EXHIBIT 4.1
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AMENDED AND RESTATED CREDIT AGREEMENT
$90,000,000
among
BWAY CORPORATION,
BWAY MANUFACTURING, INC.
and
XXXXXXXXX CONTAINERS, INC.
as Borrowers
with
BWAY CORPORATION,
as Funds Administrator,
the Lenders
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Agent
Dated as of February 7, 2003
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS........................................................... 1
1.1 General Definitions................................................... 1
1.2 Amendment and Restatement of Original Credit Agreement; No Novation... 34
1.3 Reaffirmation of Original Credit Documents............................ 35
1.4 Accounting Terms and Determinations................................... 35
1.5 Other Interpretive Provisions......................................... 36
ARTICLE 2 LOANS................................................................. 36
2.1 Commitments; Delivery of Notes........................................ 36
2.2 Borrowing Mechanics................................................... 37
2.3 Settlements Among the Agents and the Lenders.......................... 39
2.4 Mandatory Repayments: Mandatory Reduction of Commitments.............. 40
2.5 Payments and Computations............................................. 41
2.6 Maintenance of Account................................................ 42
2.7 Statement of Account.................................................. 43
2.8 Withholding and Other Taxes........................................... 43
2.9 Affected Lenders...................................................... 46
2.10 Sharing of Payments................................................... 47
2.11 Allocation of Loans and Expenses...................................... 48
ARTICLE 3 LETTERS OF CREDIT..................................................... 49
3.1 Letters of Credit..................................................... 49
3.2 Maximum Letter of Credit Outstandings; Final Maturities............... 50
3.3 Letter of Credit Requests; Minimum Stated Amount...................... 50
3.4 Letter of Credit Participations....................................... 51
3.5 Agreement to Repay Letter of Credit Drawings.......................... 53
3.6 Increased Costs....................................................... 53
ARTICLE 4 INTEREST, FEES AND EXPENSES........................................... 54
4.1 Interest on LIBOR Rate Loans.......................................... 54
4.2 Interest on Prime Rate Loans.......................................... 55
4.3 Notice of Continuation and Notice of Conversion....................... 55
4.4 Interest After Event of Default....................................... 57
4.5 Unused Line Fee....................................................... 57
4.6 Letter of Credit Fees................................................. 57
4.7 Reimbursement of Expenses............................................. 58
4.8 Authorization to Charge Borrowers' Account............................ 58
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4.9 Indemnification in Certain Events..................................... 59
4.10 Calculations and Determinations....................................... 59
4.11 Mitigation............................................................ 60
ARTICLE 5 CONDITIONS PRECEDENT.................................................. 60
5.1 Conditions to Initial Credit Event.................................... 60
5.2 Conditions to Each Credit Event....................................... 62
ARTICLE 6 REPRESENTATIONS AND WARRANTIES........................................ 62
6.1 Organization and Qualification........................................ 62
6.2 Solvency.............................................................. 62
6.3 Priority of Liens..................................................... 63
6.4 No Conflict........................................................... 63
6.5 Enforceability........................................................ 63
6.6 Consents.............................................................. 63
6.7 Financial Data........................................................ 63
6.8 Jurisdictions of Organization; Locations of Collateral................ 64
6.9 Fictitious Business Names............................................. 64
6.10 Subsidiaries.......................................................... 64
6.11 No Judgments or Litigation............................................ 64
6.12 No Defaults........................................................... 64
6.13 Labor Matters......................................................... 65
6.14 Compliance with Laws.................................................. 65
6.15 ERISA................................................................. 66
6.16 Intellectual Property................................................. 66
6.17 Licenses and Permits.................................................. 66
6.18 Title to Collateral................................................... 66
6.19 Investment Company.................................................... 66
6.20 Borrowers' Taxes and Tax Returns...................................... 66
6.21 Status of Accounts.................................................... 67
6.22 Material Contracts.................................................... 67
6.23 Affiliate Transactions................................................ 67
6.24 Accuracy and Completeness of Information.............................. 68
6.25 No Adverse Change or Event............................................ 68
ARTICLE 7 AFFIRMATIVE COVENANTS................................................. 68
7.1 Financial Information................................................. 68
7.2 Certain Collateral.................................................... 71
7.3 Corporate Existence................................................... 71
7.4 ERISA................................................................. 71
7.5 Books and Records..................................................... 72
7.6 Collateral Records.................................................... 72
7.7 Security Interests.................................................... 72
7.8 Insurance; Casualty Loss.............................................. 73
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7.9 Taxes................................................................. 74
7.10 Compliance With Laws.................................................. 74
7.11 Use of Proceeds....................................................... 75
7.12 Fiscal Year........................................................... 75
7.13 Notification of Certain Events........................................ 75
7.14 Intellectual Property................................................. 76
7.15 Maintenance of Property............................................... 76
7.16 Further Assurances.................................................... 76
ARTICLE 8 NEGATIVE COVENANTS.................................................... 77
8.1 Consolidated Fixed Charge Coverage Ratio.............................. 77
8.2 Capital Expenditures.................................................. 77
8.3 No Additional Indebtedness............................................ 77
8.4 No Liens; Judgments................................................... 79
8.5 No Sale of Assets..................................................... 81
8.6 No Corporate Changes.................................................. 82
8.7 No Guaranties......................................................... 82
8.8 No Restricted Payments................................................ 83
8.9 No Investments........................................................ 84
8.10 No Affiliate Transactions............................................. 86
8.11 Limitation on Transactions Under ERISA................................ 87
8.12 No Additional Bank Accounts........................................... 87
8.13 Amendments of Related Transactions Documents.......................... 87
8.14 Additional Restrictive Covenants...................................... 87
8.15 No Additional Subsidiaries............................................ 88
8.16 Designated Senior Debt................................................ 88
8.17 Limitation on Derivative Transactions................................. 88
ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES........................................ 88
9.1 Events of Default..................................................... 88
9.2 Acceleration and Cash Collateralization............................... 90
9.3 Remedies.............................................................. 91
ARTICLE 10 THE AGENT............................................................ 92
10.1 Appointment of Agent.................................................. 92
10.2 Nature of Duties of Agent............................................. 93
10.3 Lack of Reliance on the Agent......................................... 93
10.4 Certain Rights of the Agent........................................... 93
10.5 Reliance by the Agent................................................. 94
10.6 Indemnification of Agent.............................................. 94
10.7 The Agent in its Individual Capacity.................................. 94
10.8 Holders of Notes...................................................... 95
10.9 Successor Agent....................................................... 95
10.10 Collateral Matters.................................................... 95
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10.11 Actions with Respect to Defaults...................................... 97
10.12 Delivery of Information............................................... 97
ARTICLE 11 MISCELLANEOUS........................................................ 97
11.1 SUBMISSION TO JURISDICTION............................................ 97
11.2 JURY TRIAL............................................................ 98
11.3 GOVERNING LAW......................................................... 98
11.4 Delays; Partial Exercise of Remedies.................................. 98
11.5 Notices............................................................... 98
11.6 Assignability......................................................... 99
11.7 Confidentiality....................................................... 102
11.8 Indemnification....................................................... 102
11.9 Entire Agreement; Successors and Assigns.............................. 103
11.10 Amendments, Etc....................................................... 103
11.11 Nonliability of Agent and Lenders..................................... 104
11.12 Counterparts.......................................................... 104
11.13 Effectiveness......................................................... 105
11.14 Severability.......................................................... 105
11.15 Headings Descriptive.................................................. 105
11.16 Maximum Rate.......................................................... 105
11.17 Right of Setoff....................................................... 105
11.18 Defaulting Lender..................................................... 106
11.19 Rights Cumulative..................................................... 107
11.20 Third Party Beneficiaries............................................. 107
11.21 Joint and Several Liability of Borrowers.............................. 107
11.22 Appointment and Authorization of Funds Administrator.................. 108
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ANNEXES
ANNEX I Closing Document List
ANNEX II Lenders; Commitments; Lending Offices
EXHIBITS
EXHIBIT A Form of Assignment and Assumption Agreement
EXHIBIT B Form of Note
EXHIBIT C Form of Notice of Borrowing
EXHIBIT C-1 Form of Notice of Continuation
EXHIBIT C-2 Form of Notice of Conversion
EXHIBIT D Form of Letter of Credit Request
EXHIBIT E Form of Compliance Certificate
EXHIBIT F Form of Borrowing Base Certificate
SCHEDULES
SCHEDULE B, PART 1.1-A Additional BCO Acquisition Merger Documents
SCHEDULE B, PART 1.1-B Additional BWAY Finance Merger Documents
SCHEDULE B, PART 1.1-C Employment Agreements
SCHEDULE B, PART 1.1-D Equity Financing Documents
SCHEDULE B, PART 1.1-E Existing Note Repurchase Documents
SCHEDULE B, PART 1.1-F Xxxxx Agreements
SCHEDULE B, PART 1.1-G Management Agreements
SCHEDULE B, PART 1.1-H Additional Permitted Dispositions
SCHEDULE B, PART 1.1-I Additional Permitted Restrictive Covenants
SCHEDULE B, PART 1.1-J Additional Subordinated Note Documents
SCHEDULE B, PART 1.2(b) Existing Letters of Credit
SCHEDULE B, PART 6.1 Jurisdictions Qualified to Do Business
SCHEDULE B, PART 6.4 Conflicts
SCHEDULE B, PART 6.6 Consents
SCHEDULE B, PART 6.8 Jurisdictions of Organization; Locations of
Collateral
SCHEDULE B, PART 6.9 Fictitious Names
SCHEDULE B, PART 6.10 Subsidiaries
SCHEDULE B, PART 6.11 Outstanding Judgments; Orders; Waivers
SCHEDULE B, PART 6.12 Existing Defaults
SCHEDULE B, PART 6.13 Labor Matters
SCHEDULE B, PART 6.14 Violations and Failures to Comply with Requirements
of Law; Environmental Matters
SCHEDULE B, PART 6.15 ERISA Matters
SCHEDULE B, PART 6.18 Real Estate
SCHEDULE B, PART 6.20 Tax Matters
SCHEDULE B, PART 6.22 Material Contracts
SCHEDULE B, PART 6.23 Affiliate Transactions
SCHEDULE B, PART 8.3(e) Existing Indebtedness
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SCHEDULE B, PART 8.4(b) Existing Liens
SCHEDULE B, PART 8.9 Existing Investments
SCHEDULE B, PART 8.10 Existing Affiliate Transactions
SCHEDULE B, PART 8.12 Payroll and Xxxxx Cash Accounts
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AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF FEBRUARY 7, 2003
The Borrowers, the Funds Administrator, the Lenders and the Agent, agree
as follows (with certain terms used herein having the respective meanings
ascribed thereto in Article 1):
PRELIMINARY STATEMENTS:
1. The Borrowers, the Funds Administrator, the Lenders and the
Agent are parties to that certain Credit Agreement dated as of May 22, 2001, as
amended (such Credit Agreement, as amended prior to the date hereof, being
hereinafter referred to as the "Original Credit Agreement").
2. The Borrowers, the Funds Administrator, the Lenders and the
Agent have agreed to enter into this Credit Agreement in order to, among other
things, (a) amend and restate the Original Credit Agreement in its entirety; (b)
re-evidence, ratify and reaffirm the "Original Obligations" (as such term is
defined in Section 1.2(b) herein below); (c) reflect the consummation of the
Related Transactions; and (d) set forth the terms and conditions under which the
Agent and the Lenders will from time to time hereafter make further loans and
other extensions of credit to or for the account of the Borrowers.
3. The Borrowers, the Funds Administrator, the Lenders and the
Agent do not intend that this Credit Agreement shall constitute a novation of
the Original Credit Agreement.
4. Accordingly, in consideration of the mutual agreements set forth
herein, and subject to the terms and provisions hereof, the parties hereto
hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified:
"ACI" shall mean Xxxxxxxxx Containers, Inc., a Delaware corporation and
a Wholly-Owned Subsidiary of BMI.
"Acceptance Date" shall have the meaning ascribed to that term in
Section 11.6(c).
"Account Debtor Act of Bankruptcy" shall have the meaning ascribed to
that term in clause (g) of the definition of the term "Eligible Accounts
Receivable."
"Accounts" shall have the meaning ascribed to that term in the Borrower
Security Agreement.
"Accumulated Funding Deficiency" shall have the meaning ascribed to that
term in Section 302 of ERISA.
"Acquisition" shall mean, with respect to any Borrower, any transaction
or series of related transactions resulting in (a) the acquisition by such
Borrower of all or substantially all of the assets of any other Person, or of
any business or division of any other Person, (b) the acquisition by such
Borrower of all of the issued and outstanding Capital Securities of any other
Person, including, without limitation, by means of a merger of such other Person
with and into such Borrower (or a Wholly-Owned Subsidiary of such or any other
Borrower formed solely for the purpose of consummating such acquisition) or
otherwise causing any Person (other than any Person that is at such time a
Borrower) to become a Wholly-Owned Subsidiary of such Borrower, or (c) a merger,
consolidation or any other combination of such Borrower with any other Person
(other than any Person that is at such time a Borrower), provided that such
Borrower is the surviving Person.
"Acquisition Target" shall mean a Person whose Capital Securities or
assets, as the case may be, are acquired in an Acquisition permitted under
Section 8.9(d).
"Adjusted LIBOR Rate" shall mean, for any Interest Period, the rate
obtained by dividing (a) the LIBOR Rate for such Interest Period by (b) a
percentage equal to 1 minus the stated maximum rate (stated as a decimal) of all
reserves, if any, required to be maintained against "Eurocurrency liabilities"
as specified in Regulation D (or any successor category of liabilities under
Regulation D).
"Affiliate" shall mean, with respect to any Person, any Person which
directly or indirectly through one or more intermediaries Controls, is
Controlled by, or is under common Control with, such Person, or any Person who
is a director or executive officer of such Person or any Subsidiary of such
Person.
"Agent" shall mean DBTCo, acting in its capacity as contractual
representative for the Lenders hereunder and any successor Agent appointed
pursuant to Section 10.9.
"Applicable Lending Office" shall mean, with respect to each Lender,
such Lender's LIBOR Lending Office in the case of a LIBOR Rate Loan, and such
Lender's Domestic Lending Office in the case of a Prime Rate Loan.
"Applicable Margin" shall mean, at any time with respect to any LIBOR
Rate Loan or Prime Rate Loan, as the case may be, a percentage per annum equal
to the applicable percentage amount set forth below for such Loan with respect
to Level II, provided that from and after any Start Date to and including the
corresponding End Date, the Applicable Margin with respect to LIBOR Rate Loans
and Prime Rate Loans, respectively, shall be a percentage per annum equal to the
applicable percentage per annum set forth below if, in each case as determined
as of the Test Date for such Start Date, the Consolidated Entity shall have the
applicable ratio set forth
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below of (x) Consolidated Total Indebtedness to (y)Consolidated EBITDA for the
twelve (12) Fiscal Month period ending on such Test Date:
APPLICABLE
MARGIN
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RATIO OF CONSOLIDATED TOTAL PRIME LIBOR
INDEBTEDNESS TO CONSOLIDATED EBITDA RATE LOANS RATE LOANS
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I Equal to or greater than 4.50 to 1.00 1.25% 3.00%
II Equal to or greater than 3.25 to 1.00
but less than 4.50 to 1.00 1.25% 2.75%
III Equal to or greater than 2.50 to 1.00
but less than 3.25 to 1.00 1.25% 2.50%
IV Less than 2.50 to 1.00 1.25% 2.25%
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Notwithstanding the foregoing, if the Borrowers shall fail to deliver the
Financial Statements that are required to be delivered pursuant to Section
7.1(b), and the Agent in its sole discretion shall so elect, from the date which
is three (3) Business Days after the date on which such Financial Statements
were so required to be delivered until the date of actual delivery thereof, the
Applicable Margin shall be a percentage per annum equal to the applicable
percentage amount set forth above with respect to Level I.
"Applicable Margin Period" shall mean each period which shall commence
on a date on which the Financial Statements are delivered pursuant to Section
7.1(b) and which shall end on the earlier of (i) the date of actual delivery of
the next Financial Statements pursuant to Section 7.1(b) and (ii) the latest
date on which the next Financial Statements are required to be delivered
pursuant to Section 7.1(b), provided that the first Applicable Margin Period
shall commence with the delivery of the Financial Statements in respect of the
Test Period ending on the last day of the third Fiscal Quarter of Fiscal Year
2003.
"Approved Secured Derivative Transaction Liabilities" shall mean, with
respect to any Lender, Liabilities of the Borrowers to such Lender in respect of
a Derivative Transaction permitted pursuant to Section 8.3(f); provided, that,
prior to entering into any such Derivative Transaction, (a) such Lender shall
have delivered written notice thereof to the Agent stating the maximum amount of
the Borrowers' Liabilities in respect thereof which are to constitute secured
Obligations of the Borrowers to such Lender hereunder, and (b) such Lender shall
have received written approval from the Agent confirming such amount; provided,
further, that, in no event shall the Agent be required to approve at any time as
secured Obligations hereunder aggregate Liabilities of the Borrowers in respect
of Derivative Transactions with Lenders in an amount greater than $3,000,000 for
all such Derivative Transactions combined.
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"Assignment and Assumption Agreement" shall mean an assignment and
assumption agreement entered into by an assigning Lender and an assignee Lender,
and accepted by the Agent, in accordance with Section 11.6, substantially in the
form of Exhibit A.
"Assumption Agreement" shall mean that certain Assumption Agreement
dated as of February 7, 2003, among BWAY Finance, BWAY and BMI, as the same may
be modified, amended, extended, restated, amended and restated or supplemented
from time to time, to the extent permitted hereunder.
"Auditors" shall mean a nationally-recognized firm of independent
certified public accountants selected by the Borrowers and reasonably
satisfactory to the Agent. For purposes of this Credit Agreement, the Borrowers'
current firm of independent certified public accountants, Deloitte & Touche LLP,
shall be deemed to be satisfactory to the Agent.
"BCO Acquisition" shall mean BCO Acquisition, Inc., a Delaware
corporation and, prior to consummation of the BCO Acquisition Merger, a
Wholly-Owned Subsidiary of BCO Holding.
"BCO Acquisition Merger" shall mean the merger of BCO Acquisition with
and into BWAY, with BWAY as the surviving corporation, pursuant to the BCO
Acquisition Merger Agreement.
"BCO Acquisition Merger Agreement" shall mean that certain Agreement and
Plan of Merger dated as of September 30, 2002, among BCO Holding, BCO
Acquisition and BWAY, as the same may be modified, amended, extended, restated,
amended and restated or supplemented from time to time, to the extent permitted
hereunder.
"BCO Acquisition Merger Documents" shall mean, collectively, the BCO
Acquisition Merger Agreement and all of the other agreements, instruments and
documents set forth on Schedule B, Part 1.1-A, as the same may be modified,
amended, extended, restated, amended and restated or supplemented from time to
time, to the extent permitted hereunder.
"BCO Holding" shall mean BCO Holding Company, a Delaware corporation.
"BCO Holding Guaranty" shall mean the Guaranty of even date herewith,
executed by BCO Holding in favor of the Agent for the benefit of the Agent and
Lenders.
"BCO Holding Pledge Agreement" shall mean the Stock Pledge Agreement of
even date herewith, executed by BCO Holding in favor of the Agent for the
benefit of the Agent and Lenders, evidencing the pledge by BCO Holding to the
Agent of one hundred percent (100%) of the issued and outstanding Capital
Securities of BWAY.
"BCO Holding Related Taxes" shall mean (a) any taxes, charges or
assessments, including but not limited to sales, use, transfer, rental, ad
valorem, value-added, stamp, property, consumption, franchise, license, capital,
net worth, gross receipts, excise, occupancy, intangibles or similar taxes,
charges or assessments (other than federal, state or local taxes measured by
income and federal, state or local withholding imposed on payments made by BCO
Holding), required to be paid by BCO Holding by virtue of its being incorporated
or having Capital
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Securities outstanding (but not by virtue of owning stock or other equity
interests of any corporation or other entity other than BWAY Finance, BWAY or
any of its Subsidiaries), or being a holding company parent of BWAY Finance or
BWAY or receiving dividends from or other distributions in respect of the
Capital Securities of BWAY Finance or BWAY, or having guaranteed any obligations
of BWAY Finance, BWAY or any Subsidiary thereof, or having made any payment in
respect of any of the items for which BWAY Finance or BWAY is permitted to make
payments to BCO Holding pursuant to Section 8.8, or (b) any other federal,
state, foreign, provincial or local taxes measured by income for which BCO
Holding is liable up to an amount not to exceed with respect to any such taxes
the total amount of such taxes that BWAY and BWAY Finance would have each been
required to pay on a separate company basis or on a consolidated basis if BWAY
had filed a consolidated return on behalf of an affiliated group (as defined in
Section 1504 of the Code, or an analogous provision of state, local or foreign
law) of which it were the common parent and that included BWAY Finance, or with
respect to state and local taxes, on a combined basis if BWAY had filed a
combined return on behalf of an affiliated group consisting only of BWAY
Finance, BWAY and its Subsidiaries.
"BMI" shall mean BWAY Manufacturing, Inc., a Delaware corporation, a
successor by merger to Xxxxxx Can Company, Inc., a Delaware corporation, and a
Wholly-Owed Subsidiary of BWAY.
"BMI Pledge Agreement" shall mean the Stock Pledge Agreement dated May
22, 2001, executed by BMI in favor of the Agent for the benefit of the Agent and
Lenders, evidencing the pledge by BMI to the Agent of one hundred percent (100%)
of the issued and outstanding Capital Securities of ACI.
"Bankruptcy Default" shall mean a Default which is such by virtue of
Section 9.1(e).
"Benefit Plan" shall mean an employee pension benefit plan as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) for which the funding
requirements under Section 412 of the Code or Section 302 of ERISA is, or within
the immediately preceding six (6) years was, in whole or in part, the
responsibility of any Credit Party, any Subsidiary of any Credit Party or any
ERISA Affiliate.
"Borrowers" shall mean ACI, BMI and BWAY, and all other Persons joined
as parties hereto pursuant to Section 8.15.
"Borrowers' Account" shall have the meaning ascribed to that term in
Section 2.6.
"Borrower Security Agreement" shall mean the Amended and Restated
General Security Agreement of even date herewith, executed by each of the
Borrowers in favor of the Agent for the benefit of the Agent and Lenders.
"Borrowing" shall mean a borrowing consisting of Loans of the same Type
made on the same day by the Lenders.
"Borrowing Base" shall mean:
(a) Subject to clause (b) below, at any time, the amount equal at
such time to:
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(i) the Fixed Asset Sublimit, plus
(ii) eighty-five percent (85%) of the Eligible Accounts
Receivable, plus
(iii) the lesser of $25,000,000 or sixty percent (60%) of the
Eligible Inventory consisting of raw materials and finished goods, including,
without limitation, Eligible Inventory consisting of slit steel and blank steel,
plus
(iv) the lesser of $6,000,000 or fifty percent (50%) of the
Eligible Inventory consisting of work-in-progress; minus
(v) the aggregate amount of all Approved Secured Derivative
Transaction Liabilities; minus
(vi) the amount of any reserves established by the Agent
pursuant to clause (b) below or any other term or provision of this Credit
Agreement, including, without limitation, reserves in connection with Net
Disposition Proceeds established pursuant to Section 7.8(b) and clause (c) of
the definition of the term Fixed Asset Sublimit; minus
(vii) one hundred five percent (105.125%) of the aggregate
outstanding principal amount of Indebtedness permitted pursuant to Section
8.3(d) in excess of $200,000,000, the repurchase or redemption of which is
permitted pursuant to Section 8.8(d).
(b) The Agent at any time in its discretion (which discretion shall
be exercised in a commercially reasonable manner in accordance with the
customary business and credit practices of asset based lenders in comparable
asset based transactions) shall be entitled to (i) establish and increase or
decrease reserves against Eligible Accounts Receivable, Eligible Inventory and
the Fixed Asset Sublimit; (ii) reduce the advance rates under clauses (a)(ii),
(iii) and (iv) above or, following any such reduction, restore such advance
rates to any level equal to or below the advance rates stated in clauses
(a)(ii), (iii) and (iv) above; (iii) impose additional restrictions (or
eliminate the same) to the standards of eligibility set forth in the respective
definitions of "Eligible Accounts Receivable" and "Eligible Inventory"; and (iv)
establish and increase or decrease a reserve in the amount of interest payable
by the Borrowers hereunder, including interest on Loans and Unpaid Drawings,
provided, that the Agent shall provide notice to the Funds Administrator in
general terms concurrently with (and advise the Funds Administrator in general
terms as to the reasons for) any action taken pursuant to this clause (b), to
the extent that such action results in a material reduction in the Borrowing
Base. The Agent may but shall not be required to rely on each Borrowing Base
Certificate and any other schedules or reports delivered to it in connection
herewith in determining the then eligibility of Accounts and Inventory. Reliance
thereon by the Agent from time to time shall not be deemed to limit the right of
the Agent to revise advance rates or standards of eligibility as provided herein
above in this clause (b).
"Borrowing Base Certificate" shall have the meaning ascribed to that
term in Section 7.1(f).
"Business Day" shall mean any day other than a Saturday, Sunday or legal
holiday on which commercial banks in Chicago, Illinois or New York, New York,
are generally closed or
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are authorized to close. When used in connection with LIBOR Rate Loans, this
definition will also exclude any day on which commercial banks are not open for
dealing in Dollar deposits in the London (England, U.K.) interbank market. When
used in connection with any Letter of Credit, this definition will also exclude
any day on which the applicable Issuing Lender is not open for the general
conduct of its business.
"BWAY" shall mean BWAY Corporation, a Delaware corporation and, after
giving effect to the Mergers, a Wholly-Owed Subsidiary of BCO Holding and the
successor by merger to BCO Acquisition and BWAY Finance, respectively.
"BWAY Finance" shall mean BWAY Finance Corp., a Delaware corporation and
a Wholly-Owned Subsidiary of BCO Holding.
"BWAY Finance Merger" shall mean the merger of BWAY Finance with and
into BWAY, with BWAY as the surviving corporation.
"BWAY Finance Merger Documents" shall mean all of the agreements,
instruments and documents set forth on Schedule B, Part 1.1-B, as the same may
be modified, amended, extended, restated, amended and restated or supplemented
from time to time, to the extent permitted hereunder.
"BWAY Pledge Agreement" shall mean the Stock Pledge Agreement dated May
22, 2001, executed by BWAY in favor of the Agent for the benefit of the Agent
and Lenders, evidencing the pledge by BWAY to the Agent of one hundred percent
(100%) of the issued and outstanding Capital Securities of BMI.
"Capital Expenditures" shall mean, of any Person for any period, the
aggregate of all expenditures by such Person during such period (whether paid in
cash or accrued as liabilities and including in any event Capital Lease
Obligations) which are or are required to be included in the property, plant or
equipment reflected in the balance of such Person in accordance with GAAP;
provided that (a) Capital Expenditures of any Borrower shall not include the
purchase price paid by such Person in connection with any Acquisition permitted
pursuant to Section 8.9(d), to the extent allocable to property, plant or
equipment; and (b) Capital Expenditures of any Borrower made with Net
Disposition Proceeds shall not constitute Capital Expenditures of such Borrower
for any purposes of this Credit Agreement, to the extent (but only for so long
as) the Fixed Asset Sublimit (pursuant to clause (c) or (d) of the definition
thereof) is not required to be reduced by the amount of such Net Disposition
Proceeds.
"Capital Lease" shall mean, with respect to any Person, any lease that
is capitalized by such Person for financial statement purposes in accordance
with GAAP.
"Capital Lease Obligations" shall mean, with respect to any Person, the
obligations under Capital Leases of such Person, in each case taken at the
capitalized amount thereof for financial statement purposes in accordance with
GAAP.
"Capital Security" shall mean, with respect to any Person, (a) any share
of capital stock of or any membership, partnership or other unit of ownership
interest in such Person and (b) any
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security convertible into, or any option, warrant or other right to acquire, any
share of capital stock of or other unit of ownership interest in such Person.
"Cash Equivalents" shall mean (a) securities issued, guarantied or
insured by the United States or any of its agencies with maturities of not more
than one year from the date acquired, (b) certificates of deposit, time deposits
and bankers' acceptances with maturities of not more than one year from the date
acquired issued or guaranteed by a U.S. federal or state chartered commercial
bank of recognized standing, which has capital and unimpaired surplus in excess
of $500,000,000 or which bank or its holding company has a short-term commercial
paper rating of at least A-1 or the equivalent by Standard & Poor's Corporation,
or any successor rating agency, or at least P-1 or the equivalent by Xxxxx'x
Investors Services, Inc., or any successor rating agency (or, if at such time
neither of such Persons is issuing ratings, then a comparable rating of such
other nationally recognized rating agency as shall be approved by the Agent in
its reasonable judgment), (c) reverse repurchase agreements with terms of not
more than seven days from the date acquired, for securities of the type
described in clause (a) above and entered into only with commercial banks having
one of the requisite qualifications described in clause (b) above, (d)
commercial paper, other than commercial paper issued by any Borrower or any
Affiliate of any Borrower, issued by any Person incorporated under the laws of
the United States or any state thereof and rated at least A-1 or the equivalent
by Standard & Poor's Corporation, or any successor rating agency, or at least
P-1 or the equivalent by Xxxxx'x Investors Services, Inc., or any successor
rating agency (or, if at such time neither of such Persons is issuing ratings,
then a comparable rating of such other nationally recognized rating agency as
shall be approved by the Agent in its reasonable judgment), in each case with
maturities of not more than one year from the date acquired, and (e) investments
in money market funds which have net assets of at least $200,000,000 and at
least eighty-five percent (85%) of whose assets consist of securities and other
obligations of the type described in clauses (a) through (d) above.
"Casualty Loss" shall mean the theft, loss, physical destruction,
damage, condemnation, taking or any other similar event with respect to any
property or assets of any Borrower or any Subsidiary of any Borrower.
"Change of Control" shall mean one or more of the following events
(except to the extent occurring as a result of any of the Mergers):
(a) less than a majority of the members of the Board of
Directors of BCO Holding shall be persons who either (i) were serving as
directors on the Closing Date or (ii) were nominated as directors and
approved by the vote of either (x) the majority of the Permitted Holders
or (y) the majority of the directors who are directors referred to in
clause (i) above or this clause (ii); or
(b) a "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) shall, as a result of a tender or exchange
offer, open market purchases, privately negotiated purchases or
otherwise, have become the direct or indirect beneficial owner (within
the meaning of Rule 13d-3 under the Exchange Act) of Capital Securities
of BCO Holding representing more than thirty percent (30%) of the
combined ordinary voting power of the Capital Securities of BCO Holding,
unless and for so long as the Permitted Holders beneficially own (within
the meaning of Rule 13d-3 under the
- 8 -
Exchange Act), directly or indirectly, in the aggregate at least
fifty-one percent (51%) of the combined ordinary voting power of the
Capital Securities of BCO Holding; or
(c) at any time when any principal amount of Indebtedness is
outstanding under the Subordinated Note Indenture, the occurrence of a
"Change of Control" (as such term defined in the Subordinated Note
Indenture, as in effect from time to time); or
(d) at any time when any principal amount of Indebtedness is
outstanding under the Existing Note Indenture, the occurrence of a
"Change of Control" (as such term defined in the Existing Note
Indenture, as in effect from time to time); or
(e) BCO Holding shall cease for any reason to be the legal
and beneficial owner of one hundred percent (100%) of the Capital
Securities of BWAY.
"Closing Date" shall mean the date on which the Initial Credit Event
occurs.
"Closing Document List" shall mean the Closing Document List attached
hereto as Annex I.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean any and all assets and rights and interests in
or to property of each of the Borrowers and each of the other Credit Parties,
whether real or personal, tangible or intangible, on which a Lien is granted or
purported to be granted pursuant to the Collateral Documents.
"Collateral Access Agreements" shall mean any landlord waivers,
mortgagee waivers, bailee letters and any similar acknowledgment agreements of
any Person, such as a warehouseman or processor, in possession of Inventory of
any Borrower, in each case in form and substance reasonably satisfactory to the
Agent.
"Collateral Documents" shall mean the Security Agreements, the Pledge
Agreements and all other contracts, instruments and other documents now or
hereafter executed and delivered in connection with this Credit Agreement,
pursuant to which Liens are granted or are purported to be granted to the Agent
in the Collateral for the benefit of some or all of the Agent, the Lenders and
the Issuing Lenders.
"Commitment" of any Lender shall, subject to Section 11.18(c)(ii), mean
the amount set forth below such Lender's name on Annex II, under the heading
"Commitment," as such amount may be reduced from time to time or terminated
pursuant to the terms of this Credit Agreement.
"Consolidated EBITDA" shall mean, for any fiscal period of the
Consolidated Entity, (a) Consolidated Net Income (other than extraordinary
items) for such period; plus (b) all of the following, in each case as
determined without duplication in accordance with GAAP and to the extent
deducted in calculating Consolidated Net Income for such period: (i) Interest
Expense, income tax expense, depreciation and amortization, including
amortization of any goodwill or other intangibles, (ii) expenses attributable to
the exercise of employee options vesting upon consummation of the BCO
Acquisition Merger, (iii) non-cash compensation expense resulting
- 9 -
from the issuance of Capital Securities of BCO Holding to employees of BCO
Holding or any Borrower, (iv) (A) non-cash compensation expense resulting from
the repurchase of any Capital Securities of BCO Holding from employees of BCO
Holding or any Borrower and (B) cash compensation expense resulting from the
repurchase of any Capital Securities of BCO Holding from employees of BCO
Holding or any Borrower, in an amount not exceeding $2,000,000 in the aggregate
for any Fiscal Year ending after the Closing Date, and, in the case of each of
the foregoing clauses (A) and (B), to the extent such repurchase is permitted
pursuant to Section 8.8(b)(i), (v) payments to Xxxxx, in each case to the extent
permitted to paid during such period pursuant to Sections 8.8(b)(iii) and (vi)
and Section 8.10(b)(vii), (vi) fees and expenses (including underwriting
commissions and discounts) incurred in connection with the execution and
delivery of the Credit Documents and the consummation of the Related
Transactions in an amount not exceeding $34,000,000, in the aggregate for all
periods ending after the Closing Date combined; and plus or minus (as the case
may be) (c) all of the following, in each case as determined without duplication
in accordance with GAAP and to the extent deducted or added in calculating
Consolidated Net Income for such period: (i) adjustments resulting from foreign
currency translations, (ii) non-cash provisions for reserves for discontinued
operations, (iii) (A) non-cash restructuring charges (which may include non-cash
write-downs of any assets made during such period) and (B) cash restructuring
charges in an amount not exceeding $5,000,000 in the aggregate for all periods
ending after the Closing Date combined and $3,000,000 in any Fiscal Year, (iv)
gains and losses attributable to asset sales, (v) payments required under any
Management Change of Control Agreement, and (vi) all other non-cash charges;
provided, that, notwithstanding the foregoing, (1) to the extent that any
non-cash charge added back to Consolidated Net Income pursuant to the foregoing
for any period shall become a cash event during any subsequent period, the
amount thereof shall be deducted from Consolidated Net Income in determining
Consolidated EBITDA for such subsequent period, except, (x) in the case of
compensation expense resulting from the repurchase of any Capital Securities of
BCO Holding from employees of BCO Holding or any Borrower, to the extent
permitted to be added to Consolidated Net Income in determining Consolidated
EBITDA pursuant to the foregoing clause (b)(iv)(B), and (y) in the case of
restructuring charges, to the extent permitted to be added to Consolidated Net
Income in determining Consolidated EBITDA pursuant to the foregoing clause
(c)(iii)(B); and (2) upon consummation of any Acquisition, Consolidated EBITDA
shall be determined for all purposes of this Credit Agreement for the four
consecutive Fiscal Quarters ending on the last day of the last completed Fiscal
Quarter immediately preceding the date of such consummation on a pro forma basis
on the assumption that such Acquisition occurred on the first day of such four
Fiscal Quarter period and using historical results of the Consolidated Entity
and the related Acquisition Target for such period after giving effect to any
Permitted Pro Forma Acquisition Adjustments.
