or Other Taxes have been
levied, imposed or assessed, and promptly upon notice thereof by any
Secured Party, the Borrowers shall pay such Non-Excluded Taxes or Other
Taxes directly to the relevant Governmental Authority. If a Secured
Party receives a refund in respect of any Non-Excluded Taxes or Other
Taxes with respect to which any Borrower has paid additional amounts
pursuant to this Section 4.6, it shall within 30 days from the date of
such receipt pay over to the Borrowers (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrowers
under this Section 4.6 with respect to the Non-Excluded Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of
such Secured Party and without interest (other than interest paid by
the relevant jurisdiction or taxing authority with respect to such
refund) the portion of such refund which, in the good faith judgment of
such Secured Party, is attributable to the payment of such additional
amounts by the Borrowers and in an amount as will leave such Secured
Party in no better or worse position than it would have been in if the
payment of such additional amounts had not been required; provided,
however, that the Borrowers, upon the request of such Secured Party,
agree to repay the amount paid over to the Borrowers (plus penalties,
interest or other charges payable to the relevant jurisdiction or
taxing authority) to such Secured Party in the event such Secured Party
is required to repay such refund to such jurisdiction or taxing
authority. In addition, each Borrower, on a joint and several basis,
shall indemnify each Secured Party for any incremental Taxes that may
become payable by such Secured Party as a result of any failure of the
Borrowers to pay any Taxes when due to the appropriate Governmental
Authority or to deliver to the Administrative Agent, pursuant to clause
(c), documentation evidencing the payment of Taxes or Other Taxes. With
respect to indemnification for Non-Excluded Taxes and Other Taxes
actually paid by any Secured Party or the indemnification provided in
the immediately preceding sentence, such indemnification shall be made
within 30 days after the date such Secured Party makes written demand
therefor. Each Borrower acknowledges that any payment made to any
Secured Party or to any Governmental Authority in respect of the
indemnification obligations of the Borrowers provided in this clause
shall constitute a payment in respect of which the provisions of clause
(a) and this clause shall apply.
(e) As of the date on which any Lender becomes a party hereto,
such Lender represents that it is either (i) a corporation organized
under the laws of the United States or any State or is otherwise a
"United States-person" within the meaning of Section 7701(a)(30) of the
Code, (ii) entitled to complete exemption from United States
withholding tax imposed on or with respect to any payments, including
fees, to be made to it pursuant to this Agreement or (iii) entitled to
complete exemption from United States withholding tax on interest
imposed on or with respect to any payments of interest to be
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made pursuant to this Agreement (A) under an applicable provision of a
tax convention to which the United States of America is a party (B)
because such payments to be received by it hereunder is effectively
connected with a trade or business in the United States or (C) because
it is a recipient of portfolio interest within the meaning of Section
871(h) or 881(c) of the Code. Each Non-U.S. Lender, on or prior to the
date on which such non-U.S. Lender becomes a Lender hereunder shall
deliver to the Company and the Administrative Agent either:
(i) two duly completed copies of either (x) Internal
Revenue Service Form W-8BEN or (B) Internal Revenue Service
Form W-8ECI, or in either case an applicable successor form;
or
(ii) in the case of a Non-U.S. Lender that is not
legally entitled to deliver either form listed in clause
(e)(i), (x) a certificate of a duly authorized officer of such
Non-U.S. Lender in substantially the form of Exhibit N
attached hereto to the effect that such Non-U.S. Lender is not
(A) a "bank" within the meaning of Section 881(c)(3)(A) of the
Code, (B) a "10 percent shareholder" of any Borrower within
the meaning of Section 881(c)(3)(B) of the Code, or (C) a
controlled foreign corporation receiving interest from a
related person within the meaning of Section 881(c)(3)(C) of
the Code (such certificate, an "Exemption Certificate") and
(y) two duly completed copies of Internal Revenue Service Form
W-8BEN or applicable successor form.
In addition, each Non-U.S. Lender shall redeliver to the Company and
the Administrative Agent the forms prescribed by this clause (e) from time to
time thereafter upon the request of the Company or the Administrative Agent or
as required by applicable law or regulation and prior to the date of expiration
of the most recently delivered form, but only for so long as such Non-U.S.
Lender is legally entitled to do so.
(f) The Borrowers shall not be obligated to gross up any
payments to any Lender pursuant to clause (a)(i), or to indemnify any
Lender pursuant to clause (d), in respect of United States federal
withholding taxes to the extent imposed as a result of (i) the failure
of such Lender to deliver to the Company the form or forms and/or an
Exemption Certificate, as applicable to such Lender, pursuant to clause
(e), (ii) such form or forms and/or Exemption Certificate not
establishing a complete exemption from U.S. federal withholding tax or
the information or certifications made therein by the Lender being
untrue or inaccurate on the date delivered in any material respect, or
(iii) the Lender designating a successor lending office at which it
maintains its Loans which has the effect of causing such Lender to
become obligated for tax payments in excess of those in effect
immediately prior to such designation; provided, however, that the
Borrowers shall be jointly and severally obligated to gross up any
payments to any such Lender pursuant to clause (a)(i), and to indemnify
any such Lender pursuant to clause (d), in respect of United States
federal withholding taxes if (i) any such failure to deliver a form or
forms
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or an Exemption Certificate or the failure of such form or forms or
Exemption Certificate to establish a complete exemption from U.S.
federal withholding tax or inaccuracy or untruth contained therein
resulted from a change in any applicable statute, treaty, regulation or
other applicable law or any interpretation of any of the foregoing
occurring after the date hereof, which change rendered such Lender no
longer legally entitled to deliver such form or forms or Exemption
Certificate or otherwise ineligible for a complete exemption from U.S.
federal withholding tax, or rendered the information or certifications
made in such form or forms or Exemption Certificate untrue or
inaccurate in a material respect, (ii) the redesignation of the
Lender's lending office was made at the request of the Borrowers or
(iii) the obligation to gross up payments to any such Lender pursuant
to clause (a)(i) or to indemnify any such Lender pursuant to clause (d)
is with respect to an Assignee Lender that becomes an Assignee Lender
as a result of an assignment made at the request of the Borrowers.
(g) Each Lender also agrees at the reasonable request of the
Borrowers to deliver to the Borrowers and the Administrative Agent such
other or supplemental forms as may at any time be required as a result
of changes in applicable law or regulation in order to confirm or
maintain in effect its entitlement to exemption from United States
withholding tax on any payments hereunder; provided that the
circumstances of the Lender at the relevant time and applicable laws
make it legally entitled to do so. Each Person that shall become a
Lender or a Participant pursuant to Section 10.11.1 or Section 10.11.2
shall, upon the effectiveness of the related transfer, be required to
provide all of the forms, certifications and statements required
pursuant to this Section; provided that in the case of a Participant,
such Participant shall furnish all such required forms, certifications
and statements to the Lender from which the related participation shall
have been purchased.
(h) Each Lender agrees that it will use reasonable efforts to
designate an alternate lending office with respect to its LIBO Rate
Loans affected by any of the matters or circumstances described in this
Section 4.6 to reduce the obligation of the Borrowers to gross up any
payments to any Lenders pursuant to clause(a)(i), or to indemnify any
Lenders pursuant to clause (d), so long as such designation is not
disadvantageous to such Lender as determined by such Lender in its sole
discretion; provided that such Lender shall have no obligation to so
designate an alternate lending office located in the United States. Any
Lender claiming any additional amounts payable pursuant to this Section
4.6 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to deliver to the Borrowers or the Administrative Agent
any certificate or document reasonably requested by any Borrower or the
Administrative Agent if the delivery of such certificate or document
would avoid the need for or reduce the amount of any such additional
amounts that may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such
Lender.
(i) If any Lender that does not make a LIBO Rate Loan pursuant
to Section 4.1 or Section 4.2, is subject to increased costs pursuant
to Section 4.3, or is owed or reasonably
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anticipates being owed additional amounts pursuant to this Section 4.6
and fails to take action required under clause (h) of this Section 4.6,
any Borrower shall have the right, if no Default then exists, to
replace such Lender with another bank or financial institution with the
written consent of the Administrative Agent, which consent shall not be
unreasonably withheld, provided that (i) the obligations of any
Borrower owing to the Lender being replaced (including such increased
costs) that are not being assigned to the replacement Lender shall be
paid in full to the Lender being replaced concurrently with such
replacement, (ii) the replacement lender shall execute a Lender
Assignment Agreement and Acceptance pursuant to which it shall become a
party hereto as provided in Section 10.11.1, and (iii) upon compliance
with the provisions for assignment provided in Section 10.11.1 and the
payment of amounts referred to in clause (i), the replacement lender
shall constitute a "Lender" hereunder and the Lender being so replaced
shall no longer constitute a "Lender" hereunder.
SECTION IV.7. Payments, Computations, etc. Unless otherwise expressly
provided in a Loan Document, all payments by the Borrowers pursuant to each Loan
Document shall be made by such Borrower to the Administrative Agent for the pro
rata account of the Secured Parties entitled to receive such payment. All
payments shall be made without setoff, deduction or counterclaim not later than
12:00 noon New York City time on the date due in same day or immediately
available funds to such account as the Administrative Agent shall specify from
time to time by notice to the Company. Funds received after that time shall be
deemed to have been received by the Administrative Agent on the next succeeding
Business Day. The Administrative Agent shall promptly remit in same day funds to
each Secured Party its share, if any, of such payments received by the
Administrative Agent for the account of such Secured Party. All interest
(including interest on LIBO Rate Loans) and fees shall be computed on the basis
of the actual number of days (including the first day but excluding the last
day) occurring during the period for which such interest or fee is payable over
a year comprised of 360 days (or, in the case of interest on a Base Rate Loan
(calculated at other than the Federal Funds Rate), 365 days or, if appropriate,
366 days). Payments due on other than a Business Day shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period") be made
on the next succeeding Business Day and such extension of time shall be included
in computing interest and fees in connection with that payment.
SECTION IV.8. Sharing of Payments. If any Secured Party shall obtain
any payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Credit Extension or Reimbursement
Obligation (other than pursuant to the terms of Sections 4.3, 4.4, 4.5 or 4.6)
in excess of its pro rata share of payments obtained by all Secured Parties
entitled to receive such payment, such Secured Party shall purchase from the
other Secured Parties such participations in Credit Extensions made by them as
shall be necessary to cause such purchasing Secured Party to share the excess
payment or other recovery ratably (to the extent such other Secured Parties were
entitled to receive a portion of such payment or recovery) with each of them;
provided, however, that if all or any portion of the excess payment or other
recovery is thereafter recovered from such purchasing Secured Party, the
purchase shall
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be rescinded and each Secured Party which has sold a participation to the
purchasing Secured Party shall repay to the purchasing Secured Party the
purchase price to the ratable extent of such recovery together with an amount
equal to such selling Secured Party's ratable share (according to the proportion
of (a) the amount of such selling Secured Party's required repayment to the
purchasing Secured Party to (b) total amount so recovered from the purchasing
Secured Party) of any interest or other amount paid or payable by the purchasing
Secured Party in respect of the total amount so recovered. The Borrowers agree
that any Secured Party purchasing a participation from another Secured Party
pursuant to this Section may, to the fullest extent permitted by law, exercise
all its rights of payment (including pursuant to Section 4.9) with respect to
such participation as fully as if such Secured Party were the direct creditor of
the Borrowers in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law any Secured Party receives a secured
claim in lieu of a setoff to which this Section applies, such Secured Party
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Secured Parties entitled
under this Section to share in the benefits of any recovery on such secured
claim.
SECTION IV.9. Setoff. Each Secured Party shall, upon the occurrence and
during the continuance of any Default described in clauses (a) through (d) of
Section 8.1.9 or, with the consent of the Required Lenders, upon the occurrence
and during the continuance of any other Event of Default, have the right to
appropriate and apply to the payment of the Obligations owing to it (whether or
not then due), and (as security for such Obligations) each Borrower hereby
grants to each Secured Party a continuing security interest in, any and all
balances, credits, deposits, accounts or moneys of such Borrower then or
thereafter maintained with such Secured Party; provided, however, that any such
appropriation and application shall be subject to the provisions of Section 4.8.
Each Secured Party agrees promptly to notify such Borrower and the
Administrative Agent after any such setoff and application made by such Secured
Party; provided, however, that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of each Secured Party
under this Section are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which such Secured Party may
have.
SECTION IV.10. Guaranty Provisions. Each Borrower acknowledges and
agrees that, whether or not specifically indicated as such in a Loan Document,
all Obligations shall be joint and several Obligations of each individual
Borrower, and in furtherance of such joint and several Obligations, each
Borrower hereby irrevocably guarantees the payment of all Obligations of each
other Borrower as set forth below.
SECTION IV.10.1. Guaranty. Each Borrower hereby jointly and severally,
absolutely, unconditionally and irrevocably guarantees the full and punctual
payment when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise, of all Obligations; provided,
however, that each Borrower shall only be liable under this Agreement for the
maximum amount of such liability that can be hereby incurred without rendering
this Agreement, as it relates to such Borrower, voidable under applicable law
relating to fraudulent
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conveyance or fraudulent transfer, and not for any greater amount. This guaranty
constitutes a guaranty of payment when due and not of collection, and each
Borrower specifically agrees that it shall not be necessary or required that any
Secured Party exercise any right, assert any claim or demand or enforce any
remedy whatsoever against any Obligor or any other Person before or as a
condition to the obligations of such Borrower hereunder.
SECTION IV.10.2. Guaranty Absolute, etc. The guaranty agreed to above
shall in all respects be a continuing, absolute, unconditional and irrevocable
guaranty of payment, and shall remain in full force and effect until the
Termination Date. Each Borrower jointly and severally guarantees that the
Obligations will be paid strictly in accordance with the terms of each Loan
Document under which such Obligations arise, regardless of any law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of any Secured Party with respect thereto. The liability of
each Borrower under this Agreement shall be joint and several, absolute,
unconditional and irrevocable irrespective of (a) any lack of validity, legality
or enforceability of any Loan Document; (b) the failure of any Secured Party (i)
to assert any claim or demand or to enforce any right or remedy against any
Obligor or any other Person (including any other guarantor) under the provisions
of any Loan Document or otherwise, or (ii) to exercise any right or remedy
against any other guarantor (including any Obligor) of, or collateral securing,
any Obligations; (c) any change in the time, manner or place of payment of, or
in any other term of, all or any part of the Obligations, or any other
extension, compromise or renewal of any Obligation; (d) any reduction,
limitation, impairment or termination of any Obligations for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to (and each Borrower hereby waives any right to or claim
of) any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality, irregularity, compromise, unenforceability
of, or any other event or occurrence affecting, any Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or any
consent to or departure from, any of the terms of any Loan Document; (f) any
addition, exchange, release, surrender or non-perfection of any collateral, or
any amendment to or waiver or release or addition of, or consent to or departure
from, any other guaranty held by any Secured Party securing any of the
Obligations; or (g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any Obligor, any
surety or any guarantor.
SECTION IV.10.3. Reinstatement, etc. Each Borrower agrees that its
guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment (in whole or in part) of any of the Obligations is
rescinded or must otherwise be restored by any Secured Party, upon the
insolvency, bankruptcy or reorganization of any other Borrower, any other
Obligor or otherwise, all as though such payment had not been made.
SECTION IV.10.4. Waiver, etc. Each Borrower hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Agreement and any requirement that any Secured Party
protect, secure, perfect or insure any Lien, or any property subject thereto, or
exhaust any right or take any action against any other
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Obligor or any other Person (including any other guarantor) or entity or any
collateral securing the Obligations, as the case may be.
SECTION IV.10.5. Postponement of Subrogation, etc. Each Borrower agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under any Loan Document to which it is a party, nor shall any
Borrower seek or be entitled to seek any contribution or reimbursement from any
Obligor, in respect of any payment made hereunder, under any other Loan Document
or otherwise, until following the Termination Date. Any amount paid to any
Borrower on account of any such subrogation rights prior to the Termination Date
shall be held in trust for the benefit of the Secured Parties and shall
immediately be paid and turned over to the Administrative Agent for the benefit
of the Secured Parties in the exact form received by such Borrower (duly
endorsed in favor of the Administrative Agent, if required), to be credited and
applied against the Obligations, whether matured or unmatured, in accordance
with Section 4.8; provided, however, that if (a) any Borrower has made payment
to the Secured Parties of all or any part of the Obligations; and (b) the
Termination Date has occurred; then at such Borrower's request, the
Administrative Agent, (on behalf of the Secured Parties) will, at the expense of
such Borrower, execute and deliver to such Borrower appropriate documents
(without recourse and without representation or warranty) necessary to evidence
the transfer by subrogation to such Borrower of an interest in the Obligations
resulting from such payment. In furtherance of the foregoing, at all times prior
to the Termination Date, each Borrower shall refrain from taking any action or
commencing any proceeding against any Obligor (or its successors or assigns,
whether in connection with a bankruptcy proceeding or otherwise) to recover any
amounts in the respect of payments made under any Loan Document to any Secured
Party.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION V.1. Initial Credit Extension. The obligations of the Lenders
and, if applicable, the Issuer to fund the initial Credit Extension shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 5.1 to the satisfaction of the Agents.
SECTION V.1.1. Resolutions, etc. The Agents shall have received from
Parent and each Borrower, as applicable, (i) a copy of a good standing
certificate, dated a date reasonably close to the Effective Date, for each such
Person and (ii) a certificate, dated the Closing Date and with counterparts for
each Lender, duly executed and delivered by such Person's secretary or assistant
secretary as to
(a) resolutions of each such Person's Board of Directors then
in full force and effect authorizing, to the extent relevant, all
aspects of the transactions contemplated hereby applicable to such
Person and the execution, delivery and performance of each
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Loan Document to be executed by such Person and the transactions
contemplated hereby and thereby;
(b) the incumbency and signatures of those of its officers
authorized to act with respect to each Loan Document to be executed by
such Person (each an "Authorized Officer"); and
(c) the full force and validity of each Organic Document of
such Person and copies thereof;
upon which certificates each Secured Party may conclusively rely until it shall
have received a further certificate of the secretary or assistant secretary of
any such Person canceling or amending the prior certificate of such Person.
SECTION V.1.2. Senior Secured Notes. The Agents shall have received
fully executed copies of the Senior Secured Note Documents and all certificates,
opinions and other documents delivered thereunder, certified to be true and
complete copies thereof by an Authorized Officer of the Company.
SECTION V.1.3. Issuance of Senior Secured Notes, etc. The Company shall
have received $295,000,000 in gross proceeds from the issuance of the Senior
Secured Notes pursuant to the Senior Secured Note Indenture to the purchasers of
the Senior Secured Notes which shall have been duly executed by each of the
respective parties thereto, and which Senior Secured Note Indenture shall be in
form and substance reasonably satisfactory to the Agents.