"Consolidated Entity" shall mean BWAY and each of its Subsidiaries which
are such by virtue of clause (a) of the definition thereof but shall mean and
include, in any event, each Borrower.
"Consolidated Fixed Charge Coverage Ratio" shall mean, as determined as
of any date for any period ending on such date, the ratio of (a) Consolidated
EBITDA for such period, to (b) the sum of the following, in each case of the
Consolidated Entity, as determined without duplication in accordance with GAAP
for such period, (i) income tax expense paid in cash, (ii) Interest Expense paid
or payable in cash, (iii) Capital Expenditures (except for Capital
- 10 -
Expenditures financed with the proceeds of Indebtedness other than the Loans, to
the extent permitted pursuant to Section 8.3), (iv) payments of principal on
Indebtedness (other than repayments in the ordinary course of the Loans which do
not permanently reduce the Total Commitments); (v) reductions in the Fixed Asset
Sublimit pursuant to clause (a) of the definition thereof, and (vi) any
Restricted Payment made by BWAY pursuant to Section 8.8(b)(ii) hereof during
such period; provided, that, notwithstanding the foregoing, upon consummation of
any Acquisition, all items described in the foregoing clauses (b)(i) through
(vi) shall be determined for all purposes of this Credit Agreement for the four
consecutive Fiscal Quarters ending on the last day of the last completed Fiscal
Quarter immediately preceding the date of such consummation on a pro forma basis
on the assumption that such Acquisition occurred on the first day of such four
Fiscal Quarter period and using historical results of the Consolidated Entity
and the related Acquisition Target for such period.
"Consolidated Net Income" shall mean for any period the consolidated net
income of the Consolidated Entity as determined in accordance with GAAP for such
period.
"Consolidated Total Indebtedness" shall mean, as determined as of any
Test Date, the sum, without duplication, of (a) all Indebtedness of the
Consolidated Entity as of such Test Date, and (b) the increase, if any, in the
aggregate unpaid trade accounts payable of the Borrowers as of such Test Date
over the aggregate unpaid trade accounts payable of the Borrowers as of the last
day of the Fiscal Month immediately preceding the Fiscal Month in which such
Test Date occurs, to the extent the Agent determines in its sole discretion that
such increase has not occurred in the ordinary course of the respective
businesses of the Borrowers; provided, that, notwithstanding the foregoing, upon
consummation of any Acquisition, Consolidated Total Indebtedness shall be
determined for all purposes of this Credit Agreement for the four consecutive
Fiscal Quarters ending on the last day of the last completed Fiscal Quarter
immediately preceding the date of such consummation on a pro forma basis on the
assumption that such Acquisition occurred on the first day of such four Fiscal
Quarter period and using historical results of the Consolidated Entity and the
related Acquisition Target for such period.
"Continuation" shall have the meaning ascribed to that term in Section
4.3(a).
"Control" shall mean, with respect to any Person, the possession,
directly or indirectly, of the power to (a) vote ten percent (10%) or more of
the securities having ordinary voting power for the election of directors of
such Person or (b) direct or cause the direction of management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise either alone or in conjunction with others or any group. The words
"Controlling" and "Controlled" have correlative meanings.
"Convert," "Conversion" and "Converted" each shall refer to a conversion
of Loans of one Type into Loans of another Type pursuant to Section 4.3.
"Covered Taxes" shall have the meaning ascribed to that term in Section
2.8(a).
"Credit Agreement" shall mean this credit agreement, dated as of the
date hereof, as the same may be modified, amended, extended, restated, amended
and restated or supplemented from time to time.
- 11 -
"Credit Documents" shall mean, collectively, this Credit Agreement, the
Notes, the Letters of Credit, the BCO Holding Guaranty, each of the Collateral
Documents and all other documents, agreements and instruments now or hereafter
executed and delivered in connection herewith or therewith, as the same may be
modified, amended, extended, restated, amended and restated or supplemented from
time to time.
"Credit Event" shall mean (a) the making of a Loan and (b) the issuance
of any Letter of Credit.
"Credit Parties" shall mean, collectively, BWAY, the other Borrowers,
the Funds Administrator and all other Persons (other than the Lenders, the Agent
and the Issuing Lenders) parties to the Credit Documents (other than any
Collateral Access Agreements and any opinions of counsel delivered to the Agent,
any Lender or any Issuing Lender in connection with any Credit Document).
"Credit Party Taxes" shall have the meaning ascribed to that term in
Section 6.20(b).
"DBTCo" shall mean Deutsche Bank Trust Company Americas, a New York
banking corporation, formerly known as Bankers Trust Company, acting in its
individual capacity.
"DBTCo Account" shall have the meaning ascribed to that term in Section
2.5(c).
"Default" shall mean an event, condition or default which with the
giving of notice, the passage of time or both would be an Event of Default.
"Defaulting Lender" shall have the meaning ascribed to that term in
Section 11.18(b).
"Depositary Account" shall have the meaning ascribed to that term in
Section 2.5(b)(ii).
"Depositary Account Agreement" shall have the meaning ascribed to that
term in Section 2.5(b)(ii).
"Depositary Account Bank" shall have the meaning ascribed to that term
in Section 2.5(b)(ii).
"Derivative Contract" shall mean an agreement, whether or not in writing
and including any master agreement, documenting, evidencing or relating to any
Derivative Transaction between any Borrower, or any Subsidiary of any Borrower,
and another Person.
"Derivative Transaction" shall mean (a) an interest-rate transaction,
including an interest-rate swap, basis swap, forward rate agreement, interest
rate option (including a cap, collar, and floor), and any other instrument
linked to interest rates that gives rise to similar credit risks (including
when-issued securities and forward deposits accepted), (b) an exchange-rate
transaction, including a cross-currency interest-rate swap, a forward
foreign-exchange contract, a currency option, and any other instrument linked to
exchange rates that gives rise to similar credit risks, (c) an equity derivative
transaction, including an equity-linked swap, an equity-linked option, a forward
equity-linked contract, and any other instrument linked to equities that gives
rise to similar credit risk and (d) a commodity (including precious metal)
derivative
- 12 -
transaction, including a commodity-linked swap, a commodity-linked option, a
forward commodity-linked contract, and any other instrument linked to
commodities that gives rise to similar credit risks.
"Disbursement Account" shall mean the operating account of the Funds
Administrator maintained with the Disbursement Account Bank.
"Disbursement Account Bank" shall mean DBTCo, Deutsche Bank AG, New York
Branch, or any other bank selected from time to time by the Funds Administrator
and reasonably acceptable to the Agent.
"DOL" shall mean the United States Department of Labor and any successor
department or agency.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States of America.
"Domestic Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" below its name
on Annex II, as such annex may be amended from time to time.
"Domestic Subsidiary" shall mean each Subsidiary of a Borrower
incorporated or otherwise organized in the United States or any State thereof.
"Drawing" shall have the meaning ascribed to that term in Section
3.5(b).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
and all final or temporary regulations promulgated thereunder and all published,
generally applicable rulings with respect thereto entitled to precedential
effect.
"ERISA Affiliate" shall mean any Person required at any relevant time to
be aggregated with any Credit Party or any Subsidiary of any Credit Party under
Sections 414(b), (c), (m) or (o) of the Code.
"Eligible Accounts Receivable" shall mean Accounts of a Borrower payable
in Dollars and deemed by the Agent in its discretion (which discretion shall be
exercised in a commercially reasonable manner in accordance with the customary
business and credit practices of asset based lenders in comparable asset based
transactions) to be eligible for inclusion in the calculation of the Borrowing
Base. In determining the amount to be so included, the face amount of such
Accounts shall be reduced by the amount of all returns, discounts, claims,
credits, charges, or other allowances and by the aggregate amount of all
reserves, limits and deductions provided for in this definition and elsewhere in
this Credit Agreement, including any reserves established by the Agent pursuant
to the definition of the term "Borrowing Base" set forth herein, and there shall
be excluded any such Accounts that the Agent determines to be ineligible
pursuant to the definition of the term "Borrowing Base" set forth herein. Unless
otherwise approved in writing by the Agent, no Account of any Borrower shall be
deemed to be an Eligible Account Receivable if:
- 13 -
(a) it arises out of a sale made by such Borrower to an Affiliate of
such or any other Borrower; or
(b) its payment terms are longer than 61 days from date of invoice;
or
(c) it is unpaid more than 60 days after the original payment due
date; or
(d) it is from the same account debtor (or any Affiliate thereof)
and fifty percent (50%) or more, in face amount, of all Accounts from such
account debtor (or any Affiliate thereof) are ineligible pursuant to clause (c)
above; or
(e) the Account, when aggregated with all other Accounts of such
account debtor, exceeds twelve and one-half percent (12.50%) in face value of
all Accounts of the Borrowers combined then outstanding, to the extent of such
excess; provided that Accounts supported or secured by an irrevocable letter of
credit in form and substance reasonably satisfactory to the Agent, issued by a
financial institution reasonably satisfactory to the Agent, and duly transferred
to the Agent (together with sufficient documentation to permit direct draws by
the Agent) shall be excluded to the extent of the face amount of such letter of
credit for the purposes of such calculation; or
(f) (i) the account debtor is also a creditor of such Borrower, (ii)
the account debtor has disputed its liability on, or the account debtor has made
any claim with respect to, such Account or any other Account due from such
account debtor to such Borrower, which has not been resolved or (iii) the
Account otherwise is or may become subject to any right of setoff by the account
debtor; provided that any Account deemed ineligible pursuant to this clause (f)
shall only be ineligible to the extent of the amount owed by such Borrower to
the account debtor, the amount of such dispute or claim, or the amount of such
setoff, as applicable; or
(g) the account debtor has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or made an
assignment for the benefit of creditors, or if a decree or order for relief has
been entered by a court having jurisdiction over the account debtor in an
involuntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or if any other petition or other application for relief
under the federal bankruptcy laws has been filed by or against the account
debtor, or if the account debtor has filed a certificate of dissolution under
applicable state law or shall be liquidated, dissolved or wound-up, or shall
authorize or commence any action or proceeding for dissolution, winding-up or
liquidation, or if the account debtor has failed, suspended business, declared
itself to be insolvent, is generally not paying its debts as they become due or
has consented to or suffered a receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant portion of its assets or affairs
(any such act or event an "Account Debtor Act of Bankruptcy") and, such Account
Debtor Act of Bankruptcy is continuing, unless (i) the payment of Accounts from
such account debtor is secured by assets of, or guaranteed by, in either case in
a manner reasonably satisfactory to the Agent, a Person with respect to which an
Account Debtor Act of Bankruptcy has not occurred or is not continuing and that
is reasonably acceptable to the Agent or, (ii) the Account from such account
debtor arises
- 14 -
subsequent to a decree or order for relief with respect to such account debtor
under the federal bankruptcy laws, as now or hereafter in effect and the Agent
shall have determined in its discretion, exercised in a commercially reasonable
manner in accordance with the customary business and credit practices of
asset-based lenders in comparable asset-based transactions, that the timely
payment and collection of such Account will not be impaired; or
(h) the sale is to an account debtor outside of the United States,
Puerto Rico and Canada, unless (x) such account debtor has supplied such
Borrower with an irrevocable letter of credit in form and substance reasonably
satisfactory to the Agent, issued by a financial institution reasonably
satisfactory to the Agent and which has been duly transferred to the Agent
(together with sufficient documentation to permit direct draws by the Agent) or
(y) the relevant Account is guaranteed by a guarantor reasonably acceptable to
the Agent; or
(i) the sale to the account debtor is on a xxxx-and-hold, guarantied
sale, sale-and-return, sale on approval or consignment basis or made pursuant to
any other written agreement providing for repurchase or return, provided that no
amount owing in respect of the relevant Account shall be excluded solely as a
result of customary quality warranties or the general right to return goods
extended in the ordinary course by such Borrower to its customers; or
(j) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless such Borrower duly assigns
its rights to payment of such Account to the Agent pursuant to the Assignment of
Claims Act of 1940 (31 U.S.C. Section 3727 et seq.); or
(k) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor or the services giving rise to
such Account have not been performed by such Borrower and accepted by the
account debtor or the Account otherwise does not represent a final sale; or
(l) the Account does not comply in any material respect with all
applicable legal requirements, including, where applicable, the Federal Consumer
Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the
Board of Governors of the Federal Reserve System; or
(m) the Agent does not have a valid and perfected first priority
security interest in such Account or the Account does not otherwise conform to
the representations and warranties contained in this Credit Agreement, any
Security Agreement or any of the other Collateral Documents; or
(n) the Accounts are subject to any adverse security deposit,
progress payment or other similar advance made by or for the benefit of the
applicable account debtor; provided that any Account deemed ineligible pursuant
to this clause (n) shall only be ineligible to the extent of such security
deposit, progress payment or other similar advance, as applicable.
- 15 -
"Eligible Inventory" shall mean Inventory of a Borrower that consists of
raw materials, work in progress and finished goods deemed by the Agent in its
discretion (which discretion shall be exercised in a commercially reasonable
manner in accordance with the customary business and credit practices of asset
based lenders in comparable asset based transactions) to be eligible for
inclusion in the calculation of the Borrowing Base. In determining the amount to
be so included, the amount of such Inventory shall be valued at the lower of
cost or market on a basis consistent with such Borrower's current and historical
accounting practice, and shall exclude (i) any goods returned or rejected by
such Borrower's customers and goods in transit to third parties (other than to
such Borrower's agents and warehouses that are not excluded pursuant to clause
(b)(B) of the next succeeding sentence), (ii) any Inventory that the Agent
determines to be ineligible pursuant to the definition of the term "Borrowing
Base" set forth herein, and (iii) any reserves established by the Agent pursuant
to the definition of the term "Borrowing Base" set forth herein. Unless
otherwise approved in writing by the Agent, no Inventory of any Borrower shall
be deemed Eligible Inventory if:
(a) the Inventory is not owned solely by such Borrower or such
Borrower does not have good, valid and marketable title thereto; or
(b) the Inventory is not stored on property that is either (A) owned
or leased by such or any other Borrower or (B) owned or leased by a warehouseman
that has contracted with such Borrower to store Inventory on such warehouseman's
property (provided that, with respect to Inventory of any Borrower stored on
property leased by a Borrower, such Borrower shall have delivered to the Agent a
Collateral Access Agreement executed by the lessor of such property, and, with
respect to Inventory of any Borrower stored on property owned or leased by a
warehouseman, such Borrower shall have delivered to the Agent a Collateral
Access Agreement executed by such warehouseman); or
(c) the Inventory is not subject to a valid and perfected first
priority security interest in favor of the Agent except, with respect to
Eligible Inventory stored at sites described in clause (b)(B) of this sentence,
for Liens for normal and customary warehousing charges; or
(d) the Inventory is obsolete or slow moving (in each case as
determined by the Agent in its discretion, exercised in a commercially
reasonable manner in accordance with the customary business and credit practices
of asset-based lenders in comparable asset-based transactions) or the Inventory
does not otherwise conform in any material respect to the representations and
warranties contained in this Credit Agreement, the Borrower Security Agreement
or any of the other Collateral Documents; or
(e) the Inventory was not manufactured in accordance with and does
not meet in any material respect all standards imposed by all Requirements of
Law or by any government agency, or department or division thereof, having
regulatory authority over such goods or their manufacture, use or sale.
"Employment Agreements" shall mean, collectively, the agreements,
instruments and documents set forth on Schedule B, Part 1.1-C, as the same may
be modified, amended, extended, restated, amended and restated or supplemented
from time to time, to the extent permitted hereunder.
- 16 -
"End Date" shall mean, for any Applicable Margin Period, the last day of
such Applicable Margin Period.
"Equipment" shall have the meaning ascribed to that term in the Borrower
Security Agreement.
"Equity Financing" shall mean (i) the gross equity contribution to BCO
Holding on or prior to the Closing Date in an aggregate amount not less than
100,000,000, of which not less than $79,900,000 shall be made in immediately
available Dollars and $20,300,000 shall consist of a rollover of existing equity
in BWAY by certain of BWAY's existing shareholders; and (ii) the subsequent
contribution to the capital of BCO Acquisition of the cash portion of such gross
equity contribution.
"Equity Financing Documents" shall mean all of the agreements,
instruments and documents set forth on Schedule B, Part 1.1-D, as the same may
be modified, amended, extended, restated, amended and restated or supplemented
from time to time, to the extent permitted hereunder.
"Event(s) of Default" shall have the meaning ascribed to that term in
Article 9 of this Credit Agreement.
"Excess Cash Flow" shall mean, for any fiscal period of the Consolidated
Entity, (a) Consolidated EBITDA for such period, minus (b) the sum of (i)
Interest Expense, (ii) income taxes paid or payable in cash, (iii) principal
payments on or mandatory redemptions of Indebtedness (other than repayments of
Loans in the ordinary course of business which do not permanently reduce the
Commitments), to the extent permitted hereunder, (iv) Capital Expenditures, to
the extent permitted hereunder, and (v) scheduled mandatory reductions of the
Fixed Asset Sublimit pursuant to clause (a) of the definition thereof, and plus
or minus (as the case may be) (c) other non-recurring items reasonably
acceptable to the Agent, all determined in accordance with GAAP.
"Excess Cash Flow Allowance" shall mean an amount equal to zero,
provided, that (a) the Excess Cash Flow Allowance shall be increased on the date
which is ninety (90) days after the end of the 2003 Fiscal Year, and further
increased on the date which is ninety (90) days after the end of each
consecutive Fiscal Year ending thereafter, in each case by an amount equal to
fifty percent (50%) of Excess Cash Flow for such Fiscal Year; and (b) the Excess
Cash Flow Allowance shall be automatically and permanently decreased by an
amount equal to any portion thereof allocated from time to time by the Funds
Administrator to the making of any Capital Expenditure or to the consummation of
any Acquisition.
"Exchange Act" shall mean the Securities Exchange Act of 1934, and all
final or temporary regulations promulgated thereunder and published, generally
applicable rulings entitled to precedential effect.
"Existing Letters of Credit" shall have the meaning ascribed to that
term in Section 1.2(b).
- 17 -
"Existing Note Indenture" shall mean that certain Indenture dated as of
April 11, 1997, among the Credit Parties and Xxxxxx Trust and Savings Bank, as
trustee thereunder, as the same may be modified, amended, extended, restated,
amended and restated or supplemented from time to time, to the extent permitted
hereunder, including, without limitation, pursuant to the Existing Note
Supplemental Indenture.
"Existing Note Repurchase" shall mean the repurchase by BWAY of the
Existing Notes in an aggregate face amount not less than $50,000,000, pursuant
to the Existing Note Repurchase Documents.
"Existing Note Repurchase Documents" shall mean all of the agreements,
instruments and documents set forth on Schedule B, Part 1.1-E, as the same may
be modified, amended, extended, restated, amended and restated or supplemented
from time to time, to the extent permitted hereunder.
"Existing Note Supplemental Indenture" shall mean that certain
Supplemental Indenture dated as of February 7, 2003, among BWAY, BMI, ACI and
the trustee under the Existing Note Indenture, as the same may be modified,
amended, extended, restated, amended and restated or supplemented from time to
time, to the extent permitted hereunder.
"Existing Notes" shall have the meaning ascribed to the term "Notes" in
the Existing Note Indenture.
"Expenses" shall mean all present and future expenses actually incurred
by or on behalf of the Agent, in its capacity as Agent, in connection with this
Credit Agreement, any other Credit Document, the Related Transactions or
otherwise, whether incurred heretofore or hereafter, which expenses shall
include, without being limited to, the cost of record searches, the reasonable
fees and reasonable expenses of attorneys (including the allocated cost of
internal counsel) and paralegals, all customary costs and expenses incurred by
the Agent in opening bank accounts and lockboxes, depositing checks, receiving
and transferring funds, and any charges imposed on the Agent due to insufficient
funds of deposited checks and the Agent's standard fee relating thereto,
collateral examination fees and expenses, fees and expenses of accountants,
appraisers, field examiners or other consultants, experts or advisors employed
or retained by the Agent, fees and expenses incurred by the Agent in connection
with the assignments of or sales of participations in the Loans, title insurance
premiums, real estate survey costs, fees and taxes relative to the filing of
financing statements, costs of preparing and recording any Mortgages or any
other Collateral Documents, all expenses and costs referred to in Article 4 of
this Credit Agreement, all other fees and expenses required to be paid pursuant
to the Fee Letter and all fees and expenses incurred in connection with
releasing Collateral and the amendment or termination of any of the Credit
Documents.
"Expiration Date" shall mean the earlier of (a) February 7, 2008 and (b)
the termination or reduction to zero (0) of the Commitments.
"Exposure" shall mean, with respect to any Lender, the aggregate amount
of such Lender's outstanding Loans plus such Lender's Proportionate Share of the
Letter of Credit Outstandings.
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"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate per annum equal, for each day during such period, to the weighted average
of the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by it.
"Fee Letter" shall mean that certain fee letter agreement dated as of
the date hereof between the Agent and the Borrowers providing for the payment of
certain fees in connection with this Credit Agreement.
"Fees" shall mean the Unused Line Fee, the Letter of Credit Fee and the
Issuing Lender Fees, and, without duplication, all fees payable by the Borrowers
under the Fee Letter.
"Financial Statements" shall mean the consolidated and, unless otherwise
specified, consolidating, balance sheets, statements of operations, statements
of cash flows and statements of changes in shareholder's equity of the
Consolidated Entity for the period specified.
"Fiscal Month" shall mean any of the monthly accounting periods of the
Consolidated Entity.
"Fiscal Quarter" shall mean any of the quarterly accounting periods of
the Consolidated Entity.
"Fiscal Year" shall mean any of the annual accounting periods of the
Consolidated Entity.
"Fixed Asset Sublimit" shall mean an amount equal to $25,000,000;
provided that the Fixed Asset Sublimit shall be automatically and permanently
reduced:
(a) on the first Business Day of each consecutive Fiscal
Quarter commencing with the third Fiscal Quarter of Fiscal Year 2003, by
an amount equal to $892,850;
(b) if the ratio of Consolidated Total Indebtedness as of
the last day of such Fiscal Year, to Consolidated EBITDA for such Fiscal
Year, is equal to or greater than 3.75 to 1.00, on the date which is
ninety (90) days after the end of the 2003 Fiscal Year, and ninety (90)
days after the end of each Fiscal Year ending thereafter, in each case
by an amount equal to thirty percent (30%) of Excess Cash Flow for such
Fiscal Year;
(c) on each date on or after the Closing Date upon which any
Borrower or any Subsidiary of any Borrower receives Net Disposition
Proceeds (other than Net Disposition Proceeds in respect of Casualty
Losses, Sale-Leaseback Transactions or sales, leases, assignments,
transfers or other dispositions permitted pursuant to clauses (g), (h)
or (i) of Section 8.5), in each case by an amount equal to the greater
of (i) such Net Disposition Proceeds or (ii) the orderly liquidation
value of the Equipment or other fixed assets in respect of which such
Net Disposition Proceeds were received, as determined by the Agent in
its sole discretion; provided, that, with respect to no more
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than $2,500,000 of such Net Disposition Proceeds received in cash in any
Fiscal Year, so long as an Event of Default shall not then have occurred
and be continuing, within 30 days following receipt by the Agent of such
Net Disposition Proceeds, the Funds Administrator may deliver to the
Agent a certificate of a Responsible Officer of BWAY setting forth (x)
that portion of such Net Disposition Proceeds that the applicable
Borrower or Subsidiary, as the case may be, intends to reinvest in the
purchase of Equipment or other fixed assets used in the business of the
Borrowers within 365 days of such date of receipt, and (y) the proposed
use of such portion of such Net Disposition Proceeds (and, in connection
therewith, shall thereafter promptly provide such other information with
respect to such reinvestment as the Agent may from time to time
reasonably request) and, pending such reinvestment, the Agent shall
maintain a reserve against unused availability under the Borrowing Base
in the amount of such Net Disposition Proceeds (which reserve shall
remain in effect until reduced from time to time at the written request
of the Funds Administrator upon the Agent's receipt of evidence
reasonably satisfactory to the Agent of the purchase of such Equipment
or other fixed assets) and shall not reduce the Fixed Asset Sublimit in
the amount thereof (although an immediate reduction in the Fixed Asset
Sublimit shall occur in any event to the extent that such Net
Disposition Proceeds are less than the orderly liquidation value of the
Equipment or other fixed assets in respect of which such Net Disposition
Proceeds were received, as determined by the Agent in its sole
discretion); provided, further, that if (A) within 180 days after the
date of receipt by the Agent of such Net Disposition Proceeds, the
Borrowers have not so used such Net Disposition Proceeds, or in the
alternative have not delivered to the Agent evidence reasonably
satisfactory to the Agent that one or more of the Borrowers has entered
into one or more binding contractual commitments to so use such Net
Disposition Proceeds, or, in any event (B) within 365 days after the
date of the Agent's receipt of such Net Disposition Proceeds, the
Borrowers have not so used all or any portion of such Net Disposition
Proceeds not required to be applied to reduce the Fixed Asset Sublimit
pursuant to the preceding proviso, or pursuant to clause (A) of this
proviso, the Fixed Asset Sublimit shall be promptly reduced by an amount
equal to such remaining portion on the last day of such 180 day period
or 365 day period, as the case may be;
(d) on each date on or after the Closing Date upon which the
Fixed Asset Sublimit is required to be reduced by the amount of any Net
Disposition Proceeds in respect of a Casualty Loss pursuant to Section
7.8(b), by an amount equal to such Net Disposition Proceeds; and
(e) on each date on or after the Closing Date upon which any
Borrower or any Subsidiary of any Borrower receives Net Disposition
Proceeds in respect of any Sale-Leaseback Transaction, by an amount
equal to (i) to the extent such Net Disposition Proceeds are
attributable to Equipment (as determined by the Agent in its sole
discretion), the greater of (x) one hundred percent (100%) of such Net
Disposition Proceeds or (y) the orderly liquidation value of the
Equipment in respect of which such Net Disposition Proceeds were
received, as determined by the Agent in its sole discretion, and (ii) to
the extent such Net Disposition Proceeds are attributable to real
property or improvements thereon (as determined by the Agent in its sole
discretion), twenty-five percent (25%) of such Net Disposition Proceeds.
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"Foreign Lender" shall mean any Lender or Serving Affiliate that is not
a "United States person" within the meaning of Section 7701(a)(30) of the Code.
"Foreign Subsidiary" shall mean each Subsidiary of a Borrower that is
not a Domestic Subsidiary.
"Funding Bank" shall have the meaning ascribed to that term in Section
4.9.
"Funds Administrator" shall mean BWAY, acting in its capacity as
borrowing agent and funds administrator for itself and the other Borrowers
hereunder and under each of the other Credit Documents.
"GAAP" shall mean generally accepted accounting principles in the United
States as in effect from time to time.
"Governing Documents" shall mean, as to any Person, the certificate or
articles of incorporation and by-laws or other organizational or governing
documents of such Person.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty" of any Person shall mean any Liability, contingent or
otherwise, of such Person (other than an endorsement for collection or deposit
in the ordinary course of business) to pay any Liability of any other Person or
to otherwise protect, or having the practical effect of protecting, the holder
of any such Liability against loss (whether such obligation arises by virtue of
such Person being a partner of a partnership or participant in a joint venture
or by agreement to pay, to keep well, to maintain solvency, assets, level of
income or other financial condition, to purchase assets, goods, securities or
services or to take or pay, or otherwise). The word "Guarantee" when used as a
verb has the correlative meaning.
"Highest Lawful Rate" shall mean, at any time when any Obligations shall
be outstanding hereunder (other than contingent indemnification Obligations to
the extent that no claim giving rise thereto has been asserted and remains
unresolved or unsatisfied), the maximum nonusurious interest rate, that then may
be contracted for, taken, reserved, charged or received on the Obligations owing
under this Credit Agreement or any of the other Credit Documents, under (a) the
laws of the State of New York (or the law of any other jurisdiction whose laws
may be mandatorily applicable notwithstanding other provisions of this Credit
Agreement and the other Credit Documents) or (b) if higher, applicable federal
laws, in any case after taking into account, to the extent permitted by
applicable law, any and all relevant payments or charges under this Credit
Agreement and any other Credit Documents executed in connection herewith, and
any available exemptions, exceptions and exclusions.
"Indebtedness" of any Person shall mean (in each case, whether such
obligation is with full or limited recourse) (a) any obligation of such Person
for borrowed money, (b) any obligation of such Person evidenced by a bond,
debenture, note or other similar instrument, (c) any obligation of such Person
to pay the deferred purchase price of property or services, except a trade
account payable that arises in the ordinary course of business but only if and
so long as the
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same is payable on customary trade terms, (d) any Capital Lease Obligations of
such Person, (e) any Mandatorily Redeemable Obligation of such Person owned by
any Person other than such Person or a Subsidiary of such Person (the amount of
such Mandatorily Redeemable Obligation to be determined for this purpose as the
maximum amount payable upon redemption of such Mandatorily Redeemable
Obligation), (f) any non-contingent obligation of such Person to reimburse any
other Person in respect of amounts paid under a letter of credit or other
Guaranty issued by such other Person to the extent that such reimbursement
obligation remains outstanding after it becomes non-contingent, (g) all
obligations of such Person under Derivative Contracts, except that if any
agreement relating to such obligation provides for the netting of amounts
payable by and to such Person thereunder or if any such agreement provides for
the simultaneous payment of amounts by and to such Person, then in each such
case, the amount of such obligation shall be the net amount thereof, (i) any
Indebtedness of others secured by a Lien on any asset of such Person and (j) any
Indebtedness of others Guaranteed by such Person.
"Initial Credit Event" shall mean the initial Credit Event made under
this Credit Agreement, after giving effect to its amendment and restatement
pursuant to the terms hereof.
"Insolvency Event" shall mean, with respect to any Person, the
occurrence of any of the following: (a) such Person shall be adjudicated
insolvent or bankrupt, or generally fail to pay, or admit in writing its
inability to pay, its debts as they become due, (b) the voluntary commencement
by such Person of any proceeding or the filing of any petition by such Person
under any bankruptcy, insolvency or similar law, (c) the seeking by such Person
of dissolution or reorganization or the application by such Person for, or the
consent by such Person to, appointment of a receiver, trustee, custodian or
liquidator for it or a substantial portion of its property, assets or business
or to effect a plan or other arrangement with its creditors, (d) the filing by
such Person of any answer admitting the jurisdiction of the court and the
material allegations of an involuntary petition filed against it in any
bankruptcy, insolvency or similar proceeding, (e) the making by such Person of a
general assignment for the benefit of its creditors, or the consent to, or
acquiescence by such Person in the appointment of, a receiver, trustee,
custodian or liquidator for a substantial portion of such Person's property,
assets or business. "Insolvency Event" shall also mean, with respect to any
Person, the occurrence of any of the following: an involuntary proceeding or
involuntary petition shall be commenced or filed against such Person under any
bankruptcy, insolvency or similar law seeking the dissolution or reorganization
of it or the appointment of a receiver, trustee, custodian or liquidator for it
or of a substantial part of its property, assets or business, and such
proceedings or petitions shall not be dismissed within sixty (60) days after
commencement or filing, as the case may be, or any order for relief shall be
entered in any such proceeding.
"Interest Expense" shall mean the aggregate consolidated interest
expense (net of interest income) of the Consolidated Entity in respect of
Indebtedness determined on a consolidated basis in accordance with GAAP,
including amortization of original issue discount on any Indebtedness and of all
fees payable in connection with the incurrence of such Indebtedness, including,
without limitation, aggregate fees payable in respect of Letters of Credit
pursuant to Section 4.6 (in each case, to the extent included in interest
expense), the interest portion of any deferred payment obligation and the
interest component of any Capital Lease Obligations.
- 22 -
"Interest Period" shall mean a period, commencing, in the case of the
first Interest Period applicable to a LIBOR Rate Loan, on the date of the making
of, or conversion into, such Loan, and, in the case of each subsequent,
successive Interest Period applicable thereto, on the last day of the
immediately preceding Interest Period. The duration of each such Interest Period
shall be one, two, three or six months, in each case as the Funds Administrator
may, in an appropriate Notice of Borrowing, Notice of Continuation or Notice of
Conversion, select; provided that the Funds Administrator may not select any
Interest Period that ends after the Expiration Date. Whenever the last day of
any Interest Period would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided that if such extension would cause the last
day of such Interest Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the next preceding Business Day.
"Interim Advance" shall mean a Loan made by the Agent to a Borrower
pursuant to Section 2.2(b)(i).
"Interim Advance Period" shall have the meaning ascribed to that term in
Section 2.2(b)(i).
"Internal Revenue Service" or "IRS" shall mean the United States
Internal Revenue Service and any successor agency.
"Inventory" shall have the meaning ascribed to that term in the Borrower
Security Agreement.
"Investment" by any Person in any other Person shall mean any direct or
indirect loan or other extension of credit or capital contribution to such other
Person (by means of any transfer of cash or other property to others or any
payment for property or services for the account or use of others), any purchase
or acquisition by such Person of any Capital Securities, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, such
other Person, or any purchase or acquisition of any assets of such other Person
constituting a business unit. "Investment" shall exclude extensions of trade
credit by any Borrower or any Subsidiary of any Borrower on commercially
reasonable terms in accordance with normal trade practices of such Borrower or
such Subsidiary, as the case may be. In determining the aggregate amount of
Investments outstanding at any particular time, (a) there shall be deducted in
respect of each such Investment any amount received on such investment, whether
as a return of capital or as dividends, interest or any other form of earnings
thereon; and (b) there shall not be deducted from the original amount of any
Investment, and such Investment shall be deemed to continue to be "outstanding"
in such original amount notwithstanding, any (i) decrease in the market value
thereof or (ii) amount thereof that may have been forgiven, released, cancelled
or otherwise nullified or held to be invalid.
"Issuing Lender" shall mean DBTCo (which, for purposes of this
definition, also shall include any banking affiliate of DBTCo, including but not
limited to Deutsche Bank AG, New York Branch, which has agreed to issue Letters
of Credit for the account of the Borrowers under this Credit Agreement) or any
other Lender acceptable to Agent which has agreed to issue Letters of Credit for
the account of the Borrowers under this Credit Agreement.
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"Issuing Lender Fees" shall have the meaning ascribed to that term in
Section 4.6(b).
"Joint Venture" shall mean a corporation, partnership or other business
entity, other than a Borrower or a Subsidiary of a Borrower, engaged or proposed
to be engaged in the same or a similar line of business as the Borrowers in
which a Borrower or a Subsidiary of a Borrower owns, directly or indirectly, no
less than thirty percent (30%) of the total voting power of Capital Securities
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, management or trustees thereof (or Persons having similar
functions with respect thereto), with the balance of the ownership interests
being held by one or more third parties.
"Xxxxx" shall mean Xxxxx & Company, a Delaware limited partnership, and
its Affiliates.
"Xxxxx Agreements" shall mean all of the agreements, instruments and
documents set forth on Schedule B, Part 1.1-F, as the same may be modified,
amended, extended, restated, amended and restated or supplemented from time to
time, to the extent permitted hereunder.
"Xxxxx Associates" shall have the meaning ascribed to that term in the
definition of Permitted Transferees.
"Xxxxx Designees" shall mean Xxxxxxxx Family Partnership Ltd., Xxxx X.
XxXxxxxxxxxx, Xxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxx, Prof. Xx. Xxxxxx Xxxxxxxxx,
Xxxxx and Xxxxxxxx Xxxxx Trust, Coinvestment I, LLC, MMI Investments, LLC, U.
Xxxxxxx Xxxxx, Xx., Xxxxx X. Xxxxxxxxx, Xxxxxx X.X. Xxxxxxx, Xxxxxxxx X. Xxxxxxx
Exempt Family Trust, Xxxxxxx X. Xxxxxx, Xxxxxxxx Xxxxxx, Xxxxx X'Xxxxx, Xxxx
Xxxxxxxx III (Xxx), Xxxxxx Xxxxx and Xxxx Xxxxxxxx.
"LC Interest Rate" shall mean, at any time, a rate per annum equal to
the rate per annum applicable at such time to Prime Rate Loans.
"LC Participant" shall have the meaning ascribed to that term in Section
3.4.
"LC Supportable Obligations" shall mean (a) obligations of any Borrower
with respect to workers' compensation, surety bonds and other similar statutory
obligations and (b) other ordinary course obligations of any Borrower.
"Lender" shall, subject to Section 11.18(c)(ii), mean (a) each Person
listed as a "Lender" on the signature pages hereof and (b) each Person that has
been assigned any or all of the rights and obligations of a Lender pursuant to
and in accordance with Section 11.6.
"Letter of Credit" shall have the meaning ascribed in that term in
Section 3.1(a).
"Letter of Credit Fee" shall have the meaning ascribed to that term in
Section 4.6(a).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (a)
the Stated Amounts of all outstanding Letters of Credit, and (b) the aggregate
amount of all unpaid Drawings in respect of Letters of Credit.
"Letter of Credit Request" shall have the meaning ascribed to that term
in Section 3.3(a).
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"Liability" of any Person shall mean (in each case, whether with full or
limited recourse) any indebtedness, liability, obligation, covenant or duty of
or binding upon, or any term or condition to be observed by or binding upon,
such Person or any of its assets, of any kind, nature or description, direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, whether arising under contract, Requirement of Law,
or otherwise, whether now existing or hereafter arising, and whether for the
payment of money or the performance or non-performance of any act.
"LIBOR Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its "LIBOR Lending Office" below its name on
Annex II (or, if no such office is specified, its Domestic Lending Office), or
such other office or Affiliate of such Lender as such Lender may from time to
time specify to the Funds Administrator and the Agent.
"LIBOR Rate" shall mean, with respect to any Interest Period, (a) the
rate per annum for Dollar deposits approximately equal to the principal amount
of the LIBOR Rate Loans for which the LIBOR Rate is being determined and with
maturities comparable to the Interest Period for which such LIBOR Rate would
apply, which appears on the Telerate Page 3750 at approximately 11:00 A.M.,
London time, on the day that is two (2) Business Days prior to the first day of
such Interest Period and (b) if no such rate so appears on the Telerate Page
3750, an interest rate per annum equal to the rate (rounded upward to the
nearest whole multiple of one-sixteenth (1/16) of one percent (1.00%) per annum,
if such rate is not such a multiple) of the offered quotation, if any, to first
class banks in the London (U.K.) interbank market by Deutsche Bank AG, New York
Branch, for Dollar deposits of amounts in immediately available funds comparable
to the principal amount of the LIBOR Rate Loans for which the LIBOR Rate is
being determined with maturities comparable to the Interest Period for which
such LIBOR Rate will apply as of approximately 10:00 A.M. two (2) Business Days
prior to the commencement of such Interest Period. The term "Telerate Page 3750"
shall mean the display designated as Page 3750 on the Telerate Services (or such
other page as may replace such page on such service for the purpose of
displaying a comparable rate).
"LIBOR Rate Loan" shall mean a Loan that bears, or is to bear, interest
by reference to the LIBOR Rate.
"Lien(s)" shall mean any lien, claim, charge, pledge, security interest,
deed of trust, mortgage, other encumbrance or other arrangement having the
practical effect of the foregoing or other preferential arrangement of any other
kind and shall include the interest of a vendor or lessor under any conditional
sale agreement, Capital Lease or other title retention agreement.
"Line of Credit" shall mean, at any time, an amount equal to the
aggregate amount, at such time, of the Commitments, which shall not exceed
$90,000,000, as such amount may be reduced from time to time in accordance with
Section 2.
"Loans" shall mean amounts advanced by the Agent or any Lender pursuant
to Section 2.1, 2.2(b) or 2.3(b), and, without duplication, all amounts charged
to the Borrowers' Account by the Agent pursuant to Section 4.8.
"Lockboxes" shall have the meaning ascribed to that term in Section
2.5(b)(i).
- 25 -
"Majority Lenders" shall mean, at any time, those Lenders having more
than fifty percent (50%) of the aggregate amount of the Commitments or, if the
Commitments shall have expired or been terminated, Lenders having more than
fifty percent (50%) of the aggregate amount of the outstanding Exposures.
"Management Agreements" shall mean all of the agreements, instruments
and documents set forth on Schedule B, Part 1.1-G, as the same may be modified,
amended, extended, restated, amended and restated or supplemented from time to
time, to the extent permitted hereunder.
"Management Change of Control Agreements" shall mean those certain
Change of Control Agreements (a) dated as of August 30, 2001, between BWAY and
Xxxx-Xxxxxx X. Xxxxx, as the same may be modified, amended, extended, restated,
amended and restated or supplemented from time to time, and (b) dated as of
August 9, 2001, between BWAY and Messrs. Xxxxx X. Xxxx, Xxxxxx X. Xxxxxxxx,
Xxxxxxx X. Xxxxxxxx and Xxxxxxx X. X'Xxxxxxx, respectively, as the same may be
modified, amended, extended, restated, amended and restated or supplemented from
time to time, to the extent permitted hereunder.
"Management Investors" shall mean the officers and employees (including
current and former officers and employees) of BCO Holding, or any Borrower or
any Subsidiary of any Borrower at any time when Xxxxx beneficially owns (within
the meaning of Rule 13d-3 under the Exchange Act) (a) at least fifty-one percent
(51%) of the total ordinary voting power of the Capital Securities of BCO
Holding and (b) a greater percentage of the total ordinary voting power of the
Capital Securities of BCO Holding than is then beneficially owned in the
aggregate by the officers and employees of BCO Holding, any Borrower, or any
Subsidiary of any Borrower.
"Management Note" shall mean a promissory note issued by BWAY to a
holder of the Capital Securities of BCO Holding in accordance with the
Securityholders' Agreement to fund all or a portion of the purchase price paid
in connection with the repurchase by BCO Holding of its Capital Securities from
such holder; provided, that each such promissory note (a) shall not require any
payment of principal to be made thereunder prior to one hundred eighty (180)
days after the Expiration Date, and (b) shall be subordinated at all times in
right to and time of payment to the prior payment and performance in full of all
Obligations (other than contingent indemnification Obligations to the extent
that no claim giving rise thereto has been asserted and remains unresolved or
unsatisfied) and termination of the Commitments and this Credit Agreement, in
each case pursuant to the respective terms hereof, pursuant to subordination
provisions no less favorable to the Agent and Lenders than the subordination
provisions set forth in the Subordinated Note Indenture or, at the request of
the Borrowers, such other subordination provisions as shall be acceptable to the
Agent; and, provided, further, that each such repurchase is occasioned by the
death, disability, retirement or termination of employment or service as a
director of such holder (or any predecessor in interest of such holder).
"Mandatorily Redeemable Obligations" of any Person shall mean all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any Capital Securities of such or any other
Person which is mandatorily redeemable or otherwise required to be purchased,
retired or otherwise acquired prior to the Expiration Date.
- 26 -
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, results of operations or condition (financial or
otherwise) of the Credit Parties taken as a whole, (b) the value of the
Collateral or the amount which the Agent, the Lenders or any Issuing Lender
would be likely to receive (after giving consideration to delays in payment and
costs of enforcement) in the liquidation of such Collateral, (c) any Credit
Party's ability to perform its obligations under the Credit Documents to which
it is a party or (d) the rights and remedies of the Agent, the Lenders or any
Issuing Lender under any of the Credit Documents taken as a whole.
"Material Contract" shall mean any contract or other arrangement (other
than any Credit Document or any Related Transactions Document), whether written
or oral, to which any Borrower or any Subsidiary of any Borrower is a party with
respect to which breaches, nonperformances, cancellations or failures to renew
by any party thereto could reasonably be expected to have a Material Adverse
Effect.
"Merger Documents" shall mean the BCO Acquisition Merger Documents and
BWAY Finance Merger Documents.
"Mergers" shall mean the BCO Acquisition Merger and the BWAY Finance
Merger.
"Mortgages" shall mean the mortgage(s), deeds of trust, leasehold
mortgages and leasehold deeds of trust, if any, granted by the respective Credit
Parties to or for the benefit of the Agent, as the case may be.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA and which is, or within the immediately preceding
six (6) years was, contributed to by any Credit Party, any Subsidiary of any
Credit Party or any ERISA Affiliate.
"NAIC" shall mean the National Association of Insurance Commissioners.
"Net Disposition Proceeds" shall mean proceeds (including, without
limitation, but only as and when paid, any cash received by way of deferred
payment pursuant to a promissory note or similar instrument, receivable or
otherwise) received by or for the account of any Borrower or any Subsidiary of
any Borrower from the sale, lease, transfer or other disposition (including,
without limitation, as a result of any Casualty Loss) of any Equipment or other
fixed asset of such Person, net of (a) the costs of such sale, lease, transfer
or other disposition, including reasonable professional fees, taxes payable as a
result thereof and reasonable reserves associated therewith; and (b) amounts
applied to the repayment of indebtedness (other than the Obligations) secured by
a Lien on the applicable Equipment or other fixed asset; provided, that,
notwithstanding the foregoing, such net proceeds of Permitted Dispositions shall
not constitute Net Disposition Proceeds, unless and solely to the extent that
such net proceeds exceed (i) in the case of a Permitted Disposition described in
clause (a) of the definition of the term "Permitted Disposition," $1,000,000 and
(ii) in the case of a Permitted Disposition described in clause (b) of the
definition of the term "Permitted Disposition," $1,500,000; and, provided,
further, that proceeds of business interruption insurance shall not constitute
Net Disposition Proceeds.
- 27 -
"Net Equity Proceeds" shall mean, with respect to each issuance or sale
of any equity by any Person or any capital contribution to such Person, the cash
proceeds (net of underwriting discounts and commissions and all other costs,
fees and expenses associated therewith) received by such Person from the
respective sale or issuance of its equity or from the respective capital
contribution.
"Note" shall mean a promissory note of the Borrowers payable to the
order of any Lender, in the form of Exhibit B, evidencing the aggregate
Indebtedness of the Borrowers to such Lender resulting from the Loans made by
such Lender or acquired by such Lender pursuant to Section 11.6.
"Notice of Borrowing" shall have the meaning ascribed to that term in
Section 2.2(a)(i).
"Notice of Continuation" shall have the meaning ascribed to that term in
Section 4.3(a).
"Notice of Conversion" shall have the meaning ascribed to that term in
Section 4.3(b).
"Obligations" shall mean (a) the unpaid principal of and interest on the
Loans and the Notes, (b) the obligation of the Borrowers to pay to an Issuing
Lender the amounts of all Unpaid Drawings together with interest accrued thereon
at the LC Interest Rate, made under Letters of Credit of such Issuing Lender,
(c) the Fees, (d) the Expenses, (e) all other Liabilities of the respective
Borrowers to the Agent and any Lender (in its capacity as such and not in its
capacity as an Issuing Lender), which may arise under, out of, or in connection
with, this Credit Agreement, the Notes or any other Credit Document, including,
without limitation, the Original Obligations, (f) all other Liabilities of the
respective Borrowers to an Issuing Lender in respect of its Letters of Credit,
and (g) all other Liabilities of the respective Borrowers to a Lender in respect
of Derivative Transactions, to the extent that such Liabilities constitute
Approved Secured Derivative Transactions Liabilities. As used in clauses (a),
(b) and (c) and wherever else the determination of the amount of "interest" is
relevant, "interest" shall include interest accruing on or after the filing of,
or what would have accrued but for the filing of, any petition in bankruptcy, or
the commencement of any insolvency, reorganization, or like proceeding, relating
to any Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding.
"Other Taxes" shall have the meaning ascribed to that term in Section
2.8(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Payment" shall have the meaning ascribed to that term in Section 2.10.
"Payment Office" shall mean the office of the Agent located at 00 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other office of the Agent as
shall be specified by Agent from time to time in a notice to the other parties
hereto.
"Permitted Dispositions" shall mean the sale of (a) certain real
property of BMI located in Xxxxxxxx, Xxxxxx County, Texas, and commonly known as
00000 Xxxxxx Xxxxx, Farmers Branch, (b) the surplus equipment of the Borrowers
set forth on Schedule B, Part 1.1-H;
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provided, that in the case of each of such sales, one hundred percent (100%) of
the consideration therefor is received by the applicable Borrower in the form of
cash.
"Permitted Holders" shall mean Xxxxx, the Xxxxx Designees, Magnetite
Asset Investors, L.L.C., the Management Investors and any employee stock
ownership plan established by BCO Holding or any Borrower for the benefit of the
employees of BCO Holding, any Borrower or any of their Subsidiaries, and their
respective Permitted Transferees.
"Permitted Liens" shall have the meaning ascribed to that term in
Section 8.4.
"Permitted Management Fees" shall mean all fees payable by BCO Holding
or any Borrower or any Subsidiary of any Borrower to Xxxxx, for the rendering of
investment banking, management consulting, financial advisory or other services,
including, without limitation, all fees payable by BWAY to Xxxxx pursuant to the
Xxxxx Agreements in respect of consulting and advisory services provided by
Xxxxx to BWAY after the Closing Date.
"Permitted Pro Forma Acquisition Adjustments" shall mean, with respect
to any Acquisition, pro forma adjustments to the Financial Statements made as a
result of such Acquisition in accordance with the requirements therefor set
forth in Regulation S-X of the Securities and Exchange Commission (whether or
not the computation of such adjustments would otherwise be subject to such
requirements), and all final or temporary regulations promulgated thereunder and
published, generally applicable rulings entitled to precedential effect.
"Permitted Restrictive Covenant" shall mean (a) any covenant or
restriction contained in any Credit Document, (b) any covenant or restriction
binding upon any Person at the time such Person becomes a Subsidiary of any
Borrower if the same is not created in contemplation thereof, (c) any covenant
or restriction of the type permitted by Section 8.4 that is contained in any
contract evidencing or providing for the creation of or concerning Indebtedness
so long as such covenant or restriction is limited to assets purchased with the
proceeds thereof, (d) any covenant or restriction described in Schedule B, Part
1.1-I, but only to the extent such covenant or restriction is there identified
by specific reference to the provision of the contract in which such covenant or
restriction is contained or (e) any covenant or restriction that (i) is not more
burdensome than an existing Permitted Restrictive Covenant that is such by
virtue of clause (b), (c), (d) or (e); (ii) is contained in a contract
constituting a renewal, extension or replacement of the contract in which such
existing Permitted Restrictive Covenant is contained; and (iii) is binding only
on the Person or Persons bound by such existing Permitted Restrictive Covenant.
"Permitted Transferees" shall mean (a) in the case of Xxxxx, (i) any
Xxxxx Designee, (ii) any managing director, general partner, limited partner,
director, officer or employee of Xxxxx or any Xxxxx Designee (collectively, the
"Xxxxx Associates"), (iii) the heirs, executors, administrators, testamentary
trustees, legatees or beneficiaries of any Xxxxx Associate and (iv) any trust,
the beneficiaries of which, or a corporation or partnership, the stockholders or
partners of which, include only a Xxxxx Associate, his or her spouse, parents,
siblings, members of his or her immediate family (including adopted children)
and/or direct lineal descendants; and (b) in the case of any Management
Investors, (i) his or her executor, administrator, testamentary trustee, legatee
or beneficiaries, (ii), his or her spouse, parents, siblings, members of his or
her
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immediate family (including adopted children) and/or direct lineal descendants
or (iii) a trust, the beneficiaries of which, or a corporation or partnership,
the stockholders or partners of which, include only the Management Investor, as
the case may be, and his or her spouse, parents, siblings, members of his or her
immediate family (including adopted children) and/or direct lineal descendants.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, entity, party or government (including
any division, agency or department thereof), and, as applicable, the successors,
heirs and assigns of each.
"Pledge Agreements" shall mean the BCO Pledge Agreement, the BWAY Pledge
Agreement and the BMI Pledge Agreement, and any other pledge agreements executed
by any Borrower and delivered to the Agent pursuant to Section 8.15.
"Prime Lending Rate" shall mean the rate that Deutsche Bank AG, New York
Branch announces from time to time in New York, New York as its prime lending
rate in the United States, as in effect from time to time. The Prime Lending
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. Deutsche Bank AG, New York Branch, DBTCo
and each of the other Lenders may make commercial loans or other loans at rates
of interest at, above or below the Prime Lending Rate.
"Prime Rate Loan" shall mean a Loan that bears, or is to bear, interest
by reference to the Prime Lending Rate.
"Prohibited Transaction" shall mean any transaction that is prohibited
under Code Section 4975 or ERISA Section 406 and not exempt under Code Section
4975 or ERISA Section 408.
"Projections" shall mean all projections furnished to the Agent or any
Lender after the Closing Date pursuant to Section 7.1(d).
"Proportionate Share" shall, subject to Section 11.18(c), mean, with
respect to any Lender, a fraction (expressed as a percentage), the numerator of
which shall be the amount of such Lender's Commitment and the denominator of
which shall be the Total Commitments or, if the Commitments have been
terminated, a fraction the numerator of which shall be the principal amount of
such Lender's Exposure and the denominator of which shall be the aggregate
amount of all Exposures of all Lenders then outstanding.
"Purchase Money Liens" shall mean Liens on any fixed or capital asset of
any Borrower, including, without limitation, real property and improvements
thereon, to secure the purchase price thereof, provided that: (a) each such Lien
shall attach only to the property or improvements to be acquired; (b) a
description is furnished to the Agent for any property or improvements so
acquired, the purchase price of which is greater than $500,000; and (c) the debt
incurred in connection with such acquisitions shall not exceed one hundred
percent (100%) of the amount of the purchase price of the fixed or capital
assets then being financed.
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"Real Estate" shall mean all real property owned or leased by any Credit
Party or any Subsidiary of any Credit Party, together with all fixtures,
improvements and other structures thereon.
"Reduced Rate" shall have the meaning ascribed to that term in Section
2.8(e), relating to backup withholding tax.
"Register" shall have the meaning ascribed to that term in Section
11.6(e).
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto.
"Related Transactions" shall mean, collectively, the transactions
provided for in the respective Related Transactions Documents and the
transactions contemplated thereby.
"Related Transactions Documents" shall mean, collectively, the Merger
Documents, the Equity Financing Documents, the Existing Note Repurchase
Documents, the Subordinated Note Documents, the Employment Agreements, the Xxxxx
Agreements, the Management Agreements, the Management Change of Control
Agreements and the Securityholders' Agreement.
"Reportable Event" shall mean any of the events described in Section
4043 of ERISA with respect to a Benefit Plan or Multiemployer Plan as to which
the 30-day notice requirement has not been waived.
"Requirement of Law" shall mean, as to any Person, the Governing
Documents of such Person, and any law, treaty, rule, regulation or ordinance, or
determination of a court or other Governmental Authority or determination of an
arbitrator, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Responsible Officer" shall mean, as to any Person, the duly-appointed
chief executive officer, chief financial officer or treasurer, or a vice
president or any other duly-appointed officer, in each case of such Person.
"Restricted Payment" shall mean, with respect to any Person, (a) any
payment with respect to or on account of any of the Capital Securities of such
Person, including any dividend or other distribution on, any payment of interest
on or principal of, and any payment on account of any purchase, redemption,
retirement, exchange, defeasance or conversion of, any such Capital Securities
and (b) any optional payment or prepayment on or optional redemption, retirement
(including by making payments to a sinking or analogous fund), repurchase,
defeasance or other acquisition of, any (i) Indebtedness in respect of the
Subordinated Notes, (ii) except to the extent permitted pursuant to Section
8.8(d), Indebtedness in respect of the Existing Notes, (iii) Indebtedness in
respect of Management Notes, and (iv) Indebtedness permitted pursuant to Section
8.3(h)(ii), Section 8.3(n) or Section 8.3(o), respectively. For the purposes of
this definition, a "payment" shall include the transfer of any asset or the
incurrence of any Indebtedness or other Liability (the amount of any such
payment to be the fair market value of such asset or the amount of such
obligation, respectively) but shall not include the issuance by such Person to
the holders of a class or series of a class of its Capital Securities of the
same class
- 31 -
and, if applicable, series, other than, in the case of any Borrower or any
Subsidiary of any Borrower, Mandatorily Redeemable Obligations.
"Sale-Leaseback Transaction" shall mean any arrangement, directly or
indirectly, whereby any Borrower or any Subsidiary of any Borrower leases any
property from a Person (whether owned by such Borrower or such Subsidiary on the
Closing Date or later acquired), which has been or is to be sold or transferred
by such Borrower or such Subsidiary to such Person or to any other Person from
whom funds have been or are to be advanced on the security of such property.
"Security Agreements" shall mean the Borrower Security Agreement and any
other security agreements executed by any Borrower and delivered to the Agent
pursuant to Section 8.15.
"Securityholders' Agreement" shall mean the Securityholders' Agreement
dated as of the Closing Date among BCO Holding and the other parties thereto, as
the same may be modified, amended, extended, restated, amended and restated or
supplemented from time to time, to the extent permitted hereunder.
"Serving Affiliate" shall mean an Affiliate that is an Issuing Lender.
"Settlement Date" shall have the meaning ascribed to that term in
Section 2.3(b)(i).
"Start Date" shall mean, with respect to any Applicable Margin Period,
the first day of such Applicable Margin Period.
"Stated Amount" of each Letter of Credit shall mean, at any time, the
maximum amount available to be drawn thereunder at such time (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Subordinated Note Documents" shall mean, collectively, the Subordinated
Note Indenture, the Subordinated Notes, the Assumption Agreement, the
Supplemental Indenture and all of the other agreements, instruments and
documents set forth on Schedule B, Part 1.1-J, as the same may be modified,
amended, extended, restated, amended and restated or supplemented from time to
time, to the extent permitted hereunder.
"Subordinated Note Indenture" shall mean that certain Indenture dated as
of November 27, 2002, among the Subordinated Note Trustee, BWAY Finance and,
upon the execution and delivery of the Supplemental Indenture by each of the
parties thereto, BWAY and, for purposes of the guarantee provisions therein,
BMI, as the same may be modified, amended, extended, restated, amended and
restated or supplemented from time to time, to the extent permitted hereunder,
including, without limitation, pursuant to the Supplemental Indenture.
"Subordinated Note Trustee" shall mean The Bank of New York, acting in
its capacity as trustee under the Subordinated Indenture, and all Persons
succeeding thereto in such capacity pursuant to the terms of thereof.
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"Subordinated Notes" shall have the meaning ascribed to the term "Notes"
in the Subordinated Note Indenture.
"Subsidiary" shall mean, with respect to any Person at any time (a) any
other Person the accounts of which would be consolidated with those of such
first Person in its consolidated financial statements as of such time, and (b)
any other Person the Capital Securities of which having ordinary voting power to
elect a majority of the board of directors (or other persons having similar
functions), or other ownership interests of which ordinarily constituting a
majority voting interest, are at such time, directly or indirectly, owned by
such first Person, or by one or more of its Subsidiaries, or by such first
Person and one or more of its Subsidiaries.
"Supplemental Indenture" shall mean that certain Supplemental Indenture
dated as of February 7, 2003, among BWAY Finance, BWAY, BMI and the Subordinated
Note Trustee, as the same may be modified, amended, extended, restated, amended
and restated or supplemented from time to time, to the extent permitted
hereunder.
"Tax Transferee" shall have the meaning ascribed to that term in Section
2.8(a).
"Taxes" shall have the meaning ascribed to that term in Section 2.8(a).
"Termination Event" shall mean (a) a Reportable Event with respect to
any Benefit Plan or Multiemployer Plan; (b) the withdrawal of any Credit Party,
any Subsidiary of any Credit Party or any ERISA Affiliate from a Benefit Plan
during a plan year in which such entity was a "substantial employer" as defined
in Section 4001(a) (2) of ERISA; (c) the providing of notice of intent to
terminate a Benefit Plan under Section 4041 of ERISA; (d) the institution by the
PBGC of proceedings to terminate or appoint a trustee to administer a Benefit
Plan or Multiemployer Plan; (e) any event or condition (i) that could reasonably
be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
or, to the knowledge of any Credit Party or any Subsidiary of a Credit Party,
that could reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Multiemployer Plan or (ii) to the knowledge of any Credit Party or any
Subsidiary of a Credit Party, that could reasonably be expected to result in the
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (f)
the partial or complete withdrawal within the meaning of Sections 4203 and 4205
of ERISA, of any Credit Party, any Subsidiary of any Credit Party or any ERISA
Affiliate from a Multiemployer Plan.
"Test Date" shall mean, with respect to any Start Date, the last day of
the most recent Fiscal Quarter ended immediately prior to such Start Date.
"Test Period" shall mean each period of four consecutive Fiscal Quarters
then last ended (in each case taken as one accounting period).
"Total Commitments" shall mean the aggregate of the Commitments of all
the Lenders, which in the aggregate shall not exceed $90,000,000.
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"Total Exposure" shall mean, at any time, an amount equal to the sum at
such time of (a) the Letter of Credit Outstandings and (b) the aggregate
principal amount of outstanding Loans.
"Trigger Event" shall mean (a) availability under the Borrowing Base is
less than $20,000,000 for any period of five (5) consecutive Business Days (and
the Agent agrees to give prompt notice to the Funds Administrator if
availability under the Borrowing Base is less than $20,000,000 on any Business
Day); or (b) the Borrowers permit the Consolidated Fixed Charge Coverage Ratio,
as determined as of the last day of four (4) consecutive Fiscal Quarters, in
each case for the twelve (12) Fiscal Months ending on such date, to be less than
1:00 to 1:00.
"Type" shall mean, with respect to any Loan, whether such Loan is a
LIBOR Rate Loan or a Prime Rate Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York; provided that if, with respect to any financing
statement or by reason of any provisions of law, the perfection or the effect of
perfection or non-perfection of the Liens granted to the Agent pursuant to the
applicable Credit Document is governed by the Uniform Commercial Code as in
effect in a jurisdiction of the United States other than the State of New York,
"UCC" shall mean the Uniform Commercial Code as in effect from time to time in
such other jurisdiction for purposes of the provisions of this Credit Agreement,
each Credit Document and any financing statement relating to such perfection or
effect of perfection or non-perfection.
"Unpaid Drawing" shall have the meaning ascribed to such term in Section
3.5(a).
"Unused Line Fee" shall have the meaning ascribed to that term in
Section 4.5.
"Wholly-Owned Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person all of the Capital Securities of which (except
directors' qualifying shares) are, directly or indirectly, owned by such Person
or one or more Wholly Owned Subsidiaries of such Person or by such Person and
one or more of such Wholly-Owned Subsidiaries.
1.2 AMENDMENT AND RESTATEMENT OF ORIGINAL CREDIT AGREEMENT; NO
NOVATION.
(a) Subject to the terms and conditions set forth in this Credit
Agreement, and in reliance upon the representations and warranties of the
respective Credit Parties set forth herein and in the other Credit Documents,
effective as of the date hereof, the Original Credit Agreement is hereby amended
and restated in its entirety.
(b) It is expressly understood and agreed by each of the parties
hereto that (i) the "Obligations" (as such term is defined in this Credit
Agreement) mean and include all "Obligations" (as such term is defined in the
Original Credit Agreement) outstanding or otherwise existing on and as of the
date hereof (such Obligations being herein referred to as the "Original
Obligations"); (ii) the Original Obligations shall be payable hereafter in
accordance with the respective terms and provisions hereof; and (iii) this
Credit Agreement and any Notes issued hereunder (1) merely re-evidence, ratify
and confirm the Original Obligations, (2) in the case of any such Notes, are
given in substitution for and not in repayment of any Notes issued
- 34 -
under the Original Credit Agreement, and (3) are in no way intended and shall
not be deemed or construed to constitute a novation of the Original Credit
Agreement or any Notes issued thereunder. All letters of credit outstanding
under the Original Credit Agreement and set forth on Schedule B, Part 1.2(b)
(collectively, the "Existing Letters of Credit") shall for all purposes of this
Credit Agreement and each of the other Credit Documents be deemed issued and
outstanding under, and otherwise governed in all respects by, the applicable
terms and provisions of, this Credit Agreement.
1.3 REAFFIRMATION OF ORIGINAL CREDIT DOCUMENTS. Each Borrower, in
the respective capacities of such Borrower (and any predecessor in interest to
such Borrower) under the Original Credit Agreement and each of the other "Credit
Documents" (as such term is defined in the Original Credit Agreement, and herein
referred to as the "Original Credit Documents") to which such Borrower (or any
predecessor in interest to such Borrower) is a party (including the respective
capacities of accommodation party, assignor, grantor, guarantor, indemnitor,
mortgagor, obligor and pledgor, as applicable, and each other similar capacity,
if any, in which such Borrower (or any predecessor in interest to such Borrower)
granted Liens on all or any part of its properties and assets, or otherwise
acted as an accommodation party, guarantor, indemnitor or surety with respect to
all or any part of the Original Obligations), hereby (a) agrees that, except as
otherwise expressly set forth herein, the terms and provisions hereof shall not
affect in any way any payment, performance, observance or other obligations or
liabilities of such Borrower hereunder or under any of the other Original Credit
Documents, all of which obligations and liabilities are hereby ratified,
confirmed and reaffirmed in all respects, and (b) to the extent such Borrower
has granted Liens on any of its properties or assets pursuant to any of the
Original Credit Documents to secure the payment, performance and/or observance
of all or any part of the Original Obligations, acknowledges, ratifies, confirms
and reaffirms such grant of Liens, and acknowledges and agrees that all of such
Liens are intended and shall be deemed and construed to secure to the fullest
extent set forth therein all now existing and hereafter arising Obligations
under and as defined in this Credit Agreement, as hereafter amended, restated,
supplemented and otherwise modified and in effect from time to time.
1.4 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise defined or
specified herein, all accounting terms used herein shall have the meanings
customarily given in accordance with GAAP, and all financial computations to be
made under this Credit Agreement shall, unless otherwise specifically provided
herein, be made in accordance with GAAP applied on a basis consistent in all
material respects with the Financial Statements delivered to the Agent and the
Lenders on the Closing Date. All accounting determinations for purposes of
determining compliance with Section 8.1 shall be made in accordance with GAAP as
in effect on the Closing Date and applied on a basis consistent in all material
respects with the Financial Statements delivered to the Agent and the Lenders on
the Closing Date. The Financial Statements required to be delivered hereunder
from and after the Closing Date and all financial records shall be maintained in
accordance with GAAP as in effect as of the date of the Financial Statements
delivered to the Agent and the Lenders on the Closing Date or, if GAAP shall
change from the basis used in preparing the Financial Statements delivered to
the Agent and the Lenders on the Closing Date, the certificates required to be
delivered pursuant to Section 7.1 demonstrating compliance with the covenants
contained herein shall include calculations setting forth the adjustments
necessary to demonstrate how the Borrowers are in compliance with the financial
- 35 -
covenants based upon GAAP as in effect on the Closing Date. If any Borrower
shall change its method of inventory accounting from the first-in-first-out
method to the last-in-last-out method, all calculations necessary to determine
compliance with the covenants contained herein shall be made as if such method
of inventory accounting had not been so changed.
1.5 OTHER INTERPRETIVE PROVISIONS. Terms not otherwise defined
herein which are defined in the UCC shall have the meanings given them in the
UCC. The words "hereof," "herein" and "hereunder" and words of similar import
when used in this Credit Agreement shall refer to this Credit Agreement as a
whole and not to any particular provision of this Credit Agreement, and
references to Article, Section, Annex, Schedule, Exhibit and like references are
references to this Credit Agreement unless otherwise specified. Any item or list
of items set forth following the word "including," "include" or "includes" is
set forth only for the purpose of indicating that, regardless of whatever other
items are in the category in which such item or items are "included," such item
or items are in such category, and shall not be construed as indicating that the
items in the category are limited to such items or to items similar to such
items. An Event of Default shall "continue" or be "continuing" until such Event
of Default has been waived in accordance with Section 11.10. Except as otherwise
specified herein, all references herein (a) to any Person shall be deemed to
include such Person's successors and permitted assigns, (b) to any Requirement
of Law defined or referred to herein shall be deemed references to such
Requirement of Law or any successor Requirement of Law as the same may have been
or may be amended or supplemented from time to time and (c) to any Credit
Document shall be deemed references to such Credit Document (and, in the case of
any Note or any other instrument, any instrument issued in replacement thereof
or substitution therefor) as the terms thereof may have been or may be amended,
supplemented, waived or otherwise modified from time to time, provided that, in
the case of any Letter of Credit, any such amendment, supplement, waiver or
other modification shall have been approved in writing by the Agent. Whenever
the context so requires, the neuter gender includes the masculine or feminine,
the masculine gender includes the feminine, and the singular number includes the
plural, and vice versa. Except as otherwise specified herein, all references to
the time of day shall be deemed to be to New York City time as then in effect.
ARTICLE 2
LOANS
2.1 COMMITMENTS; DELIVERY OF NOTES.
(a) (a) Subject to the terms and conditions set forth in this Credit
Agreement, each of the Lenders severally agrees (i) to continue as Loans
hereunder all of the "Loans" (as such term is defined in the Original Credit
Agreement) outstanding on the Closing Date, and (ii) on and after the Closing
Date and to and excluding the Expiration Date, to make from time to time loans
and advances to the Borrowers hereunder on a joint and several basis (the
"Loans"); provided that no Loan shall be made if, after giving effect to the
making of such Loan and the simultaneous application of the proceeds thereof,
(i) the aggregate amount of the Exposure of such Lender would exceed the
Commitment of such Lender or (ii) Total Exposure would exceed the lesser of (A)
the Total Commitments and (B) subject to Section 2.2(b), the Borrowing Base.
- 36 -
(b) At the request of any Lender made through the Agent, the
Borrowers hereby agree to execute and deliver to such Lender a Note to evidence
the Loans made to the Borrowers by such Lender.
2.2 BORROWING MECHANICS.
(a) Except as provided in Sections 2.2(b), 2.3(b) and 4.8,
Borrowings shall be made on notice from the Funds Administrator to the Agent,
given not later than 12:00 noon on the Business Day on which a proposed
Borrowing consisting of Prime Rate Loans is requested to be made and on the
third Business Day prior to the date of any proposed Borrowing consisting of
LIBOR Rate Loans is requested to be made.