SECTION V.1.4. Consummation of Transaction, etc. The Agents shall have
received evidence satisfactory to each of them that all actions necessary to
consummate the transactions contemplated hereby shall have been taken in
accordance with all applicable law and in accordance with the terms of each
applicable transaction document. The Agents shall be satisfied with (i) the
final structure of the Transaction, (ii) the sources and uses of the proceeds
used to consummate the Transaction, and (iii) the terms and conditions of the
Transaction Documents. There shall exist at and as of the Closing Date (after
giving effect to the Transaction and the initial Credit Extensions hereunder) no
conditions that would constitute a default or an event of default under any of
the Senior Secured Note Documents, the Senior Secured Discount Notes, the Sub
Debt Documents or any other material document or material agreement.
SECTION V.1.5. Intercreditor Agreements. The Agents shall have received
executed counterparts of each of the Revolver Intercreditor Agreement and the
Senior Debt Intercreditor Agreement, dated as of the Closing Date, in each case,
duly executed and delivered by all parties thereto and in form and substance
reasonably satisfactory to the Agents.
SECTION V.1.6. Closing Date Certificate. The Agents shall have
received, with counterparts for each Lender, the Closing Date Certificate, dated
the Closing Date and duly
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executed and delivered by an Authorized Officer of each Borrower, in which
certificate each Borrower shall agree and acknowledge that the statements made
therein shall be deemed to be representations and warranties of such Borrower as
of such date, and, at the time the certificate is delivered, such statements
shall in fact be true and correct in all material respects. All documents and
agreements required to be appended to the Closing Date Certificate shall be in
form and substance satisfactory to the Agents.
SECTION V.1.7. Delivery of Notes. The Agents shall have received, for
the account of each Lender that has requested a Note, such Lender's Notes duly
executed and delivered by an Authorized Officer of each Borrower.
SECTION V.1.8. Payment of Outstanding Indebtedness, etc. All
Indebtedness identified in Item 7.2.2(b) of the Disclosure Schedule, together
with all interest, all prepayment premiums and other amounts due and payable
with respect thereto, shall have been paid in full from the proceeds of the
initial Credit Extension and the proceeds of the Senior Secured Notes and the
commitments in respect of such Indebtedness shall have been terminated, and all
Liens securing payment of any such Indebtedness have been released and the
Agents shall have received all Uniform Commercial Code Form UCC-3 termination
statements or other instruments as may be suitable or appropriate in connection
therewith.
SECTION V.1.9. Closing Fees, Expenses, etc. The Agents shall have
received for their own account, or for the account of each Lender, as the case
may be, all fees, costs and expenses due and payable pursuant to Sections 3.3
and 10.3, if then invoiced.
SECTION V.1.10. Financial Information, etc. The Agents shall have
received, with counterparts for each Lender, (a) audited consolidated financial
statements of Parent, the Company and its Subsidiaries as at September 30, 1993,
September 30, 1994, September 30, 1995, September 30, 1996, September 30, 1997
and September 30, 1998; (b) unaudited monthly and quarterly consolidated
financial statements of Parent, the Company and its Subsidiaries for each fiscal
month and Fiscal Quarter ending after September 30, 1998 (including June 30,
1999, if available) and prior to the Closing Date; and (c) a pro forma
consolidated balance sheet of Parent, the Company and its Subsidiaries (other
than Unrestricted Subsidiaries), as of the Closing Date certified by the chief
financial or accounting Authorized Officer of the Company or the Treasurer or
any Assistant Treasurer of the Company, giving effect to the consummation of the
Transaction and all the transactions contemplated by this Agreement and
reflecting the proposed capital structure of Parent, the Company and its
Subsidiaries.
SECTION V.1.11. Borrowing Base Certificate. The Agents shall have
received, with copies for each Lender, an initial Borrowing Base Certificate,
dated the Closing Date, in respect of the Borrowers' Eligible Accounts and
Eligible Inventory as of a recent date satisfactory to the Agents, duly executed
by the chief financial or accounting Authorized Officer, or the Treasurer or
Assistant Treasurer of the Company (and showing that the Borrowing Base Amount
on the
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Closing Date will exceed the initial Current Assets Loans by no less than the
Minimum Excess Availability).
SECTION V.1.12. Opinions of Counsel. The Agents shall have received
opinions, dated the Closing Date and addressed to the Agents and all Lenders,
from
(a) Xxxxxxx & Xxxxx, New York and Texas counsel to Parent and
the Borrowers, in form and substance reasonably satisfactory to the
Agents;
(b) Xxxxx Xxxxxx, general counsel to Parent and the Company,
in form and substance reasonably satisfactory to the Agents; and
(c) local counsel to the Borrowers, in the following
jurisdictions, in form and substance, and from counsel, reasonably
satisfactory to the Agents:
(i) Florida; and
(ii) Georgia.
SECTION V.1.13. Filing Agent, etc. All Uniform Commercial Code
financing statements or other similar financing statements (Form UCC-1) and
Uniform Commercial Code (Form UCC-3) termination statements required pursuant to
the Loan Documents (collectively, the "Filing Statements") shall have been
delivered to CT Corporation System or another similar filing service company
reasonably acceptable to the Agents (the "Filing Agent"). The Filing Agent shall
have acknowledged in a writing reasonably satisfactory to the Agents and its
counsel (a) the Filing Agent's receipt of all Filing Statements, (b) that the
Filing Statements have either been submitted for filing in the appropriate
filing offices or will be submitted for filing in the appropriate offices within
ten days following the Effective Date and (c) that the Filing Agent will notify
the Agents and its counsel of the results of such submissions within 30 days
following the Effective Date.
SECTION V.1.14. Intercreditor Amendment. The Agents shall have received
(a) an executed copy of the Amendment to the Parent Intercreditor Agreement (the
"Intercreditor Amendment"), dated as of July 22, 1999, among the trustee of the
Senior Secured Discount Notes Indenture, the agent under the Existing Loan
Agreement and the Company, in form and substance reasonably satisfactory to the
Agents and (b) an opinion of counsel from Xxxxxx & Xxxxxx, required under the
Senior Secured Discount Notes Indenture addressed to the trustee of such Senior
Secured Discount Notes and the Agents and the Lenders, in form and substance
satisfactory to the Agents.
SECTION V.1.15. Appraisals and Audit Analyses; Environmental Audit
Report. The Administrative Agent shall have received
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(a) an audit by PriceWaterhouseCoopers LLC of the accounts
receivable and inventory of the Borrowers, the results of which shall
be reasonably satisfactory to the Lead Arranger and the Agents;
(b) an appraisal by Chem Systems of the Company's Texas City,
Texas and Valdosta, Georgia manufacturing facilities (the "Chem Systems
Appraisal") which shall indicate that such facilities have an aggregate
orderly liquidation value in use of no less than $300,000,000 and which
shall be reasonably satisfactory to the Lead Arranger and the Agents;
and
(c) an environmental audit report (or an update of a recently
completed environment audit report) and any necessary phase I
environmental assessment reports prepared in accordance with ASTM
Standards of the real property of the Borrowers (or an update of an
existing appraisal and audit analysis thereof) and a preliminary review
of the environmental condition of the real property on which any
Foreign Subsidiary conducts manufacturing operations, in each case,
completed by Pilko & Associates, the results of which audit report
shall be reasonably satisfactory to the Lead Arranger and the Agents.
SECTION V.1.16. Pledge Agreements. The Agents shall have received, with
counterparts for each Lender
(a) the Parent Pledge Agreement, dated as of the date hereof,
duly executed and delivered by an Authorized Officer of Parent,
together with certificates evidencing all of the issued and outstanding
Capital Securities of the Company, which certificates in each case
shall be accompanied by undated instruments of transfer duly executed
in blank; and
(b) the Obligor Pledge Agreement, dated as of the date hereof,
duly executed and delivered by an Authorized Officer of each Borrower
party thereto, together with certificates evidencing all of the issued
and outstanding Capital Securities owned by (i) the Company in each
other Borrower and (ii) each other Borrower in any other Borrower,
which certificates, in each case, shall be accompanied by undated
instruments of transfer duly executed in blank; and
(c) the Agents and their counsel shall be satisfied that (i)
the Lien granted to the Administrative Agent, for the benefit of the
Secured Parties in the collateral described above is a first priority
(or local equivalent thereof) security interest; and (ii) no Lien
exists on any of the collateral described above other than (A) the Lien
created in favor of the Administrative Agent, for the benefit of the
Secured Parties, pursuant to a Loan Document, (B) the second priority
Lien on the Capital Securities of the Company in favor of the trustee
under the Senior Secured Discount Notes Indentures to secure the
obligations of Parent related to the Senior Secured Discount Notes and
(C) the second priority Lien on the Capital Securities of each other
Borrower in favor of the Trustee
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under the Senior Secured Notes Indenture to secure the obligations of
the Company related to the Senior Secured Notes; and
(d) certified copies of searches conducted with respect to all
patents, trademarks and copyrights of the Borrowers at the applicable
United States filing office.
SECTION V.1.17. Security Agreements Filings, Lockboxes, etc. The Agents
shall have received, with counterparts for each Lender, executed counterparts of
each Security Agreement and each Lockbox Agreement, each dated as of the date
hereof, duly executed by each Borrower, together with
(a) executed copies of proper Uniform Commercial Code Form
UCC-1 or similar instruments naming the applicable Borrower as a debtor
and the Administrative Agent as the secured party, or other similar
instruments or documents to be filed under the Uniform Commercial Code
of all jurisdictions as may be necessary or, in the opinion of the
Agents, desirable to perfect the security interests of the
Administrative Agent pursuant to such Security Agreement and each
Lockbox Agreement;
(b) executed copies of proper Uniform Commercial Code Form
UCC-3 assignment or termination statements, if any, necessary to
release or assign all Liens and other rights of any Person in any
collateral described in any Security Agreement securing any of the
Indebtedness identified in Item 7.2.2(b) of the Disclosure Schedule,
together with such other Uniform Commercial Code Form UCC-3 termination
statements as the Agents may reasonably request from such Obligors;
(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report
certified by a party reasonably acceptable to the Agents, dated a date
reasonably near to the Closing Date, listing all effective financing
statements which name each Borrower (under its present name and any
previous names) as the debtor and which are filed in the jurisdictions
in which filings were made pursuant to clause (a) above, together with
copies of such financing statements reflecting no prior Liens on any of
the collateral described in any Loan Document other than Permitted
Liens; and
(d) all Pledged Notes (as defined in each Security Agreement),
if any, evidencing Indebtedness payable to the Company by any Foreign
Restricted Subsidiary duly endorsed to the order of the Administrative
Agent, together with Filing Statements (or similar instruments) in
respect of such Pledged Notes executed by the Company to be filed in
such jurisdictions as the Agents may reasonably request.
SECTION V.1.18. Intellectual Property Security Agreements. The Agents
shall have received the Patent Security Agreement and the Trademark Security
Agreement, as applicable,
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each dated as of the Closing Date, duly executed and delivered by each Borrower
that owns such Collateral.
SECTION V.1.19. Insurance. The Agents shall have received, with copies
for each Lender, certificates of the insurance policies, evidencing coverage
required to be maintained pursuant to each Loan Document.
SECTION V.1.20. Mortgages. The Agents shall have received counterparts
of each Mortgage, dated as of the date hereof, duly executed by the applicable
Borrower, together with
(a) evidence of the completion (or satisfactory arrangements
for the completion) of all recordings and filings of each Mortgage as
may be necessary or, in the reasonable opinion of the Agents, desirable
to effectively create a valid, perfected first priority Lien against
the properties purported to be covered thereby subject however, to any
Permitted Liens;
(b) mortgagee's title insurance policies in favor of the
Administrative Agent for the benefit of the Secured Parties in amounts
and in form and substance and issued by insurers, reasonably
satisfactory to the Agents, with respect to the property purported to
be covered by each Mortgage, insuring that title to such property is
good and indefeasible and that the interests created by each Mortgage
constitute valid first Liens thereon free and clear of all defects and
encumbrances other than Permitted Liens and such other defects and
encumbrances as approved by the Agents, and such policies shall also
include, if required by the Agents and if available, revolving credit
endorsement, comprehensive endorsement, variable rate endorsement,
access and utilities endorsements, mechanic's lien endorsement and such
other endorsements as the Agents shall reasonably request and shall be
accompanied by evidence of the payment in full of all premiums thereon;
and
(c) such other approvals, opinions or documents as the Agents
may request including consents and estoppel agreements from landlords,
a survey of each property purported to be covered by a Mortgage in form
and substance satisfactory to the Agents and the title insurer for each
such property.
SECTION V.1.21. Cash Management Accounts. The Agents shall have
received evidence satisfactory to each of them that each Borrower shall have
provided full cash dominion over its cash management accounts as specified by
the Administrative Agent (the "Cash Management Accounts") to the Administrative
Agent, all on terms and conditions and pursuant to documentation reasonably
satisfactory to the Agents.
SECTION V.1.22. Perfection Certificate. The Agents shall have received
the Perfection Certificate, dated as of the Closing Date, duly executed and
delivered by an Authorized Officer of each Borrower.
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SECTION V.1.23. Solvency, etc. The Agents shall have received, with
counterparts for each Lender, a certificate duly executed and delivered by the
chief financial or accounting Authorized Officer of Parent and the Company,
dated as of the Closing Date, in the form of Exhibit E attached hereto.
SECTION V.1.24. Required Consents and Approvals. All required consents
and approvals shall have been obtained and be in full force and effect with
respect to the Transaction contemplated hereby from (a) all relevant
Governmental Authorities and (b) any other Person whose consent or approval the
Agents reasonably deem necessary or appropriate to effect the transactions
contemplated hereby.
SECTION V.1.25. Statement of Sources and Uses. The Agents shall have
received from the Company, a detailed statement of sources and uses giving
effect to the consummation of the Transaction contemplated by this Agreement as
of the Effective Date, reasonably satisfactory to the Agents.
SECTION V.2. All Credit Extensions. The obligation of each Lender and
the Issuer to make any Credit Extension (including the initial Credit Extension)
shall be subject to and the satisfaction of each of the conditions precedent set
forth below.
SECTION V.2.1. Compliance With Warranties, No Default, etc. Both before
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in Section 8.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true and
correct:
(a) the representations and warranties set forth in this
Agreement and each other Loan Document shall, in each case, be true and
correct in all material respects with the same effect as if then made
(unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date);
(b) the sum of the aggregate outstanding principal amount of
all Current Assets Loans and Swing Line Loans, together with the
aggregate amount of all Letter of Credit Outstandings, does not exceed
the lesser of (i) the then existing Borrowing Base Amount less the
Minimum Excess Availability and (ii) the Current Assets Loan Commitment
Amount; and
(c) no Default shall have then occurred and be continuing.
SECTION V.2.2. Credit Extension Request, etc. Subject to Section 2.3.2,
the Administrative Agent shall have received a Borrowing Request if Loans are
being requested, or an Issuance Request if a Letter of Credit is being requested
or extended. Each of the delivery of
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a Borrowing Request or Issuance Request and the acceptance by any Borrower of
the proceeds of such Credit Extension shall constitute a representation and
warranty by each Borrower that on the date of such Credit Extension (both
immediately before and after giving effect to such Credit Extension and the
application of the proceeds thereof) the statements made in Section 5.2.1 are
true and correct in all material respects.
SECTION V.2.3. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of any Obligor shall be reasonably
satisfactory in form and substance to the Agents and its counsel and the Agents
and its counsel shall have received all information, approvals, opinions,
documents or instruments as the Agents or its counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into this Agreement and
to make Credit Extensions hereunder, each Borrower represents and warrants to
each Secured Party as set forth in this Article.
SECTION VI.1. Organization, etc. Each of the Borrowers and each of
their respective Foreign Restricted Subsidiaries is validly organized and
existing and in good standing under the laws of the state or jurisdiction of its
incorporation or organization, is duly qualified to do business and is in good
standing as a foreign entity in each jurisdiction where the nature of its
business requires such qualification (except where the failure to be so
qualified and in good standing could not reasonably be expected to have a
Material Adverse Effect), and has full power and authority and holds all
requisite governmental licenses, permits and other approvals to enter into and
perform its Obligations under each Loan Document to which it is a party (except
for failures to hold such governmental licenses, permits and other approvals
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect) and to own and hold under lease its material
property and to conduct its business substantially as currently conducted by it.
SECTION VI.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by each Borrower of this Agreement and each Borrower
and Parent of each other Loan Document executed or to be executed by it, each
Borrower's and Parent's participation in the consummation of all aspects of the
Transaction and the execution, delivery and performance by any Borrower or
Parent of the agreements executed and delivered in connection with the
Transaction are in each case within each such Person's powers, have been duly
authorized by all necessary corporate (or other equivalent) action, and do not
(a) contravene any (i) Obligor's Organic Documents, (ii)
material contract or indenture binding on or affecting any Obligor,
(iii) court decree or order binding on or
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affecting any Obligor or (iv) law or governmental regulation binding on
or affecting any Obligor; or
(b) result in, or require the creation or imposition of, any
Lien on any Obligor's properties (except as contemplated by the
Transaction or any of the Loan Documents or as otherwise permitted by
this Agreement).
SECTION VI.3. Government Approval, Regulation, etc. No material
authorization or material approval or other action by, and no material notice to
or material filing with, any Governmental Authority or regulatory body or other
Person (other than those that have been, or on the Effective Date will be, duly
obtained or made and which are, or on the Effective Date will be, in full force
and effect) is required for the consummation of the Transaction or the due
execution, delivery or performance by any Obligor of any Loan Document to which
it is a party, or for the due execution, delivery and/or performance of the
Senior Secured Note Documents, in each case by the parties thereto or the
consummation of the Transaction other than in connection with the registration
of the Exchange Notes (as defined in the Senior Secured Note Indenture). No
Obligor nor any of its Subsidiaries is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION VI.4. Validity, etc. This Agreement and the Notes have been
duly executed and delivered by the Borrowers. The Senior Secured Note Indenture
has been duly executed and delivered by the Borrowers. Each Loan Document and
the Senior Secured Note Documents executed by any Obligor will, on the due
execution and delivery thereof, constitute, assuming the due authorization,
execution and delivery of each Loan Document by the parties thereto other than
the Obligors, the legal, valid and binding obligations of such Obligor,
enforceable against such Obligor in accordance with their respective terms
(except, in any case, as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and by principles of equity).