(i) Each Notice of Borrowing shall be given by,
alternatively, telephone, facsimile or electronic E-mail transmission, and, if
by telephone or electronic E-mail transmission, confirmed in writing,
substantially in the form of Exhibit C (the "Notice of Borrowing"). Each Notice
of Borrowing shall be irrevocable by and binding on the Funds Administrator and
the Borrowers.
(ii) The Funds Administrator shall notify the Agent in
writing of the names of the employees of the Funds Administrator authorized to
request Loans on behalf of the Borrowers and specifying which of those employees
are also, or, if none are, the employees that are, authorized to direct the
disbursement of Loans in a manner contrary to standing disbursement
instructions, and shall provide the Agent with a specimen signature of each such
employee, it being understood that until further notice from the Funds
Administrator, those employees authorized, respectively, to request Loans and
direct the disbursement of Loans on the date hereof under the Original Credit
Agreement continue to be so authorized. In the absence of a specification of
those employees who are authorized to vary standing disbursement instructions,
the Agent may assume that each employee authorized to request Loans also has
such authority. The Agent shall be entitled to rely conclusively on the
authority of such employees of the Funds Administrator to request Loans on
behalf of the Borrowers, or to vary standing disbursement instructions, until
the Agent receives written notice to the contrary. The Agent shall have no duty
to verify the authenticity of the signature appearing on any Notice of Borrowing
or other writing delivered pursuant to this Section 2.2(a) and, with respect to
an oral or electronic E-mail request for Loans, the Agent shall have no duty to
verify the identity of any individual representing himself as one of the
employees of the Funds Administrator authorized to make such request on behalf
of the Borrowers. Neither the Agent nor any of the Lenders shall incur any
liability to the Funds Administrator or any of the Borrowers as a result of (a)
acting upon any telephonic or electronic E-mail notice referred to in this
Section 2.2(a) if the Agent believes in good faith such notice to have been
given by a duly authorized employee of the Funds Administrator or other
individual authorized to request Loans on behalf of the Borrowers or to direct
the disbursement thereof in a manner contrary to standing disbursement
instructions, or (b) otherwise acting in good faith under this Section 2.2(a)
and an advance made and disbursed pursuant to any such telephonic or electronic
E-mail notice in accordance with this Credit Agreement shall be deemed to be a
Loan for all purposes of this Credit Agreement.
(iii) In its Notice of Borrowing, the Funds Administrator may
request one or more Borrowings on a single day. Each such Borrowing shall,
unless otherwise specifically
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provided herein, consist entirely of Loans of the same Type and shall, in the
case of a Borrowing of LIBOR Rate Loans, be in an aggregate amount for all
Lenders of not less than $2,000,000 or an integral multiple of $1,000,000 in
excess thereof. The right of the Funds Administrator to choose LIBOR Rate Loans
is subject to the provisions of Section 4.3(c).
(b) (i) In the event the Borrowers are unable to comply with (A)
the Borrowing Base limitation set forth in clause (ii)(B) of the proviso to
Section 2.1(a) or (B) the conditions precedent set forth in Section 5.2 to a
Credit Event, the Lenders authorize the Agent, in its sole discretion, to make
Loans ("Interim Advances") to the Borrowers during the period commencing on the
date the Agent first receives a Notice of Borrowing requesting an Interim
Advance until the earliest of (1) the twentieth (20th) Business Day after such
date, (2) the date the Borrowers are again able to comply with such Borrowing
Base limitation and conditions precedent, or obtains an amendment or waiver with
respect thereto and (3) the date the Majority Lenders instruct the Agent, or the
Agent determines, to cease making Interim Advances (in each case, the "Interim
Advance Period").
(ii) The Agent shall not, in any event, (A) make any Interim
Advance during any Interim Advance Period if, after giving effect to such
Interim Advance, Total Exposure would exceed one hundred ten percent (110%) of
Total Exposure on the first day of such Interim Advance Period (calculated
without giving effect to Interim Advances made on such day) and (B) make any
Interim Advance if, after giving effect to such Interim Advance, Total Exposure
would exceed the Line of Credit.
(iii) All amounts received by the Agent during an Interim
Advance Period on account of the Obligations, whether in the form of payments
from any Borrower, collections on the Collateral or otherwise, shall, so long as
any Interim Advances made during such Interim Advance Period are outstanding, be
applied by the Agent, first, to the repayment of such Interim Advances and,
second , in accordance with Section 2.5(d).
(c) The failure of any Lender to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
(d) In addition to being evidenced, as provided in Section 2.6, by
the Borrowers' Account, each Lender's Loans and the Borrowers' joint and several
obligations to repay such Loans with interest in accordance with the terms of
this Credit Agreement shall be evidenced by this Credit Agreement, the records
of such Lender and such Lender's Note. The Borrowers' Account and the Register
shall be prima facie evidence of each Lender's Loans and accrued interest
thereon and of all payments made in respect thereof.
(e) Each Lender shall be entitled to earn interest at the then
applicable rate of interest, calculated in accordance with Article 4, on
outstanding Loans which it has funded to the Agent; provided that in the case of
interest accrued but unpaid at the time of a Bankruptcy Default and interest
accruing thereafter and during a Bankruptcy Default, such Lender shall be
entitled to receive only its Proportionate Share of amounts actually received by
the Agent in respect of such interest; further provided that if any amount
received by the Agent in respect of such interest
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and distributed by it is thereafter recovered from the Agent, such Lender shall,
upon request, repay to the Agent its Proportionate Share of the amount so
recovered to the extent received by it, but without interest (unless the Agent
is required to pay interest on the amount recovered, in which case such Lender
shall be required to pay interest at a like rate).
(f) Notwithstanding the obligation of the Funds Administrator to
send written confirmation of a Notice of Borrowing made by the Funds
Administrator by telephone or electronic E-mail transmission if and when
requested by the Agent, in the event that the Agent agrees to accept a Notice of
Borrowing made by the Funds Administrator by telephone or electronic E-mail
transmission, such Notice of Borrowing shall be binding on the Funds
Administrator and each Borrower whether or not written confirmation is sent by
the Funds Administrator or requested by the Agent. The Agent may act prior to
the receipt of any requested written confirmation, without any liability
whatsoever, based upon telephonic or electronic E-mail notice believed by the
Agent in good faith to be from the Funds Administrator or its agents. The
Agent's records of the terms of any telephonic or electronic E-mail transmission
Notices of Borrowing shall absent manifest error be conclusive on the Funds
Administrator and each Borrower and Lender in the absence of gross negligence or
willful misconduct on the part of the Agent in connection therewith.
2.3 SETTLEMENTS AMONG THE AGENTS AND THE LENDERS.
(a) Except as provided in Section 2.3(b), the Agent shall give to
each Lender prompt notice of each Notice of Borrowing by telecopy or facsimile
transmission. No later than 3:00 P.M. on the date of receipt of each Notice of
Borrowing (unless such Notice of Borrowing specifies the Closing Date as the
date of Borrowing, in which case no later than 12:00 noon on the Closing Date),
each Lender will make available for the account of its Applicable Lending
Office, to the Agent at the address of the Agent set forth on Annex II, in
immediately available funds, its Proportionate Share of such Borrowing requested
to be made. Unless the Agent shall have been notified by any Lender prior to the
date of Borrowing that such Lender does not intend to make available to the
Agent its portion of the Borrowing to be made on such date, the Agent may assume
that such Lender will make such amount available to the Agent on the Settlement
Date and the Agent, in reliance upon such assumption, may but shall not be
obligated to make available the amount of the Borrowing to be provided by such
Lender. If and to the extent such Lender shall not have so made available to the
Agent its Proportionate Share on such date and the Agent shall have so made
available to the Borrowers a corresponding amount on behalf of such Lender, the
Agent may recover such amount on demand from such Lender in accordance with
Section 11.18. If such Lender does not pay such corresponding amount promptly
upon the Agent's demand therefor, the Agent may promptly notify the Funds
Administrator and the Borrowers shall immediately repay such corresponding
amount to the Agent together with accrued interest thereon at the applicable
rate or rates provided in Sections 4.1, 4.2, and 4.4.
(b) Unless the Majority Lenders have instructed the Agent to the
contrary, the Agent on behalf of the Lenders may but shall not be obligated to
make Prime Rate Loans under Section 2.2 without prior notice of the proposed
Borrowing to the Lenders, subject to the following settlement arrangements:
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(i) The amount of each Lender's Proportionate Share of Loans
shall be computed weekly (or more frequently in the Agent's discretion) and
shall be adjusted upward or downward on the basis of the amount of outstanding
Loans as of 5:00 P.M. on the last Business Day of the period specified by the
Agent (such date, the "Settlement Date"). The Agent shall deliver to each of the
Lenders promptly after the Settlement Date a summary statement of the amount of
outstanding Loans for such period. The Lenders shall transfer to the Agent, or,
subject to Section 11.18(c)(i), the Agent shall transfer to the Lenders, such
amounts as are necessary so that (after giving effect to all such transfers) the
amount of Loans made by each Lender shall be equal to such Lender's
Proportionate Share of the aggregate amount of Loans outstanding as of such
Settlement Date. During a Bankruptcy Default, amounts required to be transferred
by the Lenders to the Agent shall, instead of constituting Loans to the
Borrowers, be in the form of participations purchased by the Lenders in the
outstanding Loans of DBTCo. If the summary statement is received by the Lenders
prior to 12:00 noon on any Business Day, each Lender shall make the transfers
described above in immediately available funds no later than 3:00 P.M. on the
day such summary statement was received; and if such summary statement is
received by the Lenders after 12:00 noon on such day, each Lender shall make
such transfers no later than 3:00 P.M. on the next succeeding Business Day. The
obligation of each of the Lenders to transfer such funds shall be irrevocable
and unconditional and without recourse to or warranty by the Agent. Each of the
Agent and the Lenders agrees to xxxx its books and records on the Settlement
Date to show at all times the dollar amount of its Proportionate Share of the
outstanding Loans.
(ii) To the extent that the settlement described above shall
not yet have occurred, upon repayment of Loans by the Borrowers, the Agent may
first apply such amounts repaid directly to the amounts made available by the
Agent pursuant to this Section 2.3(b).
(iii) Because the Agent on behalf of the Lenders may be
advancing and/or may be repaid Loans prior to the time when the Lenders will
actually advance and/or be repaid Loans, interest with respect to Loans shall be
allocated by the Agent to each Lender and the Agent in accordance with the
amount of Loans actually advanced by and repaid to each Lender and the Agent and
shall accrue from and including the date such Loans are so advanced to but
excluding the date such Loans are either repaid by the Borrowers in accordance
with Section 2.4 or actually settled by the applicable Lender as described in
this Section 2.3(b).
2.4 MANDATORY REPAYMENTS: MANDATORY REDUCTION OF COMMITMENTS.
(a) Except during an Interim Advance Period, the amount by which
Total Exposure exceeds the Borrowing Base at any time shall be immediately due
and payable without the necessity of any demand. Repayments of such excess
amounts shall be applied, first, to the repayment of Loans, second, to the
payment of outstanding reimbursement obligations with respect to Letters of
Credit, and, third, to the securing, with cash or Cash Equivalents as provided
in the second paragraph of Section 9.2 (but without the requirement of any
demand provided for in such paragraph), of the Letter of Credit Outstandings (in
each case to the extent the same are such by virtue of clause (a) of the
definition thereof).
(b) (i) On the Expiration Date, the Commitment of each Lender
shall automatically reduce to zero and may not be reinstated.
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(ii) The Borrowers may reduce or terminate the Line of Credit
at any time and from time to time in whole or in part, without premium or
penalty, by reducing or terminating the Commitments, any such reduction or
termination to be pro rata on the amounts at the time of the Commitments;
provided that each such reduction must be in an amount not less than $5,000,000
(and in increments of $1,000,000); and provided further that (A) if the
Borrowers seek to reduce the Line of Credit to an amount less than $25,000,000,
then the Line of Credit shall be reduced to zero and this Credit Agreement shall
be terminated and (B) once reduced the amount of any such reductions in the Line
of Credit may not be reinstated.
(iii) The amount by which Total Exposure exceeds the aggregate
amount of the Commitments at any time shall be immediately due and payable
without the necessity of any notice or demand. Repayments of such excess amounts
shall be applied, first, to the repayment of Loans, second, to the payment of
Unpaid Drawings, and, third, to the securing, with cash or Cash Equivalents as
provided in the second paragraph of Section 9.2 (but without the requirement of
any demand provided for in such paragraph), of the Letter of Credit Outstandings
(in each case to the extent the same are such by virtue of clause (a) of the
definition thereof).
2.5 PAYMENTS AND COMPUTATIONS.
(a) (i) The Borrowers shall, subject, in the case of payments in
respect of Letters of Credit, to Section 3.5, make each payment under the Credit
Documents and under the Notes not later than 2:00 P.M. on the day when due and
payable in Dollars to the Agent at the Payment Office in immediately available
funds. The obligations of the Borrowers to the Lenders with respect to such
payments shall be discharged by making such payments to the Agent pursuant to
this Section 2.5 or by the Agent, in its discretion, adding such payments to the
principal amount of the Loans outstanding by charging such payments to the
Borrowers' Account pursuant to Section 2.6.
(ii) Amounts payable by the Borrowers in respect of any
Letter of Credit should be made by the Funds Administrator to the Agent.
(b) (i) On or prior to the Closing Date, BMI (and, after the
Closing Date, any other Borrower requested from time to time by the Agent) shall
establish and shall maintain one or more Lockboxes (with respect to each such
Borrower, such Borrower's "Lockboxes") and shall instruct all account debtors on
the Accounts of such Borrower to remit all payments to such Borrower's
Lockboxes. All amounts received by any Borrower from any account debtor, in
addition to all other cash received from any other source (including, without
limitation, Net Disposition Proceeds, as and when received in cash, but
excluding Net Equity Proceeds, to the extent the use or proposed use of such Net
Equity Proceeds could not reasonably be expected to result in a Default or an
Event of Default), shall upon receipt be deposited into a Depositary Account.
(ii) Each Borrower required to establish and maintain
Lockboxes pursuant to Section 2.5(b)(i), the Agent and one or more financial
institutions selected by such Borrower and reasonably acceptable to the Agent
(each a "Depositary Account Bank") shall enter into agreements in form and
substance satisfactory to the Agent (each a "Depositary Account Agreement"),
providing, among other things, that (A) the Agent will open an account at each
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Depositary Account Bank (each a "Depositary Account") and (B) all receipts
received in the Lockboxes of each Borrower shall be transferred at the end of
each day to the appropriate Depositary Account.
(iii) The closing of any Lockbox or Depositary Account and the
termination of any Depositary Account Agreement shall require in each case the
prior written consent of the Agent.
(c) Upon the terms and subject to the conditions set forth in the
applicable Depositary Account Agreement, all available amounts held in each
Depositary Account shall be wired each Business Day into an account (the "DBTCo
Account") maintained by the Agent at DBTCo.
(d) (i) All amounts received by the Agent for distribution
hereunder shall, subject to Section 2.2(b)(iii), be distributed in the following
order:
first, to the payment of any Fees, Expenses or other
Obligations then due and payable to the Agent under any of the
Credit Documents, including amounts advanced by the Agent on
behalf of the Lenders pursuant to Section 2.3(b);
second, during a Bankruptcy Default, to the payment of
the unpaid principal amounts of all Unpaid Drawings payable to
each Issuing Lender, together with accrued but unpaid interest
thereon at the LC Interest Rate;
third, to the ratable payment of any Fees and other
Obligations then due and payable to the Lenders under any of the
Credit Documents, other than to a Lender in its capacity as an
Issuing Lender and other than those Obligations specifically
referred to in this Section 2.5(d)(i);
fourth, to the ratable payment of interest due and
payable on the Loans;
fifth, to the ratable payment of principal due and
payable on the Loans; and
sixth, to the ratable payment of other Liabilities not
specifically referred to in this Section 2.5(d) then due and
payable to the Issuing Lenders with respect to Letters of
Credit.
(ii) Each Person receiving a payment from the Agent pursuant
to Section 2.5(d)(i) shall, for all purposes of this Credit Agreement and other
Credit Documents, be deemed to have applied that payment in the order specified
in Section 2.5(d)(i).
2.6 MAINTENANCE OF ACCOUNT. The Agent shall maintain an account
("Borrowers' Account") on its books in the name of the Borrowers in which the
Borrowers will be charged with all loans and advances made by the Lenders to the
Borrowers or for the Borrowers' account, including the Loans, the Fees, the
Expenses and any other Obligations. The Borrowers will be credited, in
accordance with Section 2.5 above, with all amounts received by the Agent or the
Lenders from the Borrowers or from others for the Borrowers' account, including,
as set forth above, all amounts received by the Agent in payment of Accounts. In
no event shall prior
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recourse to any Accounts or other Collateral be a prerequisite to the Agent's
right to demand payment of any Obligation upon its maturity. Further, the Agent
shall have no obligation whatsoever to perform in any respect any of the
contracts or obligations relating to the Accounts.
2.7 STATEMENT OF ACCOUNT. After the end of each month, the Agent
shall send the Funds Administrator a statement accounting for the charges,
loans, advances and other transactions occurring among and between the Agent,
the Lenders, the Funds Administrator and the Borrowers during that month. In the
event that the Funds Administrator does not object in writing to any information
reflected in any such monthly statement within thirty (30) days of its receipt
thereof, such statement shall, absent manifest error, be an account stated,
which is final, conclusive and binding on the Borrowers.
2.8 WITHHOLDING AND OTHER TAXES.
(a) Any and all payments by the Borrowers hereunder, under the Notes
or in respect of Letters of Credit which are made, to or for the benefit of any
Lender (whether in its capacity as a Lender or an Issuing Lender, and as used in
Section 2.8, the term "Lender" shall mean a Lender in each such capacity, and
shall also include each Serving Affiliate of such Lender) or the Agent shall,
except as may be required by law, be made, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings and penalties, interests and all other liabilities with
respect thereto ("Taxes"), excluding, (i) in the case of each such Lender, or
the Agent, Taxes imposed on, or measured by, its net income (including any Taxes
imposed on branch profits) and franchise Taxes, Taxes on capital and other
"doing business" Taxes imposed on it by the United States or the jurisdiction
under the laws of which such Lender, or the Agent (as the case may be), is
organized or any political subdivision thereof, (ii) in the case of each such
Lender, Taxes imposed on, or measured by, its net income (including any Taxes
imposed on branch profits), and franchise Taxes, Taxes on capital and other
"doing business" Taxes imposed on it, by the jurisdiction of such Lender's
Applicable Lending Office or any political subdivision thereof, (iii) in the
case of each such Lender, or the Agent, Taxes that would not have been imposed
if the only connection between such Person and the jurisdiction imposing such
Taxes was the activities of such Person pursuant to or in respect of this Credit
Agreement, (iv) in the case of each such Lender, Taxes that would not been
imposed but for the sale of a participation pursuant to Section 11.6(g), (v) in
the case of any Lender or Tax Transferee, as the case may be, Taxes that would
not have been imposed if such Lender or Tax Transferee, as the case may be, had
complied with the provisions of Section 2.8(e) or (f), as applicable, (vi) in
the case of each such Lender, and the Agent, any Taxes that are in effect and
that would apply to a payment to or for the benefit of such Lender, or Agent, as
applicable, as of the Closing Date, and (vii) if any Person acquires any
interest in this Credit Agreement, any Note or any participation interest in any
Letter of Credit pursuant to the provisions of Section 3.4, or a Lender or the
Agent changes the office in which any Loan or any participation interest in any
Letter of Credit is made, accounted for or booked, or a Lender or an Issuing
Lender changes the office at which any Letter of Credit is maintained (any such
Person, or such Lender or the Agent in that event, being referred to as a "Tax
Transferee"), any Taxes to the extent that they are in effect and would apply to
a payment to or for the benefit of such Tax Transferee as of the date of the
acquisition of such interest or change in office, as the case may be (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes"). If any
Borrower shall be required by law to deduct any Covered Taxes from or in respect
of any sum payable hereunder, under any
- 43 -
Note or in respect of any Letter of Credit to or for the benefit of any Lender,
the Agent or any Tax Transferee, (A) the sum payable shall be increased as may
be necessary so that after making all required deductions of Covered Taxes
(including deductions of Covered Taxes applicable to additional sums payable
under this Section 2.8) such Lender, the Agent or such Tax Transferee, as the
case may be, receives an amount equal to the sum it would have received had no
such deductions been made, (B) such Borrower shall make such deductions and (C)
such Borrower shall pay the full amount so deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, each Borrower agrees to pay any present or future
stamp, documentary, excise, privilege, intangible or similar levies that arise
at any time or from time to time (i) from any payment made under any and all
Credit Documents, or (ii) from the execution or delivery by any Credit Party of,
or from the filing or recording or maintenance of, or otherwise with respect to
the exercise by the Agent or the Lenders of their rights under, any and all
Credit Documents (hereinafter referred to as "Other Taxes").
(c) The Borrowers will jointly and severally indemnify each Lender,
the Agent, and any Tax Transferee for the full amount of (i) Covered Taxes
imposed on or with respect to amounts payable hereunder under any Note or in
respect of any Letter of Credit, and (ii) Other Taxes. Payment of this
indemnification shall be made within thirty (30) days from the date such Lender,
the Agent or such Tax Transferee certifies and sets forth in writing and in
reasonable detail the calculation thereof as to the amount and type of such
Taxes. Any such certificate submitted by such Lender, the Agent or such Tax
Transferee in good faith to Borrowers shall, absent manifest error, be final,
conclusive and binding on all parties.
(d) Within 30 days after having received a receipt for Covered Taxes
or Other Taxes, the Funds Administrator will furnish to the Agent, at its
address referred to in Section 11.5, the original or a certified copy of a
receipt evidencing payment thereof.
(e) On or before the Closing Date, (i) each Lender that is a Foreign
Lender shall deliver to the Agent and the Funds Administrator two valid, duly
completed copies of either IRS Form W-8BEN or W-8ECI or successor applicable
form, as the case may be, and any other required form, and (ii) at the request
of the Funds Administrator, each Lender that is not a Foreign Lender shall
deliver to the Agent and the Funds Administrator two valid, duly completed
copies of IRS Form W-9 or successor applicable form, as the case may be, and any
other required form, certifying in each case that such Lender is entitled to
receive payments under this Credit Agreement, the Notes or any Letter of Credit
payable to it without deduction or withholding of any United States federal
income taxes. Each Lender that is a Foreign Lender and, at the request of the
Funds Administrator, each Lender that is not a Foreign Lender shall also deliver
to the Agent and the Funds Administrator two further copies of said Form X-0XXX,
X-0XXX or W-9, as applicable, or successor applicable forms, or other manner of
required certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from a required withholding of United States
federal income tax or after the occurrence of any event requiring a change in
the most recent form previously delivered by it to the Funds Administrator and
the Agent, and such extensions or renewals thereof as may reasonably be
requested by the Funds Administrator and the Agent, certifying that such Lender
is entitled to receive payments
- 44 -
under this Credit Agreement, the Notes or any Letter of Credit payable to it
without deduction or withholding of any United States federal income taxes
unless in any such case any change in a tax treaty to which the United States is
a party, or any change in law or regulation of the United States or official
interpretation thereof has occurred after the Closing Date and prior to the date
on which any such delivery would otherwise be required that renders all such
forms inapplicable or that would prevent such Lender from duly completing and
delivering any such form with respect to it, and such Lender advises the Funds
Administrator and the Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
(f) If a Tax Transferee that is not a "United States person" within
the meaning of Section 7701(a)(30) of the Code acquires an interest in this
Credit Agreement, any Note, any participation interest in any Letter of Credit
or any of the other Credit Documents or a Foreign Lender changes the office
through which Loans or any other obligations are made, accounted for or booked,
or a Foreign Lender if an Issuing Lender, changes the office at which any Letter
of Credit is maintained, the transferor, or the applicable Foreign Lender, in
the case of a change of office, shall cause such Tax Transferee to agree that,
on or prior to the effective date of such acquisition or change, as the case may
be, it will deliver to the Funds Administrator and the Agent two valid, duly
completed copies of IRS Form W-8BEN or W-8ECI or successor applicable form, as
the case may be, and any other required form, certifying in each case that such
Tax Transferee is entitled to receive payments under this Credit Agreement, the
Notes, each Letter of Credit and each of the other Credit Documents payable to
it without deduction or withholding of United States federal income tax. If a
Tax Transferee that is a "United States person" within the meaning of Section
7701(a)(30) of the Code acquires an interest in this Credit Agreement, any Note,
any participation interest in any Letter of Credit or any of the other Credit
Documents, at the request of the Funds Administrator, on the effective date of
such acquisition it will deliver to the Funds Administrator and the Agent two
valid, duly completed copies of IRS Form W-9 or successor applicable form, as
the case may be, and any other required form, certifying in each case that such
Tax Transferee is entitled to receive payments under this Credit Agreement, the
Notes, each Letter of Credit and each of the other Credit Documents payable to
it without deduction or withholding of United States federal income tax. At the
request of the Funds Administrator, each Tax Transferee that delivers to the
Funds Administrator and the Agent a Form X-0XXX, X-0XXX or W-9 and any other
required form, pursuant to the next two preceding sentences, further undertakes
to deliver two further copies of the said forms, or successor applicable forms,
or other manner of required certification, as the case may be, on or before the
date that any such form expires or becomes obsolete or otherwise is required to
be resubmitted as a condition to obtaining an exemption from a required
withholding of United States federal income tax or after the occurrence of any
event requiring a change in the most recent form previously delivered by it to
the Funds Administrator and the Agent, and such extensions or renewals thereof
as may reasonably be requested by the Funds Administrator and the Agent,
certifying that such Tax Transferee is entitled to receive payments under this
Credit Agreement, the Notes and any Letter of Credit without deduction or
withholding of any United States federal income taxes, unless any change in a
tax treaty to which the United States is a party, or any change in law or
regulation or official interpretation thereof has occurred after the effective
date of such acquisition or change and prior to the date on which any such
delivery would otherwise be required that renders all such forms inapplicable or
that would prevent such
- 45 -
Tax Transferee from duly completing and delivering any such form with respect to
it, and such Tax Transferee advises the Funds Administrator and the Agent that
it is not capable of receiving payments without any deduction or withholding of
United States federal income tax.
(g) If any Taxes for which any Borrower would be required to make
payment under this Section 2.8 are imposed, the applicable Lender or the Agent,
as the case may be, shall (A) at the request of the Funds Administrator deliver
such validly executed forms or certificates as may be necessary to claim a
reduction in the rate of withholding or deduction to which the Lender or Agent,
as the case may be, is entitled and (B) use its best efforts to avoid or reduce
such Taxes by taking any other appropriate action (including assigning its
rights hereunder to a related entity or a different office) which would not in
the sole opinion of such Lender or the Agent be otherwise disadvantageous to
such Lender or the Agent, as the case may be.
(h) If any Lender, Agent or Tax Transferee receiving an
indemnification payment hereunder with respect to Taxes shall subsequently
receive a refund from any taxing authority which is attributable to such
indemnification payment, such Person shall promptly pay such refund (together
with any interest paid with respect to such refund) to the Borrowers.
(i) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in this Section 2.8 shall survive the payment in full of the Obligations.
(j) Each Lender shall cause each of its Serving Affiliates that is a
Foreign Lender to take the actions required to be taken by such Serving
Affiliate as a Foreign Lender under Section 2.8(e), (f), (g) and (h).
2.9 AFFECTED LENDERS. If any Borrower is obligated to pay to any
Lender (whether in its capacity as a Lender or an Issuing Lender) or any Serving
Affiliate of such Lender any amount under Sections 2.8 or 4.9, or if any Lender
is a Defaulting Lender, the Borrowers may, if no Default or Event of Default
then exists, replace such Lender or Serving Affiliate with another lender
reasonably acceptable to the Agent, and such Lender hereby agrees to be so
replaced or to cause such Serving Affiliate to be replaced, subject to the
following:
(a) (i) The Obligations of the Borrowers hereunder then due to
the Lender to be replaced (in its capacity as a Lender, and including such
increased or additional costs incurred from the date of notice to the Funds
Administrator of such increase or additional costs through the date such Lender
is replaced hereunder) shall be paid in full to such Lender concurrently with
such replacement; and
(ii) the Obligations of the Borrowers hereunder to the Lender
to be replaced in its capacity as an Issuing Lender, or to its Serving Affiliate
in such capacity, shall continue until (A) each Letter of Credit issued by that
Person has expired or been drawn in full, (B) all outstanding reimbursement
obligations with respect to such Letters of Credit, together with interest
thereon at the LC Interest Rate, shall have been paid in full, and (C) all other
Obligations in respect of Letters of Credit (other than contingent
indemnification Obligations to the extent that no claim giving rise thereto has
been asserted and remains unresolved or unsatisfied), to the
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extent then due and payable, have been paid in full and, to the extent not then
due and payable, been secured to the satisfaction of such Person.
(b) If such replacement is a result of increased costs under
Sections 2.8 or 4.9, the replacement Lender shall be a bank or other financial
institution that is not subject to such increased costs which caused the
Borrowers' election to replace any Lender hereunder, and each such replacement
Lender shall execute and deliver to the Agent such documentation satisfactory to
the Agent pursuant to which such replacement Lender is to become a party hereto,
conforming to the provisions of Section 11.6, with a Commitment equal to that of
the Lender being replaced and shall make Loans in the aggregate principal amount
equal to the aggregate outstanding principal amount of the Loans of the Lender
being replaced;
(c) Upon such execution of such documents referred to in clause (b)
and repayment of the amounts referred to in clause (a), the replacement lender
shall be a "Lender" with a Commitment as specified herein above and the Lender
being replaced shall cease to be a "Lender" hereunder, except with respect to
Sections 2.9(c), 3.6, 4.9, 11.7 and 11.8 of this Credit Agreement, which shall
survive as to such replaced Lender and except to the extent such Lender
continues to be an Issuing Lender pursuant to Section 2.9(a)(ii);
(d) The Agent shall reasonably cooperate in effectuating the
replacement of any Lender under this Section 2.9, but at no time shall the Agent
be obligated to initiate any such replacement;
(e) Any Lender replaced under this Section 2.9 shall be replaced at
the Borrowers' sole cost and expense and at no cost or expense to the Agent or
any of the Lenders; and
(f) If the Borrowers propose to replace any Lender pursuant to this
Section 2.9 because the Lender seeks reimbursement under either Section 2.8 or
4.9, then it must also use reasonable efforts to replace any other Lender who
seeks similar levels of reimbursement (as a percentage of such Lender's
Commitment) under such Sections.
2.10 SHARING OF PAYMENTS. (a) (i) If any Lender (including a
Lender in its capacity as an Issuing Lender) shall obtain any payment (whether
voluntary, involuntary, and whether through the exercise of any right of set-off
by virtue of its claim in any applicable bankruptcy, insolvency or other similar
proceeding being deemed secured by a Liability owed by it to any Credit Party,
including a claim deemed secured under Section 506 of the Bankruptcy Code, or
otherwise) (each a "Payment"), on account of (A) the Loans made by it, (B) its
participation interests in Letters of Credit; or (C) any of the other
Obligations due and payable to it in excess of its Proportionate Share of
payments on account of the Loans or participation interests in Letters of Credit
or such other Obligations obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the Loans made
by them, in their participation in Letters of Credit or their other such
Obligations as shall be then due and payable as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
however, provided that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and each such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according
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to the proportion of (1) the amount of such Lender's required repayment to (2)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect to the total
amount so recovered. Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.10 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of such Borrower in the amount of such
participation.
(ii) For purposes of this Section 2.10, all Unpaid Drawings
due and payable to any Issuing Lender shall be deemed to constitute "Loans" made
by such Issuing Lender, and such Issuing Lender agrees that it shall apply all
Payments received by it in its capacity as an Issuing Lender to the payment or
the collateralization of the Obligations that then constitute Unpaid Drawings
payable to such Issuing Lender before applying them to any other Obligations due
it.
(b) If an Issuing Lender is an Affiliate of a Lender, such Lender
shall cause such Affiliate to comply with the provisions of subsection (a)(i) of
Section 2.10 as fully as though such Affiliate were a Lender subject to such
subsection.
2.11 ALLOCATION OF LOANS AND EXPENSES.
(a) The Borrowers maintain an integrated cash management system
reflecting their interdependence on one another and the mutual benefits shared
among them as a result of their respective operations. In order to efficiently
fund and operate their respective businesses and minimize the number of
Borrowings which they will make under this Credit Agreement and thereby reduce
the administrative costs and record keeping required in connection therewith,
including the necessity to enter into and maintain separately identified and
monitored borrowing facilities, the Borrowers have requested, and the Agent and
the Lenders have agreed that, subject to Section 11.21, (i) all Loans will be
advanced to and for the account of the Borrowers on a joint and several basis to
the Disbursement Account and (ii) all Letters of Credit will be issued pursuant
to an LC Application executed by the Funds Administrator on behalf and for the
account of the Borrower or Borrowers specified by the Funds Administrator in
such application. Each Borrower hereby acknowledges that it will be receiving a
direct benefit from each Loan made and each Letter of Credit issued pursuant to
this Credit Agreement.
(b) In order to track more precisely the respective recipients of
the proceeds of each Loan and the Borrower or Borrowers receiving the primary
benefit from the issuance of each Letter of Credit, and to assist the Funds
Administrator, the Borrowers, the Agent and the Lenders in administering the
Loans and the Letters of Credit, each Borrower has agreed with the Agent and the
Lenders to cause the Funds Administrator to establish and maintain, and the
Funds Administrator hereby agrees to establish and maintain, accounts with
respect to each Borrower (each Borrower's "Allocation Account") in which the
Funds Administrator shall record its good faith allocation to each of the
Borrowers of (w) the proceeds, if any, of each Loan received by or for the
account of such Borrower, (x) payments made to the Agent on account of the
Obligations of such Borrower, (y) the aggregate face amount of all outstanding
Letters of Credit issued for the benefit of such Borrower, and (z) all
previously unallocated Expenses.
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(c) At the request of the Agent, as soon as available, but not later
than fifteen (15) Business Days after the last Business Day of each month ending
after the Closing Date, the Funds Administrator shall deliver to the Agent and
each Borrower a report prepared by or under the supervision of a Responsible
Officer of the Funds Administrator, and certified by such Responsible Officer,
setting forth with respect to each Borrower the balance of the Allocation
Account of such Borrower as of the end of, and all activity occurring in such
Allocation Account during, such month. Absent manifest error, each such monthly
statement shall be final, conclusive and binding on the respective Borrowers.
ARTICLE 3
LETTERS OF CREDIT
3.1 LETTERS OF CREDIT.
(a) Subject to and upon the terms and conditions set forth herein,
the Funds Administrator may, at any time and from time to time on and after the
Closing Date and prior to the 30th day prior to the Expiration Date, request the
Agent to (and upon receipt of the applicable Letter of Credit Request, the Agent
shall): (i) cause an Issuing Lender to issue for the joint and several account
of the Borrowers and for the benefit of (A) any holder (or any trustee, agent or
other similar representative for any such holders) of LC Supportable
Obligations, an irrevocable standby letter of credit, in a form customarily used
by the Issuing Lender or in such other form as has been approved by the Issuing
Lender, and (B) sellers of goods to a Borrower, an irrevocable trade letter of
credit, or (ii) approve the issuance by an Issuing Lender of an irrevocable
trade letter of credit upon application made by the Funds Administrator directly
to such Issuing Lender pursuant to an application procedure approved by Agent in
advance, in each case in a form customarily used by the Issuing Lender or in
such other form as has been approved by the Issuing Lender, (each such letter of
credit, a "Letter of Credit" and, collectively, the "Letters of Credit"). All
Letters of Credit shall be denominated in Dollars and shall be issued on a sight
basis only.
(b) Notwithstanding anything to the contrary set forth in this
Credit Agreement, the Agent shall not be under any obligation to cause an
Issuing Lender to issue any Letter of Credit, or to approve the issuance by an
Issuing Lender of any Letter of Credit, if at the time of such issuance or
approval, any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing Lender
from issuing such Letter of Credit or any Requirement of Law applicable to such
Issuing Lender or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over such Issuing Lender
shall prohibit, or request that such Issuing Lender refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuing Lender is
not otherwise compensated hereunder) not in effect with respect to such Issuing
Lender on the date hereof, or any unreimbursed loss, cost or expense which was
not applicable or in effect with respect to such Issuing Lender as of the date
hereof and which such Issuing Lender reasonably and in good xxxxx xxxxx material
to it.
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3.2 MAXIMUM LETTER OF CREDIT OUTSTANDINGS; FINAL MATURITIES.
Notwithstanding anything to the contrary contained in this Credit Agreement, (a)
no Letter of Credit shall be issued if (x) the Stated Amount thereof, when added
to the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid on the date of, and prior to the issuance of, the respective Letter of
Credit) at such time would exceed $10,000,000, or (y) after giving effect to
such issuance, the Total Exposure would exceed the lesser of (I) the Total
Commitments and (II) the Borrowing Base; and (b) each Letter of Credit shall by
its terms terminate on or before (x) in the case of standby Letters of Credit,
the date which occurs 12 months after the date of the issuance thereof (although
any such standby Letter of Credit may be extendible for successive periods of up
to 12 months on terms reasonably acceptable to the Agent and the applicable
Issuing Lender), but in no event later than ten (10) Business Days prior to
Expiration Date, and (y) in the case of trade Letters of Credit, on or before
the date which occurs 180 days after the date of issuance thereof, but in no
event later than the thirtieth (30th) day prior to the Expiration Date.
3.3 LETTER OF CREDIT REQUESTS; MINIMUM STATED AMOUNT.
(a) Whenever the Funds Administrator desires the Agent to cause or
approve the issuance of a Letter of Credit for the account of the Borrowers (or
to amend or modify any existing Letter of Credit), the Funds Administrator shall
give the Agent at least five Business Days' (or such shorter period as is
acceptable to the Agent) written notice thereof (including by way of facsimile
transmission). Each such notice shall be given to Agent in the form attached
hereto as Exhibit D (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Funds Administrator and each of the
Borrowers to the Agent and the Lenders that such Letter of Credit may be issued
in accordance with, and will not violate the requirements of, Section 3.2. Upon
receipt by the Agent of a Letter of Credit Request, the Agent shall, subject to
the terms and conditions of this Credit Agreement, either cause the applicable
Issuing Lender to issue (or amend or modify, as the case may be), or approve the
issuance of, the requested Letter of Credit for the account of the Borrowers in
accordance with such Issuing Lender's usual and customary practices. Upon the
issuance or modification of, or amendment to, any standby Letter of Credit, the
applicable Issuing Lender shall promptly provide written confirmation of such
issuance, amendment or modification, as the case may be, to the Funds
Administrator and the Agent, and such notice shall be accompanied by a copy of
such issuance, modification or amendment, as the case may be. Upon receipt of
such notice, the Agent shall promptly provide written notice to the LC
Participants of such issuance, modification or amendment, and if requested, the
Agent shall provide each such LC Participant with copies of any such issuance,
modification or amendment. With regard to trade Letters of Credit, the
applicable Issuing Lender shall, on the first Business Day of each week, provide
the Agent with a report, by facsimile transmission, of the daily aggregate
outstanding trade Letters of Credit during the previous week. Upon receipt of
such report, the Agent shall provide the LC Participants with the contents of
such report. Notwithstanding anything to the contrary contained in this Credit
Agreement, in the event that any Lender is a Defaulting Lender, no Issuing
Lender shall be required to issue any Letter of Credit unless such Issuing
Lender has entered into arrangements satisfactory to it and the Borrowers to
eliminate such Issuing Lender's risk with respect to the participation in
Letters of Credit by such Defaulting Lender, including by cash
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collateralizing such Defaulting Lender's Proportionate Share of the Letter of
Credit Outstandings.
3.4 LETTER OF CREDIT PARTICIPATIONS.
(a) Immediately upon the issuance by an Issuing Lender of any Letter
of Credit, such Issuing Lender shall be deemed to have sold and transferred to
each Lender (other than such Issuing Lender in its capacity (if any) as a
Lender) and each such Lender (in its capacity under this Section 3.4, an "LC
Participant"), shall be deemed irrevocably and unconditionally to have purchased
and received from such Issuing Lender, without recourse or warranty, an
undivided interest and participation, to the extent of such LC Participant's
Proportionate Share, in such Letter of Credit, each drawing or payment made
thereunder and the joint and several obligations of the Borrowers under this
Credit Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Commitments or Proportionate Shares
of the respective Lenders pursuant to Section 2.9 or Section 11.6, it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings relating thereto, there shall be an automatic adjustment to the
participations pursuant to this Section 3.4 to reflect the new Proportionate
Shares of the assignor and assignee Lender, as the case may be.
(b) In determining whether to pay under any Letter of Credit, no
Issuing Lender shall have any obligation relative to the other Lenders other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by any Issuing Lender under or in connection with
any Letter of Credit issued by it, if taken or omitted to be taken by it in good
faith, shall not create for such Issuing Lender any resulting liability to any
of the Borrowers, any other Credit Party, any Lender or any other Person unless
such action is taken or omitted to be taken with gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision).
(c) In the event that any Issuing Lender makes any payment under any
Letter of Credit issued by it and the Borrowers shall not have reimbursed such
amount in full to such Issuing Lender pursuant to Section 3.5(a), such Issuing
Lender shall promptly notify the Agent, which shall promptly notify each LC
Participant of such failure, and each LC Participant shall promptly and
unconditionally pay to such Issuing Lender the amount of such LC Participant's
Proportionate Share of such unreimbursed payment in Dollars and in same day
funds. If the Agent so notifies, prior to 12:00 Noon on any Business Day, any LC
Participant required to fund a payment under a Letter of Credit, such LC
Participant shall make available to the applicable Issuing Lender in Dollars
such LC Participant's Proportionate Share of the amount of such payment on such
Business Day in same day funds. If and to the extent such LC Participant shall
not have so made its Proportionate Share of the amount of such payment available
to the applicable Issuing Lender, such LC Participant agrees to pay to such
Issuing Lender, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to such Issuing
Lender at the overnight Federal Funds Rate for the first three days and at the
interest rate applicable to Loans that are maintained as Prime Rate Loans for
each day thereafter. The failure of any LC Participant to make available to any
Issuing Lender its Proportionate Share of any payment under any Letter of Credit
shall not relieve any
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other LC Participant of its obligation hereunder to make available to such
Issuing Lender its Proportionate Share of any payment under such Letter of
Credit on the date required, as specified above, but no LC Participant shall be
responsible for the failure of any other LC Participant to make available to
such Issuing Lender such other LC Participant's Proportionate Share of any such
payment.
(d) Whenever any Issuing Lender receives a payment of a
reimbursement obligation as to which it has received any payments from the LC
Participants pursuant to clause (c) above, such Issuing Lender shall pay to each
such LC Participant which has paid its Proportionate Share thereof, in Dollars
and in same day funds, an amount equal to such LC Participant's share (based
upon the proportionate aggregate amount originally handed by such LC Participant
to the aggregate amount funded by all LC Participants) of the principal amount
of such reimbursement obligation and interest thereon accruing after the
purchase of the respective participations.
(e) Upon the request of any LC Participant, each Issuing Lender
shall furnish to such LC Participant copies of any Letter of Credit issued by it
and such other documentation with respect thereto as may reasonably be requested
by such LC Participant.
(f) The obligations of the LC Participants to make payments to an
Issuing Lender with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Credit
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Credit
Agreement or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other
right which any Credit Party or any Subsidiary of any Credit Party may have at
any time against a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any Person for whom any such transferee may be acting),
the Agent, any LC Participant, or any other Person, whether in connection with
this Credit Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying transaction
between any Credit Party or any Subsidiary of any Credit Party and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
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3.5 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS.
(a) The Borrowers jointly and severally agree to reimburse each
Issuing Lender, by making payment to the Agent in immediately available funds at
the Payment Office, for any payment or disbursement made by such Issuing Lender
under any Letter of Credit issued by it (each such amount so paid, until
reimbursed, an "Unpaid Drawing"), not later than one Business Day following
receipt by the Funds Administrator of notice of such payment or disbursement
(provided that no such notice shall be required to be given if an Event of
Default under Section 9.1(e) shall have occurred and be continuing, in which
case the Unpaid Drawing shall be due and payable immediately without
presentment, demand, protest or notice of any kind (all of which are hereby
waived by the Funds Administrator and each of the Borrowers, to the extent such
waiver is permitted pursuant to applicable law)), with interest on the amount so
paid or disbursed by such Issuing Lender, to the extent not reimbursed prior to
12:00 Noon on the date of such payment or disbursement, from and including the
date paid or disbursed to but excluding the date such Issuing Lender was
reimbursed by the Borrowers therefor at a rate per annum equal to the Prime
Lending Rate in effect from time to time plus one percent (1.00%); provided,
that, to the extent such amounts are not reimbursed prior to 12:00 Noon on the
third Business Day following the receipt by the Funds Administrator of notice of
such payment or disbursement or following the occurrence and during the
continuance of a Default or an Event of Default, interest shall thereafter
accrue on the amounts so paid or disbursed by the applicable Issuing Lender (and
until reimbursed by the Borrowers) at a rate per annum equal to the Prime
Lending Rate in effect from time to time plus three percent (3.0%), with such
interest to be payable on demand. Each Issuing Lender shall give the Funds
Administrator prompt written notice of each Drawing under any Letter of Credit
issued by it, provided that the failure to give any such notice shall in no way
affect, impair or diminish the obligations of the Borrowers hereunder (except to
the extent otherwise expressly provided herein).
(b) The obligations of the Borrowers under this Section 3.5 to
reimburse each Issuing Lender with respect to Drawings under Letters of Credit
issued by it (each a "Drawing") (including, in each case, interest thereon)
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which any
Borrower, any Subsidiary of any Borrower or any other Credit Party may have or
have had against any Lender (including in its capacity as an Issuing Lender or
as a LC Participant), including, without limitation, any defense based upon the
failure of any Drawing under a Letter of Credit to conform to the terms of the
Letter of Credit or any nonapplication or misapplication by the beneficiary of
the proceeds of such Drawing; provided that the Borrowers shall not be obligated
to reimburse any Issuing Lender for any wrongful payment made by such Issuing
Lender under a Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Issuing
Lender (as determined by a court of competent jurisdiction in a final and
non-appealable decision).
3.6 INCREASED COSTS. If at any time after the Closing Date, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by the
NAIC or any Governmental Authority charged with the interpretation or
administration thereof, or compliance by any Issuing Lender or any LC
Participant with any request or directive by the NAIC or by any such
Governmental Authority (whether or not having the force of law), shall either
(i) impose, modify or make applicable any
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reserve, deposit, capital adequacy or similar requirement (excluding imposition
of Taxes, which shall be governed by Section 2.8, and excluding any reserve
requirement reflected in the Adjusted LIBOR Rate) against letters of credit
issued by such Issuing Lender or participated in by such LC Participant, or (ii)
impose on such Issuing Lender or such LC Participant any other conditions
relating, directly or indirectly, to this Credit Agreement or any Letter of
Credit (excluding imposition of Taxes, which shall be governed by Section 2.8,
and excluding any reserve requirement reflected in the Adjusted LIBOR Rate); and
the result of any of the foregoing is to increase the cost to such Issuing
Lender or such LC Participant of issuing, maintaining or participating in any
Letter of Credit, or reduce the amount of any sum received or receivable by such
Issuing Lender or such LC Participant hereunder or reduce the rate of return on
such Person's capital with respect to Letters of Credit (except for changes in
the rate of tax on, or determined by reference to, the net income or profits of
such Issuing Lender or such LC Participant pursuant to the laws of the
jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein),
then, upon the delivery of the certificate referred to below to the Funds
Administrator by such Issuing Lender or such LC Participant within ninety days
after an officer of such Issuing Lender or such LC Participant, as the case may
be, responsible for overseeing the transactions contemplated by this Credit
Agreement knows or had reason to know that such amount is payable by the
Borrowers pursuant to this Section 3.6 (a copy of which certificate shall be
sent by such Issuing Lender or such LC Participant to the Agent), the Borrowers
jointly and severally agree to pay to such Issuing Lender or such LC
Participant, as the case may be, such additional amount or amounts as will
compensate such Issuing Lender or LC Participant for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. Any Issuing Lender or LC Participant, upon determining that any
additional amounts will be payable to such Person pursuant to this Section 3.6,
will give prompt written notice thereof to the Funds Administrator, which notice
shall include a certificate submitted to the Funds Administrator by such Issuing
Lender or LC Participant (a copy of which certificate shall be sent by such
Issuing Lender or such LC Participant, as the case may be, to the Agent),
setting forth in reasonable detail the basis for the calculation of such
additional amount or amounts necessary to compensate such Person. The
certificate required to be delivered pursuant to this Section 3.6 shall, absent
manifest error, be final and conclusive and binding on the Funds Administrator
and each of the Borrowers.
ARTICLE 4
INTEREST, FEES AND EXPENSES
4.1 INTEREST ON LIBOR RATE LOANS. Subject to the provisions of
Section 4.4, each LIBOR Rate Loan shall bear interest on its unpaid principal
amount at a rate per annum equal to the applicable Adjusted LIBOR Rate plus the
Applicable Margin, as the same may be adjusted pursuant to the provisions of the
definition of Applicable Margin. Such interest shall be payable on the last day
of each Interest Period with respect to such LIBOR Rate Loan (or, in the case of
Interest Periods in excess of three months on each of the ninetieth (90th) day
and the last day of such Interest Period), at the date of Conversion of such
LIBOR Rate Loan (or a portion thereof) to a Prime Rate Loan and at maturity of
such LIBOR Rate Loan, and after maturity of such LIBOR Rate Loan (whether by
acceleration or otherwise), upon demand. The Agent upon
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determining the Adjusted LIBOR Rate for any Interest Period shall promptly
notify the Funds Administrator and the Lenders by telephone (confirmed promptly
in writing) or in writing thereof. Each determination by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
4.2 INTEREST ON PRIME RATE LOANS. Subject to the provisions of
Section 4.4, each Prime Rate Loan shall bear interest on its unpaid principal
amount at a rate per annum equal to the Prime Lending Rate plus the Applicable
Margin, as the same may be adjusted pursuant to the provisions of the definition
of Applicable Margin. Such interest shall be payable in arrears on the first day
of each calendar quarter and at maturity of such Prime Rate Loan, and after
maturity of such Prime Rate Loan (whether by acceleration or otherwise), upon
demand. In the event of any change in said Prime Lending Rate, the rate
hereunder shall change, effective as of the day the Prime Lending Rate changes.
Each determination by the Agent of any interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
4.3 NOTICE OF CONTINUATION AND NOTICE OF CONVERSION.
(a) With respect to any Borrowing consisting of LIBOR Rate Loans,
the Borrowers may (so long as no Default or Event of Default has occurred and is
continuing, subject to the provisions of Section 4.3(c)), elect to maintain such
Borrowing or any portion thereof as consisting of LIBOR Rate Loans by selecting
a new Interest Period for such Borrowing, which new Interest Period shall
commence on the last day of the immediately preceding Interest Period. Each
selection of a new Interest Period (a "Continuation") shall be made by notice
given not later than 12:00 noon on the third Business Day prior to the date of
any such Continuation relating to LIBOR Rate Loans, by the Funds Administrator
to the Agent. Such notice by the Funds Administrator of a Continuation (a
"Notice of Continuation") shall be in substantially the form of Exhibit C-1,
specifying (i) the date of such Continuation, (ii) the type of Loans subject to
such Continuation, (iii) the aggregate amount of Loans subject to such
Continuation and (iv) the duration of the selected Interest Period, all of which
shall be specified in such manner as is necessary to comply with all limitations
on Loans outstanding hereunder. The Borrowers may elect to maintain more than
one Borrowing consisting of LIBOR Rate Loans by combining such Borrowings into
one Borrowing and selecting a new Interest Period pursuant to this Section
4.3(a); provided that each of the Borrowings so combined shall consist of Loans
having Interest Periods ending on the same date. If the Borrowers shall fail to
select a new Interest Period for any Borrowing consisting of LIBOR Rate Loans in
accordance with this Section 4.3(a), such Loans will automatically, on the last
day of the then existing Interest Period therefor, Convert into Prime Rate
Loans.
(b) The Borrowers may on any Business Day (so long as no Default or
Event of Default has occurred and is continuing), upon notice (each such notice,
a "Notice of Conversion") given by the Funds Administrator to the Agent, and
subject to the provisions of Section 4.3(c), Convert the entire amount of or a
portion of all Loans of one Type comprising the same Borrowing into Loans of
another Type; however, provided that any Conversion of any LIBOR Rate Loans into
Loans of another Type shall be made on, and only on, the last day of an Interest
Period for such LIBOR Rate Loans and, upon Conversion of any Loans into Loans of
another Type, the Borrowers shall pay accrued interest to the date of Conversion
on the principal amount Converted. Each such Notice of Conversion shall be given
not later than 12:00 noon on
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the Business Day prior to the date of any proposed Conversion into Prime Rate
Loans and on the third Business Day prior to the date of any proposed Conversion
into LIBOR Rate Loans. Subject to the restrictions specified above, each Notice
of Conversion shall be in substantially the form of Exhibit C-2 hereto
specifying (i) the requested date of such Conversion, (ii) the Type of Loans to
be Converted, (iii) the portion of such Type of Loan to be Converted, (iv) the
Type of Loan such Loans are to be Converted into and (v) if such Conversion is
into LIBOR Rate Loans, the duration of the respective Interest Periods of each
of such Loans. Each Conversion shall be in an aggregate amount for the Loans of
all Lenders of not less than $2,000,000 or any integral multiple of $1,000,000
in excess thereof. The Borrowers may elect to Convert the entire amount of or a
portion of all Loans of one Type comprising more than one Borrowing into Loans
of another Type by combining such Borrowings into one or more Borrowings
consisting of Loans of another Type; provided that if the Borrowings so combined
consist of LIBOR Rate Loans, each of such Loans so combined shall have Interest
Periods ending on the same date.
(c) Notwithstanding anything contained in subsections (a) and (b)
above or elsewhere in this Credit Agreement to the contrary,
(i) (A) if the Agent is unable to determine the LIBOR
Rate for LIBOR Rate Loans comprising any
requested Borrowing, Continuation or Conversion,
the right of the Borrowers to select or maintain
LIBOR Rate Loans for such Borrowing or any
subsequent Borrowing shall be suspended until
the Agent shall notify the Funds Administrator
and the Lenders that the circumstances causing
such suspension no longer exist, and each Loan
comprising such Borrowing shall be a loan of a
Type that is unaffected by such circumstances,
as selected by the Borrowers pursuant to this
Credit Agreement;
(B) if a Lender shall, at any time, notify the
Agent that, because of a change in applicable
law after the date such Lender became a Lender,
it has become unlawful for such Lender to
participate in any requested Borrowing,
Continuation or Conversion of LIBOR Rate Loans,
to continue its LIBOR Rate Loans, or to comply
with its obligations hereunder in respect
thereof, that Lender's obligation to participate
in any such requested Borrowing, Continuation or
Conversion shall be discharged by such Lender's
making its participation therein in the form of
a Prime Rate Loan, and any of such Lender's
LIBOR Rate Loans not otherwise being converted
shall be converted into Prime Rate Loans on the
earlier of (1) the last day of the applicable
Interest Period and (2) the last day such Lender
may lawfully continue to maintain LIBOR Rate
Loans, provided that any Prime Rate Loan that,
but for this clause (B), would have been a LIBOR
Rate Loan shall constitute part of the Borrowing
of which any such LIBOR Rate Loan was or would
have been a part;
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(ii) if the Majority Lenders shall, at least one Business Day
before the date of any requested Borrowing, Continuation or Conversion, notify
the Agent that the Adjusted LIBOR Rate for Loans comprising such Borrowing will
not adequately reflect the cost to such Lenders of making or funding their
respective Loans for such Borrowing, the right of the Borrowers to select LIBOR
Rate Loans for such Borrowing shall be suspended until the Agent shall notify
the Funds Administrator and the Lenders that the circumstances causing such
suspension no longer exist, and each Loan comprising such Borrowing shall be a
Loan of a Type that is unaffected by such circumstances, as selected by the
Borrowers pursuant to this Credit Agreement; and
(iii) the Borrowers shall borrow, prepay, convert and continue
Loans in a manner such that (A) the aggregate principal amount of LIBOR Rate
Loans having the same Interest Period shall at all times be not less than
$2,000,000, (B) there shall not be, at any one time, more than five Interest
Periods in effect with respect to LIBOR Rate Loans and (C) no payment of LIBOR
Rate Loans will have to be made prior to the last day of an applicable Interest
Period in order to repay the Loans in the amounts and on the date specified in
Section 2.4(b)(i).
(d) Each Notice of Continuation and Notice of Conversion shall be
irrevocable by and binding on the Borrowers.
4.4 INTEREST AFTER EVENT OF DEFAULT. Interest on any amount of
overdue interest on or overdue principal of the Loans, and interest on the
amount of principal under the Loans outstanding as of the date an Event of
Default occurs, and at all times thereafter until the earlier of the date upon
which (a) all Obligations (other than contingent indemnification Obligations to
the extent that no claim giving rise thereto has been asserted and remains
unresolved or unsatisfied) have been paid and satisfied in full or (b) such
Event of Default shall not be continuing, shall be payable on demand at a rate
per annum equal to the rate at which the Loans are bearing interest pursuant to
Sections 4.1 and 4.2 above, plus two percent (2.0%). In the event of any change
in said applicable interest rate, the rate hereunder shall change, effective as
of the day the applicable interest rate changes, so as to remain two percent
(2.0%) per annum above the then applicable interest rate.
4.5 UNUSED LINE FEE. The Borrowers shall pay to the Agent, for the
ratable benefit of the Lenders, a non-refundable fee (the "Unused Line Fee")
equal to one-half of one percent (0.50%) per annum of the unused portion of the
Line of Credit (with any outstanding Letters of Credit constituting usage of the
Line of Credit). The Unused Line Fee shall accrue daily from the Closing Date
until the Expiration Date, and shall be due and payable quarterly in arrears, on
the first Business Day of calendar quarter and on the Expiration Date.
4.6 LETTER OF CREDIT FEES.
(a) The Agent shall be entitled to charge for the account of the
Funds Administrator on the first Business Day of each calendar quarter, a fee
payable by the Borrowers for the ratable benefit of the Lenders, in an amount
equal to the Applicable Margin with respect to LIBOR Rate Loans in effect from
time to time of the Stated Amount of all Letters of Credit outstanding during
the immediately preceding calendar quarter (the "Letter of Credit Fee").
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(b) The Agent shall also be entitled to charge to the account of the
Funds Administrator as and when incurred by the Agent or any Lender, the
customary charges, fees, costs and expenses charged to the Agent or any Lender
for the Funds Administrator's account by any Issuing Lender (the "Issuing Lender
Fees") in connection with the issuance, transfer, drawing, amendment or
negotiation of any Letters of Credit by the Issuing Lender thereof. Each
determination by the Agent of Letter of Credit Fees and Issuing Lender Fees
shall be conclusive and binding for all purposes, absent manifest error.
(c) Agent shall also be entitled to charge for the account of the
Funds Administrator the applicable fee with respect to each Letter of Credit set
forth in the Fee Letter.
(d) Upon notice from Agent, after the occurrence of an Event of
Default until the earlier of the date upon which (i) all Obligations shall have
been paid and satisfied in full or (ii) such Event of Default shall not be
continuing, the Letter of Credit Fee payable with respect to Letters of Credit
shall be payable on demand at a rate per annum equal to the Letter of Credit Fee
then in effect pursuant to clause (a) above plus two percent (2.0%). In the
event of any change in such Letter of Credit Fee, the Letter of Credit Fee
hereunder shall change, effective as of the date of such change so as to remain
two percent (2.0%) per annum above the then applicable Letter of Credit Fee.
4.7 REIMBURSEMENT OF EXPENSES.
(a) From and after the Closing Date, the Borrowers shall promptly
reimburse the Agent for all Expenses of the Agent as the same are incurred by
the Agent and upon receipt of invoices therefor and, if requested by the Funds
Administrator, such reasonable backup materials and information as any Borrower
shall reasonably request.
(b) The Borrowers shall pay to each Lender, upon request, such
amount or amounts as such Lender determines in good faith are necessary to
compensate it for any loss, cost or expense incurred by it as a result of (i)
any payment, prepayment or conversion of a LIBOR Rate Loan on a date other than
the last day of an Interest Period for such LIBOR Rate Loan or (ii) a LIBOR Rate
Loan for any reason not being made or converted, or any payment of principal
thereof or interest thereon not being made, on the date therefor determined in
accordance with the applicable provisions of this Credit Agreement. At the
election of such Lender, and without limiting the generality of the foregoing,
but without duplication, such compensation on account of losses may include an
amount equal to the excess of (A) the interest that would have been received
from the Borrowers under and in accordance with the terms of this Credit
Agreement on any amounts to be reemployed during an Interest Period or its
remaining portion, as the case may be, over (B) the interest component of the
return that such Lender reasonably determines it could have obtained had it
placed such amount on deposit with DBTCo in the interbank Dollar market for a
period equal to such Interest Period or its remaining portion, as the case may
be.
4.8 AUTHORIZATION TO CHARGE BORROWERS' ACCOUNT. Each Borrower hereby
authorizes the Agent to charge the Borrowers' Account with the amount of all
principal, interest, Fees, Expenses and other amounts to be paid hereunder,
under the Fee Letter and under the other Credit Documents as and when such
payments become due and payable (without giving effect to any grace period
applicable thereto pursuant to Section 9.1(a)(ii)), including, without
limitation,
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all Unpaid Drawings. Each Borrower confirms that any charges which the Agent may
so make to the Borrowers' Account as herein provided will be made as an
accommodation to the Borrowers and solely at the Agent's discretion.
4.9 INDEMNIFICATION IN CERTAIN EVENTS. If after the Closing Date,
either (a) any change in or in the interpretation of any law or regulation is
introduced, including with respect to reserve requirements, applicable to DBTCo,
Deutsche Bank AG or any other banking or financial institution from whom any of
the Lenders borrows funds or obtains credit (a "Funding Bank"), the Agent or any
of the Lenders (excluding imposition of Taxes, which shall be governed by
Section 2.8, and excluding any reserve requirement reflected in the Adjusted
LIBOR Rate), or (b) the Agent, a Funding Bank or any of the Lenders complies
with any future guideline or request from any central bank or other Governmental
Authority (excluding imposition of Taxes, which shall be governed by Section
2.8, and excluding any reserve requirement reflected in the Adjusted LIBOR Rate)
or (c) the Agent, a Funding Bank or any of the Lenders determines that the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof has or would have the effect
described below, or the Agent, a Funding Bank or any of the Lenders complies
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, and
in the case of any event set forth in this clause (c), such adoption, change or
compliance has or would have the direct or indirect effect of reducing the rate
of return on any of the Lenders' capital as a consequence of its obligations
hereunder or with respect to any participation interest in any Letter of Credit
(excluding imposition of Taxes, which shall be governed by Section 2.8, and
excluding any reserve requirement reflected in the Adjusted LIBOR Rate) to a
level below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration the Agent's or such Funding
Bank's or Lender's policies as the case may be with respect to capital adequacy)
by an amount deemed by such Lender to be material, or any of the foregoing
events described in clauses (a), (b) or (c) increases the cost to the Agent, or
any of the Lenders of (i) funding or maintaining the Line of Credit; or (ii)
acquiring or maintaining any participation interest in any Letter of Credit, or
reduces the amount receivable in respect thereof, or in respect of such Letter
of Credit, by the Agent or any Lender, then the Borrowers shall promptly upon
receipt from the Agent of the certificate referred to in the following sentence,
pay to the Agent, for the account of each applicable Lender or, as applicable, a
Funding Bank, additional amounts sufficient to indemnify such Person against
such increase in cost or reduction in amount receivable. A certificate as to the
amount of such increased cost and setting forth in reasonable detail the
calculation thereof shall be submitted to the Funds Administrator by the Person
making such claim, and shall be conclusive absent manifest error.
4.10 CALCULATIONS AND DETERMINATIONS.
(a) All calculations of (i) interest hereunder and (ii) Fees, shall
be made by the Agent, on the basis of a year of 360 days, or, if such
computation would cause the interest and fees chargeable hereunder to exceed the
Highest Lawful Rate, 365/366 days, in each case to the extent applicable for the
actual number of days elapsed (including the first day but excluding the last
day) occurring in the period for which such interest or fees are payable.
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(b) In making the determinations contemplated by Sections 4.7, 4.8
and 4.9, the Agent and each Lender, as the case may be, may make such estimates,
assumptions, allocations and the like that such Person in good faith determines
to be appropriate.
(c) Each determination by the Agent of an interest rate or payment
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
4.11 MITIGATION. If a condition or event occurs which requires the
payment of any additional amounts or increased costs with respect to any Lender
or Issuing Lender pursuant to Sections 2.8 or 4.9, such Lender or Issuing
Lender, as the case may be, shall promptly take such steps as may reasonably be
available to it to mitigate the effects of such condition or event; provided,
that no Lender or Issuing Lender (as the case may be) shall be required to take
any step that, in its reasonable judgment, would be disadvantageous to it in any
material respect or would require it to incur material additional costs.
ARTICLE 5
CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL CREDIT EVENT. The Initial Credit Event is
subject to the satisfaction or waiver, immediately prior thereto or concurrently
therewith, of the following conditions precedent:
(a) Closing Document List. The Agent shall have received each of the
agreements, opinions, reports, approvals, consents, certificates and other
documents set forth on the Closing Document List attached hereto as Annex I,
including, without limitation, a copy of the solvency letter provided for in
Section 5.13 of the BCO Acquisition Merger Agreement (on which the Agent and the
Lenders shall be entitled to rely).
(b) Fees and Expenses. The Agent and each of the Lenders shall have
received payment in full of those Fees and Expenses referred to in the Fee
Letter and in Article 4 payable to them concurrently with or prior to the
Initial Credit Event (or an irrevocable authorization to pay such Fees or
Expenses out of the proceeds of the initial Loans).
(c) Changes in Market. There shall not have occurred and be
continuing a material adverse change in the market for syndicated bank credit
facilities, or a material disruption of, or material adverse change in,
financial, banking or capital market conditions, in each case since September
30, 2002, as reasonably determined by the Agent.
(d) Borrowing Base; Unused Availability. After giving pro forma
effect to the funding of the initial Loans, the issuance of the initial Letters
of Credit, if any, and the payment of all costs, fees and expenses incurred by
or for the account of the Borrowers in connection with the execution and
delivery of this Credit Agreement, the other Credit Documents and the Related
Transactions which are due and payable on the Closing Date, there shall be
unused availability under the Borrowing Base of at least $35,000,000.
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(e) Related Transactions Documents. There shall have been delivered
to the Agent true, correct and complete copies of the following documents:
(i) all Merger Documents;
(ii) all Equity Financing Documents;
(iii) all Existing Note Repurchase Documents;
(iv) all Subordinated Note Documents;
(v) the Securityholders' Agreement;
(vi) all Management Agreements;
(vii) all Employment Agreements;
(viii) all Management Change of Control Agreements; and
(ix) all Xxxxx Agreements;
all of which Merger Documents, Equity Financing Documents, Existing Note
Repurchase Documents, Subordinated Note Documents, Management Agreements,
Management Change of Control Agreements, Employment Agreements and Xxxxx
Agreements, together with the Securityholders' Agreement, shall be in form and
substance reasonably satisfactory to the Agent and shall be in full force and
effect (it being understood and agreed that each of the foregoing agreements,
instruments and documents are satisfactory to the Agent).
(f) Consummation of Certain Related Transactions. The Agent shall be
reasonably satisfied that the Mergers, the Equity Financing and the Existing
Note Repurchase shall have been in each case consummated in accordance with the
Merger Documents, the Equity Financing Documents and the Existing Note
Repurchase Documents, respectively, and all material applicable Requirements of
Law, and each of the material conditions precedent to the consummation of the
Mergers, the Equity Financing and the Existing Note Repurchase, respectively,
shall have been satisfied in all material respects and not waived, except with
the consent of the Agent (each of which consents shall not be unreasonably
withheld or delayed).
(g) Payment of Indebtedness Under BCO Holding Promissory Note. BWAY
shall have received in immediately available Dollars payment in full of the
aggregate outstanding principal balance under that certain Promissory Note dated
November 27, 2002, executed by BCO Holding and payable to BWAY.
(h) Issuance of Subordinated Notes. BWAY shall have assumed the
obligations of BWAY Finance with respect to the Subordinated Notes pursuant to
and in accordance with the Supplemental Indenture and gross proceeds thereof in
an aggregate amount not less than $200,000,000 shall be available in immediately
available funds for the account of BWAY.
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The occurrence of the Initial Credit Event shall be deemed to constitute an
acknowledgement by the Agent and each Lender that each of the conditions
precedent thereto set forth in this Section 5.1 have been satisfied.
5.2 CONDITIONS TO EACH CREDIT EVENT. On the date of each Credit
Event (including the Initial Credit Event), both immediately before and
immediately after giving effect thereto and to the application of the proceeds
therefrom, the following statements shall be true to the reasonable satisfaction
of the Agent (and each request for a Credit Event, shall constitute a
representation and warranty by each Borrower that on the date of such Credit
Event, immediately before and immediately after giving effect thereto and to the
application of the proceeds therefrom, such statements are true):
(a) The representations and warranties contained in this
Credit Agreement and in each other Credit Document are true and correct
in all material respects on and as of the date of such Credit Event as
though made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an earlier
date (in which case such representations and warranties shall have been
true and correct in all material respects on and as of such earlier
date); and
(b) No Default or Event of Default has occurred and is
continuing, or could reasonably be expected to result from such Credit
Event or the application of the proceeds thereof.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Credit Agreement
and each Issuing Lender to issue Letters of Credit, each Borrower, with respect
to itself, each of the other Borrowers and each of their respective
Subsidiaries, hereby represents and warrants to the Agent, the Lenders and each
Issuing Lender:
6.1 ORGANIZATION AND QUALIFICATION. Each Credit Party and each
Subsidiary of each Credit Party: (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate or other organizational power and authority to own its properties
and assets and to transact the businesses in which it presently is, or proposes
to be, engaged and (c) is duly qualified and is authorized to do business and is
in good standing in each jurisdiction where it presently is, or proposes to be,
engaged in business, except for any failures to be so qualified, authorized or
in good standing which singly or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. Schedule B, Part 6.1 lists all
jurisdictions in which each Credit Party and each Subsidiary of each Credit
Party are qualified to do business as foreign corporations.