SECTION VI.5. Financial Information. The financial statements of
Parent, the Company and its Subsidiaries furnished to the Administrative Agent
and each Lender pursuant to Section 5.1.10 have been prepared in accordance with
GAAP consistently applied (except as may be indicated in the notes thereto), and
present fairly subject, in the case of unqualified financial statements and
other unaudited financial information, to normal recurring audit adjustments,
the consolidated financial condition of the Persons covered thereby as at the
dates thereof and the results of their operations for the periods then ended.
All balance sheets, all statements of operations, shareholders' equity and cash
flow and all other financial information of each of Parent, the Company and its
Subsidiaries furnished pursuant to Section 7.1.1 have been and will for periods
following the Effective Date be prepared in accordance with GAAP consistently
applied (except as may be indicated in the notes thereto), and do or will
present fairly subject, in
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the case of unqualified financial statements and other unaudited financial
information, to normal recurring audit adjustments, the consolidated financial
condition of the Persons covered thereby as at the dates thereof and the results
of their operations for the periods then ended.
SECTION VI.6. No Material Adverse Change. There has been no material
adverse change in the financial condition, results of operations, assets,
business, properties or prospects of the Company or the Borrowers and their
Subsidiaries, taken as a whole, since May 31, 1999.
SECTION VI.7. Litigation, Labor Controversies, etc. There is no pending
or, to the knowledge of the Borrowers or their Subsidiaries, threatened
litigation, action, proceeding or labor controversy
(a) except as disclosed in Item 6.7 of the Disclosure
Schedule, affecting any Obligor, or any of their respective properties,
businesses, assets or revenues, which could reasonably be expected to
have a Material Adverse Effect, and no adverse development has occurred
in any labor controversy, litigation, arbitration or governmental
investigation or proceeding disclosed in Item 6.7 which could
reasonably be expected to have a Material Adverse Effect; or
(b) which purports to affect the legality, validity or
enforceability of any Loan Document, the Senior Secured Note Documents
or the Transaction.
SECTION VI.8. Subsidiaries. Parent has no Subsidiaries except those
Subsidiaries (a) which are identified in Item 6.8 of the Disclosure Schedule or
(b) which are permitted to have been organized or acquired in accordance with
Sections 7.1.8 or 7.2.5.
SECTION VI.9. Ownership of Properties. The Borrowers and each of their
Foreign Restricted Subsidiaries owns (a) in the case of owned real property,
good and indefeasible fee title to, and (b) in the case of owned personal
property, good and valid title to, or, in the case of leased real or personal
property, valid and enforceable leasehold interests (as the case may be) in, all
of its properties and assets, real and personal, tangible and intangible, of any
nature whatsoever, free and clear in each case of all Liens or claims, except
for Permitted Liens.
SECTION VI.10. Taxes. The Borrowers and each of their Subsidiaries have
filed all tax returns and reports required by U.S., Canadian or Barbados law to
have been filed by it and has paid all Taxes and governmental charges thereby
shown to be due and owing, except any such Taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its books
or which the failure to file or pay, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
SECTION VI.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of
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any Credit Extension hereunder, no steps have been taken to terminate any
Pension Plan other than a standard termination under Section 4041(b) of ERISA,
and no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition
exists or event or transaction has occurred with respect to any Pension Plan
which could reasonably be expected to result in the incurrence by the Borrowers
or any member of the Controlled Group of any liability, fine or penalty which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Each Foreign Employee Benefit Plan maintained or
contributed to by the Borrowers, any Foreign Restricted Subsidiaries or any
ERISA Affiliate is in compliance with all laws, regulations and rules applicable
thereto and the respective requirements of the governing documents for such Plan
except for such failures which, individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. The aggregate of the
liabilities to provide all of the accrued benefits under any Foreign Pension
Plan maintained or contributed to by the Borrowers, any Foreign Restricted
Subsidiaries or any ERISA Affiliate does not exceed the current fair market
value of the assets held in the trust or other funding vehicle for such Plan in
a manner that could reasonably be expected to have a Material Adverse Effect.
With respect to any Foreign Employee Benefit Plan maintained by the Borrowers,
any Foreign Restricted Subsidiaries or any ERISA Affiliate (other than a Foreign
Pension Plan), reasonable reserves have been established in accordance with
prudent business practice or where required by ordinary accounting practices in
the jurisdiction in which such Plan is maintained. The aggregate unfunded
liabilities, after giving effect to any reserves for such liabilities, with
respect to such Plans are not reasonably expected to have a Material Adverse
Effect. There are no actions, suits or claims (other than routine claims for
benefits) pending or threatened against the Borrowers, any Foreign Restricted
Subsidiaries or any ERISA Affiliate with respect to any Foreign Employee Benefit
Plan.
SECTION VI.12. Environmental Warranties. Except as set forth in Item
6.12 of the Disclosure Schedule:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrowers or any of the Foreign
Restricted Subsidiaries have been, and continue to be, owned or leased
by the Borrowers and their Foreign Restricted Subsidiaries in
compliance with all Environmental Laws except where the failure to do
so could not reasonably be expected to have a Material Adverse Effect;
(b) there have been no past, and there are no pending or
threatened (i) claims, complaints, notices or requests for information
received by any Borrower or any of their Foreign Restricted
Subsidiaries with respect to any alleged violation of any Environmental
Law, or (ii) complaints, notices or inquiries to the Borrowers or any
of their Foreign Restricted Subsidiaries regarding potential liability
under any Environmental Law which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
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(c) there have been no Releases of Hazardous Materials at, on
or under any property now or previously owned or leased by the
Borrowers or any of their Foreign Restricted Subsidiaries that have
had, or could reasonably be expected to have, a Material Adverse
Effect;
(d) the Borrowers and their Foreign Restricted Subsidiaries
have been issued and are in compliance with all permits, certificates,
approvals, licenses and other authorizations relating to environmental
matters except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect;
(e) no property now or previously owned or leased by the
Borrowers or any of their Foreign Restricted Subsidiaries is listed or
proposed for listing (with respect to owned property only) on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar State list of sites requiring investigation or clean-up which,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrowers or any of their
Foreign Restricted Subsidiaries that, singly or in the aggregate, have
had, or could reasonably be expected to have, a Material Adverse
Effect;
(g) neither the Borrowers nor any Foreign Restricted
Subsidiaries has directly transported or directly arranged for the
transportation of any Hazardous Material to any location which is
listed or proposed for listing on the National Priorities List pursuant
to CERCLA, on the CERCLIS or on any similar State list or which is the
subject of federal, State or local enforcement actions or other
investigations which may lead to material claims against the Borrowers
or such Foreign Restricted Subsidiaries for any remedial work, damage
to natural resources or personal injury, including claims under CERCLA
which individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the
Borrowers or any Foreign Restricted Subsidiary that, singly or in the
aggregate, have had, or could reasonably be expected to have, a
Material Adverse Effect; and
(i) no conditions exist at, on or under any property now or
previously owned or leased by the Borrowers or any Foreign Restricted
Subsidiary which, with the passage of time, or the giving of notice or
both, would give rise to material or contingent liability under any
Environmental Law which individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
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SECTION VI.13. Accuracy of Information.
(a) None of the factual information heretofore or contemporaneously
furnished in writing to any Secured Party by or on behalf of any Obligor in
connection with any Loan Document or any transaction contemplated hereby
(including the Transaction) contains any untrue statement of a material fact, or
omits to state any material fact necessary to make any information not
misleading, and no other factual information hereafter furnished in connection
with any Loan Document by or on behalf of any Obligor to any Secured Party will
contain any untrue statement of a material fact or will omit to state any
material fact necessary to make any information not misleading on the date as of
which such information is dated or certified.
(b) All written information prepared by any consultant or professional
advisor on behalf of any Borrower or any of its Foreign Restricted Subsidiaries
which was furnished to the Agents or any Lender in connection with the
preparation, execution and delivery of this Agreement has been reviewed by the
Borrowers, and nothing has come to the attention of the Borrowers in the context
of such review which would lead them to believe that such information (or the
assumptions on which such information is based) is not, taken as a whole, true
and correct in all material respects or that such information, taken as a whole,
omits to state any material fact necessary to make such information not
misleading in any material respect.
(c) Insofar as any of the information described above includes
assumptions, estimates, projections or opinions, the Borrowers have reviewed
such matters and nothing has come to the attention of the Borrowers in the
context of such review which would lead them to believe that such assumptions,
estimates, projections or opinions, omit to state any material fact necessary to
make such assumptions, estimates, projections or opinions not reasonable or not
misleading in any material respect. All projections and estimates have been
prepared in good faith on the basis of reasonable assumptions.
SECTION VI.14. Regulations U and X. No Obligor is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Credit Extensions will be used to purchase or
carry margin stock or otherwise for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulation U or Regulation X. Terms for which
meanings are provided in F.R.S. Board Regulation U or Regulation X or any
regulations substituted therefor, as from time to time in effect, are used in
this Section with such meanings.
SECTION VI.15. Year 2000. Each Borrower has reviewed the areas within
its business and operations which could be adversely affected by, and has
developed or is developing a program to address on a timely basis, the "Year
2000 Problem" (that is, the risk that computer applications used by such Obligor
may be unable to recognize and properly perform date-sensitive functions
involving certain dates prior to and any date after December 31, 1999). Based on
such review and program, each Borrower believes that the Year 2000 Problem could
not reasonably be expected to have a Material Adverse Effect. It is acknowledged
and agreed by
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each Secured Party that the foregoing representation does not include any
representation or warranty with respect to any Year 2000 Problem or Material
Adverse Effect caused by or resulting from any matter which is beyond the
Borrowers' reasonable control, including a Year 2000 Problem which (a) is caused
by, results from or is experienced by any non-affiliated Person or a Year 2000
Problem at any non-affiliated Person, any Secured Party or any Governmental
Authority (or any Year 2000 Problem of or at any such Person) or (b) is caused
by or results from the failure of any consultants of the Borrowers to properly
identify deficient systems, to propose or select remedial action that adequately
addresses any deficiencies or to complete the remediation in a timely manner.
SECTION VI.16. Issuance of Subordinated Debt; Status of Obligations as
Senior Debt, etc. (a) The Company had the power and authority to incur the
Subordinated Debt as provided for under the Sub Debt Documents applicable
thereto and had duly authorized, executed and delivered the Sub Debt Documents
applicable to such Subordinated Debt. The Company had issued, pursuant to due
authorization, the Subordinated Debt under the applicable Sub Debt Documents,
and such Sub Debt Documents constitute the legal, valid and binding obligations
of the Company enforceable against the Company in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights generally
and by principles of equity). The subordination provisions of the Subordinated
Debt contained in the Sub Debt Documents are enforceable against the holders of
the Subordinated Debt by the holder of any "Senior Debt" (as defined in the Sub
Debt Documents) or similar term referring to the Obligations. All Obligations,
including those to pay principal of and interest (including post-petition
interest, whether or not allowed as a claim under bankruptcy or similar laws) on
the Loans and Reimbursement Obligations, and fees and expenses in connection
therewith, constitute "Senior Debt" (as defined in the Sub Debt Documents) or
similar term relating to the Obligations and all such Obligations are entitled
to the benefits of the subordination created by the Sub Debt Documents. Each
Borrower acknowledges that the Administrative Agent, each Lender and the Issuer
is entering into this Agreement and is extending its Commitments in reliance
upon the subordination provisions of the Sub Debt Documents.
(b) the Senior Secured Notes have been issued and sold to the initial
purchasers thereof on or prior to the Closing Date in accordance with and
pursuant to the terms of the Senior Secured Notes Indenture and in compliance
with all laws, including Rule 144A of the Securities Act of 1933, as amended,
and all other applicable federal and State securities laws.
SECTION VI.17. Solvency. The Transaction (including the incurrence of
the initial Credit Extension hereunder and the application of the proceeds of
the Credit Extensions), will not involve or result in any fraudulent transfer or
fraudulent conveyance under the provisions of Section 548 of the Bankruptcy Code
(11 U.S.C. Section 101 et seq., as from time to time hereafter amended, and any
successor or similar statute) or any applicable State law respecting fraudulent
transfers or fraudulent conveyances. On the Closing Date, prior to and after
giving effect to the Transaction and the making of each Credit Extension made on
the Closing Date and after giving
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effect to the application of the proceeds of such Credit Extensions, each of the
Borrowers and each of their Subsidiaries is Solvent. The Borrowers and their
Subsidiaries are Solvent.
SECTION VI.18. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral owned by the Borrowers, the loss, impairment or
infringement of which might have a material adverse effect on the financial
condition, operations, assets, business, properties, revenues or prospects of
the Borrowers and their Subsidiaries taken as whole, except as set forth in Item
6.18 of the Disclosure Schedule:
(a) such Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and
enforceable;
(c) the Borrowers have made all necessary filings and
recordations to protect their respective interests in such Intellectual
Property Collateral, including (if permissible) recordations of all
such interests in the Intellectual Property Collateral in the United
States Patent and Trademark Office and/or the United States Copyright
Office;
(d) the Borrowers are the exclusive owners of the entire and
unencumbered right, title and interest in and to such Intellectual
Property Collateral (except for (i) Liens created under the Loan
Documents, (ii) the second priority Lien on such Intellectual Property
Collateral in favor of the Trustee to secure the obligations of the
Borrowers related to the Senior Secured Notes (if any) and (iii)
Permitted Liens and except for rights of licensees under licenses of
such Intellectual Property Collateral in the ordinary course of
business) and no claim has been made that the use of such Intellectual
Property Collateral does or may violate the asserted rights of any
third party except for claims that could not reasonably be expected to
have a material adverse effect on the financial condition, operations,
assets, business, properties, revenues or prospects of the Borrowers,
taken as a whole; and
(e) the Borrowers have performed and will continue to perform
all acts and have paid and will continue to pay all required fees and
taxes relating to registrations are current.
SECTION VI.19. Ownership of Stock. Parent owns free and clear of all
Liens (other than the first priority Liens pursuant to the Parent Pledge
Agreement and the second priority Lien pursuant to the Discount Notes Pledge
Agreement), 100% of the outstanding shares of common stock (whether voting or
non-voting) of the Company on a fully diluted basis. The Company owns (directly
or indirectly) free and clear of all Liens (other than pursuant to the Obligor
Pledge Agreement and the second priority Lien on such Collateral in favor of the
Trustee to secure the obligations of the Company related to the Senior Secured
Notes) 100% of the outstanding Capital Securities (whether voting or non-voting)
of each other Borrower on a fully diluted basis.
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There are no outstanding options, warrants or convertible securities with
respect to the Capital Securities of any Borrower.
ARTICLE VII
COVENANTS
SECTION VII.1. Affirmative Covenants. Each Borrower agrees with each
Lender, the Issuer and the Administrative Agent that until the Termination Date
has occurred, each Borrower will, and will cause its Foreign Restricted
Subsidiaries to, perform or cause to be performed the obligations set forth
below.
SECTION VII.1.1. Financial Information, Reports, Notices, etc. The
Company will furnish or cause to be furnished to the Administrative Agent and
each Lender copies of the following financial statements, reports, notices and
information:
(a) (i) as soon as available and in any event within 50 days
after the end of each of the first three Fiscal Quarters of each Fiscal
Year, an unaudited consolidated and consolidating balance sheet of the
Borrowers and their Foreign Restricted Subsidiaries as of the end of
such Fiscal Quarter and consolidated and consolidating statements of
income and cash flow of the Borrowers and their Foreign Restricted
Subsidiaries for such Fiscal Quarter and for the period commencing at
the end of the previous Fiscal Year and ending with the end of such
Fiscal Quarter, and including (in each case), in comparative form the
figures for the corresponding Fiscal Quarter in, and year to date
portion of, the immediately preceding Fiscal Year, certified as
complete and correct by the chief financial or accounting Authorized
Officer of the Company or the Treasurer or any Assistant Treasurer of
the Company and (ii) as soon as available and in any event within 30
days after the end of each month, a copy of the consolidated and
consolidating balance sheet of the Borrowers and their Foreign
Restricted Subsidiaries as of the end of such month, and the related
consolidated and consolidating statements of income and cash flow of
the Borrowers and their Foreign Restricted Subsidiaries for such month
and for the period commencing at the end of the previous Fiscal Year
and ending with the end of such month, and, in each case, setting forth
in comparative form the figures for the same monthly accounting periods
ending in the immediately preceding Fiscal Year (to the extent
available) and certified by the chief financial or chief accounting
Authorized Officer of the Company or the Treasurer or any Assistant
Treasurer of the Company;
(b) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a copy of the consolidated and unaudited
consolidating balance sheet of the Borrowers and their Foreign
Restricted Subsidiaries, and the related consolidated and consolidating
statements of income and cash flow of the Borrowers and their Foreign
Restricted Subsidiaries for such Fiscal Year, setting forth in
comparative form the figures for the immediately preceding Fiscal Year,
audited (without any Impermissible
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Qualification) by independent public accountants of recognized national
standing and stating that such consolidated financial statements
present fairly the consolidated financial condition as of the end of
such Fiscal Year, and the consolidated results of operations and cash
flows for such Fiscal Year, of the Borrowers and their Foreign
Restricted Subsidiaries in accordance with GAAP, applied on a
consistent basis; provided, however that any consolidating statements
delivered pursuant to this clause shall be unaudited;
(c) as soon as available and in any event within 20 days after
the end of each calendar month, a Borrowing Base Certificate dated and
reflecting amounts as of the close of business on the last day of the
preceding calendar month;
(d) as soon as possible and in any event within three Business
Days after the Borrowers obtains knowledge of the occurrence of a
Default, a statement of an Authorized Officer of the Company setting
forth details of such Default and the action which the Company or such
Borrower has taken and proposes to take with respect thereto;
(e) as soon as possible and in any event within three Business
Days after the Borrowers obtains knowledge of (i) the occurrence of any
material adverse development with respect to any litigation, action,
proceeding or labor controversy described in Item 6.7 of the Disclosure
Schedule or (ii) the commencement of any litigation, action, proceeding
or labor controversy of the type and materiality described in Section
6.7, notice thereof and, to the extent the Administrative Agent
requests, copies of all documentation relating thereto;
(f) promptly after the sending or filing thereof, copies of
all reports, notices, prospectuses and registration statements which
any Obligor files with the SEC or any national securities exchange;
(g) immediately upon becoming aware of (i) the institution of
any steps by any Person to terminate any Pension Plan other than a
standard termination under 4041(b) of ERISA, (ii) the failure to make a
required contribution to any Pension Plan if such failure is sufficient
to give rise to a Lien under Section 302(f) of ERISA, (iii) the taking
of any action with respect to a Pension Plan which could result in the
requirement that any Obligor furnish a bond or other security to the
PBGC or such Pension Plan, or (iv) the occurrence of any event with
respect to any Pension Plan which could result in the incurrence by any
Obligor of any material liability, fine or penalty, notice thereof and
copies of all documentation relating thereto;
(h) promptly upon receipt thereof, copies of all "management
letters" submitted to the Borrowers or any other Obligor by the
independent public accountants referred to in clause (b) in connection
with each audit made by such accountants;
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(i) promptly following the mailing or receipt of any notice or
report delivered under the terms of any Subordinated Debt, the Senior
Secured Discount Notes Indenture or the Senior Secured Note Documents,
copies of such notice or report;
(j) at the cost of the Borrowers, a report or reports of an
independent (or an employee of the Administrative Agent) collateral
field examiner approved (i) by the Company, whose approval shall not be
unreasonably withheld, and (ii) by the Administrative Agent (and which
collateral field examiner may be the Administrative Agent or an
affiliate thereof) with respect to the Eligible Accounts and Eligible
Inventory components included in the Borrowing Base. The Administrative
Agent may (and, at the direction of the Current Assets Required
Lenders, shall) request such reports or additional reports as it (or
the Current Assets Required Lenders) shall reasonably deem necessary;
(k) each calendar year (on or about June 30) a desktop update
of the Chem System Appraisal which shall confirm that the Company's
Texas City, Texas and Valdosta, Georgia manufacturing facilities have
an aggregate orderly liquidation value in use of no less than
$300,000,000, such update to be reasonably satisfactory in all other
material respects to the Agents;
(l) such other financial and other information as any Lender
or the Issuer through the Administrative Agent may from time to time
reasonably request; and
(m) any amendment or modification to the Standby Purchase
Agreements.