6.2 SOLVENCY. The fair saleable value of the assets of each Credit
Party and each Subsidiary of each Credit Party exceeds all its probable
liabilities, including those to be incurred pursuant to this Credit Agreement
and the other Credit Documents. Each Credit Party and each Subsidiary of each
Credit Party: (a) does not have unreasonably small capital with which to
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conduct the business in which it is engaged and (b) has not incurred, and does
not believe that it will incur after giving effect to the transactions
contemplated by this Credit Agreement and the other Credit Documents, debts
beyond its ability to pay such debts as they become due.
6.3 PRIORITY OF LIENS. The Liens granted pursuant to the Credit
Documents constitute the valid and enforceable first priority and perfected
Liens on Collateral of the type in which a security interest may be perfected by
filing, except, in the case of priorities, for Permitted Liens, and except as
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general principles of equity (whether considered
in a proceeding in equity or law).
6.4 NO CONFLICT. The execution, delivery and performance by each
Credit Party and each Subsidiary of each Credit Party of each Credit Document or
Related Transactions Document to which it is a party: (a) are within its
corporate or other organizational power; (b) have been duly authorized by all
necessary corporate or other organizational action; (c) except as set forth on
Schedule B, Part 6.4, are not in contravention in any material respect of any
material Requirement of Law or any Related Transaction Document or Material
Contract, and do not require any Credit Party to obtain any consent of any other
Person thereto under any Related Transaction Document or Material Contract; and
(d) will not, except as contemplated herein, result in the imposition of any
Liens upon any of its properties (except for Permitted Liens).
6.5 ENFORCEABILITY. This Credit Agreement, each other Credit
Document and each Related Transactions Document to which any Credit Party or any
Subsidiary of any Credit Party is a party are the legal, valid and binding
obligations of such Credit Party or Subsidiary, as the case may be, and are
enforceable against such Credit Party or Subsidiary, as the case may be, in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and general principles of equity (whether considered in a proceeding
in equity or law).
6.6 CONSENTS. Except as set forth on Schedule B, Part 6.6, no
consent or authorization of or filing or registration with any Governmental
Authority is required to be obtained or made by any Credit Party in connection
with any Credit Event hereunder, the grant of the Liens pursuant to the Credit
Documents, or the execution, delivery or performance by any Credit Party of this
Credit Agreement, the Notes, the other Credit Documents or the Related
Transactions Documents, except for (a) authorizations which have been duly
obtained or filings which have been duly made and which, in each case, are in
full force and effect, (b) filings to perfect the Liens created by the
Collateral Documents, and (c) filings pursuant to the Assignment of Claims Act
of 1940 (31 U.S.C. Section 3727 et seq.).
6.7 FINANCIAL DATA. The Borrowers have furnished or caused to be
furnished to the Lenders the following Financial Statements, which have been
prepared in accordance with GAAP consistently applied throughout the periods
involved, except as otherwise noted therein (and, with respect to the Financial
Statements referred to in clause (b) below, except for the absence of footnotes
and subject to normal year-end adjustments): (a) balance sheets as of, and
statements of operations, shareholder's equity and cash flows for the 2002
Fiscal Year, audited by independent certified public accountants and accompanied
by an unqualified opinion thereof;
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and (b) an unaudited balance sheet as of, and unaudited statements of
operations, shareholder's equity and cash flows for the Fiscal Quarter ending in
December, 2002.
6.8 JURISDICTIONS OF ORGANIZATION; LOCATIONS OF COLLATERAL. The
jurisdiction of incorporation or other organization of each Borrower and each
Subsidiary of each Borrower is set forth on Schedule B, Part 6.8. There is no
location at which any Borrower or any Subsidiary of any Borrower has any
Collateral (except for vehicles and Inventory in transit for processing in the
ordinary course of business) other than those locations identified on Schedule
B, Part 6.8. Schedule B, Part 6.8 also contains a complete list of the legal
names and addresses of each warehouse at which Inventory of any Borrower is
stored. None of the receipts received by any Borrower from any warehouseman
states that the goods covered thereby are to be delivered to bearer or to the
order of a named person or to a named person and such named person's assigns.
Except as set forth on Schedule B, Part 6.8, no Borrower nor any of its
Subsidiaries sells any Inventory on consignment (as such term is defined in
Section 9-102(a) of the UCC).
6.9 FICTITIOUS BUSINESS NAMES. Except as set forth on Schedule B,
Part 6.9, no Borrower and no Subsidiary of any Borrower has used any corporate
or fictitious name (including d/b/a's, tradenames or the like) during the five
(5) years preceding the date hereof, other than the corporate name under which
it has executed this Credit Agreement.
6.10 SUBSIDIARIES. The only Subsidiaries of each Credit Party are
those listed on Schedule B, Part 6.10. Upon consummation of the Related
Transactions, BCO Holding will be the record and beneficial owner of all of the
issued and outstanding Capital Securities of BWAY, and a Borrower or a
Wholly-Owned Subsidiary of a Borrower will be the record and beneficial owner of
all of the issued and outstanding Capital Securities of each of the other
Subsidiaries, in each case listed on Schedule B, Part 6.10. Upon consummation of
the Related Transactions, there will be no proxies, irrevocable or otherwise,
with respect to such Capital Securities, and no Capital Securities of any
Borrower or any Subsidiary of any Borrower will be, or may become, required to
be issued by reason of any options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, Capital Securities of any Borrower
or any Subsidiary of any Borrower, and there will be no contracts, commitments,
understandings or arrangements by which any Borrower or any Subsidiary of any
Borrower will be, or may become, bound to issue additional Capital Securities
convertible into or exchangeable for such Capital Securities. All of such shares
listed on Schedule B, Part 6.10 are owned by the applicable Credit Party free
and clear of any Liens, other than Permitted Liens.
6.11 NO JUDGMENTS OR LITIGATION. Except (a) as set forth on Schedule
B, Part 6.11, or (b) with respect to matters that singly or in the aggregate
could not reasonably be expected to have a Material Adverse Effect, and in any
event do not constitute an Event of Default pursuant to Section 9.1(j), no
judgments, orders, writs or decrees are outstanding against any Credit Party or
any Subsidiary of any Credit Party nor is there now pending or, to any
Borrower's knowledge, threatened any litigation, contested claim, investigation,
arbitration, or governmental proceeding by or against any Credit Party or any
Subsidiary of any Credit Party.
6.12 NO DEFAULTS. No Credit Party and no Subsidiary of any Credit
Party is in default under any term of any Related Transactions Document or
Material Contract, except (a) as set
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forth on Schedule B, Part 6.12 and (b) for any such defaults which singly or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule B, Part 6.12, as of the date hereof, no
Borrower knows of any material dispute regarding any Related Transaction
Document or Material Contract.
6.13 LABOR MATTERS.
(a) Except as set forth on Schedule B, Part 6.13, there is no labor
related litigation, contested claim, investigation or proceeding before any
Governmental Authority pending or, to the knowledge of any Borrower, threatened
between any Credit Party or any Subsidiary of any Credit Party and any of their
respective employees, except for any of the foregoing which singly or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
(b) No Credit Party and no Subsidiary of any Credit Party is engaged
in any unfair labor practice, except for any such practices which singly or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is (i) no unfair labor practice complaint pending against any
Credit Party or any Subsidiary of any Credit Party or, to the knowledge of any
Borrower, threatened against any of them, before the National Labor Relations
Board, and no grievance or significant arbitration proceeding arising out of or
under collective bargaining agreements is so pending against any Credit Party or
any Subsidiary of any Credit Party or, to the knowledge of any Borrower,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against any Credit Party or any Subsidiary of any Credit Party
or, to the knowledge of any Borrower, threatened against any of them and (iii)
no union representation question with respect to the employees of any Credit
Party or any Subsidiary of any Credit Party and no union organizing activities,
except (with respect to any matter specified in the foregoing clauses (i), (ii)
or (iii)) for any of the foregoing which singly or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
6.14 COMPLIANCE WITH LAWS.
(a) Except as set forth on Schedule B, Part 6.14 and for other
matters that singly or in the aggregate could not reasonably be expected to have
a Material Adverse Effect, no Credit Party and no Subsidiary of any Credit Party
has (i) violated or failed to comply with any Requirement of Law or (ii) any
Liability of which any Borrower has knowledge or reasonably should have
knowledge in connection with any release, generation, storage, use,
transportation, disposal or other handling of any hazardous or toxic waste,
substance or constituent into the environment, or (iii) received any notice,
letter or other indication of potential Liability arising from the release,
generation, storage, use, transportation, disposal or other handling of any
hazardous or toxic waste, substance or constituent into the environment.
(b) Except as set forth on Schedule B, Part 6.14 and for other
matters that singly or in the aggregate could not reasonably be expected to have
a Material Adverse Effect, none of the operations of any Credit Party or any
Subsidiary of any Credit Party is the subject of any federal or state
investigation evaluating whether such Borrower or Subsidiary disposed of any
hazardous or toxic waste, substance or constituent at any site that may require
remedial action, or any federal or state investigation evaluating whether any
remedial action is needed to respond to a release of any hazardous or toxic
waste, substance or constituent into the environment.
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6.15 ERISA. No Credit Party, no Subsidiary of any Credit Party and no
ERISA Affiliate maintains or contributes to any Benefit Plan or Multiemployer
Plan other than those listed on Schedule B, Part 6.15.
6.16 INTELLECTUAL PROPERTY. Each Credit Party and each Subsidiary of
each Credit Party possesses such patents, patent applications, copyrights,
service marks, trademarks and trade names (or licenses thereof) as are required
to continue to conduct its present business activities, except for any failures
to so possess which singly or in the aggregate could not reasonably be expected
to have a Material Adverse Effect.
6.17 LICENSES AND PERMITS. Each Credit Party and each Subsidiary of
each Credit Party has obtained and holds in full force and effect, all
franchises, licenses, permits, certificates, authorizations, qualifications,
easements, rights of way and other similar rights and approvals which are
required to continue to conduct its present business activities, except for any
such failures to obtain or hold in full force and effect which singly or in the
aggregate could not reasonably be expected to have a Material Adverse Effect. No
Borrower and no Subsidiary of any Borrower is in violation of the terms of any
such franchise, license, permit, certificate, authorization, qualification,
easement, right of way, or other similar right or approval, except for any such
violations which singly or in the aggregate could not reasonably be expected to
have a Material Adverse Effect.
6.18 TITLE TO COLLATERAL. All Real Estate is identified on Schedule
B, Part 6.18. Each Credit Party and each Subsidiary of each Credit Party has
good and marketable title in fee simple to, or a valid leasehold interest in,
all its Real Estate, and has good title to all other material items of
Collateral, except as otherwise set forth on Schedule B, Part 8.4(b), and no
Collateral is subject to any Lien, except Permitted Liens.
6.19 INVESTMENT COMPANY. No Credit Party and no Subsidiary of any
Credit Party is (a) an investment company or a company controlled by an
investment company within the meaning of the Investment Company Act of 1940, or
(b) 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.
6.20 BORROWERS' TAXES AND TAX RETURNS.
(a) Except as set forth on Schedule B, Part 6.20, each Credit Party
and each Subsidiary of each Credit Party (and any affiliated group of which any
Credit Party or any Subsidiary of any Credit Party is now or has been a member)
have timely filed (inclusive of any permitted extensions) with the appropriate
taxing authorities all material returns (including information returns) in
respect of Credit Party Taxes required to be filed through the date hereof.
(b) All material taxes, assessments, fees and other governmental
charges payable by any Credit Party and any Subsidiary of any Credit Party (and
any affiliated group of which any Credit Party or any Subsidiary of any Credit
Party is now or has been a member) in respect of their incomes, franchises,
businesses, properties or otherwise ("Credit Party Taxes") in respect of periods
beginning prior to the date hereof, have been timely paid, or will be timely
paid, or an
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adequate reserve has been established therefor, as set forth in Schedule B, Part
6.20 or in the Financial Statements.
(c) As of the date hereof, except as set forth in Schedule B, Part
6.20, no material deficiencies for Credit Party Taxes have been claimed,
proposed or assessed by any taxing or other Governmental Authority against any
Credit Party or any Subsidiary of any Credit Party and no Tax Liens have been
filed. As of the date hereof, except as set forth in Schedule B, Part 6.20,
there are no pending or, to the best of the knowledge of any Credit Party,
threatened audits, investigations or claims for or relating to any material
liability in respect of Credit Party Taxes, and there are no matters under
discussion with any governmental authorities with respect to Credit Party Taxes
which are likely to result in a material additional liability for Credit Party
Taxes. As of the date hereof, either the federal income tax returns of each
Credit Party and each Subsidiary of each Credit Party have been audited by the
Internal Revenue Service and such audits have been closed, or the period during
which any assessments may be made by the Internal Revenue Service has expired
without waiver or extension, for all years up to and including the 1995 Fiscal
Year. As of the date hereof, except as set forth in Schedule B, Part 6.20, no
extension of a statute of limitations relating to Credit Party Taxes is in
effect with respect to any Credit Party or any Subsidiary of any Credit Party.
(d) No Credit Party and no Subsidiary of any Credit Party has any
obligation under any written tax sharing agreement or agreement regarding
payments in lieu of Credit Party Taxes.
6.21 STATUS OF ACCOUNTS. Except as expressly disclosed with
reasonable specificity in the most recent Borrowing Base Certificate delivered
to the Agent hereunder, each Account of each Borrower is based on an actual and
bona fide sale and delivery of goods or rendition of services to customers, made
by such Borrower in the ordinary course of its businesses; the goods and
inventory being sold by any Borrower and the Accounts created thereby are the
exclusive property of such Borrower and are not and shall not be subject to any
Lien whatsoever, other than Permitted Liens, and such Borrower's customers have
accepted the goods or services, owe and are obligated to pay the full amounts
stated in the invoices according to their terms, without any dispute, offset,
defense or counterclaim or contra.
6.22 MATERIAL CONTRACTS. Schedule B, Part 6.22 contains a true,
correct and complete list of all Related Transaction Documents and all Material
Contracts in effect on the date hereof. As of the date hereof, none of the
Material Contracts contains any restrictions on any Credit Party or any
Subsidiary of any Credit Party or any of their respective properties which
singly or in the aggregate could reasonably be expected to have a Material
Adverse Effect.
6.23 AFFILIATE TRANSACTIONS. Except for (a) the Related Transactions,
(b) transactions expressly permitted pursuant to Section 8.10, and (c)
transactions set forth on Schedule B, Part 6.23, no Credit Party and no
Subsidiary of any Credit Party is a party to or bound by any agreement or
arrangement (whether oral or written) to which any Affiliate of such Credit
Party or Subsidiary, as the case may be, is a party, other than (i) in the
ordinary course of and pursuant to the reasonable requirements of such Person's
business and (ii) upon terms no less favorable to such Person than could be
obtained in a comparable arms-length transaction with an unaffiliated Person.
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6.24 ACCURACY AND COMPLETENESS OF INFORMATION. All factual
information (other than Financial Statements and Projections) furnished by or on
behalf of any Credit Party or any Subsidiary of any Credit Party in writing to
the Agent, any Lender, or the Auditors for purposes of or in connection with
this Credit Agreement or any of the other Credit Documents, or any transaction
contemplated hereby or thereby, including without limitation, the Related
Transactions, taken as a whole, will not, when furnished, contain any untrue
statement of a material fact or omit to state a material fact known to any
Credit Party or any Subsidiary of any Credit Party necessary in order to make
the statements therein not misleading in light of the circumstances under which
such statements are made. All Projections furnished by or on behalf of any
Credit Party or any Subsidiary of any Credit Party to the Agent or any Lender
after the Closing Date will be prepared in good faith based upon assumptions
believed by such Person at the time of preparation to be reasonable; it being
understood that Projections are subject to significant uncertainties and
contingencies (many of which are beyond such Person's control) and that no
assurances can be given that such Projections will be realized.
6.25 NO ADVERSE CHANGE OR EVENT. Since the last day of Fiscal Year
2002, no event relating to or affecting any of the Credit Parties has occurred
or failed to occur, that has had or could reasonably be expected to have, either
alone or in conjunction with all other such changes, events and failures, a
Material Adverse Effect. Such an event may have occurred or failed to occur at
any particular time notwithstanding the fact that at such time no Default or
Event of Default shall have occurred and be continuing.
The Borrowers may, at any time and from time to time, upon written
notice to the Agent, amend any one or more of the Schedules referred in this
Article 6, or create any Schedule with respect to any representation or warranty
in this Article 6, and any representation or warranty contained herein to which
any such Schedule relates shall from and after the date of any such amendment or
creation, as the case may be, refer to such Schedule as so amended or created,
provided, that in no event may any Borrower amend or create any such Schedule if
such amendment or creation would reflect or evidence a Default or Event of
Default, except for any such Default or Event of Default waived pursuant to
Section 11.10.
ARTICLE 7
AFFIRMATIVE COVENANTS
Until the Expiration Date and payment and satisfaction of all
Obligations (other than contingent indemnification Obligations to the extent
that no claim giving rise thereto has been asserted and remains unresolved or
unsatisfied):
7.1 FINANCIAL INFORMATION. The Borrowers shall furnish or cause to
be furnished to the Lenders the following information within the following time
periods:
(a) as soon as available and in any event within ninety (90) days
after the end of each Fiscal Year (i) audited Financial Statements as of the
close of such Fiscal Year and for such Fiscal Year, together with comparisons to
the Financial Statements for the prior year and to the most recent projections
with respect to such Fiscal Year delivered pursuant to clause (d) of this
Section 7.1, in each case accompanied by (A) an opinion of the Auditors (which
shall be
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unqualified as to scope and otherwise in form and substance reasonably
satisfactory to the Agent), (B) such Auditors' "Management Letter" to BWAY, (C)
a written statement signed by the Auditors stating that, in the course of the
regular audit of the business of the Credit Parties, which audit was conducted
by the Auditors in accordance with generally accepted auditing standards, the
Auditors have not obtained any knowledge of the existence of any Default or
Event of Default under any provision of this Credit Agreement, or, if such
Auditors shall have obtained from such examination any such knowledge, they
shall disclose in such written statement the existence of the Default or Event
of Default and the nature thereof, it being understood that such Auditors shall
have no liability, directly or indirectly, to anyone for failure to obtain
knowledge of any such Default or Event of Default, and (ii) a narrative
discussion of the consolidated and consolidating financial condition and results
of operations and the consolidated and consolidating liquidity and capital
resources of Credit Parties for such fiscal year prepared by a Responsible
Officer of BWAY. To the extent that BWAY's annual report on Form 10-K contains
any of the foregoing items, the Lenders will accept such Form 10-K in lieu of
such items;
(b) as soon as available and in any event within forty-five (45)
days after the end of each Fiscal Quarter (except the last Fiscal Quarter of any
Fiscal Year) (i) Financial Statements as at the end of and for such period and
for the current Fiscal Year to date, together with comparisons to the Financial
Statements for the same periods in the prior year and to the most recent
projections with respect to such periods delivered pursuant to clause (d) of
this Section 7.1, all in reasonable detail and duly certified (subject to the
absence of footnotes and normal year-end audit adjustments) by a Responsible
Officer of BWAY as having been prepared substantially in accordance with GAAP,
and (ii) a narrative discussion of the consolidated and consolidating financial
condition and results of operations and the consolidated and consolidating
liquidity and capital resources of the Credit Parties for such period and for
the Fiscal Year to date prepared by a Responsible Officer of BWAY. To the extent
that BWAY's quarterly report on Form 10-Q contains any of the foregoing terms,
the Lenders will accept such Form 10-Q in lieu of such items;
(c) as soon as available and in any event within thirty (30) days
after the end of each Fiscal Month (except the last Fiscal Month of any Fiscal
Quarter, with respect to which such reports shall be delivered within forty-five
(45) days after the end of such Fiscal Month (other than the last Fiscal Quarter
of any Fiscal Year with respect to which such reports shall be delivered within
ninety (90) days after the end of such Fiscal Month)), Financial Statements as
at the end of such Fiscal Month and Financial Statements for the current Fiscal
Year to date, together with a comparison to the Financial Statements for the
same periods in the prior Fiscal Year, all in reasonable detail and duly
certified (subject to the absence of footnotes and normal year-end audit
adjustments) by a Responsible Officer of BWAY as having been prepared
substantially in accordance with GAAP;
(d) not later than forty-five (45) days prior to the end of each
Fiscal Year commencing with the 2003 Fiscal Year, monthly projections of the
financial condition and results of operations of the Consolidated Entity for the
following Fiscal Year and annual projections for each subsequent Fiscal Year
through and including the Fiscal Year in which the Expiration Date occurs,
including, but not limited to, projected consolidating balance sheets,
consolidated and consolidating statements of operations and consolidated and
consolidating
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statements of cash flows and consolidated and consolidating statements of
changes in shareholders' equity for such Fiscal Years;
(e) a copy of the state and federal income tax returns of each
Borrower and each Subsidiary of each Borrower within sixty (60) days after they
are filed with the appropriate taxing authorities, if and when requested by any
Lender;
(f) upon request by the Agent at any time and in any event not later
than 12:00 Noon on the third Business Day of each week (other than the last week
of any month covered by a monthly certificate), and within eight (8) Business
Days after the last Business Day of each month, a borrowing base certificate
(the "Borrowing Base Certificate") in the form of Exhibit F, duly completed,
detailing each Borrower's Eligible Accounts Receivable and Eligible Inventory as
of each Friday of the immediately preceding week and as of the last day of such
month, as applicable (or such other date as the Agent may specify in such
request), and certified by a Responsible Officer of BWAY and subject only to
adjustment upon completion of the normal year-end audit of physical inventory
(provided that no weekly certificate need be delivered unless at the time such
delivery would otherwise be required pursuant to the terms of this clause (f),
based on the most recent Borrowing Base Certificate delivered by the Borrowers
to the Agent hereunder, there shall be unused availability under the Borrowing
Base of less than $25,000,000). In addition, each Borrowing Base Certificate
shall have attached to it such additional schedules and/or other information as
the Agent may reasonably request;
(g) together with each delivery of Financial Statements required
pursuant to Sections 7.1(a), (b) and (c), respectively, a compliance certificate
substantially in the form of Exhibit E along with a schedule in form and
substance reasonably satisfactory to the Agent of the calculations used in
determining, as of the end of the applicable fiscal period covered thereby,
whether the Borrowers were in compliance with the covenants set forth in Article
8 of this Credit Agreement for such fiscal period;
(h) promptly and in any event within five (5) Business Days after
becoming aware of the occurrence of a Default or Event of Default, a certificate
of a Responsible Officer of BWAY specifying the nature thereof and the proposed
response thereto, each in reasonable detail;
(i) promptly upon the earlier of the mailing or filing thereof,
copies of all 00-Xx, 00-Xx, 0-Xx, proxy statements, annual reports, quarterly
reports, registration statements and any other filings or other communications
made by any Borrower to holders of its publicly traded securities or the
Securities Exchange Commission from time to time pursuant to the Securities
Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended;
(j) from time to time, such further information regarding the
Collateral, business affairs and prospects and financial condition of each
Borrower and each Subsidiary of each Borrower as the Agent may reasonably
request; and
(k) within ten (10) Business Days after the occurrence thereof,
notice of any Casualty Loss.
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7.2 CERTAIN COLLATERAL. Promptly, upon the request of the Agent from
time to time, each Borrower shall provide to the Agent written statements
listing items of Inventory and Equipment in reasonable detail as requested by
the Agent. Each Borrower shall conduct or cause to be conducted annually (in a
manner consistent with the requirements for the physical count of the Inventory
in connection with the Borrowers' annual audit conducted by the Auditors) a
physical count of the Inventory and, if requested by the Agent, a copy of such
count shall be promptly supplied to the Agent accompanied by a report of the
value (valued at FIFO) of such Inventory. Upon the occurrence and during the
continuance of an Event of Default, each Borrower shall conduct such a physical
count of the Inventory at such other times and as of such other dates as the
Agent shall reasonably request. In addition to, and not in limitation of, the
foregoing, at any time and from time to time the Agent may conduct (or engage
third parties to conduct) such field examinations, appraisals, verifications and
evaluations of the Collateral as the Agent shall deem necessary or appropriate
in the exercise of its sole discretion; provided, that, so long as an Event of
Default shall not have occurred and be continuing, the Agent shall not conduct
(or engage third parties to conduct) field examinations, appraisals,
verifications and evaluations of the Collateral more than twice in any Fiscal
Year. If any Inventory of a Borrower is at any time hereafter stored or located
at any warehouse not owned or leased by such Borrower, then such Borrower shall
promptly deliver to such warehouseman notification of the Agent's Lien on such
Inventory and shall take such other steps as the Agent reasonably requires to
perfect its Liens thereon.
7.3 CORPORATE EXISTENCE. Each Borrower shall, and shall cause each
of its Subsidiaries to, (i) except as otherwise expressly permitted pursuant to
Section 8.6, maintain its corporate or other existence and maintain in full
force and effect all licenses, bonds, franchises, and qualifications to do
business, and all other rights, in each case required to continue to conduct its
business activities, and (ii) continue in, and limit their operations to, the
same general lines of business as presently conducted by it (and reasonable
extensions thereof).
7.4 ERISA. Each Borrower shall deliver to the Agent and each of the
Lenders, at such Borrower's expense, the following information at the times
specified below:
(a) within thirty (30) days after the filing thereof with the DOL,
Internal Revenue Service or PBGC, copies of each annual report (form 5500
series), including Schedule B thereto, filed with respect to each Benefit Plan;
(b) within thirty (30) days after receipt by such Borrower, any
Subsidiary of such Borrower or any ERISA Affiliate of each actuarial report for
any Benefit Plan or Multiemployer Plan and each annual report for any
Multiemployer Plan, copies of each such report;
(c) within thirty (30) days after the occurrence thereof,
notification of (i) any increase in the benefits of any existing Benefit Plan,
(ii) the establishment of any new Benefit Plan and (iii) the commencement of
contributions to any Benefit Plan or Multiemployer Plan not set forth on
Schedule B, Part 6.15; and
(d) within ten (10) days after the occurrence thereof, a statement
describing the material details of any event or condition referred to in clauses
(i) through (vii) of Section 9.1(i), whether or not such event or condition
shall constitute an Event of Default.
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Except for any such failures to comply which singly or in the aggregate
could reasonably be expected to have a Material Adverse Effect, each Borrower
and its Subsidiaries shall establish, maintain and operate all employee benefit
plans (as defined in Section 3(3) of ERISA) to comply in all respects with the
provisions of ERISA, the Code, and all other Requirements of Law, other than to
the extent that such Borrower or any such Subsidiary (i) is in good faith
contesting by appropriate proceedings the validity or application of any such
Requirement of Law and (ii) has made an adequate reserve or other appropriate
provision therefor as required in order to be in conformity with GAAP.
7.5 BOOKS AND RECORDS. Each Borrower agrees to maintain, and to
cause each of its Subsidiaries to maintain, books and records, including those
pertaining to the Collateral, in such detail, form and scope as is consistent
with good business practice, and agrees that such books and records will reflect
the Agent's and Lenders' respective interests in its Accounts. Each Borrower
agrees that the Agent or its agents may enter upon the premises of such Borrower
or any Subsidiary of such Borrower at any time and from time to time, during
normal business hours and upon reasonable notice under the circumstances, and at
any time at all on and after the occurrence and during the continuance of a
Default or an Event of Default for the purposes of (a) inspecting the Collateral
and/or copying (at such Borrower's expense) any and all records pertaining
thereto and (b) discussing the business affairs and prospects and financial
condition of such or any other Borrower and each Subsidiary of such or any other
Borrower with any officers, employees and directors of such Borrower or such
Subsidiary or with the Auditors. Each Borrower shall give the Agent thirty (30)
days prior written notice of any change in the location of any Collateral from
the locations specified on Schedule B, Part 6.8, and each Borrower shall execute
in advance of such change and cause to be delivered to the Agent any Collateral
Access Agreements or other documents reasonably required by the Agent, all in
form and substance reasonably satisfactory to the Agent. Each Borrower agrees to
advise the Agent promptly, in sufficient detail, of any substantial changes
relating to the type, quantity or quality of the Collateral, or any event which
singly or in the aggregate could reasonably be expected to have a material
adverse effect on the value of the Collateral or on the Liens granted for the
benefit of the Agent, the Lenders and the Issuing Lenders thereon.
7.6 COLLATERAL RECORDS. Each Borrower agrees to execute and deliver
promptly, and to cause each of its Subsidiaries to execute and deliver promptly,
to the Agent, from time to time, such written statements and schedules as the
Agent may reasonably require, including those described in Section 7.1 of this
Credit Agreement, designating, identifying or describing the Collateral. The
failure by any Borrower or any Subsidiary of any Borrower, however, to promptly
give the Agent such statements or schedules shall not affect, diminish, modify
or otherwise limit the Liens on the Collateral granted pursuant to the Credit
Documents.
7.7 SECURITY INTERESTS. Each Borrower shall, and shall cause each of
its Subsidiaries to, defend the Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein (other than with
respect to Permitted Liens). Each Borrower shall, and shall cause each of its
Subsidiaries to, comply with the requirements of all state and federal laws in
order to grant to the Agent, the Lenders and the Issuing Lenders valid and
perfected first priority security interests in the Collateral, subject to
Permitted Liens, with perfection, in the case of any investment property, being
effected by giving the Agent control of such investment property, rather than by
the filing of a UCC financing statement with respect to such investment
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property. The Agent is hereby authorized by each Borrower to file any UCC
financing statements covering the Collateral in appropriate jurisdictions
whether or not such Borrower's signatures appear thereon. Each Borrower shall,
and shall cause each of its Subsidiaries to, do whatever the Agent may
reasonably request, from time to time, to effect the purposes of this Credit
Agreement and the other Credit Documents, including filing notices of liens, UCC
financing statements, fixture filings and amendments, renewals and continuations
thereof; cooperating with the Agent's representatives; keeping stock records;
obtaining waivers from landlords and mortgagees and from warehousemen and their
landlords and mortgagees; and, paying claims which might, if unpaid, become a
Lien on the Collateral.
7.8 INSURANCE; CASUALTY LOSS.
(a) Each Borrower agrees to maintain, and to cause each of its
Subsidiaries to maintain, public liability insurance, third party property
damage insurance and replacement value insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts and
covering such risks as are at all times satisfactory to the Agent in its
commercially reasonable judgment. All policies covering the Collateral are to
name the Agent as an additional insured and the loss payee in case of loss, and
are to contain such other provisions as the Agent may reasonably require to
fully protect the interest of the Lenders in the Collateral and to any payments
to be made under such policies. Each Borrower shall diligently file and
prosecute, or cause to be filed and prosecuted, all claims for any award or
payment in connection with a Casualty Loss with respect to such Borrower or any
Subsidiary of such Borrower. Each Borrower and each Subsidiary of a Borrower
shall receive in trust and pay to the Agent, promptly upon receipt thereof, the
Net Disposition Proceeds of all Casualty Losses with respect to such Person, for
application to the Loans. After the occurrence and during the continuance of an
Event of Default, (A) no settlement on account of any such Casualty Loss with
respect to any Borrower shall be made without the consent of the Agent and (B)
the Agent may participate in any such proceedings and the applicable Borrower
shall deliver to the Agent such documents as may be reasonably requested by the
Agent to permit such participation and shall consult with the Agent, its
attorneys and agents in the making and prosecution of such claim or claims. Each
Borrower hereby irrevocably authorizes and appoints the Agent its
attorney-in-fact, and agrees that, upon request, it will cause each Subsidiary
of such Borrower to authorize and appoint the Agent its attorney-in-fact, after
the occurrence and during the continuance of an Event of Default, to collect and
receive any such award or payment and to file and prosecute such claim or
claims, which power of attorney shall be irrevocable and shall be deemed to be
coupled with an interest, and each Borrower shall, upon demand of the Agent,
make, execute and deliver, and cause each of its Subsidiaries to make, execute
and deliver, any and all assignments and other instruments sufficient for the
purpose of assigning any such award or payment to the Agent for the benefit of
the Agent, the Lenders and the Issuing Lenders, free and clear of any
encumbrances of any kind or nature whatsoever.
(b) Notwithstanding anything to the contrary contained herein, upon
the occurrence of any Casualty Loss with respect to any Equipment or other fixed
assets of any Borrower or any Subsidiary of any Borrower, the Agent shall
establish a reserve against unused availability under the Borrowing Base in an
amount equal to the orderly liquidation value of such fixed assets (as
determined by the Agent in its sole discretion). Each such reserve shall remain
in effect until such time as the Net Disposition Proceeds of such Casualty Loss
are received by the Agent for
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application to the Loans, at which time the Fixed Asset Sublimit shall be
automatically and permanently reduced by an amount equal to the greater of (i)
such Net Disposition Proceeds and (ii) such orderly liquidation value; provided,
that, with respect to no more than $7,500,000 of such Net Disposition Proceeds
received in cash in any Fiscal Year, so long an Event of Default shall not have
occurred and be continuing, within 90 days following receipt by the Agent
thereof, the Funds Administrator may deliver to the Agent a certificate of a
Responsible Officer of BWAY setting forth (x) that portion of such Net
Disposition Proceeds that the applicable Borrower or Subsidiary, as the case may
be, intends to reinvest in the purchase of Equipment or other fixed assets used
in the business of the Borrowers within two (2) years of such date of receipt,
and (y) the proposed use of such portion of such Net Disposition Proceeds (and,
in connection therewith, shall thereafter promptly provide such other
information with respect to such reinvestment as the Agent may from time to time
reasonably request) and, pending such reinvestment, the Agent shall continue to
maintain a reserve against unused availability under the Borrowing Base in the
amount of such Net Disposition Proceeds (which reserve shall remain in effect
until reduced from time to time at the written request of the Funds
Administrator upon the Agent's receipt of evidence reasonably satisfactory to
the Agent of the purchase of such Equipment or other fixed assets) and shall not
reduce the Fixed Asset Sublimit in the amount thereof (although an immediate
reduction in the Fixed Asset Sublimit shall occur in any event to the extent
that such Net Disposition Proceeds are less than the orderly liquidation value
of the Equipment or other fixed assets with respect to which such Casualty Loss
occurred, as determined by the Agent in its sole discretion); provided, further,
that if (A) within 365 days after the date of receipt by the Agent of such Net
Disposition Proceeds, the Borrowers have not so used such Net Disposition
Proceeds, or in the alternative have not delivered to the Agent evidence
reasonably satisfactory to the Agent that one or more of the Borrowers has
entered into one or more binding contractual commitments to so use such Net
Disposition Proceeds, or, in any event (B) within two (2) years after the date
of the Agent's receipt of such Net Disposition Proceeds, the Borrowers have not
so used all or any portion of such Net Disposition Proceeds not required to be
applied to reduce the Fixed Asset Sublimit pursuant to the preceding proviso, or
pursuant to clause (A) of this proviso, the Fixed Asset Sublimit shall be
promptly reduced by an amount equal to such remaining portion on the last day of
such 365 day period or two year period, as the case may be.
7.9 TAXES. Each Borrower agrees to pay, when due and payable, and to
cause each of its Subsidiaries to pay when due and payable, all Credit Party
Taxes lawfully levied or assessed against such Borrower, any Subsidiary of such
Borrower or any of their properties, including any of the Collateral, before any
penalty or interest accrues thereon; provided that, unless such Credit Party
Taxes have become a federal tax or ERISA Lien on any of the assets of such
Borrower or any such Subsidiary, no such Credit Party Taxes need be paid if the
same are being contested, in good faith, by appropriate proceedings promptly
instituted and diligently conducted and if an adequate reserve or other
appropriate provision shall have been made therefor as required in order to be
in conformity with GAAP.