SECTION VII.1.2. Maintenance of Existence; Compliance With Laws, etc.
The Borrowers' will, and will cause each of their Foreign Restricted
Subsidiaries to,
(a) except as otherwise permitted by Section 7.2.10, preserve
and maintain its legal existence; and
(b) comply in all material respects with all applicable laws,
rules, regulations and orders, including the payment (before the same
become delinquent), of all Taxes, assessments and governmental charges
imposed upon the Borrowers or their Foreign Restricted Subsidiaries or
upon their property except to the extent being diligently contested in
good faith by appropriate proceedings and for which adequate reserves
in accordance with GAAP have been set aside on the books of the
Borrowers or their Foreign Restricted Subsidiaries, as applicable.
SECTION VII.1.3. Maintenance of Properties. The Borrowers will, and
will cause each of their Foreign Restricted Subsidiaries to, maintain, preserve,
protect and keep its and their respective properties in good repair, working
order and condition (ordinary wear and tear excepted), and make necessary
repairs, renewals and replacements so that the business carried on
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by the Borrowers and their Foreign Restricted Subsidiaries may be properly
conducted at all times, unless the Borrowers or any such Foreign Restricted
Subsidiary determines in good faith that the continued maintenance of such
property is no longer economically desirable (provided that any such
determination with respect to any property material to the operations of the
Borrowers or its Foreign Restricted Subsidiaries shall be made only after
consultation with the Administrative Agent).
SECTION VII.1.4. Insurance. The Borrowers will, and will cause each of
their Foreign Restricted Subsidiaries to:
(a) maintain insurance on its property with financially sound
and reputable insurance companies against loss and damage in at least
the amounts (and with only those deductibles) customarily maintained,
and against such risks as are typically insured against in the same
general area, by Persons of comparable size engaged in the same or
similar business as the Borrowers and their Foreign Restricted
Subsidiaries; and
(b) all worker's compensation, employer's liability insurance
or similar insurance as may be required under the laws of any state or
jurisdiction in which it may be engaged in business.
Without limiting the foregoing, all insurance policies required pursuant to this
Section for each Borrower shall (i) list the Administrative Agent on behalf of
the applicable Secured Parties as mortgagee (in the case of property insurance)
or additional insured (in the case of liability insurance), as applicable, and
provide that no cancellation or modification of the policies will be made
without 30 days' prior written notice to the Administrative Agent and (ii) be in
addition to any requirements to maintain specific types of insurance contained
in the other Loan Documents.
SECTION VII.1.5. Books and Records. The Borrowers will, and will cause
each of their Foreign Restricted Subsidiaries to, keep books and records in
accordance with GAAP which accurately reflect all of its business affairs and
transactions and permit each Secured Party or any of their respective
representatives, at reasonable times and intervals upon reasonable notice to the
Company, to visit each Borrower's offices, to discuss such Borrower's financial
matters with its officers and employees, and its independent public accountants
(and each Borrower hereby authorizes such independent public accountant to
discuss the Borrowers' and each Obligor's financial matters with each Secured
Party or their representatives whether or not any representative of the Company
or such Borrower is present) and to examine (and photocopy extracts from) any of
its books and records. The Borrowers shall jointly and severally pay any fees of
such independent public accountant incurred in connection with the
Administrative Agent's exercise of its rights pursuant to this Section at any
time and any other Secured Party's exercise of their rights pursuant to this
Section if a Default has occurred and is continuing.
SECTION VII.1.6. Foreign Employee Benefit Plan Compliance. The
Borrowers shall cause each of its Foreign Restricted Subsidiaries and ERISA
Affiliates to establish, maintain and
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operate all Foreign Employee Benefit Plans (other than government-sponsored
plans) in compliance in all material respects with all laws, regulations and
rules applicable thereto and the respective requirements of the governing
documents for such plans.
SECTION VII.1.7. Use of Proceeds. Each Borrower will apply the proceeds
of the Credit Extensions as follows:
(a) for the purposes described in the third recital;
(b) for working capital and general corporate purposes of the
Borrowers; and
(c) for issuing Letters of Credit for the account of each
Borrower.
SECTION VII.1.8. Future Borrowers, Security, etc. The Borrowers will,
and will cause each Subsidiary that is not a Foreign Restricted Subsidiary or an
Unrestricted Subsidiary to execute any documents, Filing Statements, agreements
and instruments, and take all further action (including filing Mortgages) that
may be required under applicable law, or that the Administrative Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the validity
and first priority of the security interests created or intended to be created
by the Loan Documents. The Borrowers will cause any subsequently acquired or
organized Subsidiary that is not a Foreign Restricted Subsidiary or an
Unrestricted Subsidiary to execute a Joinder Agreement and each applicable Loan
Document (including a supplement to the applicable Security Agreements) in favor
of the Secured Parties. In addition, from time to time, the Borrowers will, at
their cost and expense, promptly secure the appropriate Obligations by pledging
or creating, or causing to be pledged or created, perfected security interests
with respect to such of its assets and properties as the Administrative Agent or
the Required Lenders shall designate, it being understood that it is the intent
of the parties that the Obligations shall be secured by, among other things,
substantially all the assets of the Borrowers and each Subsidiary that is not a
Foreign Restricted Subsidiary or Unrestricted Subsidiary (including real and
other properties acquired subsequent to the Effective Date but excluding the
Capital Securities of any Foreign Restricted Subsidiary or Unrestricted
Subsidiary owned by such Borrower or Subsidiary). Such security interests and
Liens will be created under the Loan Documents in form and substance
satisfactory to the Administrative Agent, and each Borrower shall deliver or
cause to be delivered to the Lenders all such instruments and documents
(including legal opinions, title insurance policies and lien searches) as the
Administrative Agent shall reasonably request to evidence compliance with this
Section.
SECTION VII.1.9. Cash Management Accounts. The applicable Borrower
shall provide instructions to the appropriate Person as often as necessary to
ensure that any and all amounts deposited in the Cash Management Accounts are
transferred, either directly or indirectly, to the Administrative Agent, to be
applied against any outstanding Loans as specified by the applicable Borrower so
long as no Default is occurring and no Borrower shall close or transfer any such
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account, or open any new deposit account, in any case without the prior written
consent of the Administrative Agent and such new deposit account shall be
subject to a cash management account agreement similar to those controlling the
Cash Management Accounts.
SECTION VII.1.10. Environmental Covenant. The Borrowers will, and will
cause each of its Foreign Restricted Subsidiaries to,
(a) use and operate all of its facilities and properties in
compliance in all material respects with all Environmental Laws, keep
(and, when applicable, obtain in a timely manner) all necessary
material permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain
in compliance in all material respects therewith, and handle all
Hazardous Materials (including the disposition and storing thereof) in
compliance with all applicable Environmental Laws which in the good
faith judgment of the Company are of a material nature, except in each
case where the failure to do so could not reasonably be expected to
have a Material Adverse Effect;
(b) promptly notify the Administrative Agent and provide
copies upon receipt of all written claims, complaints, notices or
inquiries from third parties relating to Releases of Hazardous
Materials from its facilities and properties or compliance with
Environmental Laws which in the good faith judgment of the Company are
of a material nature and which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; and
(c) provide such information and certifications which the
Administrative Agent may reasonably request from time to time to
evidence compliance with this Section.
SECTION VII.1.11. As to Intellectual Property Collateral. (a) The
Borrowers shall not, except in the exercise of their reasonable business
judgment, do any act, or omit to do any act, whereby any item of material
Intellectual Property Collateral may lapse or become abandoned or dedicated to
the public or unenforceable other than upon the natural expiration of protective
periods under applicable law.
(b) The Borrowers shall notify the Administrative Agent as
soon as practicable if it knows, or has reason to know, that any
application or registration relating to any material item of the
Intellectual Property Collateral may become abandoned or dedicated to
the public or placed in the public domain or invalid or unenforceable
other than upon the natural expiration of protective periods under
applicable law, or of any adverse determination or development
(including the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark Office or
the United States Copyright Office) regarding the ownership by the
Borrowers of any material item of the Intellectual Property Collateral
or the Borrowers' right to register the same or to keep and maintain
and enforce the same.
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(c) In no event shall the Borrowers, or any of their
respective agents, employees, designees or licensees, file an
application for the registration of any Intellectual Property
Collateral with the United States Patent and Trademark Office or the
United States Copyright Office, unless it promptly informs the
Administrative Agent, and upon request of the Administrative Agent,
executes and delivers any and all agreements, instruments, documents
and papers as the Administrative Agent may reasonably request to
evidence the Administrative Agent's security interest in such
Intellectual Property Collateral and the goodwill and general
intangibles of the Borrowers relating thereto or represented thereby.
(d) Unless the Borrowers shall otherwise determine in the
exercise of its reasonable business judgment, the Borrowers shall take
all necessary steps, including in any proceeding before the United
States Patent and Trademark Office or the United States Copyright
Office, to maintain and pursue any application (and to obtain the
relevant registration) filed with respect to, and to maintain any
registration of, any material item of the Intellectual Property
Collateral, including the filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and
taxes (except to the extent that dedication, abandonment or
invalidation is permitted under the foregoing clauses (a), (b) and
(c)).
SECTION VII.1.12. Future Real Estate Properties. Within 30 days after
the acquisition by the Borrowers of any real property owned in fee with a value
in excess of $150,000, the Borrowers shall take all steps necessary, at their
own cost and expense, to (a) grant the Administrative Agent a first priority
mortgage Lien on such real property, fixtures and buildings and improvements
thereon and (b) obtain title insurance coverage on such property in an amount,
containing such terms and exceptions and issued by an insurance company,
acceptable to the Administrative Agent in the Administrative Agent's reasonable
discretion (together with such favorable legal opinions with respect thereto as
the Administrative Agent may reasonably request).
SECTION VII.1.13. Non-Consolidation of Unrestricted Subsidiaries. The
Borrowers will be, and shall cause each of their Foreign Restricted Subsidiaries
to be, operated at all times in such a manner that its assets and liabilities
may not be substantively consolidated with those of any Unrestricted Subsidiary
in the event of the bankruptcy or insolvency of such Unrestricted Subsidiary. In
this regard, the Borrowers shall, and shall cause each of its Foreign Restricted
Subsidiaries to:
(a) not (i) consolidate or merge with or into any Unrestricted
Subsidiary or (ii) sell, lease or otherwise transfer, directly or
indirectly, all or substantially all of its assets to any Unrestricted
Subsidiary;
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(b) maintain separate financial statements to the extent done
in the ordinary course of business, corporate records and books of
account separate from each Unrestricted Subsidiary;
(c) maintain its assets separately from the assets of any
Unrestricted Subsidiary (including through maintenance of a separate
bank account);
(d) not guarantee the obligations of any Unrestricted
Subsidiary, or advance funds for the payment of expenses or otherwise,
to any Unrestricted Subsidiary (excluding overhead items, tax sharing
and similar items);
(e) conduct all of its business correspondence and other
communications in its own name and on its own stationery;
(f) maintain a board of directors that is separate from the
boards of directors of all Unrestricted Subsidiaries;
(g) maintain the requisite legal formalities in order that the
Borrowers and their Foreign Restricted Subsidiaries may each be treated
as a legally separate entity from any Unrestricted Subsidiary; and
(h) cause each Unrestricted Subsidiary, at the time of its
creation or acquisition, to be adequately capitalized.
SECTION 7.1.15. ANEXCO Receivables. Receivables owing by ANEXCO to the
Company shall not be counted in the definition of Eligible Receivables unless
the Company (i) causes all amounts received by ANEXCO by the applicable account
debtors to be transferred to the Company at the times required by the ANEXCO LLC
Agreement, (ii) causes all amounts received by the Company from ANEXCO to be
immediately transferred to the Company's depositary account maintained with the
Administrative Agent as soon as such amounts are paid to the Company by ANEXCO,
(iii) promptly remits notice to the Administrative Agent with respect to any
legal action commenced against ANEXCO or any Lien that is imposed on the assets
of ANEXCO, in either case, of which the Company becomes aware, (iv) to the
extent that audited financial statements are prepared for ANEXCO, promptly
provides the Administrative Agent with a copy of such financial statements
(subject to the execution by the Administrative Agent of an appropriate
confidentiality agreement in form and substance reasonably satisfactory to the
Administrative Agent, the Company and BP), (v) provides notice to the
Administrative Agent with respect to the occurrence of any event with respect to
ANEXCO that could reasonably be expected to have a Material Adverse Effect with
respect to ANEXCO and (vi) provides a detailed list of all account obligors with
respect to the ANEXCO account receivables and provides such other information
regularly provided by the Borrowers to the Administrative Agent with respect to
all other accounts receivable included in "Eligible Accounts." In addition,
unless the Administrative Agent otherwise consents in writing, in the event that
the Company (i)
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consents to the granting of any Lien by ANEXCO on any of its accounts
receivable, (ii) transfers any of its rights or obligations under the ANEXCO,
LLC Agreement or the BP Joint Venture Agreement, including any membership
interest in ANEXCO, in a manner which will result in the Board of Managers of
ANEXCO being able to authorize the granting of any Lien on the accounts
receivable of ANEXCO without the consent of the Company or (iii) amends the
ANEXCO LLC Agreement or the BP Joint Venture Agreement in any manner which
extends the period of time during which ANEXCO must make any payment to the
Company on account of sales of acrylonitrile to or through ANEXCO or permits the
granting of any Lien on the accounts receivable of ANEXCO without the consent of
the Company, then all receivables owing to the Company by ANEXCO shall
immediately cease to be Eligible Receivables.
SECTION VII.2. Negative Covenants. Each Borrower covenants and agrees
with each Lender, the Issuer and the Administrative Agent that until the
Termination Date has occurred each Borrower will, and will cause its Foreign
Restricted Subsidiaries to, perform or cause to be performed the obligations set
forth below.
SECTION VII.2.1. Business Activities. No Borrower will, nor will any
Borrower permit any of its Foreign Restricted Subsidiaries to, engage in any
business activity except those business activities engaged in on the date of
this Agreement and business activities reasonably related or incidental thereto.
SECTION VII.2.2. Indebtedness. The Borrowers will not, and will not
permit any of their Foreign Restricted Subsidiaries to, create, incur, assume or
permit to exist any Indebtedness, other than (without duplication):
(a) Indebtedness in respect of the Obligations and refinancing
of such Indebtedness;
(b) until the Closing Date, Indebtedness that is to be repaid
in full as further identified in Item 7.2.2(b) of the Disclosure
Schedule;
(c) Indebtedness existing as of the Effective Date which is
identified in Item 7.2.2(c) of the Disclosure Schedule, and refinancing
of such Indebtedness on No Less Favorable Terms and Conditions;
(d) unsecured Indebtedness (i) incurred in the ordinary course
of business of the Borrowers and their Foreign Restricted Subsidiaries
(including open accounts extended by suppliers on normal trade terms in
connection with purchases of goods and services which are not overdue
for a period of more than 90 days or, if overdue for more than 90 days,
as to which a dispute exists and adequate reserves in conformity with
GAAP have been established on the books of such Borrower or such
Foreign Restricted Subsidiary) and (ii) in respect of performance,
surety or appeal bonds provided in the ordinary course
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of business, but excluding (in each case), Indebtedness incurred
through the borrowing of money or Contingent Liabilities in respect
thereof;
(e) Indebtedness (and refinancings of such Indebtedness on No
Less Favorable Terms and Conditions) (i) in respect of industrial
revenue bonds or other similar governmental or municipal bonds, and
(ii) Capitalized Lease Liabilities; provided, that the aggregate amount
of all Indebtedness outstanding pursuant to this clause (e) shall not
at any time exceed $2,000,000 in the aggregate in any Fiscal Year;
(f) unsecured Indebtedness owing by (i) any Borrower to a
Canadian Subsidiary not to exceed $5,000,000 in the aggregate at any
one time outstanding, (ii) a Canadian Subsidiary to any Borrower not to
exceed $2,000,000 in the aggregate at any one time outstanding, (iii)
any Canadian Subsidiary to any other Canadian Subsidiary; and (iv) any
Borrower to another Borrower; which Indebtedness shall, if payable by a
Canadian Subsidiary to the Borrowers be evidenced by one or more
promissory notes in form and substance reasonably satisfactory to the
Administrative Agent, duly executed and delivered in pledge to the
Administrative Agent pursuant to a Loan Document, and shall not be
forgiven or otherwise discharged for any consideration other than
payment in full or in part in cash (provided, that only the amount
repaid in part shall be discharged) ;
(g) obligations for current taxes, assessments and other
governmental charges and taxes, assessments and other governmental
charges which are not yet due or are being contested in good faith by
appropriate action or proceeding promptly initiated and diligently
conducted, if such reserve as shall be required by GAAP shall have been
made therefore so long as no Lien is filed by such Person with respect
to such Indebtedness;
(h) Indebtedness of the Company evidenced by the Senior
Secured Notes, and Indebtedness of any other Borrower in respect of its
guaranty of such Senior Secured Notes and refinancings of such
Indebtedness on No Less Favorable Terms and Conditions;
(i) unsecured Subordinated Debt of the Company incurred
pursuant to the terms of the Sub Debt Documents in a principal amount
not to exceed $425,000,000 (minus any repayments, redemptions or
repurchases in respect thereof) and refinancings of such Subordinated
Debt which continue to satisfy the terms of the definition of
"Subordinated Debt" and are on No Less Favorable Terms and Conditions;
(j) other unsecured Indebtedness of the Borrowers and their
Foreign Restricted Subsidiaries (other than Indebtedness of Foreign
Restricted Subsidiaries owing to the Borrowers) in an aggregate amount
at any time outstanding not to exceed $5,000,000;
(k) Indebtedness in respect of Hedging Obligations entered
into in the ordinary course of business;
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(l) non-recourse Indebtedness of an Unrestricted Subsidiary;
(m) Indebtedness evidencing the deferred purchase price of
newly acquired property or incurred to finance the acquisition of
equipment or construction by the Borrowers and their Foreign Restricted
Subsidiaries (pursuant to purchase money mortgages or otherwise,
whether owed to the seller or a third party) used in the ordinary
course of business of the Borrowers and their Foreign Restricted
Subsidiaries (provided, that such Indebtedness is incurred within 60
days of the acquisition or construction of such property) in an amount
not to exceed $2,000,000 in any Fiscal Year; and
(n) Indebtedness under the Canadian Facility;
provided, however, that no Indebtedness otherwise permitted by clauses (e),
(f)(ii), (j), (k), (m) or (n) shall be assumed or otherwise incurred if a
Default has occurred and is then continuing or would result therefrom.