7.10 COMPLIANCE WITH LAWS.
(a) Except for any such failures to comply which singly or in the
aggregate could not reasonably be expected to have a Material Adverse Effect,
each Borrower agrees to comply, and
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to cause each of its Subsidiaries to comply, with all Requirements of Law
applicable to its business or its operations or to the Collateral or any part
thereof.
(b) Within fifteen (15) days after any Borrower learns of the
enactment or promulgation of any Requirement of Law which could reasonably be
expected to have a Material Adverse Affect, such Borrower shall provide the
Agent with notice thereof.
(c) At the request of the Agent from time to time, but in any event
not more frequently than once in any twelve month period, and at the sole cost
and expense of the Borrowers, each Borrower shall retain an environmental
consulting firm, satisfactory to Agent in its commercially reasonable judgment,
to conduct an environmental review, audit or investigation of the specific items
as reasonably requested by the Agent relating to the properties of such Borrower
and its Subsidiaries located in the United States and provide to the Agent and
each Lender a copy of any reports delivered in connection therewith. At the
request of the Agent, each Borrower shall provide the Agent with any additional
information relating to environmental matters and any potential related
liability resulting therefrom as the Agent may reasonably request.
7.11 USE OF PROCEEDS. The Loans made to the Borrowers hereunder shall
be used solely by the Borrowers to pay the costs and expenses of the Related
Transactions and the transactions contemplated by this Credit Agreement and for
working capital and other general corporate purposes of the Borrowers, including
Investments consisting of Acquisitions, to the extent permitted pursuant to
Section 8.9(d). The Borrowers shall not use any portion of the proceeds of any
such Loans for the purpose of purchasing or carrying any "margin stock" (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
in any manner which violates the provisions of Regulation U or X of said Board
of Governors or for any other purpose in violation of any applicable statute or
regulation, or of the terms and conditions of this Credit Agreement.
7.12 FISCAL YEAR. Each Borrower agrees to maintain its Fiscal Year as
a year ending on the Sunday closest to September 30th of the applicable year
unless otherwise required by law, in which case such Borrower will give the
Agent at least thirty (30) days prior written notice of any change therein.
7.13 NOTIFICATION OF CERTAIN EVENTS. Each Borrower agrees that it
shall promptly notify the Agent of:
(a) any Material Contract of such Borrower or any of its
Subsidiaries that is terminated or amended, restated, supplemented or otherwise
modified (in any material and adverse respect) or any new Material Contract that
is entered into (in which event such Borrower shall provide the Agent with a
true, correct and complete copy of such Material Contract);
(b) any material and adverse change or amendment of the material
terms upon which any material supplier of such Borrower or any of its
Subsidiaries does business with such Borrower or Subsidiary;
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(c) the entry of any order, judgment or decree in excess of
$1,000,000 against such Borrower or any of its Subsidiaries or any of their
respective properties or assets;
(d) receipt by such Borrower or any of its Subsidiaries of any
notification of violation in any material respect of any material Requirement of
Law from any Governmental Authority;
(e) the occurrence of any event which in the good faith
determination of such Borrower has had or could reasonably be expected to have a
Material Adverse Effect;
(f) any proceedings being instituted or, to the knowledge of any
Credit Party, threatened to be instituted by or against such Borrower or any of
its Subsidiaries, before any Governmental Authority, involving liability or
potential liability of $500,000 or more, in the case of any one such proceeding,
and $1,000,000 or more, in the aggregate for all such proceedings instituted or
threatened to be instituted by or against the Borrowers and their Subsidiaries
combined;
(g) the occurrence of an "Event of Default" (as such term is defined
in the Subordinated Note Indenture); and
(h) the occurrence of an "Event of Default" (as such term is defined
in the Existing Note Indenture).
7.14 INTELLECTUAL PROPERTY. Except for any such failures to preserve
and keep in full force and effect which singly or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, each Borrower shall,
and shall cause each of its Subsidiaries to, do and cause to be done all things
necessary to preserve and keep in full force and effect all registrations of
patents, copyrights, trademarks, service marks and other marks, trade names or
other trade rights required in the conduct of its business.
7.15 MAINTENANCE OF PROPERTY. Each Borrower agrees to keep, and to
cause each of its Subsidiaries to keep, all property useful and necessary to its
respective businesses in good working order and condition in all material
respects (ordinary wear and tear excepted) in accordance with their past
operating practices.
7.16 FURTHER ASSURANCES. Each Borrower shall take promptly, and shall
cause each of its Subsidiaries to take promptly, all such further actions and
execute all such further documents and instruments as the Agent may at any time
reasonably determine to be necessary or desirable to further carry out and
consummate the transactions contemplated by the Credit Documents, to cause the
execution, delivery and performance of the Credit Documents to be duly
authorized and to perfect or protect the Liens (and the priority status thereof)
of the Agent on the Collateral (subject to Permitted Liens).
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ARTICLE 8
NEGATIVE COVENANTS
Until the Expiration Date and payment and satisfaction of all
Obligations (other than contingent indemnification Obligations to the extent
that no claim giving rise thereto has been asserted and remains unresolved or
unsatisfied), each Borrower agrees that:
8.1 CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Upon the occurrence of
a Trigger Event, (a) if such Trigger Event is the event described in clause (a)
of the definition thereof, the Borrowers shall not permit the Consolidated Fixed
Charge Coverage Ratio to be less than 1:00 to 1:00 as determined as of the last
day of the most recent Fiscal Month with respect to which the Borrowers have
delivered Financial Statements to the Agent (whether pursuant to Section 7.1(a),
(b), or (c)) for the twelve (12) Fiscal Months ending on such last day; and (b)
if such Trigger Event is the event described in clause (b) of the definition
thereof, (i) the occurrence of such Trigger Event shall constitute an Event of
Default, and (ii) whether or not such Event of Default is subsequently waived by
the Majority Lenders, the Borrowers shall not permit the Fixed Charge Coverage
Ratio, as determined as of the last day of each Fiscal Quarter ending
thereafter, in each case for the twelve (12) Fiscal Months ending on such date,
to be less than 1:00 to 1:00.
8.2 CAPITAL EXPENDITURES. No Borrower shall, or shall permit any of
its Subsidiaries to, directly or indirectly, make payments for Capital
Expenditures in any Fiscal Year in excess of (a) $17,000,000, plus (b) fifty
percent (50%) of the amount permitted to be spent on Capital Expenditures
pursuant to clause (a) of this Section 8.2 in the immediately preceding Fiscal
Year and not so used, plus (c) to the extent that, in the absence of such
allocation, the aggregate amount of all such payments for Capital Expenditures
in any such Fiscal Year would exceed the aggregate amount permitted pursuant to
foregoing clauses (a) and (b), that portion of the Excess Cash Flow Allowance,
if any, allocated to Capital Expenditures in such Fiscal Year pursuant to a
certificate of a Responsible Officer of the Funds Administrator delivered to the
Agent (any such allocation to be irrevocable and binding upon the Funds
Administrator and the Borrowers).
8.3 NO ADDITIONAL INDEBTEDNESS. No Borrower shall, or shall permit
any of its Subsidiaries to, directly or indirectly, incur, create, assume or
suffer to exist any Indebtedness other than:
(a) (i) Indebtedness secured by Purchase Money Liens, and (ii)
Indebtedness consisting of regularly scheduled rental payments under Capital
Leases (such Capital Leases in any event to be entered into on commercially
reasonable terms); provided that the Indebtedness described in the foregoing
clauses (i) and (ii) shall not exceed, in the aggregate for the Borrowers and
their respective Subsidiaries combined, $5,000,000 outstanding at any one time;
(b) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(c) Indebtedness of any Borrower to any other Borrower; provided,
that, in each case, if and to the extent that any such Indebtedness is evidenced
by a promissory note or similar
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instrument such promissory note or other instrument shall be duly endorsed and
delivered to the Agent as additional Collateral;
(d) (i) Indebtedness evidenced by the Subordinated Notes in an
original principal amount not exceeding $200,000,000 (as reduced from time to
time by any repayments of principal thereof made on or after the Closing Date)
and (ii) Indebtedness evidenced by the Existing Notes in an outstanding
principal amount not exceeding $1,000,000 (as reduced from time to time by any
repayments of principal thereof made on or after the Closing Date);
(e) Indebtedness described on Schedule B, Part 8.3(e);
(f) Indebtedness to any Lender in respect of Derivative Transactions
entered into by any Borrower or any Subsidiary of any Borrower in the ordinary
course and pursuant to the reasonable requirements of such Person's business and
not for speculation;
(g) obligations or other Liabilities incurred in connection with
Acquisitions permitted pursuant to Section 8.9 in respect of usual and customary
provisions regarding post-closing purchase price adjustment, earnouts and
indemnification in the agreements governing such Acquisitions;
(h) (i) Indebtedness in an aggregate outstanding principal amount
not exceeding $5,000,000, assumed by any Borrower or any Subsidiary of any
Borrower in connection with any Acquisition otherwise permitted pursuant to
Section 8.9(d), including Indebtedness of a Person that becomes a Borrower as a
result of such Acquisition, to the extent such Indebtedness was not incurred in
contemplation of or in connection with such Acquisition and consists solely of
Capital Lease Obligations, Indebtedness secured by mortgage Liens on real
property, or Liens on Equipment, in each case of the Acquisition Target, and
obligations under real property and other ordinary course operating leases, and
(ii) unsecured Indebtedness in an aggregate outstanding principal amount not
exceeding $20,000,000, assumed or incurred by any Borrower or any Subsidiary of
any Borrower in connection with any Acquisition otherwise permitted pursuant to
Section 8.9(d), which was incurred in contemplation of or in connection with
such Acquisition, to the extent that all Indebtedness assumed or incurred by any
Borrower or any Subsidiary of any Borrower pursuant this clause (ii) shall not
require any scheduled payment of principal with respect thereto prior to one
hundred eighty (180) days after the Expiration Date;
(i) unsecured Indebtedness incurred in the ordinary course of
business to finance insurance premiums;
(j) Indebtedness in respect of bids, tenders, contracts (other than
contracts for the payment of money), leases, statutory obligations, surety and
appeal bonds and other obligations of like nature arising in the ordinary course
of business;
(k) Indebtedness incurred in the ordinary course of business in
respect of netting services, overdraft protections and other similar services in
connection with deposit accounts and Indebtedness in connection with drafts
payable for payroll and other ordinary course expense items;
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(l) unsecured Indebtedness evidenced by Management Notes in an
aggregate principal amount not exceeding $2,000,000, incurred in any Fiscal
Year;
(m) Indebtedness of Foreign Subsidiaries incurred solely for working
capital purposes in an aggregate principal amount not to exceed $5,000,000
outstanding at any time;
(n) Indebtedness in respect of Guaranties expressly permitted under
Section 8.7;
(o) unsecured Indebtedness of any Borrower or any Subsidiary of any
Borrower, in addition to other Indebtedness permitted under clauses (a) through
(n) above, in an aggregate principal amount, when aggregated with the
Investments made pursuant to Section 8.9(l) and Indebtedness Guaranteed by any
Borrower or any Subsidiary of any Borrower pursuant to Sections 8.7(g) and (h),
respectively, not to exceed $7,500,000 outstanding at any time, provided, that
such Indebtedness (a) may not be assumed or incurred by any Borrower or any
Subsidiary of any Borrower in connection with or in contemplation of any
Acquisition, and (b) shall not require any scheduled payment of principal with
respect thereto prior to one hundred eighty (180) days after the Expiration
Date; and
(p) extensions, renewals and replacements of any Indebtedness
described in clauses (a) through (o) above, in each case to the extent that such
extension, renewal or replacement, as the case may be, does not in any case
increase the aggregate outstanding principal amount thereof and is on terms no
more onerous in any material respect to the respective obligors in respect
thereof.
8.4 NO LIENS; JUDGMENTS. No Borrower shall, or shall permit any of
its Subsidiaries to, directly or indirectly, mortgage, assign, pledge, transfer,
create, incur, assume, suffer to exist or otherwise permit any Lien (whether as
a result of a purchase money or title retention transaction, or other security
interest, judgment or otherwise) to exist on any of its property, assets,
revenues or goods, whether real, personal or mixed, whether now owned or
hereafter acquired, except for the following (the "Permitted Liens"):
(a) Liens granted by such Borrower or Subsidiary pursuant to any
Credit Document;
(b) Liens in existence on the Closing Date which are listed (and the
property subject thereto described) on Schedule B, Part 8.4(b);
(c) Purchase Money Liens;
(d) Liens of warehousemen, mechanics, material men, workers,
repairmen, common carriers, landlords and other similar Liens arising by
operation of law or otherwise, not waived in connection herewith, for amounts
that are not overdue by more than forty-five (45) days or which are being
diligently contested in good faith by such Borrower or Subsidiary by appropriate
proceedings;
(e) Attachment and judgment Liens, to the extent and for so long as
the underlying judgments and decrees do not constitute an Event of Default
pursuant to Section 9.1(j);
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(f) Liens for Credit Party Taxes not yet due and payable or Liens
for Credit Party Taxes which are being diligently contested in good faith by
such Borrower by appropriate proceedings, provided that an adequate reserve with
respect thereto has been established in accordance with GAAP;
(g) Deposits or pledges to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment insurance
incurred in the ordinary course of business;
(h) Deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in the ordinary
course of business;
(i) Easements, covenants, licenses, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of business which (i)
appear as exceptions on the title insurance policies delivered to the Agent in
connection with the execution and delivery of the Existing Credit Agreement, and
(ii) other easements, covenants, licenses, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, do not detract in any material respect from the value of the property
subject thereto or interfere in any material respect with the ordinary conduct
of the business of any Borrower or any Subsidiary of any Borrower;
(j) leases or subleases granted to third Persons not materially
interfering with the conduct of the business of any Borrower or any Subsidiary
of any Borrower;
(k) Liens existing on any property or assets acquired in connection
with an Acquisition permitted pursuant to Section 8.9 prior to the acquisition
thereof by a Borrower, including any such Liens on any property or assets of any
Person that becomes a Borrower as a result of such Acquisition, so long as such
Liens are not granted in contemplation of or in connection with such Acquisition
and secure Indebtedness permitted pursuant to Section 8.3(h)(i);
(l) Liens on assets of Foreign Subsidiaries securing Indebtedness
permitted pursuant to Section 8.3(m);
(m) Liens of landlords or mortgages of landlords arising by
operation of law securing lease obligations that are not overdue by more than
forty-five (45) days or are being contested in good faith by appropriate
proceedings, or any possessory rights of a lessor to the leased property under
the provisions of any lease expressly permitted by the terms of this Credit
Agreement;
(n) any encumbrance or restriction (including, without limitation,
put and call agreements) with respect to the Capital Securities of any Joint
Venture expressly permitted by the terms of this Credit Agreement pursuant to
the Joint Venture or similar agreement with respect to such Joint Venture;
(o) Liens on intellectual property to the extent such Liens arise
from the granting of licenses to use such intellectual property to any Person in
the ordinary course of business;
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(p) Liens on property subject to Sale-Leaseback Transactions
permitted under Section 8.5(f) and general intangibles related thereto;
(q) Liens on individual items of Collateral consisting of Equipment,
real property or other fixed assets in addition to those permitted under clauses
(a) through (p) above as the Agent may approve in writing in its sole
discretion, to the extent securing aggregate Indebtedness in an outstanding
principal amount not greater than $2,000,000; and
(r) Extensions and renewals of the foregoing permitted Liens;
provided that the aggregate amount of such extended or renewed Liens is not
increased and such extended or renewed Liens are on terms and conditions no more
restrictive than the terms and conditions of the Liens being extended or
renewed.
8.5 NO SALE OF ASSETS. No Borrower shall, or shall permit any of its
Subsidiaries to, directly or indirectly, sell, lease, assign, transfer or
otherwise dispose of any assets other than:
(a) Inventory in the ordinary course of business;
(b) individual items of Collateral (other than any Capital
Securities of any of its Subsidiaries), with a book value of less than, in the
aggregate for all Borrowers and their respective Subsidiaries combined, during
any Fiscal Year, $250,000;
(c) the Permitted Dispositions;
(d) outdated and worn out property disposed of in the ordinary
course of business;
(e) property no longer used or useful in the conduct of the business
of such Person and disposed of in the ordinary course of business;
(f) Sale-Leaseback Transactions, so long as (i) no Default or Event
of Default then exists or would result therefrom, (ii) each such sale is in an
arm's-length transaction and such Borrower or Subsidiary, as the case may be,
receives fair value in consideration therefor, (iii) the total consideration
received by such Person is in immediately available Dollars and is paid at the
time of the closing of such sale, (iv) the Net Disposition Proceeds thereof are
applied as a reduction in the Fixed Asset Sublimit as (and to the extent)
required by clause (e) of the definition thereof, and (v) the aggregate
consideration for all Sale-Leaseback Transactions consummated after the Closing
Date does not exceed $2,000,000 in the aggregate for all Borrowers and their
respective Subsidiaries combined;
(g) the sale or discount, in each case without recourse and in the
ordinary course of business, of Accounts of such Person, but only in connection
with the compromise or collection thereof and not as part of any financing
transaction;
(h) sales, transfers and dispositions of non strategic assets
purchased as part of an Acquisition permitted pursuant to Section 8.9;
(i) as expressly permitted pursuant to Section 8.6; and
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(j) other sales, leases, assignments, transfers or other
dispositions of assets in addition to those described in the foregoing clauses
(a) through (i);
provided that, (i) in the case of any sale, lease, assignment, transfer or other
disposition described in foregoing clauses (e) and (j), respectively, (A) each
such sale, lease, assignment, transfer or other disposition shall be for fair
value, (B) no less than ninety percent (90%) of the total consideration for each
such sale, lease, assignment, transfer or other disposition is received by the
applicable Borrower or Subsidiary, as the case may be, in the form of
immediately available Dollars at the closing of such sale, lease, assignment,
transfer or other disposition, and (ii) in the case of sales, leases,
assignments, transfers and other dispositions described in foregoing clauses
(d), (e) and (j), respectively, the aggregate consideration for all such sales,
leases, assignments, transfers or other dispositions does not exceed, in the
aggregate for all Borrowers and their respective Subsidiaries combined, for any
Fiscal Year, $2,500,000.
8.6 NO CORPORATE CHANGES. No Borrower shall, or shall permit any of
its Subsidiaries to, directly or indirectly, merge, consolidate, liquidate, wind
up, dissolve or otherwise alter or modify such Borrower's or such Subsidiary's
Governing Documents, corporate name, mailing addresses, structure, status or
existence, provided that (a) the Related Transactions occurring on or prior to
the Closing Date shall be permitted, (b) any Borrower or any Subsidiary of a
Borrower may be merged, consolidated or liquidated with or into, as the case may
be, such or any other Borrower so long as (i) a Borrower shall be the continuing
or surviving corporation and (ii) no Default or Event of Default shall exist or
result therefrom; (b) may alter or modify such Person's Governing Documents,
except for any such alterations or modifications, as the case may be, that
singly or in the aggregate could reasonably be expected to have a material
adverse impact on the rights, remedies and other interests of the Agent or
Lenders under the Credit Documents taken as a whole; and (c) may alter its
corporate name and mailing addresses upon not less than thirty (30) days' prior
written notice to the Agent.
8.7 NO GUARANTIES. No Borrower shall, or shall permit any of its
Subsidiaries to, directly or indirectly, issue or assume any Guaranty with
respect to the Liabilities of any other Person, including any Subsidiary or
Affiliate of such or any other Borrower, except (a) by the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (b) by the giving of usual and customary
indemnities in connection with the sale of Inventory or other asset dispositions
permitted hereunder, (c) by the giving of usual and customary indemnities in
connection with Acquisitions permitted pursuant to Section 8.9, (d) Guaranties
of Indebtedness permitted to be incurred pursuant to Section 8.3; (e) Guaranties
of surety and appeal bonds and other obligations of like nature arising in the
ordinary course of business; (f) obligations to insurance carriers in respect of
workmen's compensation and other insurance coverage arising in the ordinary
course of business, (g) Guaranties of Indebtedness of directors, officers and
employees of BCO Holding, any Borrower or any Subsidiary of any Borrower; and
(h) Guaranties in respect of Indebtedness of a Person in connection with a Joint
Venture; provided that, in no event shall (i) the aggregate principal amount of
Indebtedness outstanding at any time that is Guaranteed pursuant to clause (g)
and (h) of this Section 8.7, when aggregated with the amount of Investments then
outstanding under Section 8.9(l), exceed $5,000,000, and (ii) the aggregate
principal amount of Indebtedness outstanding at any time that is Guaranteed
pursuant to clause (g) and (h) of this Section 8.7,
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when aggregated with the amount of Indebtedness then outstanding under Section
8.3(o), exceed $7,500,000.
8.8 NO RESTRICTED PAYMENTS. No Borrower shall, or shall permit any
of its Subsidiaries to, directly or indirectly make any Restricted Payment,
provided, that:
(a) (i) any Borrower may declare and pay dividends and make other
distributions to any other Borrower, (ii) any Borrower may make payments
required pursuant to the Merger Documents (in each case as in effect on the date
hereof), and (iii) any Subsidiary of any Borrower which is not itself a Borrower
may declare and pay dividends and make other distributions to its shareholders
or other equity holders generally, so long as such Borrower receives at least
its proportionate share thereof (based upon its relative holding of the equity
interest in the Subsidiary paying such dividend, or making such distribution as
the case may be, and taking into account the relative preferences, if any, of
the various classes of equity interest of such Subsidiary);
(b) BWAY may make Restricted Payments to BCO Holding:
(i) to permit BCO Holding to repurchase or redeem issued and
outstanding Management Notes or Capital Securities of BCO Holding (or options to
purchase Capital Securities of BCO Holding) held by former officers, directors
or employees of BCO Holding, any Borrower or any Subsidiary of any Borrower
following the death, retirement, disability or termination of employment or
service as a director of such officers, directors or employees, so long as (to
the extent such Restricted Payment is paid in cash, as opposed to through the
issuance of a Management Note): (i) immediately before and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing
and there shall be unused availability under the Borrowing Base of at least
$20,000,000; and (ii) the aggregate amount of all such payments made in cash
after the Closing Date does not exceed $10,000,000;
(ii) to permit BCO Holding to pay BCO Holding Related Taxes;
(iii) to permit BCO Holding to pay (substantially
contemporaneously with, and in the same amount of, such distributions) (x)
obligations under or in respect of director and officer insurance policies, and
(y) indemnification obligations owing to directors, officers, employees and
other Persons under its Governing Documents, the Employment Agreements and the
Xxxxx Agreements (in the case of all such agreements and documents, as in effect
on the date hereof) or any other written agreements with any such Person entered
into after the Closing Date by BCO Holding in the ordinary course of business;
(iv) to permit BCO Holdings (substantially contemporaneously
with, and in the same amount of, such distributions) to pay reasonable and
customary directors' fees and expenses, reasonable legal and accounting expenses
and other similar reasonable expenses necessary or advisable to the maintenance
of BCO Holding's corporate existence and good standing;
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(v) to permit BCO Holding (substantially contemporaneously
with, and in the same amount of, such distributions) to pay fees and expenses
incurred by BCO Holding in connection with the Related Transactions Documents;
(vi) to permit BCO Holding to pay (substantially
contemporaneously with, and in the same amount of, such distributions),
reasonable and customary fees, compensation and benefits paid to officers,
directors, employees of BCO Holding for services rendered to BCO Holding in the
ordinary course of business; and
(vii) to permit BCO Holdings to make payments required
pursuant to the Merger Documents (in each case as in effect on the date hereof);
(c) so long as immediately before and after giving effect thereto,
no Default or Event of Default shall have occurred and be continuing, BWAY may
repurchase or redeem up to 35% of the aggregate principal amount of the
Subordinated Notes outstanding on the Closing Date at a redemption price of no
more than 110% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the date of such repurchase or redemption with the Net
Equity Proceeds of any capital contribution to BWAY by BCO Holdings;
(d) BWAY may repurchase or redeem 100% of the Existing Notes at a
purchase or redemption price of no more than 105.125% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the date of such
purchase or redemption; and
(e) BWAY may make regularly scheduled payments of interest under the
Subordinated Notes, at the respective times and in the respective amounts
required under the Subordinated Note Indenture, to the extent permitted pursuant
to Article 10 and Article 12 of the Subordinated Note Indenture, as in effect on
the Closing Date.
8.9 NO INVESTMENTS. No Borrower shall, or shall permit any of its
Subsidiaries to, directly or indirectly, make any Investment in any Person other
than:
(a) Investments in existence on the Closing Date which are set forth
on Schedule B, Part 8.9;
(b) Advances or loans to employees made in the ordinary course of
business;
(c) Interest-bearing demand or time deposits (including certificates
of deposit) which are insured by the Federal Deposit Insurance Corporation
("FDIC") or a similar federal insurance program; however, provided that such
Borrower may, in the ordinary course of its business, maintain in its
disbursement accounts from time to time accounts in excess of then applicable
FDIC or other program insurance limits;
(d) Investments in connection with Acquisitions, provided that:
(i) on the date of consummation of each such Acquisition,
Agent shall have received a certificate duly executed by a Responsible Officer
of BWAY certifying that the financial condition referred to in clause (ii) below
with respect thereto is satisfied, together with evidence thereof reasonably
satisfactory to the Agent,
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(ii) the Consolidated Fixed Charge Coverage Ratio, determined
on a pro forma basis (after giving effect to any Permitted Pro Forma Acquisition
Adjustments in connection with such Acquisition) for the period of four (4)
consecutive Fiscal Quarters ending on the last day of the last completed Fiscal
Quarter immediately preceding the proposed date of consummation of such
Acquisition (on the assumption such Acquisition occurred on the first day of
such four Fiscal Quarter period and using historical results of the Consolidated
Entity and the related Acquisition Target for such period), shall be at least
equal to the minimum ratio with respect to such period required pursuant to
Section 8.1,
(iii) each such Acquisition shall be consummated (x) in
accordance with all material applicable Requirements of Law and the applicable
Borrower and Acquisition Target shall have obtained all material consents and
approvals of Governmental Authorities necessary in connection therewith and with
the business operations of the related Acquisition Target after such Acquisition
and (y) pursuant to such agreements, documents and instruments as shall be in
each case in form and substance reasonably satisfactory to the Agent,
(iv) the related Acquisition Target shall be engaged in the
same or substantially similar lines of business being conducted by the Borrowers
on the Closing Date (or reasonable extensions thereof),
(v) no Default or Event of Default shall exist at the time
of consummation thereof or would result therefrom,
(vi) after giving effect to each such Acquisition, the ratio
of Consolidated Total Indebtedness as of the last day of the Fiscal Quarter
ending immediately prior to the Fiscal Quarter in which such Acquisition is
consummated, to Consolidated EBITDA for the twelve month period ending as of
such day, is less than 4.0 to 1.00, and
(vii) proceeds of Revolving Loans may be used to consummate
(or make cash earnout payments in respect of) an Acquisition after the Closing
Date only to the extent that (A) after giving effect to such Acquisition (or
cash earnout payment, as the case may be), unused availability under the
Borrowing Base is at least equal to the greater of (x) $20,000,000 and (y) the
aggregate proceeds of Revolving Loans used to consummate such Acquisition (or
make such cash earnout payment, as the case may be), and (B) the aggregate
proceeds of Revolving Loans used to consummate all Acquisitions (or make cash
earnout payments, as the case may be) after the Closing Date does not exceed
$35,000,000;
(e) extensions of trade credit in the ordinary course of business;
(f) Investments expressly permitted pursuant to Sections 8.3, 8.7,
8.8, 8.10 and 8.17;
(g) non-cash consideration issued in connection with the sale,
lease, transfer or other disposition of assets, to the extent expressly
permitted by Section 8.5;
(h) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers, and Investments received in good
faith settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
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(i) Cash Equivalents, to the extent the Agent has a perfected, first
priority Lien thereon securing all Obligations;
(j) Investments by any Borrower in any other Borrower;
(k) Investments consisting of payments made by any Borrower in
respect of indemnification obligations then due and payable to directors,
officers, employees and other Persons under such Borrower's Governing Documents,
any Employment Agreements or any other written agreements with any such Person
entered into after the Closing Date by BWAY in the ordinary course of business;
(l) Investments (including Investments consisting of Joint Ventures)
in addition to those permitted under clauses (a) through (k) above; provided,
that (i) before and after giving effect to each such Investment, no Default or
Event of Default shall have occurred and be continuing, (ii) the aggregate
amount, without duplication, of all Investments made by Borrowers and their
respective Subsidiaries on or after the Closing Date pursuant to this clause (l)
shall not exceed $3,000,000, and (iii) the aggregate amount, without
duplication, of all such Investments, when aggregated with the outstanding
principal amount of Indebtedness Guaranteed by any Borrower or any Subsidiary of
any Borrower pursuant to Section 8.7(g) or (h), respectively, shall not exceed
$5,000,000; and
(m) Investments in addition to those permitted under clauses (a)
through (l) above as the Agent may approve in writing in its sole discretion.
8.10 NO AFFILIATE TRANSACTIONS. No Borrower shall, or shall permit
any of its Subsidiaries to, directly or indirectly, enter into any transaction
with, including the purchase, sale or exchange of property or the rendering of
any service to any Subsidiary of a Borrower or other Affiliate of a Borrower and
whether or not such transaction would otherwise be permitted under any of the
other provisions of the Credit Documents, except (a) in the ordinary course of
and pursuant to the reasonable requirements of such Borrower's or such
Subsidiary's business, as the case may be, and upon terms no less favorable to
such Borrower or such Subsidiary than could be obtained in a comparable
arms-length transaction with an unaffiliated Person; and (b) for (i)
transactions set forth on Schedule B, Part 8.10, (ii) the Related Transactions
(including the payment of fees and expenses in connection therewith, to the
extent payment thereof by a Borrower is required pursuant to the Related
Transactions Documents), (iii) employment agreements entered into in the
ordinary course of business with officers of any Borrower or any Subsidiary of
any Borrower, (iv) reasonable and customary compensation and benefits paid to,
and indemnity provided on behalf of, officers, directors, employees or
Affiliates of any Borrower or any Subsidiary of any Borrower in the ordinary
course of business, (v) transactions by or among any Borrower and any other
Borrower, (vi) transactions expressly permitted pursuant to Section 8.3, 8.6,
8.7, 8.8 or 8.9, (vii) except to the extent such payments constitute Permitted
Management Fees, the making of required payments to Xxxxx pursuant to any of the
Xxxxx Agreements (in each case as in effect on the date hereof), (viii) to the
extent that before and after giving effect to each such payment of Permitted
Management Fees, no Default or Event of Default shall have occurred and be
continuing, the payment by any Borrower to Xxxxx of Permitted Management Fees in
an aggregate amount not exceeding $500,000 in any Fiscal Year, provided, that,
to the extent that any payments of Permitted Management Fees are not made at
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any time because a Default or an Event of Default has occurred and is
continuing, the amount of all such unpaid Permitted Management Fees shall
continue to accrue and, when any such Default or Event of Default is no longer
continuing, BWAY may make payments to Xxxxx in an amount equal to the total
amount of all such unpaid Permitted Management Fees (to the extent that before
and after giving effect to each such payment, no other Default or Event of
Default shall have occurred and be continuing).
8.11 LIMITATION ON TRANSACTIONS UNDER ERISA. (a) No Borrower shall,
or shall permit any of its Subsidiaries to, directly or indirectly amend a
Benefit Plan resulting in an increase in current liability for the plan year
such that any of such Borrower, any Subsidiary of such Borrower or any ERISA
Affiliate is required to provide security to such a Benefit Plan under Section
401(a)(29) of the Code.
8.12 NO ADDITIONAL BANK ACCOUNTS. Except with the prior written
consent of the Agent, no Borrower shall, or shall permit any of its Subsidiaries
to, directly or indirectly, open, maintain or otherwise have any checking,
savings or other accounts at any bank or other financial institution, or any
other account where money is or may be deposited or maintained with any Person,
other than the Disbursement Account, the Depositary Accounts and the other
accounts set forth on Schedule B, Part 8.12.
8.13 AMENDMENTS OF RELATED TRANSACTIONS DOCUMENTS. No Borrower shall,
or shall permit any of its Subsidiaries to, directly or indirectly, amend,
modify, cancel or terminate or permit the amendment, modification, cancellation
or termination of, any of the Related Transaction Documents to which it is a
party, except for any such amendments, modifications, cancellations or
terminations, as the case may be, that singly or in the aggregate could not
reasonably be expected to have a material adverse impact on the rights, remedies
and other interests of the Agent or Lenders under the Credit Documents taken as
a whole.
8.14 ADDITIONAL RESTRICTIVE COVENANTS. Except for Permitted
Restrictive Covenants and restrictions existing under or by reason of (a)
applicable Requirements of Law, (b) the Subordinated Note Documents, (c)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of any Borrower or any Subsidiary of any Borrower, (d)
restrictions on the transfer of any asset subject to a Lien permitted pursuant
to Sections 8.4(c) and (k), and (e) customary restrictions in agreements
relating to the sale of a Subsidiary of any Borrower, pending consummation of
such sale, no Borrower shall, or shall permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective: (i) any consensual restriction limiting the ability (whether by
covenant, event of default, subordination or otherwise and including any such
the effect of which is to require the providing of equal and ratable security to
any other Person in the event a Lien is granted to or for the benefit of the
Agent and the Lenders) to (A) pay dividends or make any other distributions on
shares of its Capital Securities held by any Borrower or any other Subsidiary of
any Borrower; (B) pay any obligation to any Borrower or any other Subsidiary of
any Borrower; (C) make any loans or advances to or other Investments in any
Borrower or in any other Subsidiary of any other Borrower; or (D) create or
permit to exist any Lien upon the assets of any Borrower or any Subsidiary of
any Borrower, other than Liens permitted under Section 8.4; or (ii) any
contractual obligation which could reasonably be expected to restrict or
otherwise inhibit in any material
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respect the Agent's rights or ability to sell or otherwise dispose of the
Collateral or any part thereof after the occurrence of an Event of Default.
8.15 NO ADDITIONAL SUBSIDIARIES. No Borrower shall, or shall permit
any of its Subsidiaries to, directly or indirectly, form or acquire any new
Subsidiaries after the Closing Date, except for (a) Wholly-Owned Subsidiaries
which are Foreign Subsidiaries, to the extent that the Investment therein is
permitted pursuant to Section 8.9(l), (b) Wholly-Owned Subsidiaries which are
Domestic Subsidiaries formed or acquired by a Borrower in connection with the
consummation of an Acquisition permitted pursuant to Section 8.9(d), and (c)
Joint Ventures, to the extent that the Investment therein is permitted pursuant
to Section 8.9(k); provided, that, (i) in the case of any such Wholly-Owned
Subsidiary which is a Domestic Subsidiary formed or acquired in connection with
the consummation of an Acquisition, upon or immediately following such
consummation, (x) such Wholly-Owned Subsidiary shall be joined as a party to
this Credit Agreement, the Borrower Security Agreement and all other applicable
Credit Documents and shall have taken such further actions and executed such
additional agreements, documents and instruments as the Agent may reasonably
determine to be necessary or desirable to further carry out and consummate the
provisions contemplated by the Credit Documents with respect to such
Wholly-Owned Subsidiary, including, without limitation, the granting to the
Agent for the benefit of the Agent and Lenders of an enforceable, first (subject
to Permitted Liens) and perfected Lien on substantially all properties and
assets of such Wholly-Owned Subsidiary and (y) the Agent shall have been granted
for the benefit of the Agent and Lenders an enforceable, first (subject to
Permitted Liens) and perfected Lien on all Capital Securities of any kind
therein, (ii) in the case of any such Wholly-Owned Subsidiary which is a Foreign
Subsidiary, the Agent shall have been granted for the benefit of the Agent and
Lenders an enforceable, first (subject to Permitted Liens) and perfected Lien on
sixty-five percent (65%) of the total combined voting power of all classes of
Capital Securities therein, and in the case of both clauses (i) and (ii) above,
the Agent shall have received duly executed copies of all agreements,
instruments and documents as the Agent may reasonably deem necessary or
desirable in connection therewith.