SECTION VII.2.3. Liens. No Borrower will, nor will any Borrower permit
any of its Foreign Restricted Subsidiaries to, create, incur, assume or permit
to exist any Lien upon any of its property (including Capital Securities of any
Person), revenues or assets, whether now owned or hereafter acquired, except the
following (collectively, "Permitted Liens"):
(a) Liens securing payment of the Obligations;
(b) until the Closing Date, Liens securing payment of
Indebtedness of the type described in clause (b) of Section 7.2.2;
(c) Liens existing as of the Effective Date and disclosed in
Item 7.2.3(c) of the Disclosure Schedule, which Item 7.2.3(c) shall
include all Liens securing Indebtedness described in clause (c) of
Section 7.2.2, and extensions thereof and refinancings of such
Indebtedness; provided, that no such Lien that secures Indebtedness
shall encumber any additional property and the amount of Indebtedness
secured by such Lien is not increased from that existing on the
Effective Date (as such Indebtedness may have been permanently reduced
subsequent to the Effective Date);
(d) Liens securing Indebtedness of the type permitted under
clauses (e) and (m) of Section 7.2.2; provided, that (i) such Lien is
granted within 60 days after such Indebtedness is incurred, (ii) the
Indebtedness secured thereby does not exceed 80% of the lesser of the
cost or the fair market value of the applicable property, improvements
or equipment at the time of such lease, acquisition or construction and
(iii) such Lien secures only the assets that are the subject of the
Indebtedness referred to in such clause;
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(e) a second priority and subordinated Lien on both the
Capital Securities of the Borrowers (other than the Company) and the
Fixed Assets of the Borrowers and a first priority Lien on the Capital
Securities of the Canadian Subsidiaries of the Company, in each case,
securing the Senior Secured Notes or any refinancing of the Senior
Secured Notes on No Less Favorable Terms and Conditions and a second
priority Lien on the stock of the Company to secure the Indebtedness of
Parent under the Senior Secured Discount Notes or any refinancing of
such Indebtedness on No Less Favorable Terms and Conditions;
(f) Liens in favor of carriers, warehousemen, mechanics,
repairmen, workmen, crews, materialmen and landlords, maritime Liens
and other Liens imposed by law granted or imposed in the ordinary
course of business for amounts not overdue more than 60 days (other
than any such Liens securing amounts overdue for any period that can,
with the filing of any document or any other action, "prime" any Liens
securing the Obligations) or being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on the Borrowers' books;
(g) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits, or to
secure performance of tenders, statutory obligations, surety and appeal
bonds, government contracts, performance bonds, bids, leases or other
similar obligations (other than for borrowed money) entered into in the
ordinary course of business or to secure obligations on surety and
appeal bonds or performance bonds;
(h) judgment Liens in existence for less than 45 days after
the entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies and which do not otherwise result in an Event of Default
under Section 8.1.6;
(i) Permitted Real Estate Liens;
(j) Liens for Taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on the Borrowers' books;
(k) Liens securing a Canadian Facility on collateral
comprising similar assets to the Current Assets Collateral owned by the
applicable Canadian Subsidiary; and
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(l) Ordinary course of business Liens not described above or
in the definition of Permitted Real Estate Liens that do not secure any
Indebtedness and could not, in any event, be prior to any Liens granted
under the Loan Documents in an amount not to exceed $2,000,000 in the
aggregate.
SECTION VII.2.4. Excess Availability. The Borrowers will not permit
Excess Availability at any time to be less than the Minimum Excess Availability,
provided, however, that from time to time the Administrative Agent may decrease
the Minimum Excess Availability by the amount of the Overadvance Amount, when in
the reasonable judgment of the Administrative Agent such adjustment, is deemed
necessary.
SECTION VII.2.5. Investments. The Borrowers will not, and will not
permit any of their Foreign Restricted Subsidiaries to, purchase, make, incur,
assume or permit to exist any Investment in any other Person, other than the
following (collectively, "Permitted Investments"):
(a) Investments existing on the Effective Date and identified
in Item 7.2.5(a) of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(d) Investments permitted as Capital Expenditures pursuant to
Section 7.2.7;
(e) Investments by way of contributions to capital or
purchases of Capital Securities (i) by any Borrower in any other
Borrower, (ii) by any Borrower in any Foreign Restricted Subsidiary
pursuant to clause (f)(ii) of Section 7.2.2 and (iii) by any Borrower
in any Canadian Subsidiary in order to keep such Canadian Subsidiary's
debt to equity ratio in compliance with applicable Canadian Tax law so
that such Canadian Subsidiary can receive Canadian tax deductions for
its interest payments on Indebtedness (the "Net Canadian Capital
Contribution"); provided, that (A) the amount of such Net Canadian
Contribution made by such Borrower to such Canadian Subsidiary less any
dividends or distributions received by such Borrower from such Canadian
Subsidiary in connection with such capital contribution and (B) such
Net Canadian Capital Contribution be no greater than the amount
required by such Canadian Subsidiary to keep its debt to equity ratio
in compliance with such law, and in any event, not in excess of
$2,000,000 in any Fiscal Year.
(f) Investments constituting (i) accounts receivable arising,
(ii) trade debt granted, or (iii) deposits made in connection with the
purchase price of goods or services, in each case, in the ordinary
course of business;
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(g) Investments made by Parent, any Borrower or any Foreign
Restricted Subsidiary solely in the form of Capital Securities of
Parent issued to (but not sold to) or contributed to the capital of an
Unrestricted Subsidiary with an aggregate market value of such Capital
Securities of Parent not to exceed (i) prior to the Fixed Assets Loan
Commitment Termination Date, $50,000,000 and (ii) on or subsequent to
the Fixed Assets Loan Commitment Termination Date, $100,000,000;
provided, however, that such Capital Securities are used to make an
acquisition by such Unrestricted Subsidiary of another Person or all or
substantially all of the assets of such Person (or any business or
division of such other Person), provided, further, however, that (a) at
the time of such acquisition, the business activities of such Person or
assets acquired complies with the limitations on business activities
set forth in Section 7.2.1. and (b) immediately before and after giving
effect to such acquisition no Default shall have occurred and be
continuing or would result therefrom;
(h) Investments consisting of routine loans or advances to
employees (including payroll, travel and related expenses) in the
ordinary course of business not to exceed $25,000 at any time
outstanding to any one employee and $500,000 in the aggregate;
(i) Investments consisting of loans to finance the purchase of
homes by employees who have been relocated by any Borrower or any
Foreign Restricted Subsidiary in an aggregate principal amount
outstanding at any one time not to exceed $500,000;
(j) Investments consisting of loans or advances by any
Borrower or any Foreign Restricted Subsidiary to any employee stock
ownership plan of Parent, any Borrower or any Foreign Restricted
Subsidiary; provided that (i) the aggregate amount of any such loan or
advance does not exceed 5% of the cash received by the Borrowers or any
Foreign Restricted Subsidiary (either directly or through a capital
contribution from Parent) after the date hereof from any
contemporaneous issuance or sale of any Capital Securities of Parent
made in connection with or to provide part of the consideration for a
direct or indirect acquisition by any Borrower or any Foreign
Restricted Subsidiary of the Capital Securities of a third party that
is not an Affiliate of the Borrower or the all or substantially all of
the assets of a third party or any business or division of a third
party that is not an Affiliate of the Borrower, (ii) immediately after
giving effect to such acquisition, the entity whose Capital Securities
are acquired is a Borrower or a Foreign Restricted Subsidiary or the
assets acquired are held by a Borrower or a Foreign Restricted
Subsidiary, as applicable, and (iii) any individuals that become
employees of a Borrower or a Foreign Restricted Subsidiary in
connection with such acquisition, to the extent eligible, are permitted
to participate in the ESOP;
(k) Investments resulting from purchases of shares of the
Capital Securities of Parent pursuant to put options arising under any
employee stock ownership plan of
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Parent, any Borrower or any Foreign Restricted Subsidiary, but only to
the extent such purchases are expressly required by (i) the provisions
of such employee stock ownership plan as in effect on the date hereof;
or (ii) Section 409(h)(1)(B) of the Code and the regulations
thereunder;
(l) Investments consisting of any deferred portion of the
sales price or any non-cash portion of the consideration received by
any Borrower in connection with any Disposition permitted under Section
7.2.11;
(m) investments in any Person resulting from a Transfer of the
Fibers Business, consummated in accordance with Section 7.2.16; and
(n) other Investments in an amount not to exceed $5,000,000 at
any one time outstanding;
provided, however, that
(o) any Investment which when made complies with the
requirements of clauses (a), (b) or (c) of the definition of the term
"Cash Equivalent Investment" may continue to be held notwithstanding
that such Investment if made thereafter would not comply with such
requirements; and
(p) no Investment otherwise permitted by clauses (d), (e)(i),
(g), (h), (i), (j), (k), (l), (m) or (n) shall be permitted to be made
if any Default has occurred and is continuing or would result
therefrom.
SECTION VII.2.6. Restricted Payments, etc. The Borrowers will not, and
will not permit any of their Foreign Restricted Subsidiaries to, declare or make
a Restricted Payment, or make any deposit for any Restricted Payment, other than
Restricted Payments made by Subsidiaries to the Borrowers, except that (a) the
Company may declare and deliver dividends payable solely in shares of its
Capital Securities or in options, warrants or rights to purchase shares of its
Capital Securities, (b) the Company may make contributions to any employee stock
ownership plan of Parent, the Company or any other Borrower on behalf of the
employees of the Borrowers and their Subsidiaries in the aggregate amount in any
Fiscal Year not to exceed 8% of payroll expense during such Fiscal Year
attributable to employees of the Borrowers and their Subsidiaries who are
eligible to participate in such employee stock ownership plan, (c) any
Subsidiary of the Borrowers other than any U.S. Subsidiary of a Canadian
Subsidiary may declare and deliver dividends to any Borrower or any Wholly Owned
Subsidiary, and any Canadian Subsidiary or any Unrestricted Subsidiary may
redeem shares of its own Capital Securities, and (d) the Company may declare and
pay in any Fiscal Year Permitted Parent Dividends so long as, at the time of
payment of such dividend (both before and after giving effect to the payment
thereof), the Company satisfies the conditions precedent for the making of Loans
set forth in Section 5.2.
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SECTION VII.2.7. Capital Expenditures, etc. Subject (in the case of
Capitalized Lease Liabilities), to clause (e) of Section 7.2.2, the Borrowers
will not, and will not permit any of their Foreign Restricted Subsidiaries to,
make or commit to make Capital Expenditures in any period below which aggregate
in excess of the amount set forth below opposite such Fiscal Year (the "Maximum
Capital Expenditure Amount"):
Maximum Capital
Period Expenditure Amount
------ ------------------
Closing Date - September 30, 1999 $ 8,000,000
October 1, 1999 - September 30, 2000 $ 40,000,000
October 1, 2000 - September 30, 2001 $ 35,000,000
October 1, 2001 - September 30, 2002 $ 40,000,000
October 1, 2002 - September 30, 2003 $ 33,000,000
October 1, 2003 - June 30, 2004 $ 30,000,000;
and thereafter
provided, however, that
(a) to the extent Capital Expenditures are made in any Fiscal
Year in an amount less than the Maximum Capital Expenditure Amount, the
Capital Expenditures the Borrowers or the Foreign Restricted
Subsidiaries may make in the next following Fiscal Year (the
"Carry-Forward Year") shall be increased by 50% of the amount of the
permitted Capital Expenditures not so made or accrued in the
immediately preceding Fiscal Year (the "Carry-Forward Amount");
(b) no Carry-Forward Amount may be carried forward beyond the
Carry-Forward Year;
(c) any Carry-Forward Amount shall be used in the
Carry-Forward Year before any amount of the Capital Expenditures
permitted to be made or committed to be made in such Fiscal Year are
used; and
(d) Capital Expenditures made for the restoration, repair or
replacement of any fixed or capital asset that was destroyed or
damaged, in whole in part, shall not be included in the calculation of
the amount of Capital Expenditures made in any Fiscal Year to the
extent that such Capital Expenditures are made with insurance proceeds
received in connection with such destruction or damage.
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SECTION VII.2.8. No Prepayment of Subordinated Debt or the Senior
Secured Notes. The Borrowers will not, and will not permit any of their Foreign
Restricted Subsidiaries to:
(a) make any payment or prepayment of principal of, or premium
or interest on, any Subordinated Debt, the Senior Secured Discount
Notes or the Senior Secured Notes (i) other than, so long as no Event
of Default has occurred and is continuing, on the stated, scheduled
date for payment of interest or other mandatory payments expressly set
forth in the applicable Sub Debt Documents, the Senior Secured Discount
Notes, the Senior Discount Notes Indenture or the Senior Secured Note
Documents, or (ii) which would violate the terms of this Agreement, the
applicable Sub Debt Documents, the Senior Secured Discount Notes or the
Senior Secured Note Documents;
(b) redeem, retire, purchase, defease or otherwise acquire any
Subordinated Debt, the Senior Secured Discount Notes or the Senior
Secured Notes unless expressly required to redeem or purchase such
Indebtedness under the Sub Debt Documents, the Senior Secured Discount
Notes Indenture, the Senior Secured Discount Notes or the Senior
Secured Note Documents following compliance with Section 3.1.1; or
(c) make any deposit (including the payment of amounts into a
sinking fund or other similar fund) for any of the foregoing purposes.
Furthermore, neither the Borrowers nor any Foreign Restricted Subsidiary will
designate any Indebtedness other than the Obligations and the obligations under
the Senior Secured Note Documents as "Senior Debt" (or any analogous term) in
any Sub Debt Document.
SECTION VII.2.9. Capital Securities of Subsidiaries. Except (in the
case of the Fibers Subsidiaries) for a Transfer of the Fibers Business, the
Borrowers will not, and will not permit any of their Foreign Restricted
Subsidiaries to, (a) issue any Capital Securities (whether for value or
otherwise) to any Person other than (in the case of Subsidiaries) the Borrowers
or another Wholly-Owned Subsidiary or (b) become liable in respect of any
obligation (contingent or otherwise) to purchase, redeem, retire, acquire or
make any other payment in respect of any Capital Securities of the Borrowers or
any Subsidiary or any option, warrant or other right to acquire any such Capital
Securities.
SECTION VII.2.10. Consolidation, Merger, etc. Other than in connection
with a Transfer of the Fibers Business, the Borrowers will not, and will not
permit any of their Foreign Restricted Subsidiaries to, liquidate or dissolve,
consolidate with, or merge into or with (collectively, to "Merge") any other
Person, or purchase or otherwise acquire all or substantially all of the assets
of any Person (or any division thereof other than through an Unrestricted
Subsidiary), except any Borrower may Merge with and into another Borrower, and
the assets or Capital Securities of any Borrower may be purchased or otherwise
acquired by any other Borrower; provided, that in no event shall any Borrower or
Pledged Subsidiary Merge with and into any Subsidiary other than another
Borrower or a Pledged Subsidiary unless after giving
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effect thereto, the Administrative Agent shall have a perfected pledge of, and
security interest in and to, at least the same percentage of the issued and
outstanding interests of Capital Securities (on a fully diluted basis) of the
surviving Person as the Administrative Agent had immediately prior to such
Merger in form and substance reasonably satisfactory to the Administrative Agent
and its counsel, pursuant to such documentation and opinions as shall be
necessary in the opinion of the Administrative Agent to create, perfect or
maintain the collateral position of the Secured Parties therein.
SECTION VII.2.11. Permitted Dispositions. The Borrowers will not, and
will not permit any of their Foreign Restricted Subsidiaries to, Dispose of any
of the Borrowers' or such Foreign Restricted Subsidiaries' assets (including
accounts receivable, inventory and Capital Securities) to any Person in one
transaction or series of transactions unless such Disposition is either (a) a
Permitted Disposition, (b) the Transfer of the Fibers Business, (c) is permitted
by Section 7.2.10 or (d) Dispositions of other property (real, mixed or
personal) in an aggregate amount not to exceed $5,500,000 in the aggregate in
any Fiscal Year and so long as no Default has occurred and is continuing. Upon
the consummation of the Transfer of the Fibers Business, the Company or the
Fibers Subsidiaries shall Cash Collateralize all Letters of Credit issued for
the account of any Fibers Subsidiary. Each Borrower, the Agents, each Lender and
the Issuer acknowledges that after the Transfer of the Fibers Business, the
Fibers Subsidiaries shall no longer be considered to be Borrowers hereunder.
SECTION VII.2.12. Modification of Certain Agreements. Except in
connection with a Transfer of the Fibers Business the Borrowers will not, and
will not permit any of their Foreign Restricted Subsidiaries to, consent to any
amendment, supplement, waiver or other modification of, or enter into any
forbearance from exercising any rights with respect to the terms or provisions
contained in,
(a) the Sub Debt Documents, the Senior Note Documents, the
Senior Secured Discount Notes or the Senior Secured Discount Notes
Indenture, other than any amendment, supplement, waiver or modification
for which no fee is payable to the holders of the relevant Indebtedness
and which (i) extends the date or reduces the amount of any required
repayment, prepayment or redemption of the principal of such
Indebtedness, (ii) reduces the rate or extends the date for payment of
the interest, premium (if any) or fees payable on such Indebtedness or
(iii) makes the covenants, events of default or remedies therein less
restrictive on the Company, (iv) cures any ambiguity, omission, defect
or inconsistency therein, and could not in any way adversely affect the
Lenders, (v) provides for the assumption of the issuer of such
Indebtedness's obligations to the holders of such Indebtedness in the
case of a Merger permitted hereunder, (vi) provides for uncertificated
notes, or (vii) complies with requirements of an SEC order to effect or
maintain the qualification of the indenture for such Indebtedness under
the Trust Indenture Act of 1939, as amended, in each case, after
written notice to the Administrative Agent; or
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(b) the Tax Sharing Agreement or the terms of any preferred
stock, if any, in any manner that is adverse to the Lenders.
SECTION VII.2.13. Transactions With Affiliates. The Borrowers will not,
and will not permit any of their Foreign Restricted Subsidiaries to, enter into
or cause or permit to exist any arrangement, transaction or contract (including
for the purchase, lease or exchange of property or the rendering of services)
with any of its other Affiliates (other than between Borrowers) unless such
arrangement, transaction or contract (a) is on fair and reasonable terms no less
favorable to the Borrowers or such Foreign Restricted Subsidiary than they could
obtain in an arm's-length transaction with a Person that is not an Affiliate and
(b) is of the kind which would be entered into by a prudent Person in the
position of the Borrowers or such Foreign Restricted Subsidiary with a Person
that is not one of their Affiliates.
SECTION VII.2.14. Restrictive Agreements, etc. Except as otherwise
expressly provided for in the Senior Secured Note Documents as in effect on the
date hereof, the Borrowers will not, and will not permit any of their Foreign
Restricted Subsidiaries to, enter into any agreement prohibiting
(a) the creation or assumption of any Lien upon their
properties, revenues or assets, whether now owned or hereafter
acquired;
(b) the ability of any Obligor to amend or otherwise modify
any Loan Document; or
(c) the ability of any Foreign Restricted Subsidiary to make
any payments, directly or indirectly, to the Borrowers, or the ability
of the Borrowers to make any payments, directly or indirectly, to other
Borrowers, including by way of dividends, advances, repayments of
loans, reimbursements of management and other intercompany charges,
expenses and accruals or other returns on investments.
The foregoing prohibitions shall not apply to restrictions contained (i) in any
Loan Document, (ii) in the case of clause (a), any agreement governing any
Indebtedness permitted by clause (e) of Section 7.2.2 as to the assets financed
with the proceeds of such Indebtedness or (iii) in the case of clauses (a) and
(c) above, in a Canadian Facility entered into by a Foreign Restricted
Subsidiary in accordance with Section 7.2.17. The Administrative Agent is hereby
authorized to release any Foreign Restricted Subsidiary from its obligations
under this Section in connection with a transaction permitted under Section
7.2.17.
SECTION VII.2.15. Sale and Leaseback. The Borrowers will not, and will
not permit any of their Foreign Restricted Subsidiaries to, directly or
indirectly enter into any agreement or arrangement providing for the sale or
transfer by it of any property (now owned or hereafter acquired) to a Person and
the subsequent lease or rental of such property or other similar property from
such Person in an aggregate amount not in excess of (a) $2,000,000 in the case
of the
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Borrowers and (b) $10,000,000 in the case of Foreign Restricted Subsidiaries;
provided that this Section 7.2.15 shall not apply to the lease of the laboratory
facilities currently located at the Toronto Office after the sale of the Toronto
Office.
SECTION VII.2.16. Transfer of the Fibers Business. (a) The Borrowers
can in a single transaction or series of related transactions make a Transfer of
the Fibers Business if each of the following conditions is satisfied:
(i) no Default or Event of Default shall have occurred
and be continuing or would result therefrom;
(ii) the Transfer of the Fibers Business shall be in the
best interests of the Borrowers and the consideration received by the
Borrowers from such Transfer of the Fibers Business shall be at least
equal to the fair market value of such transaction, in each case, as
determined by a written resolution adopted in good faith by the Board
of Directors of the Company;
(iii) if less than 85% of the consideration received in a
Transfer of the Fibers Business is in the form of cash or Permitted
Consideration, the Company must deliver an opinion to the
Administrative Agent, in form and substance reasonably satisfactory to
the Administrative Agent, as to the fairness of the transaction to the
Company from a financial point of view, issued by an Independent
Financial Advisor;
(iv) in the case of any Joint Venture Contribution,
immediately after giving effect to such transaction, the Company will
be the beneficial owner of 60% or less of the Capital Securities of the
entity to which such Joint Venture Contribution is made;
(v) in the case of any Sale of the Fibers Business, the
transferee in such Transfer of the Fibers Business shall be a Person
other than an Affiliate of the Company;
(vi) the Company (or, if applicable, the Fibers
Subsidiaries) shall legally and effectively grant the Administrative
Agent for the benefit of the Fixed Assets Secured Parties a first
priority security interest in any non-cash proceeds received by the
Company (or the Fibers Subsidiaries) in such Transfer of the Fibers
Business, including any Capital Securities, as additional security for
the repayment of the Fixed Assets Loans and deliver an opinion of
counsel as to the validity of the creation and the perfection of such
security interest in form and substance satisfactory to the
Administrative Agent;
(vii) the Fibers Subsidiaries shall have repaid all Credit
Extensions for which they submitted the applicable Borrowing Request
and are outstanding; and
(viii) all Net Disposition Proceeds received in such
Transfer of the Fibers Business shall be applied as provided in clause
(d) of Section 3.1.1.
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(b) Upon any Transfer of the Fibers Business, (i) any Lien created
under any Loan Document with respect to the Fibers Subsidiaries and (ii) if more
than 50% of the Capital Securities of the Fibers Subsidiaries is transferred by
the Company in connection with such Transfer of the Fibers Business, any Lien in
such Capital Securities and the Obligations as a "Borrower" under any Loan
Documents made by the Fibers Subsidiaries shall immediately cease and terminate.
Upon the receipt of written notice from the Company of a proposed Transfer of
the Fibers Business, the Administrative Agent is authorized and directed to
execute and deliver to the Company, concurrently with the closing of such
Transfer of the Fibers Business, at the Company's expense, such documents as the
Company shall reasonably request to evidence such release of Liens and, if
applicable, the termination of the Obligations as a "Borrower" hereunder made by
the Fibers Subsidiaries; and
(c) Unless a Default or an Event of Default shall have occurred and be
continuing, the Company (or, if applicable, the Fibers Subsidiaries) shall be
entitled to (i) receive cash interest payments on any deferred payment of
principal under any promissory note, installment receivable or other arrangement
received in connection with any Transfer of the Fibers Business and use such
payments for general corporate purposes, (ii) receive and use all distributions
in respect of any Capital Security for general corporate purposes, (iii) vote
any Capital Security and (iv) give consents, approvals, waivers and
ratifications in respect of any Capital Security; provided, however, that (A)
the Company shall legally and effectively grant the Administrative Agent a first
priority security interest for the benefit of the Fixed Assets Lenders in any
distributions paid or payable other than in cash in respect of, and instruments
and other property received, receivable or otherwise distributed in respect of,
or in exchange for, any Capital Securities as additional security for the Fixed
Assets Loans and deliver to the Administrative Agent an opinion of counsel as to
the validity of the creation and perfection of such security interest in form
and substance and from counsel reasonably satisfactory to the Administrative
Agent, (B) no vote shall be cast or consent, approval, waiver or ratification
given or action taken which would have a Material Adverse Effect on the value of
any Capital Securities or be inconsistent with or violate the provisions of this
Agreement and (C) the Company shall apply the proceeds of any distribution
received as a Return of Capital as Net Disposition Proceeds.
SECTION VII.2.17. Canadian Facility. The Borrowers will not permit any
Foreign Restricted Subsidiary to enter into a Canadian Facility unless such
Foreign Restricted Subsidiary first proposes a term sheet to the Agents on
commercially reasonable terms and conditions which the Agents will negotiate in
good faith toward a goal of providing a Canadian Facility on substantially the
terms and conditions of this Agreement. If the Agents do not provide a
commitment to enter into a Canadian Facility based on such terms and conditions
presented by the Borrowers within 60 days of receiving such proposed terms and
conditions, such Foreign Restricted Subsidiaries may obtain a Canadian Facility
on similar commercially reasonable terms and conditions from other financial
institutions (with the consent of the Agents, such consent not to be
unreasonably withheld or delayed). Upon entering into the Canadian Facility, the
applicable Foreign Restricted Subsidiaries will automatically be released from
their Obligations solely with respect to clauses (a) and (c) of Section 7.2.14.
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SECTION VII.2.18. Attornment. To the extent expressly required under
the leases set forth in Item 7.2.18 of the Disclosure Schedule, the Agents and
each Lender hereby acknowledge and agree that the Liens granted pursuant to the
Loan Documents are subject to the rights of certain lessees under the leases
disclosed in Item 7.2.3(c) of the Disclosure Schedule and will be subject to the
rights of lessees under any leases entered into by any Borrower or any Foreign
Restricted Subsidiary after the date hereof which are permitted pursuant to this
Agreement (collectively, the "Leases") subject to the express rights contained
in the applicable Lease. The rights of the tenants under the Leases to the
leased premises shall not be adversely affected by the exercise by any Agent or
any Lender of any of their rights under any Loan Document, nor shall any such
tenant be in any other way deprived of its rights under the applicable Lease
except in accordance with the terms of such Lease. In the event that any Agent
or any Lender succeeds to the interest of any Borrower or any Foreign Restricted
Subsidiary under a Lease, such Lease shall not be terminated or affected thereby
except as set forth therein, and any sale of the applicable leased premises by
any Agent or any Lender or pursuant to the judgment of any court in an action to
enforce the remedies provided for in the Loan Documents shall be made subject to
such Lease and the rights of such tenant expressly set forth thereunder. If any
Agent or any Lender succeeds to the interests of any Borrower or any Foreign
Restricted Subsidiary in and to the applicable leased premises or under such
Lease or enters into possession of such leased premises, such Agent and Lenders,
and such tenants, shall be bound to each other under all of the express terms,
covenants and conditions of such Lease, as if such Agent or Lender were
originally the applicable Borrower or Foreign Restricted Subsidiary as lessor
thereunder.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION VIII.1. Listing of Events of Default. Each of the following
events or occurrences described in this Article shall constitute an "Event of
Default".
SECTION VIII.1.1. Non-Payment of Obligations. The Borrowers shall
default in the payment or prepayment when due of
(a) any payment or prepayment when due of any principal on any
Loan or any Reimbursement Obligation or any deposit of cash for
collateral purposes pursuant to Section 2.6.4;
(b) any interest on any Loan or any Reimbursement Obligation
and such default shall remain unremedied for a period of 3 days after
such amount was due; or
(c) any fee described in Article III or any other monetary
Obligation, and such default shall continue unremedied for a period of
five days after such amount was due.
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SECTION VIII.1.2. Breach of Warranty. Any representation or warranty of
any Obligor made or deemed to be made in any Loan Document (including any
certificates delivered pursuant to Article V) is or shall be incorrect when made
or deemed to have been made in any material respect.
SECTION VIII.1.3. Non-Performance of Certain Covenants and Obligations.
Any Borrower shall default in the due performance or observance of any of its
obligations under clause (d) of Section 7.1.1, Section 7.1.7, Section 7.1.10,
Section 7.1.12, Section 7.1.13 or Section 7.2 or any Obligor shall default in
the due performance or observance of its obligations in respect of such Sections
as such Sections are incorporated by reference or otherwise in any Loan Document
to which such Obligor is a party. Any Borrower shall default in the due
performance or observance of any of its obligations under clauses (c), (e) or
(g) of Section 7.1.1 or Section 7.1.6, and such default shall continue
unremedied for a period of five Business Days.
SECTION VIII.1.4. Non-Performance of Other Covenants and Obligations.
Any Obligor shall default in the due performance and observance of any other
agreement contained in any Loan Document executed by it, and such default shall
continue unremedied for a period of 30 days after written notice thereof shall
have been given to the Company by the Administrative Agent or any Lender.
SECTION VIII.1.5. Default on Other Indebtedness. A default shall occur
in the payment of any amount when due (subject to any applicable grace period),
whether by acceleration or otherwise, of any Indebtedness (other than
Indebtedness described in Section 8.1.1) of Parent, the Company or any of its
Subsidiaries or any other Obligor having a principal amount, individually or in
the aggregate, in excess of $5,000,000, or a default shall occur in the
performance or observance of any obligation or condition with respect to such
Indebtedness if the effect of such default is to accelerate the maturity of any
such Indebtedness or such default shall continue unremedied for any applicable
period of time sufficient to permit the holder or holders of such Indebtedness,
or any trustee or agent for such holders, to cause or declare such Indebtedness
to become due and payable or to require such Indebtedness to be prepaid,
redeemed, purchased or defeased, or require an offer to purchase or defease such
Indebtedness to be made, prior to its expressed maturity or which such default
shall continue unremedied for at least 30 days.
SECTION VIII.1.6. Judgments. Any judgment or order for the payment of
money individually or in the aggregate in excess of $2,000,000, exclusive of (a)
any amounts covered by insurance (less any applicable deductible) and as to
which the insurer has acknowledged its responsibility to cover such judgment or
order, and (b) any amounts covered by an indemnitor (with a long-term senior
unsecured debt rating greater than BBB and Baa2 by S&P and Xxxxx'x) where such
indemnitor has acknowledged, in writing, in form and substance reasonably
satisfactory to the Administrative Agent, that it will indemnify such judgment
or order, shall be rendered against one or more Borrowers or any of their
Subsidiaries or any other Obligor and such judgment shall not have been vacated
or discharged or stayed or bonded pending appeal within 30 days after the entry
thereof or enforcement proceedings shall have been commenced by any creditor
upon such judgment or order.
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SECTION VIII.1.7. Pension Plans. Any of the following events shall
occur with respect to any Pension Plan
(a) the institution of any steps by any Borrower, any member
of its Controlled Group or any other Person to terminate a Pension Plan
other than a standard termination under Section 4041(b) of ERISA if, as
a result of such termination, any such Borrower or any such member
could be required to make a contribution to such Pension Plan, or could
reasonably expect to incur a liability or obligation to such Pension
Plan, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION VIII.1.8. Change in Control. Any Change in Control shall occur.
SECTION VIII.1.9. Bankruptcy, Insolvency, etc. Any Obligor shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness generally to pay, debts as they
become due;
(b) apply for, consent to, or acquiesce in the appointment of
a trustee, receiver, sequestrator or other custodian for any
substantial part of the property of any thereof, or make a general
assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence in or permit or suffer to exist the appointment of a
trustee, receiver, sequestrator or other custodian for a substantial
part of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60 days;
provided, that each Borrower hereby expressly authorizes each Secured
Party to appear in any court conducting any relevant proceeding during
such 60-day period to preserve, protect and defend their rights under
the Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law or any dissolution,
winding up or liquidation proceeding, in respect thereof, and, if any
such case or proceeding is not commenced by any Obligor, such case or
proceeding shall be consented to or acquiesced in by such Obligor, as
the case may be, or shall result in the entry of an order for relief
which case, proceeding or order shall continue undischarged, unstayed
or undismissed for 60 days; provided, that each Borrower hereby
expressly authorizes each Secured Party to appear in any court
conducting any such case or proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents; or
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(e) take any action authorizing, or in furtherance of, any of
the foregoing.
SECTION VIII.1.10. Impairment of Security, etc. Any Loan Document or
any Lien granted thereunder shall (except in accordance with its terms), in
whole or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of any Obligor party thereto; any
Obligor or any other party shall, directly or indirectly, contest in any manner
such effectiveness, validity, binding nature or enforceability; or, except as
permitted under any Loan Document, any Lien (i) securing any Fixed Assets
Obligation shall, in whole or in part, cease to be a perfected (A) first
registered priority Lien in the case of Fixed Assets or the Capital Securities
of any Borrower (except in the case of a Transfer of the Fibers Business) and
(B) second registered priority Lien in the case of Current Assets or (ii)
securing any Current Assets Obligation shall, in whole or in part, cease to be a
perfected first registered priority Lien in the case of Current Assets, in each
case, subject to Permitted Liens.
SECTION VIII.1.11. Failure of Subordination. Unless otherwise waived or
consented to by the Administrative Agent, the Lenders and the Issuer in writing,
the subordination provisions relating to any Subordinated Debt (the
"Subordination Provisions") shall fail to be enforceable by the Administrative
Agent, the Lenders and the Issuer in accordance with the terms thereof, or the
monetary Obligations shall fail to constitute "Senior Debt" (or similar term)
referring to such Obligations; or the Company or any of its Subsidiaries shall,
directly or indirectly, disavow or contest in any manner (a) the effectiveness,
validity or enforceability of any of the Subordination Provisions, (b) that the
Subordination Provisions exist for the benefit of the Administrative Agent, the
Lenders and the Issuer or (c) that all payments of principal of or premium and
interest on the Subordinated Debt, or realized from the liquidation of any
property of any Obligor, shall be subject to any of such Subordination
Provisions.
SECTION VIII.1.12. Default Under Senior Secured Discount Notes. Parent
shall fail to observe or perform any covenant or agreement contained in the
Senior Secured Discount Notes or the Senior Secured Discount Notes Indenture
within any applicable grace period, if the effect of such failure or other event
is to accelerate, or to permit the holders of the Senior Secured Discount Notes
or any other Person to accelerate, the maturity thereof.
SECTION VIII.2. Action if Bankruptcy. If any Event of Default described
in clauses (a) through (d) of Section 8.1.9 with respect to any Borrower shall
occur, the Commitments (if not theretofore terminated) shall automatically
terminate and the outstanding principal amount of all outstanding Loans and all
other Obligations (including Reimbursement Obligations) shall automatically be
and become immediately due and payable, without notice or demand to any Person
and each Borrower shall automatically and immediately be obligated to Cash
Collateralize all Letter of Credit Outstandings.
SECTION VIII.3. Action if Other Event of Default. If any Event of
Default (other than any Event of Default described in clauses (a) through (d) of
Section 8.1.9 with respect to any
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Borrower) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Company declare all or any portion of the
outstanding principal amount of the Loans and other Obligations (including
Reimbursement Obligations) to be due and payable and/or the Commitments (if not
theretofore terminated) to be terminated, whereupon the full unpaid amount of
such Loans and other Obligations which shall be so declared due and payable
shall be and become immediately due and payable, without further notice, demand
or presentment, and/or, as the case may be, the Commitments shall terminate and
the Borrowers shall automatically and immediately be obligated to Cash
Collateralize all Letter of Credit Outstandings.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION IX.1. Actions. Each Lender hereby appoints DLJ as its
Syndication Agent and CIT as its Administrative Agent under and for purposes of
this Agreement and each other Loan Document. Each Lender authorizes the Agents
to act on behalf of such Lender under this Agreement and each other Loan
Document and, in the absence of other written instructions from the Required
Lenders received from time to time by the Agents (with respect to which each of
the Agents agrees that it will comply, except as otherwise provided in this
Section or as otherwise advised by counsel), to exercise such powers hereunder
and thereunder as are specifically delegated to or required of the Agents by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto. The Agents may execute any of their respective duties under
this Agreement and each other Loan Document by or through their respective
employees, agents and attorneys-in-fact. Each Lender hereby indemnifies (which
indemnity shall survive any termination of this Agreement) the Agents, pro rata
according to such Lender's percentage of each existing Loan Commitment Amount,
from and against any and all liabilities, obligations, losses, damages, claims,
costs or expenses of any kind or nature whatsoever which may at any time be
imposed on, incurred by, or asserted against, either of the Agents in any way
relating to or arising out of this Agreement and any other Loan Document,
including reasonable attorneys' fees, and as to which any Agent is not
reimbursed by any Obligor (and without limiting the obligation of any Obligor to
do so); provided, however, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent jurisdiction in a final
proceeding to have resulted from such Agent's gross negligence or wilful
misconduct. No Agent shall be required to take any action hereunder or under any
other Loan Document, or to prosecute or defend any suit in respect of this
Agreement or any other Loan Document, unless it is indemnified hereunder to such
Agent's satisfaction. If any indemnity in favor of either of the Agents shall be
or become, in such Agent's determination, inadequate, such Agent may call for
additional indemnification from the Lenders and cease to do the acts indemnified
against hereunder until such additional indemnity is given.
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SECTION IX.2. Funding Reliance, etc. Unless the Administrative Agent
shall have been notified by telephone, confirmed in writing, by any Lender by
3:00 p.m., New York City time, on the day prior to a Borrowing or Disbursement
with respect to a Letter of Credit pursuant to Section 2.6.2 that such Lender
will not make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent and,
in reliance upon such assumption, make available to the applicable Borrower a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Administrative Agent, such Lender and such Borrower
severally agree to repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Administrative Agent made such amount available to such Borrower to the date
such amount is repaid to the Administrative Agent, at the interest rate
applicable at the time to Loans comprising such Borrowing.
SECTION IX.3. Exculpation. None of the Agents or the Lead Arranger nor
any of their respective directors, officers, employees or agents shall be liable
to any Lender for any action taken or omitted to be taken by it under this
Agreement or any other Loan Document, or in connection herewith or therewith,
except for its own willful misconduct or gross negligence, nor responsible for
any recitals or warranties herein or therein, nor for the effectiveness,
enforceability, validity or due execution of this Agreement or any other Loan
Document, nor for the creation, perfection or priority of any Liens purported to
be created by any of the Loan Documents, or the validity, genuineness,
enforceability, existence, value or sufficiency of any collateral security, nor
to make any inquiry respecting the performance by each Borrower or any other
Obligor of its obligations hereunder or under any other Loan Document. None of
the Agents, the Documentation Agent or the Lead Arranger nor any of their
respective directors, officers, employees or agents shall be responsible for or
have any duty to ascertain, inquire into or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder (other than a statement, warranty or representation made by the Agent
in writing), (b) the performance or observance of any of the covenants or
agreements of any Obligor under any Loan Document, including, without
limitation, any agreement by an Obligor to furnish information directly to each
Lender, (c) the satisfaction of any condition specified in Article V, expect
receipt of items required to be delivered solely to the Agents, (d) the
existence or possible existence of any Default or Event of Default, or (e) the
financial condition of any Obligor. Any such inquiry which may be made by an
Agent or the Issuer shall not obligate it to make any further inquiry or to take
any action. The Agents and the Issuer shall be entitled to rely upon advice of
counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which the Agents or the Issuer, as applicable, believe to
be genuine and to have been presented by a proper Person.
SECTION IX.4. Successor. The Syndication Agent and the Documentation
Agent may resign as such upon one Business Day's notice to the Company and the
Administrative Agent. The Administrative Agent may resign as such at any time
upon at least 30 days' prior notice to the Company and all Lenders. The
Administrative Agent may be removed at any time with or
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without cause by written notice received by the Administrative Agent from the
Required Lenders, such removal to be effective on the date specified in such
notice. If the Administrative Agent at any time shall resign or be removed, the
Required Lenders may, with the prior consent of the Company (which consent shall
not be unreasonably withheld or delayed and which shall not be required if an
Event of Default has occurred and is continuing) appoint another Lender as a
successor Administrative Agent which shall thereupon become the Administrative
Agent hereunder. If no successor Administrative Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent's giving notice of
resignation or receiving notice of removal, then the retiring Administrative
Agent may, on behalf of the Lenders, with the consent of the Company, which
consent shall not be unreasonably withheld and which shall not be required if an
Event of Default has occurred and is continuing, appoint a successor
Administrative Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State thereof) or a
U.S. branch or agency of a commercial banking institution, and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as the successor
Administrative Agent may reasonably request, and shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation or removal hereunder as such, the provisions
of (a) this Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Agreement, and (b) Section 10.3 and Section 10.4 shall continue to inure to its
benefit. Notwithstanding anything else to the contrary in this Section 9.4, the
Administrative Agent may at any time, without the consent of the Company, any
Obligor or any Lender, appoint an Affiliate which is a commercial banking
institution as a successor Administrative Agent.
SECTION IX.5. Credit Extensions by Each Agent and Issuer. Each Agent
and the Issuer shall have the same rights and powers with respect to (a) in the
case of the Agents, the Credit Extensions made by it or any of its Affiliates
and (b) in the case of the Issuer, the Loans made by it or any of its
Affiliates, as any other Lender and may exercise the same as if it were not an
Agent or the Issuer. Each Agent, the Issuer and each of their respective
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Company or any Subsidiary or Affiliate of the Company
as if such Agent or Issuer were not an Agent or Issuer hereunder.
SECTION IX.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Agents, the Lead Arranger, the Documentation Agent, the
Issuer and each other Lender, and based on such Lender's review of the financial
information of each Borrower, this Agreement, the other Loan Documents (the
terms and provisions of which being satisfactory to such Lender) and such other
documents, information and investigations as such Lender has deemed appropriate,
made its own credit decision to extend its Commitments. Each Lender also
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acknowledges that it will, independently of the Agents, the Documentation Agent,
the Lead Arranger, the Issuer and each other Lender, and based on such other
documents, information and investigations as it shall deem appropriate at any
time, continue to make its own credit decisions as to exercising or not
exercising from time to time any rights and privileges available to it under the
Loan Documents.
SECTION IX.7. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each material notice or material request required or
permitted to be given to the Administrative Agent by the Borrowers pursuant to
the terms of the Loan Documents (unless concurrently delivered to the Lenders by
the Borrowers). The Administrative Agent will distribute to each Lender each
document or instrument received for its account and copies of all other
communications received by the Administrative Agent from the Borrowers for
distribution to the Lenders by the Administrative Agent in accordance with the
terms of the Loan Documents. The Agents shall have no duty to disclose to the
Lenders information that is not required to be furnished by the Borrowers to the
Agents, but that may be voluntarily furnished by the Borrowers to the Agents
(either in their capacity as Agent or in their individual capacity).
SECTION IX.8. Reliance by Agents. The Agents shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone or telecopy) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person, and upon advice and
statements of legal counsel, independent accountants and other experts selected
by the Agents. As to any matters not expressly provided for by the Loan
Documents, the Agents shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with instructions
given by the Required Lenders or all of the Lenders as is required in such
circumstance, and such instructions of such Lenders and any action taken or
failure to act pursuant thereto shall be binding on all Secured Parties. For
purposes of applying amounts in accordance with this Section, the Agents shall
be entitled to rely upon any Secured Party that has entered into a Rate
Protection Agreement with any Obligor for a determination (which such Secured
Party agrees to provide or cause to be provided upon request of the Agents) of
the outstanding Obligations owed to such Secured Party under any Rate Protection
Agreement. Unless it has actual knowledge evidenced by way of written notice
from any such Secured Party and any Borrower to the contrary, the Agents, in
acting in such capacity under the Loan Documents, shall be entitled to assume
that no Rate Protection Agreements or Obligations in respect thereof are in
existence or outstanding between any Secured Party and any Obligor.
SECTION IX.9. Defaults. The Agents shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Agents have
received a written notice from a Lender or a Borrower specifying such Default
and stating that such notice is a "Notice of Default". In the event that the
Agents receive such a notice of the occurrence of a Default, the Agents shall
give prompt notice thereof to the Lenders. The Agents shall (subject to Section
10.1) take such action with respect to such Default as shall be directed by the
Required Lenders; provided, that unless and until the Agents shall have received
such directions, the Agents may (but shall not be
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obligated to) take such action, or refrain from taking such action, with respect
to such Default as they shall deem advisable in the best interest of the Lenders
except to the extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the authorization of the
Required Lenders or all Lenders.
SECTION IX.10. The Documentation Agent. Notwithstanding anything else
to the contrary contained in this Agreement or any other Loan Document, the
Documentation Agent, in such capacity, shall have no duties or responsibilities
under this Agreement or any other Loan Document nor any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Documentation Agent, in such capacity except as are explicitly set
forth herein or in the other Loan Documents.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION X.1. Waivers, Amendments, etc. The provisions of this Agreement
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
in writing by each Borrower and each Obligor party thereto and the Required
Lenders; provided, however, that no such amendment, modification or waiver shall
be effective which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders unless
consented to in writing by each Lender;
(b) (i) modify this Section 10.1, or clause (a) of Section
10.10, (ii) change the definition of "Required Lenders", (iii) reduce
any fees described in Article III, (iv) release Parent from its
obligations under the Parent Pledge Agreement, (v) release all or
substantially all of the collateral security (except in each case as
otherwise specifically provided in this Agreement, the Revolver
Intercreditor Agreement, a Pledge Agreement or a Security Agreement)
without the written consent of each Lender adversely affected thereby
(it being understood and agreed that with respect to the release of any
such collateral security securing or guaranteeing the Current Assets
Obligations or the Fixed Assets Obligations, as the case may be, the
approval of the Current Assets Required Lenders or the Fixed Assets
Required Lenders, as applicable, shall be required), (vi) amend, modify
or waive the provisions of Section 3.1.1 or Section 3.1.2 or clause (b)
of Section 2.2.2 or (vii) extend any Loan Commitment Termination Date,
in each case, without the written consent of each Lender adversely
affected thereby;
(c) increase the Fixed Assets Loan Commitment Amount or the
Percentage of any Fixed Assets Lender without the consent of each Fixed
Assets Lender adversely affected thereby;
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(d) increase the Current Assets Loan Commitment Amount or the
Percentage of any Current Assets Lender or the Letter of Credit
Commitment Amount without the consent of each Current Assets Lender
adversely affected thereby;
(e) (i) extend the final Stated Maturity Date for any Lender's
Loan, (ii) reduce the principal amount of or rate of interest on any
Lender's Loan or reduce any fee payable to any Lender or (iii) extend
the date on which any principal payment, interest or fees are payable
on any Lender's Loans, in each case without the written consent of such
Lender (it being understood and agreed, however, that any vote to
rescind any acceleration made pursuant to Section 8.2 and Section 8.3
of amounts owing with respect to the Loans and other Obligations shall
only require the vote of the Required Lenders);
(f) increase the Stated Amount of any Letter of Credit unless
consented to by the Issuer of such Letter of Credit;
(g) affect adversely the interests, rights or obligations of
any Agent, the Issuer, the Swing Line Lender, or the Lead Arranger (in
its capacity as Agent, Issuer, the Swing Line Lender, or Lead
Arranger), unless consented to in writing by such Agent, the Issuer,
the Swing Line Lender or the Lead Arranger, as the case may be;
(h) change the definition of "Borrowing Base Amount",
"Eligible Account", "Eligible Inventory" or "Overadvance Amount", in
each case if the effect of such change would be to require a Current
Assets Lender to make or participate in a Credit Extension in an amount
that is greater than such Current Assets Lender would have had to make
or participate in immediately prior to such amendment, modification or
waiver without the written consent of each Current Assets Lender;
provided, however, nothing contained in this clause shall limit the
Administrative Agent's ability to adjust the Borrowing Base Amount, the
amount of Eligible Accounts, the amount of Eligible Inventory or the
Overadvance Amount to the extent otherwise permitted by this Agreement;
(i) have the effect (either immediately or at some later time)
of enabling the Borrowers to satisfy a condition precedent set forth in
Section 5.2 to the making of a Loan or the issuance of a Letter of
Credit without the written consent of applicable Lenders holding at
least 51% of the applicable Loan Commitments; or
(j) amend (i) the Fixed Assets Security Documents without the
consent of the Fixed Assets Required Lenders or (ii) amend the Current
Assets Security Agreement, the Revolving Intercreditor Agreement or
Section 7.1.15 without the consent of the Current Assets Required
Lenders.
Notwithstanding anything to the contrary contained in this Section 10.1, the
Agents may, without the consent of any Lender, execute amendments or
modifications of any Loan Document to cure
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any ambiguity, omission, defect or inconsistency therein or which otherwise are
immaterial or would otherwise not have any adverse affect the rights or
interests of any Lender hereunder. No failure or delay on the part of any Agent,
the Issuer, any Lender in exercising any power or right under this Agreement or
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on any Obligor in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by any Agent, the Issuer,
any Lender under this Agreement or any other Loan Document shall, except as may
be otherwise stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.
For purposes of this Section 10.1, the Syndication Agent, in
coordination with the Administrative Agent, shall have primary responsibility,
together with the Company, in the negotiation, preparation and documentation
relating to any amendment, modification or waiver of this Agreement, any other
Loan Document or any other agreement or document related hereto or thereto
contemplated pursuant to this Section.
SECTION X.2. Notices; Time. All notices, requests and other
communications provided to any party hereto under this Agreement or any other
Loan Document shall be in writing and addressed, delivered or transmitted to
such party at its address or facsimile number set forth on Schedule II hereto
or, in the case of a Lender which becomes a party hereto after the date hereof,
as set forth in the Lender Assignment Agreement pursuant to which such Lender
becomes a Lender hereunder or at such other address or facsimile number as may
be designated by such party in a notice to the other parties. Any notice, (a) if
mailed and properly addressed with postage prepaid or if properly addressed and
sent by pre-paid courier service, shall be deemed given when has been received
or (b) if transmitted by facsimile, shall be deemed given when transmitted (and
telephonic confirmation of receipt thereof has been received). Unless otherwise
indicated, all references to the time of a day in a Loan Document shall refer to
New York City time.
SECTION X.3. Payment of Costs and Expenses. Each Borrower, jointly and
severally, agrees to pay on demand all reasonable expenses of each Agent
(including the reasonable fees and out-of-pocket expenses of Xxxxx, Xxxxx &
Xxxxx, counsel to the Agents and of local or foreign counsel, if any, who may be
retained by counsel to the Agents) in connection with
(a) the syndication by the Syndication Agent and the Lead
Arranger of the Loans, the negotiation, preparation, execution and
delivery of this Agreement and of each other Loan Document, including
schedules, opinions and exhibits, and any amendments, waivers,
consents, supplements or other modifications to this Agreement or any
other Loan Document as may from time to time hereafter be required,
whether or not the transactions contemplated hereby are consummated;
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(b) the filing, recording or refiling or rerecording of any
Loan Document and/or any Filing Statements relating thereto and all
amendments, supplements and modifications to any thereof and any and
all other documents or instruments of further assurance required to be
filed or recorded or refiled or rerecorded by the terms of any Loan
Document;
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document; and
(d) post-closing U.C.C.-11 searches (within 120 days of the
Effective Date) to confirm that the Liens granted to the Administrative
Agent for the benefit of the Secured Parties have been perfected.
Each Borrower further jointly and severally agrees to pay, and to save the
Agents and the Lenders harmless from all liability for, any stamp or other
similar Taxes which may be payable in connection with the execution or delivery
of this Agreement, the Borrowings hereunder, the issuance of the Notes, the
issuance of the Letters of Credit or any other Loan Documents. Each Borrower
also agrees to jointly and severally reimburse each Agent and each Lender upon
demand for all reasonable out-of-pocket expenses (including attorneys' fees and
legal expenses) incurred by such Agent or such Lender in connection with (i) the
negotiation of any restructuring or "work-out", whether or not consummated, of
any Obligations and (ii) the enforcement of any Obligations. In addition, the
Borrowers jointly and severally also agree, subject to the terms of this
Agreement, to reimburse the Administrative Agent on demand for all reasonable
third party administration, audit and monitoring expenses incurred in connection
with the Borrowing Base and determinations in respect thereof.
SECTION X.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitment,
each Borrower jointly and severally indemnifies, exonerates and holds each
Agent, the Lead Arranger, the Issuer and each Lender and each of their
respective partners, trustees, officers, directors, attorneys, employees and
agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements, whether incurred in connection with actions between or among the
parties hereto or the parties hereto and third parties (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit
Extension, including all Indemnified Liabilities arising in connection
with the Transaction;
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(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of any Borrower as the result of any
determination by the Required Lenders pursuant to Article V not to make
any Credit Extension hereunder but excluding any such action in which a
court of competent jurisdiction in a final non-appealable judgment
determined that such Lenders breached their obligations hereunder in
respect of such Credit Extension);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by any Obligor or any Subsidiary
thereof of all or any portion of the Capital Securities or assets of
any Person, whether or not an Indemnified Party is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to
the protection of the environment or the Release by any Obligor or any
Subsidiary thereof of any Hazardous Material;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by any Obligor or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, such Obligor or Subsidiary; or,
(f) each Lender's Environmental Liability (the indemnification
herein shall survive repayment of the Obligations and any transfer of
the property of any Obligor or its Subsidiaries by foreclosure or by a
deed in lieu of foreclosure for any Lender's Environmental Liability,
regardless of whether caused by, or within the control of, such Obligor
or such Subsidiary);
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. Each Borrower and its permitted successors and
assigns hereby waive, release and agree not to make any claim, or bring any cost
recovery action against, any Indemnified Party under CERCLA or any state
equivalent, or any similar law now existing or hereafter enacted. It is
expressly understood and agreed that to the extent that any Indemnified Party is
strictly liable under any Environmental Laws, such Borrower's obligation to such
Indemnified Party under this indemnity shall likewise be without regard to fault
on the part of such Borrower, to the extent permitted under applicable law, with
respect to the violation or condition which results in liability of an
Indemnified Party. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, such Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
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SECTION X.5. Survival. The obligations of each Borrower under Sections
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 and the obligations of the Lenders under
Section 9.1, shall in each case survive any termination of this Agreement
(including in the event of any release of any Borrower pursuant to the terms of
this Agreement other than in connection with a Transfer of the Fibers Business),
the payment in full in cash of all Obligations, the termination of all
Commitments and any assignment from one Lender to another (in the case of
Sections 10.3 and 10.4) and the occurrence of the Termination Date. The
representations and warranties made by each Obligor in this Agreement and in
each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.
SECTION X.6. Severability. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION X.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION X.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original (whether such counterpart is originally
executed or an electronic copy of an original and each party hereto other than
the Agents and the Company expressly waives its rights to receive originally
executed documents other than with respect to any Notes) and all of which shall
constitute together but one and the same agreement. This Agreement shall become
effective as of the date first above written when counterparts hereof executed
on behalf of each Borrower, the Agents and each Lender (or notice thereof
satisfactory to the Agents) shall have been received by the Syndication Agent.
SECTION X.9. Governing Law; Entire Agreement. THIS AGREEMENT AND EACH
OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCLUDING THE LAW OF
CONFLICTS BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. EACH
LETTER OF CREDIT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE
DESIGNATED, THE INTERNATIONAL STANDBY PRACTICES (ISP98--INTERNATIONAL CHAMBER OF
COMMERCE PUBLICATION NUMBER 590 (THE "ISP98 RULES")) AND, AS TO MATTERS NOT
GOVERNED BY THE ISP98 RULES, THE INTERNAL LAWS OF THE STATE OF NEW YORK. This
Agreement and the other Loan Documents constitute the entire
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understanding among the parties hereto with respect to the subject matter hereof
and thereof and supersede any prior agreements, written or oral, with respect
thereto.
SECTION X.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
(a) no Borrower may assign or transfer its rights or
obligations hereunder without the prior written consent of the
Administrative Agent and all Lenders other than pursuant to Section
7.2.10; and
(b) the rights of sale, assignment and transfer of the Lenders
are subject to Section 10.11.
SECTION X.11. Sale and Transfer of Loans; Participations in Loans and
Notes. Each Lender may assign, or sell participations in, its Loans and
Commitments to one or more other Persons in accordance with this Section 10.11.
SECTION X.11.1. Assignments. Any Lender (an "Assignor Lender"), may
(a) with notice to the Administrative Agent and with the
written consents (whether by originally executed counterpart or
electronic copy thereof) of the Company and the Syndication Agent, (i)
which consents shall not be unreasonably delayed or withheld, (ii)
which consents shall not be required in the case of assignments made
(A) to the Agents or any of their Affiliates, (B) by the Agents, the
Documentation Agent or any of their Affiliates, to any commercial bank,
fund which is regularly engaged in making, purchasing or investing in
loans or securities or any other financial institution or commercial
finance company (an "Eligible Assignee") during the initial syndication
(which shall be within thirty days of the Closing Date, such period the
"Initial Syndication") and (C) which consent of the Company shall not
be required at any time when an Event of Default shall have occurred
and be continuing; and
(b) with notice to the Company and the Agents, but without the
consent of the Company, the Agents or the Issuer, may assign and
delegate to any of its Affiliates or to any other Lender or to a
Related Fund of any Lender
(each such Person described in either of the foregoing clauses as being the
Person to whom such assignment and delegation is to be made, being hereinafter
referred to as an "Assignee Lender"), at any time assign and delegate to one or
more Eligible Assignees all or any fraction of such Lender's total Loans,
participations in each Letter of Credit and Letter of Credit Outstandings with
respect thereto and Commitments in a minimum aggregate amount equal to the
lesser of (i) $5,000,000 or (ii) the then remaining amount of such Lender's
Loans and Commitments; provided, however, that any such Assignee Lender will
comply, if applicable, with the provisions
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contained in Section 4.6 and each Obligor and the Agents shall be entitled to
continue to deal solely and directly with such Lender in connection with the
interests so assigned and delegated to an Assignee Lender until (A) written
notice of such assignment and delegation, together with payment instructions,
addresses and related information with respect to such Assignee Lender, shall
have been given to each Borrower and the Agents by such Lender and such Assignee
Lender, (B) the Assignor Lender and such Assignee Lender shall have executed and
delivered to each Borrower and the Agents a Lender Assignment Agreement,
accepted by the Agents, and (C) the processing fees described below shall have
been paid.
From and after the date that the Agents accept such Lender Assignment Agreement,
(i) the Assignee Lender thereunder shall be deemed automatically to have become
a party hereto and to the extent that rights and obligations hereunder have been
assigned and delegated to such Assignee Lender in connection with such Lender
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents, and (ii) the Assignor Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan Documents.
Within ten Business Days after its receipt of notice that the Administrative
Agent has received an executed Lender Assignment Agreement, if the Assignor
Lender or Assignee Lender so requests, the Borrowers shall execute and deliver
to the Administrative Agent (for delivery to the relevant Assignee Lender), new
Notes evidencing such Assignee Lender's assigned Loans and Commitments and, if
the Assignor Lender has retained Loans and Commitments hereunder, replacement
Notes in the principal amount of the Loans and Commitments retained by the
Assignor Lender hereunder (such Notes to be in exchange for, but not in payment
of, those Notes then held by such Assignor Lender). Each such Note shall be
dated the date of the predecessor Notes. The Assignor Lender shall xxxx the
predecessor Notes "exchanged" and deliver them to the Company. Accrued interest
and accrued fees on the Loans prior to assignment shall be paid to the assignee
Lender and following assignment shall be paid to the Assignor Lender at the same
time or times provided in this Agreement. Such Assignor Lender or such Assignee
Lender must also pay a processing fee to the Administrative Agent upon delivery
of any Lender Assignment Agreement in the amount of $2,500, unless such
assignment and delegation is by a Lender to its Affiliate or to a Related Fund,
if such assignment and delegation is by a Lender to a Federal Reserve Bank (or,
if such Lender is an investment fund, to the trustee under the indenture to
which such fund is a party in support of its obligations to such trustee), as
provided below, is otherwise consented to by the Administrative Agent or if such
assignment is by the Agents or the Documentation Agent during the Initial
Syndication. Any attempted assignment and delegation not made in accordance with
this Section 10.11.1 shall be null and void. Nothing contained in this Section
10.11.1 shall prevent or prohibit any Lender from pledging its rights (but not
its obligations to make Loans or participate in Letters of Credit of Letter of
Credit Outstandings) under this Agreement and/or its Loans hereunder (i) to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank or (ii) in the case of a Lender that is an investment fund,
to the trustee under the indenture to which such fund is a party in support of
its obligations to such trustee; provided, that any such assignment to a trustee
shall be subject to the provisions of
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clause (a) of this Section 10.11.1. In the event that S&P, Xxxxx'x or Xxxxxxxx'x
BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders that are
insurance companies (or Best's Insurance Reports, if such insurance company is
not rated by Insurance Watch Ratings Service)) shall, after the date that any
Lender with a Commitment to make Revolving Loans or participate in Letters of
Credit becomes a Lender, downgrade the long-term certificate of deposit rating
or long-term senior unsecured debt rating of such Lender, and the resulting
rating shall be below BBB-, Baa3 or C (or BB, in the case of Lender that is an
insurance company (or B, in the case of an insurance company not rated by
InsuranceWatch Ratings Service)) respectively, then the Borrowers (with the
consent of the Administrative Agent such consent not to be unreasonably
withheld) shall have the right, but not the obligation, upon notice to such
Lender and the Agents, to replace such Lender with an Assignee Lender in
accordance with and subject to the restrictions contained in this Section, and
such Lender hereby agrees to transfer and assign without recourse (in accordance
with and subject to the restrictions contained in this Section) all its
interests, rights and obligations in respect of its Revolving Loan Commitment
under this Agreement to such Assignee Lender; provided, however, that (i) no
such assignment shall conflict with any law, rule and regulation or order of any
Governmental Authority and (ii) such Assignee Lender shall pay to such Lender in
immediately available funds on the date of such assignment the principal of and
interest and fees (if any) accrued to the date of payment on the Loans made, and
Letters of Credit participated in, by such Lender hereunder and all other
amounts accrued for such Lender's account or owed to it hereunder.
SECTION X.11.2. Participations. Any Lender may at any time sell to one
or more commercial banks or other Persons (each such commercial bank and other
Person being herein called a "Participant") participating interests in any of
the Loans, Commitments, participations in each Letter of Credit and Letters of
Credit Outstandings or other interests of such Lender hereunder; provided,
however, that
(a) no participation contemplated in this Section shall
relieve such Lender from its Commitments or its other obligations
hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations and such
Participant shall not become a Lender hereunder unless such Lender and
such Participant comply with the provisions set forth in this Section
10.11;
(c) each Obligor and the Agents shall continue to deal solely
and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement and each of the other Loan
Documents;
(d) no Participant, unless such Participant is an Affiliate of
such Lender, or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such Participant's
consent, agree
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to any reduction in the interest rate or amount of fees that such
Participant is otherwise entitled to, a decrease in the principal
amount, or an extension of the final Stated Maturity Date, of any Loan
in which such Participant has purchased a participating interest or a
release of all or substantially all of the collateral security under
the Loan Documents or any Subsidiary under the Subsidiary Guaranty, in
each case except as otherwise specifically provided in a Loan Document;
and
(e) the Borrowers shall not be required to pay any amount
under Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 that is greater than
the amount which it would have been required to pay had no
participating interest been sold.
Each Borrower acknowledges and agrees, subject to clause (e) above, that, to the
fullest extent permitted under applicable law, each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a
Lender.
SECTION X.12. Confidentiality. The Lenders shall hold all non-public
information obtained pursuant to the requirements of this Agreement in
accordance with their customary procedures for handling confidential information
of this nature and in accordance with safe and sound banking practices and in
any event may make disclosure to any of their examiners, Affiliates, outside
auditors, counsel and other professional advisors in connection with this
Agreement or as reasonably required by any bona fide transferee, participant or
assignee or as required or requested by any governmental agency or
representative thereof or pursuant to legal process; provided, however, that
(a) unless specifically prohibited by applicable law or court
order, each Lender shall notify the Company of any request by any
governmental agency or representative thereof (other than any such
request in connection with an examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information;
(b) prior to any such disclosure pursuant to this Section
10.12, each Lender shall require any such bona fide transferee,
participant and assignee receiving a disclosure of non-public
information to agree
(i) to be bound by this Section 10.12; and
(ii) to require such Person to require any other
Person to whom such Person discloses such non-public
information to be similarly bound by this Section 10.12; and
(c) except as may be required by an order of a court of
competent jurisdiction and to the extent set forth therein, no Lender
shall be obligated or required to return any materials furnished by any
Borrower or any Subsidiary.
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SECTION X.13. Other Transactions. Nothing contained herein shall
preclude the Secured Parties from engaging in any transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with any
Borrower or any of its Affiliates in which such Borrower or such Affiliate is
not restricted hereby from engaging with any other Person.
SECTION X.14. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE
LENDERS OR THE BORROWERS THAT IS BROUGHT IN THE STATE OF NEW YORK SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK
LOCATED IN NEW YORK COUNTY OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWERS HEREBY
EXPRESSLY AND IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH SUCH LITIGATION. THE BORROWERS FURTHER IRREVOCABLY CONSENT TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AND EXPRESSLY AND IRREVOCABLY
APPOINTS CT CORPORATION SYSTEM AS ITS DOMICILE AND ADDRESS FOR SERVICE OF
PROCESS FOR PURPOSES OF ANY ACTION AS TO WHICH IT HAS SUBMITTED TO JURISDICTION
AS SET FORTH IN THIS SECTION, AND AGREES THAT SERVICE UPON SUCH AUTHORIZED AGENT
SHALL BE DEEMED IN EVERY RESPECT SERVICE OF PROCESS UPON ANY BORROWER OR ITS
SUCCESSORS AND ASSIGNS, AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, SHALL BE
TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON IT. EACH BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS
SECTION SHALL
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AFFECT THE RIGHT OF ANY AGENT, ANY LENDER OR THE ISSUER TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY SUCH PERSON TO
BRING ANY ACTION OR PROCEEDING AGAINST SUCH BORROWER OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTION. TO THE EXTENT THAT ANY BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, EACH BORROWER HEREBY, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION X.15. Waiver of Jury Trial. THE AGENTS, THE LENDERS, THE ISSUER
AND THE BORROWERS HEREBY, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION (WHETHER SOUNDING IN TORT, CONTRACT
OR OTHERWISE) BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE
LENDERS, THE ISSUER OR THE BORROWERS. EACH BORROWER ACKNOWLEDGES AND AGREES THAT
IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS, THE LENDERS AND THE
ISSUER ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION X.16. Certain Collateral Matters. The Administrative Agent is
authorized on behalf of all the Lenders, without the necessity of any notice to
or further consent from the Lenders, from time to time to take any action with
respect to any Collateral or the Loan Documents which may be necessary to
perfect and maintain perfected the security interest in and Liens upon the
Collateral granted pursuant to the Loan Documents. The Lenders irrevocably
authorize the Administrative Agent, at its option and in its discretion, to
release or modify any security interest or Lien granted to or held by the
Administrative Agent (a) on any Collateral subject to the Fixed Assets Security
Documents on the Fixed Assets Termination Date; (b) on any Collateral subject to
the Current Assets Security Documents on the Current Assets Termination Date;
(c) on any property Disposed of as part or in connection with any Permitted
Disposition; (d) on any property in which the Borrowers owned no interest at the
time the security interest and/or Lien was granted or at any time thereafter
owns no interest; (e) on property leased to the Borrowers under a lease which
has expired or been terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is
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not intended by the Borrowers to be, renewed or extended; (f) on an instrument
evidencing Indebtedness or other debt instrument, if the Indebtedness evidenced
thereby has been paid in full; (g) to effectuate the Transfer of the Fibers
Business and release the Fibers Subsidiaries from their Obligations hereunder in
connection therewith in accordance with the terms hereof; or (h) if approved,
authorized or ratified in writing by the applicable Required Lenders or each
Lender required by Section 10.1. Upon request by the Administrative Agent at any
time, the Lenders will confirm in writing the Administrative Agent's authority
to release or modify particular types or items of collateral pursuant to this
Section. Additionally, the Lenders hereby irrevocably authorize the
Administrative Agent to enter into the Revolver Intercreditor Agreement and the
Senior Debt Intercreditor Agreement and agree to be bound by all of the terms
and conditions contained therein.
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138
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
STERLING CHEMICALS, INC.,
as a Borrower
By:
-------------------------------
Title:
STERLING CANADA, INC.,
as a Borrower
By:
-------------------------------
Title:
STERLING PULP CHEMICALS US, INC.,
as a Borrower
By:
-------------------------------
Title:
STERLING PULP CHEMICALS, INC.,
as a Borrower
By:
-------------------------------
Title:
STERLING FIBERS, INC.,
as a Borrower
By:
-------------------------------
Title:
139
STERLING CHEMICALS ENERGY, INC.,
as a Borrower.
By:
-------------------------------
Title:
STERLING CHEMICALS INTERNATIONAL,
INC.,
as a Borrower
By:
-------------------------------
Title:
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent and
as a Lender
By:
-------------------------------
Title:
CREDIT SUISSE FIRST BOSTON
as the Documentation Agent and
as a Lender
By:
-------------------------------
Title:
By:
-------------------------------
Title:
140
THE CIT GROUP/BUSINESS CREDIT, INC.,
as the Administrative Agent
and as a Lender
By:
-------------------------------
Title:
141
LENDERS:
IBJ WHITEHALL BUSINESS CREDIT
CORPORATION
By:
-------------------------------
Title:
142
FLEET CAPITAL CORPORATION
By:
-------------------------------
Title:
143
COAST BUSINESS CREDIT A DIVISION OF
SOUTHERN PACIFIC BANK
By:
-------------------------------
Title:
144
FINOVA CAPITAL CORPORATION
By:
-------------------------------
Title:
145
TEXTRON FINANCIAL CORP.
By:
-------------------------------
Title:
000
XXXXX XXXX FINANCIAL SERVICING
CORPORATION
By:
-------------------------------
Title:
147
GMAC BUSINESS CREDIT, LLC
By:
-------------------------------
Title:
148
THE PROVIDENT BANK
By:
-------------------------------
Title:
149
GPSF SECURITIES, INC.
By:
-------------------------------
Title:
150
FOOTHILL CAPITAL CORPORATION
By:
-------------------------------
Title:
151
CONGRESS FINANCIAL CORPORATION
(SOUTHWEST)
By:
-------------------------------
Title:
152
COMERICA BANK
By:
-------------------------------
Title:
153
SCHEDULE I
DISCLOSURE SCHEDULE TO REVOLVING CREDIT AGREEMENT
ITEM 1.1. Designated Shareholders
ITEM 1.2 Unrestricted Subsidiaries
ITEM 1.3 Legal Description of Vancouver Release Parcel
ITEM 1.4 Foreign Restricted Subsidiaries
ITEM 6.7. Litigation
ITEM 6.8. Existing Subsidiaries
ITEM 6.12. Environmental Matters
ITEM 6.16. Intellectual Property
ITEM 7.2.2(b) Indebtedness to be Paid
CREDITOR OUTSTANDING PRINCIPAL AMOUNT
ITEM 7.2.2(c) Ongoing Indebtedness
ITEM 7.2.3(c) Ongoing Liens
ITEM 7.2.5(a) Ongoing Investments
ITEM 7.2.18 Existing Leases
ITEM 7.2.18 Attornment Leases
-1-
154
SCHEDULE II
PERCENTAGES;
LIBO OFFICE;
DOMESTIC OFFICE
PERCENTAGES
---------------------------------------
CURRENT ASSETS
NAME AND NOTICE DOMESTIC LOAN FIXED ASSETS LOAN
ADDRESS OF LENDER LIBO OFFICE OFFICE COMMITMENT COMMITMENT
------------------ ----------- -------- -------------- -------------------
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155
SCHEDULE III
ACCOUNT OBLIGOR SCHEDULE
ITEM A: 60 DAYS PAYMENT ACCOUNT OBLIGORS
BP Amoco PLC
E.I. du Pont de Nemours & Co.
The Goodyear Tire and Rubber Co.
Monsanto Company
Solutia Inc.
ITEM B: ACCEPTABLE ACCOUNTS
BASF Group
(including Polioles S.A. de C.V.)
Xxxxx XX
BP Amoco PLC
Mitsubishi International Corporation
ITEM C: 25% DESIGNATED ACCOUNT OBLIGORS
BASF Group
Xxxxx XX
BP Amoco PLC
Dow Chemical Company
E.I. du Pont de Nemours & Co.
Monsanto Company
Nissho Iwai
Xxxxxxxx Petroleum Co.
Solutia Inc.
-3-