8.16 DESIGNATED SENIOR DEBT. No Borrower shall, or shall permit any
of its Subsidiaries to designate any Indebtedness (other than the Obligations)
as "Designated Senior Debt" for purposes of, and as defined in the Subordinated
Note Indenture.
8.17 LIMITATION ON DERIVATIVE TRANSACTIONS. Except for Derivative
Transactions which are entered into in the ordinary course and pursuant to the
reasonable requirements of such Person's business, the Indebtedness in respect
of which is permitted pursuant to Section 8.3(f), no Borrower shall, or shall
permit any of its Subsidiaries to, enter into any Derivative Transaction.
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES
9.1 EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an Event of Default hereunder (whatever the reason for such
event and whether it shall be voluntary or involuntary, or within or without the
control of any Borrower, any Subsidiary of any
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Borrower or any other Credit Party, or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule or regulation
of any governmental or nongovernmental body):
(a) failure of the Borrowers to pay (i) any Obligation in respect of
principal of any Loan when due and payable, whether at stated maturity, by
acceleration or otherwise, or (ii) any interest on any Loan, or any Fees,
Expenses or other Obligations, in each case within three (3) Business Days of
when due and payable, whether at stated maturity, by acceleration or otherwise;
or
(b) failure of any Borrower or any Subsidiary of any Borrower to
perform, comply with or observe any term, covenant or agreement applicable to it
contained in Article 7 (other than Sections 7.3, 7.9, 7.12 and 7.15) or Article
8; or
(c) (i) any representation or warranty made by any Borrower, any
Subsidiary of any Borrower or any other Credit Party under this Credit Agreement
or under any other Credit Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(ii) any Borrower, any Subsidiary of any Borrower or any
other Credit Party shall fail to comply with any covenant contained in this
Credit Agreement or the other Credit Documents (other than under a provision
covered by Section 9.1(a) or (b) above), which failure to comply is not cured
within thirty (30) days after notice thereof from the Agent to the Funds
Administrator; or
(d) except as otherwise expressly permitted hereunder, dissolution,
liquidation, winding up or cessation of any Credit Party's businesses, or the
failure of any Credit Party to meet its debts generally as they mature, or the
calling of one or more meetings of any Credit Party's major creditors for
purposes of obtaining a moratorium on payment or a compromise of such Credit
Party's debts; or
(e) any Credit Party shall become the subject of an Insolvency
Event; or
(f) the occurrence of a Change of Control; or
(g) (i) the occurrence of an Event of Default (as such term is
defined in the Subordinated Note Indenture); or
(ii) occurrence of a default or event of default (in each
case which shall continue beyond the expiration of any applicable grace periods)
which permits the acceleration of the maturity of any note, agreement or
instrument evidencing any other Indebtedness of any Borrower or any Subsidiary
of any Borrower, and the aggregate principal amount of all such Indebtedness
with respect to which such a default or event of default has occurred, or the
maturity of which is permitted to be accelerated, exceeds $1,000,000; or
(h) any covenant, agreement or obligation of any party contained in
or evidenced by any of the Credit Documents shall cease to be enforceable in
accordance with its terms, or any party (other than the Agent or the Lenders, in
its capacity as such, and not in its capacity as an
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Issuing Lender) to any Credit Document shall deny or disaffirm its obligations
under any of the Credit Documents, or any Credit Document shall be cancelled,
terminated, revoked or rescinded without the express prior written consent of
the Agent, or any action or proceeding shall have been commenced by any Person
(other than the Agent or a Lender, in its capacity as such, and not in its
capacity as an Issuing Lender) seeking to cancel, revoke, rescind or disaffirm
the obligations of any party to any Credit Document, or any court or other
Governmental Authority shall issue a judgment, order, decree or ruling to the
effect that any of the obligations of any party to any Credit Document are
illegal, invalid or unenforceable; or
(i) (i) any Termination Event shall occur with respect to any
Benefit Plan, (ii) any Accumulated Funding Deficiency, whether or not waived,
shall exist with respect to any Benefit Plan, (iii) any Person shall engage in
any Prohibited Transaction involving any Benefit Plan, (iv) any Borrower, any
Subsidiary of any Borrower or any ERISA Affiliate shall be in "default" (as
defined in ERISA Section 4219(c)(5)) with respect to payments owing to any
Benefit Plan that is a Multiemployer Plan as a result of such Person's complete
or partial withdrawal (as described in ERISA Section 4203 or 4205) therefrom,
(v) any Borrower, any Subsidiary of any Borrower or any ERISA Affiliate shall
fail to pay when due and payable an amount that is payable by it to the PBGC or
to any Benefit Plan under Title IV of ERISA, (vi) a proceeding shall be
instituted by a fiduciary of any such Benefit Plan against any Borrower, any
Subsidiary of any Borrower or any ERISA Affiliate to enforce ERISA Section 515
and such proceeding shall not have been dismissed within 30 days thereafter or
(vii) any Person shall engage in any breach of fiduciary duty under Section 404
of ERISA involving any Benefit Plan, except that no event of default or
non-compliance with law referred to in clauses (i) through (vii) shall
constitute an Event of Default if it, together with all other such events or
conditions at the time existing, has not subjected, and in the reasonable
determination of the Agent will not subject, any Borrower or any Subsidiary of
any Borrower to any liability that, alone or in the aggregate with all such
liabilities for all such Persons, exceeds $1,000,000; or
(j) One or more judgments or decrees shall be entered against any
Borrower or any Subsidiary of any Borrower involving a liability of $500,000 or
more, in the case of any one such judgment or decree, and $1,000,000 or more, in
the aggregate for all such judgments and decrees for the Borrowers and their
Subsidiaries combined (in each case, to the extent not paid or covered by a
reputable and solvent insurance carrier that has acknowledged such coverage in
writing) and such judgments or decrees shall not have been vacated, discharged
or stayed pending appeal within thirty (30) days from the entry date thereof; or
(k) BCO Holding engages in any type of business activity other than
the ownership of the Capital Securities of BWAY and the performance of its
respective obligations under the Related Transactions Documents and the Credit
Documents.
9.2 ACCELERATION AND CASH COLLATERALIZATION. Upon the occurrence of
an Event of Default and which is continuing, the Agent shall, upon the request
of the Majority Lenders, and by delivery of notice to the Funds Administrator
from the Agent, take any or all of the following actions, without prejudice to
the rights of the Agent, any Lender or the holder of any Note to enforce its
claims against any Borrower: (a) declare all Obligations (other than contingent
indemnification Obligations to the extent that no claim giving rise thereto has
been asserted and remains unresolved or unsatisfied) to be immediately due and
payable (except with respect to
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any Event of Default set forth in Section 9.1(e), in which case all such
Obligations (including, without limitation, all accrued but unpaid interest,
fees and Expenses) shall automatically become immediately due and payable
without the necessity of any notice or other demand) without presentment,
demand, protest or any other action or obligation of the Agent or any Lender;
and (b) immediately terminate the Commitments hereunder.
In addition, upon demand by the Agent or the Majority Lenders upon the
occurrence of any Event of Default and which is continuing, the Borrowers shall
deposit with the Agent with cash or Cash Equivalents in an amount equal to 105%
of the Letter of Credit Outstandings (in each case to the extent the same are
such by virtue of clause (a) of the definition thereof). Such deposit shall be
held by the Agent as security for, and to provide for the payment of, Letter of
Credit Outstandings.
If at any time after acceleration of the maturity of the Obligations,
the Borrowers shall pay all arrears of interest and all payments on account of
principal of the Loans which shall have become due and payable otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in Section 4.4) and all Events of
Default and Defaults (other than nonpayment of principal of and accrued interest
on the Loans and other Obligations due and payable solely by virtue of
acceleration) shall be remedied or waived, then by written notice to the Funds
Administrator, the Majority Lenders may elect, in the sole discretion of such
Majority Lenders, to rescind and annul the acceleration and its consequences and
return any cash collateral; but such action shall not affect any subsequent
Default or Event of Default or impair any right or remedy consequent thereon.
The provisions of the preceding sentence are intended merely to bind the Lenders
to a decision which may be made at the election of the Majority Lenders; they
are not intended to benefit the Borrowers and do not give any Borrower the right
to require the Lenders to rescind or annul any acceleration hereunder or to
return any cash collateral, even if the conditions set forth herein are met.
9.3 REMEDIES. From and after the occurrence of any Event of Default
and which is continuing, the Agent may, to the extent permitted by applicable
law: (a) remove from any premises where same may be located any and all
documents, instruments, files and records (including the copying of any computer
records), and any receptacles or cabinets containing same, relating to any or
all of the Collateral, or the Agent may use (at the expense of the Borrowers)
such of the supplies or space of any Borrower at any Borrower's place of
business or otherwise, as may be necessary to properly administer and control
any or all of the Collateral or the handling of collections and realizations
thereon; (b) bring suit, in the name of a Borrower or the Lenders and generally
shall have all other rights respecting any or all of the Collateral, including
the right to: accelerate or extend the time of payment, settle, compromise,
release in whole or in part any amounts owing on any or all of the Collateral
and issue credits in the name of a Borrower or the Lenders; and (c) foreclose
the security interests created pursuant to the Credit Documents by any available
judicial procedure, or to take possession of any or all of the Collateral
without judicial process and enter any premises where any Collateral may be
located for the purpose of taking possession of or removing same. To the extent
permitted by applicable law, the Agent shall have the right, without notice or
advertisement, to sell, lease, or otherwise dispose of all or any part of the
Collateral, whether in its then condition or after further preparation or
processing, in the name of a Borrower or the Lenders, or in the name of such
other party as the Agent may designate, either at public or private sale or at
any broker's board, in lots
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or in bulk, for cash or for credit, with or without warranties or
representations, and upon such other terms and conditions as the Agent in its
sole discretion may deem advisable, and the Agent or any other Lender shall have
the right to purchase at any such sale. If any Collateral shall require
rebuilding, repairing, maintenance or preparation, the Agent shall have the
right, at its option, to do such of the aforesaid as is necessary, for the
purpose of putting such Collateral in such saleable form as the Agent shall deem
appropriate. Each Borrower agrees, at the request of the Agent, to assemble the
Collateral and to make it available to the Agent at places which the Agent shall
select, whether at the premises of such or any other Borrower or elsewhere, and
to make available to the Agent the premises and facilities of such Borrower for
the purpose of the Agent's taking possession of, removing or putting the
Collateral in saleable form. However, if notice of intended disposition of any
Collateral is required by law, it is agreed that ten (10) days notice shall
constitute reasonable notification. Unless expressly prohibited by the licensor
thereof, if any, the Agent is hereby granted a license to use, upon the
occurrence and during the continuance of an Event of Default, all computer
software programs, data bases, processes and materials used by each Borrower in
connection with its businesses or in connection with the Collateral. The net
cash proceeds resulting from the Agent's exercise of any of the foregoing rights
(after deducting all charges, costs and expenses, including reasonable
attorneys' fees) shall be applied by the Agent to the payment of the Obligations
(other than contingent indemnification Obligations to the extent that no claim
giving rise thereto has been asserted and remains unresolved or unsatisfied),
whether due and payable or to become due and payable, in such order as the Agent
may elect, and pending such payment shall be held as security for such payment.
All of such net cash proceeds remaining after the payment of all Obligations
(other than contingent indemnification Obligations to the extent that no claim
giving rise thereto has been asserted and remains unresolved or unsatisfied),
unless otherwise required pursuant to applicable law, shall be paid by the Agent
to the Funds Administrator. Each Borrower shall remain liable to the Agent and
the Lenders for any deficiencies. The enumeration of the foregoing rights is not
intended to be exhaustive and the exercise of any right shall not preclude the
exercise of any other rights, all of which shall be cumulative.
ARTICLE 10
THE AGENT
10.1 APPOINTMENT OF AGENT.
(a) Each Lender hereby designates DBTCo as its contractual
representative to act as herein specified. Each Lender hereby irrevocably
authorizes, and each holder of a Note or a participation interest in a Letter of
Credit by the acceptance of such Note or participation interest shall be deemed
irrevocably to authorize, the Agent to take such action on its behalf under the
provisions of this Credit Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Agent shall hold all
Collateral and all payments of principal, interest, Fees, charges and Expenses
received pursuant to this Credit Agreement or any other Credit Document for the
benefit of the Lenders and the Issuing Lenders to be distributed as provided
herein. The Agent may perform any of its duties hereunder by or through its
agents or employees.
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(b) The provisions of this Article 10 are solely for the benefit of
the Agent, the Lenders and the Issuing Lenders, and none of the Credit Parties
shall have any rights as a third party beneficiary of any of the provisions
hereof (other than Section 10.9). In performing its functions and duties under
this Credit Agreement, the Agent shall act solely as agent of the Lenders and
the Issuing Lenders and does not assume and shall not be deemed to have assumed
any obligation toward or relationship of agency or trust with or for any Credit
Party.
10.2 NATURE OF DUTIES OF AGENT. The Agent shall have no duties or
responsibilities except those expressly set forth in this Credit Agreement and
the other Credit Documents. Neither the Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason of
this Credit Agreement or the other Credit Documents a fiduciary relationship in
respect of any Lender or any Issuing Lender, and nothing in this Credit
Agreement or the other Credit Documents, expressed or implied, is intended to or
shall be so construed as to impose upon the Agent any obligations in respect of
this Credit Agreement or the other Credit Documents except as expressly set
forth herein or therein.
10.3 LACK OF RELIANCE ON THE AGENT.
(a) Independently and without reliance upon the Agent, any Lender or
any Issuing Lender, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the financial or other
condition and affairs of each Credit Party in connection with the taking or not
taking of any action in connection herewith and (ii) its own appraisal of (A)
the creditworthiness of each Credit Party, and (B) the Collateral, and, except
as expressly provided in this Credit Agreement, the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or any Issuing Lender with any credit or other information with respect thereto,
whether coming into its possession before the Initial Credit Event or at any
time or times thereafter.
(b) The Agent shall not be responsible to any Lender or Issuing
Lender for any recitals, statements, information, representations or warranties
herein or in any other Credit Document or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, priority or sufficiency
of this Credit Agreement or any other Credit Document or the financial or other
condition of any Credit Party. The Agent shall not be required to make any
inquiry concerning either the performance or observance, of any of the terms,
provisions or conditions of this Credit Agreement or any other Credit Document,
or the financial condition of any Credit Party, or the existence or possible
existence of any Default or Event of Default, unless specifically requested to
do so in writing by any Lender or Issuing Lender, as the case may be.
10.4 CERTAIN RIGHTS OF THE AGENT. The Agent shall have the right to
request instructions from the Lenders at any time. If the Agent shall request
instructions from the Lenders with respect to any act or action (including the
failure to act) in connection with this Credit Agreement, the Agent shall be
entitled to refrain from such act or taking such action unless and until the
Agent shall have received instructions from the Majority Lenders (or, to the
extent required pursuant to Section 11.10, all Lenders), and the Agent shall not
incur liability to
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any Person by reason of so refraining. Without limiting the foregoing, no Lender
or Issuing Lender shall have any right of action whatsoever against the Agent as
a result of the Agent acting or refraining from acting hereunder in accordance
with the instructions of the Majority Lenders.
10.5 RELIANCE BY THE AGENT. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex or facsimile transmission, E-mail, telecopier
message, cablegram, order or other documentary, teletransmission or telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person. The Agent may consult with legal counsel
(including counsel for the Borrowers with respect to matters concerning the
Borrowers), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts. The
Agent may, but shall not be required to, rely on Borrowing Base Certificates and
any other schedules or reports delivered to the Agent in connection herewith in
determining the amount of the Borrowing Base and the then eligibility of
Accounts and Inventory of the respective Borrowers. Reliance thereon by the
Agent from time to time shall not be deemed to limit the right of the Agent to
revise advance rates or standards of eligibility to the extent provided in the
definition of the term "Borrowing Base" set forth herein.
10.6 INDEMNIFICATION OF AGENT. To the extent the Agent is not
reimbursed and indemnified by the Borrowers, each Lender will reimburse and
indemnify the Agent, in proportion to its respective Commitment, for and against
any and all Liabilities, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever (including all Expenses) which may be imposed on,
incurred by or asserted against the Agent, in any way relating to or arising out
of this Credit Agreement or any other Credit Document; provided that no Lender,
shall be liable for any portion of such Liabilities, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent it is
determined by a judgment of a court that is binding on the Agent, final and not
subject to review on appeal, to be the result of acts or omissions on the part
of the Agent, constituting gross negligence or willful misconduct.
10.7 THE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to lend under this Credit Agreement, the Loans made by it and the
Notes issued to it, and its participation in Letters of Credit, the Agent shall
have the same rights and powers hereunder as any other Lender or holder of a
Note or participation interests and may exercise the same as though it was not
performing the duties specified herein; and the terms "Lenders," "Majority
Lenders," "holders of Notes," or any similar terms shall, unless the context
clearly otherwise indicates, include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, acquire equity interests in, and
generally engage in any kind of banking, trust, financial advisory or other
business with any Borrower or any Affiliate of any Borrower as if it were not
performing the duties specified herein, and may accept fees and other
consideration from any Borrower for services in connection with this Credit
Agreement and otherwise without having to account for the same to the Lenders or
any Issuing Lender.
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10.8 HOLDERS OF NOTES.
(a) The Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
10.9 SUCCESSOR AGENT.
(a) The Agent may, upon five (5) Business Days' notice to the
Lenders and the Funds Administrator, resign at any time (effective upon the
appointment of a successor Agent pursuant to the provisions of this Section
10.9) by giving written notice thereof to the Lenders and the Funds
Administrator. Upon such resignation, the Majority Lenders shall have the right,
upon five (5) days' notice to the Funds Administrator (and with the consent of
the Borrowers, which consent shall not be unreasonably withheld or delayed), to
appoint a successor Agent. If no successor Agent (i) shall have been so
appointed by the Majority Lenders and (ii) shall have accepted such appointment,
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then, upon five (5) days' notice, the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent.
(b) Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Credit Agreement. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article 10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this Credit
Agreement.
(c) In the event of a material breach by the Agent of its duties
hereunder, the Agent may be removed by the Majority Lenders for cause and the
provisions of this Section 10.9 shall apply to the appointment of a successor
Agent. Such removal of the Agent shall also operate, if at the time any such
Person is serving as such, as a removal of DBTCo and each of its Serving
Affiliates, if any, as an Issuing Lender, subject to Section 10.9(d).
(d) No removal of DBTCo, Deutsche Bank AG or any of its Serving
Affiliates pursuant to Section 10.9(c), as an Issuing Lender, shall be effective
unless its Liabilities under each Letter of Credit are secured with cash or by
letters of credit in form and substance, and issued by issuers, reasonably
satisfactory to DBTCo, Deutsche Bank AG or such Serving Affiliate.
10.10 COLLATERAL MATTERS.
(a) Each Lender and each Issuing Lender authorizes and directs the
Agent to enter into the Collateral Documents for the benefit of such Person.
Each Lender and each Issuing Lender hereby agrees, and each holder of any Note
by the acceptance thereof will be deemed to agree, that, except as otherwise set
forth in Section 11.10, any action taken by the Majority
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Lenders in accordance with the provisions of this Credit Agreement or the
Collateral Documents, and the exercise by the Majority Lenders of the powers set
forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the Lenders and
all the Issuing Lenders. The Agent is hereby authorized on behalf of all of the
Lenders and all the Issuing Lenders, without the necessity of any notice to or
further consent from any Lender or any Issuing Lender from time to time prior
to, an Event of Default, to take any action with respect to any Collateral or
Collateral Documents which may be necessary to perfect and maintain perfected
the Liens upon the Collateral granted pursuant to the Collateral Documents.
(b) Each Lender and each Issuing Lender hereby authorizes the Agent,
at its option and in its discretion, to release any Lien granted to or held by
the Agent upon any Collateral (i) upon termination of the Commitments and
payment and satisfaction of all of the Obligations at any time arising under or
in respect of this Credit Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby, (ii) constituting property being
sold or disposed of upon receipt of the proceeds of such sale by the Agent, if
the Funds Administrator certifies to the Agent that such sale or disposition is
made in compliance with Section 8.5 (and the Agent may rely conclusively on any
such certificate, without further inquiry) or (iii) if approved, authorized or
ratified in writing by the Majority Lenders, unless such release is required to
be approved by all of the Lenders pursuant to Section 11.10. Upon request by the
Agent at any time, each Lender and each Issuing Lender will confirm in writing
the Agent's authority to release particular types or items of Collateral
pursuant to this Section 10.10.
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to in
writing by the Majority Lenders (or all Lenders, if such release is required to
be approved by all of the Lenders pursuant to Section 11.10), and upon at least
five (5) Business Days' prior written request by the Funds Administrator, the
Agent shall (and is hereby irrevocably authorized by each Lender and each
Issuing Lender, to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Agent for the benefit of the Agent, the
Lenders and the Issuing Lenders herein or pursuant hereto upon the Collateral
that was sold or transferred; provided that (i) the Agent shall not be required
to execute any such document on terms which, in the Agent's good faith
determination would expose the Agent to or create any Liability or entail any
consequence, other than the release of such Liens without recourse or warranty
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of any Borrower or any Credit
Party in respect of) all interests retained by any Borrower or any Credit Party,
including the proceeds of the sale, all of which shall continue to constitute
part of the Collateral. In the event of any sale or transfer of Collateral, or
any foreclosure with respect to any of the Collateral, the Agent shall be
authorized to deduct all of the Expenses reasonably incurred by the Agent from
the proceeds of any such sale, transfer or foreclosure.
(d) The Agent shall have no obligation whatsoever to any Lender, any
Issuing Lender or any other Person to assure that the Collateral exists or is
owned by any Borrower or any Subsidiary thereof or is cared for, protected or
insured or that the Liens granted to the Agent herein or in any of the
Collateral Documents or pursuant hereto or thereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising at
all or in any manner or under any duty of care,
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disclosure or fidelity any of the rights, authorities and powers granted or
available to the Agent in this Section 10.10 or in any of the Collateral
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, the Agent may act in any manner it
may deem appropriate, in its sole discretion, given the Agent's own interest in
the Collateral as one of the Lenders and that the Agent shall have no duty or
liability whatsoever to the Lenders, except for its gross negligence or willful
misconduct.
10.11 ACTIONS WITH RESPECT TO DEFAULTS. In addition to the Agent's
right to take actions on its own accord as permitted under this Credit
Agreement, the Agent shall take such action with respect to a Default or Event
of Default as shall be directed by the Majority Lenders; provided that until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable and in the best
interests of the Lenders and the Issuing Lenders; and, further, provided that
the Agent shall not be required under any circumstances to take any action that,
in its judgment, (a) is contrary to any provision of the Credit Documents or
applicable law or (b) will expose it to any liability or expense against which
it has not been indemnified to its satisfaction.
10.12 DELIVERY OF INFORMATION. The Agent shall not be required to
deliver to any Lender or any Issuing Lender originals or copies of any
documents, instruments, notices, communications or other information received by
the Agent from the Funds Administrator, any Borrower, any Subsidiary of any
Borrower, the Majority Lenders, any Lender, any Issuing Lender or any other
Person under or in connection with this Credit Agreement or any other Credit
Document except (a) as specifically provided in this Credit Agreement or any
other Credit Document and (b) as specifically requested from time to time in
writing by any Lender, or any Issuing Lender with respect to a specific
document, instrument, notice or other written communication received by and in
the possession of the Agent at the time of receipt of such request and then only
in accordance with such specific request.
ARTICLE 11
MISCELLANEOUS
11.1 SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NONEXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN EACH CASE LOCATED IN NEW YORK, NEW YORK, AND APPELLATE
COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW
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OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH PARTY AT THE
ADDRESS OF SUCH PARTY SET FORTH IN SECTION 11.5 OR AT SUCH OTHER ADDRESS OF
WHICH THE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY
HERETO TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING
AGAINST ANY BORROWER, OR ITS PROPERTY IN THE COURTS OF OTHER JURISDICTIONS; AND
(e) IN THE CASE OF EACH CREDIT PARTY, WAIVES DUE DILIGENCE, DEMAND,
PRESENTMENT AND PROTEST AND ANY NOTICES THEREOF AS WELL AS NOTICE OF NONPAYMENT.
11.2 JURY TRIAL. THE CREDIT PARTIES, THE AGENT, EACH ISSUING LENDER
AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE OTHER CREDIT DOCUMENTS OR
ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
11.3 GOVERNING LAW. THE RIGHTS AND DUTIES OF THE CREDIT PARTIES, THE
AGENT, EACH ISSUING LENDER AND THE LENDERS UNDER THIS CREDIT AGREEMENT, THE
NOTES (INCLUDING MATTERS RELATING TO THE MAXIMUM PERMISSIBLE RATE) AND THE OTHER
CREDIT DOCUMENTS SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
11.4 DELAYS; PARTIAL EXERCISE OF REMEDIES. No delay or omission of
Agent, any Issuing Lender, any Lender or any Credit Party to exercise any right
or remedy hereunder or under any of the other Credit Documents, whether before
or after the happening of any Event of Default, shall impair any such right or
shall operate as a waiver thereof or as a waiver of any such Event of Default.
No single or partial exercise by the Agent, any Issuing Lender, any Lender or
any Credit Party of any right or remedy shall preclude any other or further
exercise thereof, or preclude any other right or remedy.
11.5 NOTICES. Except as otherwise provided herein, all notices and
correspondence hereunder shall be in writing and sent by certified or registered
mail, return receipt requested, or by overnight delivery service, with all
charges prepaid, to the following addresses, (a) if to the
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Agent, or any of the Lenders, then to Deutsche Bank Trust Company Americas, 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention Credit Department (with a
copy to Deutsche Bank Trust Company Americas, 000 Xxxxx Xxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Credit Department); (b) if to any
Issuing Lender, to the address specified in the applicable Letter of Credit
Request; and (c) if to the Funds Administrator or any Borrower, then to such
Person at 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000, Attention: Treasurer
(with a copy to Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, Attention: Xxxxxxx Xxxxx, Esq.) or by facsimile transmission, promptly
confirmed in writing sent by first class mail, (i) if to the Agent, or any of
the Lenders, at (000) 000-0000, (with a copy to (000) 000-0000); (ii) if to an
Issuing Lender, as specified in the applicable Letter of Credit Request; and
(iii) if to the Funds Administrator or any Borrower at (000) 000-0000 (with a
copy to Debevoise & Xxxxxxxx, (000) 000-0000, Attention: Xxxxxxx Xxxxx, Esq.,
and to Xxxxx & Company, L.P., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx X. Xxxxxxx XX). All such notices and correspondence shall be
deemed given (a) if sent by certified or registered mail, three (3) Business
Days after being postmarked, (b) if sent by overnight delivery service, when
received at the above stated addresses or when delivery is refused and (c) if
sent by facsimile transmission, when receipt of such transmission is
acknowledged.
11.6 ASSIGNABILITY.
(a) The Borrowers shall not have the right to assign this Credit
Agreement or any interest therein except with the prior written consent of the
Agent.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of such
Lender except to the extent such transfer would result in increased costs to the
Borrowers.
(c) Each Lender may assign to one or more banks, other financial
institutions or investment funds all or a portion of its rights and obligations
under this Credit Agreement, the Notes and the other Credit Documents; provided
that, except in the case of an assignment to a Federal Reserve Bank (which may
be made without condition or restriction, provided that no such assignment to a
Federal Reserve Bank shall release a Lender from any of its obligations
hereunder or substitute any such assignee for such Lender as a party hereto),
(i) such assignment shall be for a fixed and not varying percentage of the
assigning Lender's Loans, participation interests in Letters of Credit and
Commitment, (ii) the Agent (after prior consultation with the Funds
Administrator) shall consent to such assignment), (iii) for each such
assignment, the parties thereto shall execute and deliver to the Agent, for its
acceptance and recording in the Register (as defined below), an Assignment and
Assumption Agreement, together with any Note or Notes subject to such assignment
and a processing and recordation fee of $5,000 and (iv) except for any
assignment covering all or the remaining portion of an assigning Lender's rights
and obligations under this Credit Agreement, the Notes and the other Credit
Documents, no such assignment shall be for less than $10,000,000 of the
assigning Lender's Commitment, unless such assignment is to a then-current
holder of a Note. Upon such execution and delivery of the Assignment and
Assumption Agreement to the Agent, from and after the date specified as the
effective date in the Assignment and Assumption Agreement (the "Acceptance
Date"), (A) the assignee thereunder shall be a party hereto, and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Assumption Agreement,
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such assignee shall have the rights and obligations of a Lender hereunder and
(B) the assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Assumption
Agreement, relinquish its rights (other than any rights it may have pursuant to
Section 11.8, which rights will survive) and be released from its obligations
(other than any obligations it may have pursuant to Section 11.7, which
obligations will survive under this Credit Agreement (and, in the case of an
Assignment and Assumption Agreement covering all or the remaining portion of an
assigning Lender's rights and obligations under this Credit Agreement, such
Lender shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Assumption
Agreement, the assignee thereunder confirms and agrees as follows: (i) other
than as provided in such Assignment and Assumption Agreement, the assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Credit Agreement or any other Credit Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Credit Agreement, the Notes, or any other Credit Document; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower, any
other Credit Parties or any Issuing Lender, the value of the Collateral, or the
performance or observance by (A) any Borrower or any other Credit Parties of any
of its obligations under this Credit Agreement or any other Credit Document, or
(B) any Issuing Lender of any of its obligations in respect of any Letter of
Credit; (iii) such assignee confirms that it has received a copy of this Credit
Agreement, together with copies of the Financial Statements referred to in
Section 7.1 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Assumption Agreement; (iv) such assignee represents and warrants
that it is a bank, savings and loan association or other similar savings
institution, insurance company, investment fund or company or other financial
institution that makes or acquires commercial loans in the ordinary course of
its business, that it is participating hereunder as a Lender for such commercial
purposes, and that it has the knowledge and experience to be and is capable of
evaluating the merits and risks of being a Lender hereunder; (v) such assignee
will continue, independently and without reliance upon the Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, to make its own credit decisions in taking
or not taking action under this Credit Agreement; (vi) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Credit Agreement and the other Credit Documents
as are delegated to the Agent by their terms, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Credit Agreement are required to be performed by it as a Lender.
(e) The Agent shall maintain at its address referred to in Section
11.5 a copy of each Assignment and Assumption Agreement delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Funds Administrator, each of the Borrowers, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Credit
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Agreement. The Register and copies of each Assignment and Assumption shall be
available for inspection by any Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Assumption Agreement
executed by an assigning Lender, together with the Note or Notes subject to such
assignment (which Note or Notes the Agent shall promptly xxxx "substituted and
amended"), the Agent shall, if such Assignment and Assumption Agreement has been
completed and is in substantially the form of Exhibit A hereto and otherwise
complies with this Section 11.6, (i) accept such Assignment and Assumption
Agreement, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Funds Administrator. Within five (5)
Business Days after its receipt of such notice, if so requested by the Agent,
the Borrowers shall execute and deliver to the Agent in exchange for the
surrendered Note or Notes a new Note or Notes to the order of the assignee in an
amount equal to the Commitment assumed by it pursuant to such Assignment and
Assumption Agreement and, if the assigning Lender has retained a Commitment
hereunder, a new Note or Notes to the order of the assigning Lender in an amount
equal to the Commitment retained by it hereunder. Such new Note or Notes shall
re-evidence the Indebtedness outstanding under the old Note or Notes and shall
be in an aggregate principal amount equal to the aggregate principal amount of
such surrendered Note or Notes, shall be dated the Closing Date and shall
otherwise be in substantially the form of the Note or Notes subject to such
assignments.
(g) Each Lender may sell participations (without the consent of the
Agent, any Borrower or any other Lender) to one or more parties in or to all or
a portion of its rights and obligations under this Credit Agreement (including
all or a portion of its Commitment, the Loans owing to it and the Note or Notes
held by it); provided that (i) such Lender's obligations under this Credit
Agreement (including its Commitment to the Borrowers hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall remain
the holder of any such Note for all purposes of this Credit Agreement, (iv) the
Funds Administrator, the Borrowers, the Agent, and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Credit Agreement and such Notes and
(v) such Lender shall not transfer, grant, assign or sell any participation
under which the participant shall have rights to approve any amendment or waiver
of this Credit Agreement except to the extent such amendment or waiver would (A)
extend the final maturity date or the date for the payments of any installment
of fees or principal or interest of any Loans or Letter of Credit reimbursement
obligations in which such participant is participating; (B) reduce the amount of
any installment of principal of the Loans or the amount of any Drawing under any
Letter of Credit in which such participant is participating; (C) except as
otherwise expressly provided in this Credit Agreement, reduce the interest rate
applicable to the Loans or the amount of any Drawing under any Letter of Credit
in which such participant is participating; or (D) except as otherwise expressly
provided in this Credit Agreement, reduce any Fees payable hereunder. Each
Lender selling or granting a participation, including a participation sold
pursuant to Section 2.10, shall indemnify the Borrowers and the Agent for any
Taxes and Liabilities that either may sustain as a result of such Lender's
failure to withhold and pay any Taxes applicable to payments by such Lender to
its participant in respect of such participation.
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(h) Each Lender agrees that, without the prior written consent of
the Borrowers and the Agent, it will not make any assignment hereunder in any
manner or under any circumstances that would require registration or
qualification of, or filings in respect of, any Loan, Note or other Obligation
under the securities laws of the United States of America or of any
jurisdiction.
(i) Subject to Section 11.7(e), in connection with the efforts of
any Lender to assign its rights or obligations or to participate interests, such
Lender may disclose any information in its possession regarding any Borrower.
11.7 CONFIDENTIALITY. Each Lender agrees that it will use its
reasonable best efforts not to disclose without the prior consent of the
Borrowers (other than to its employees, auditors, advisors, Affiliates and
counsel, or to another Lender if the disclosing Lender or such disclosing
Lender's holding or parent company in its sole discretion determines that any
such party should have access to such information) any information with respect
to any Borrower or any of its Subsidiaries, which is furnished pursuant to this
Credit Agreement or any other Credit Document (or the respective transactions
contemplated hereby or thereby, as the case may be) and which is designated by
such Borrower to the Lenders in writing as confidential, provided that any
Lender may disclose any such information (a) as has become generally available
to the public, other than as a result of a breach of this Section 11.7, (b) as
may be required in any report, statement or testimony submitted to or
examination conducted by any Governmental Authority having or claiming to have
jurisdiction over such Lender, (c) as may be required in response to any summons
or subpoena or in connection with any litigation, (d) in order to comply with
any Requirement of Law, (e) to any prospective or actual transferee or
participant in connection with any contemplated transfer or participation of any
of the Notes or Commitments or any interest therein by such Lender which
prospective transferee or participant shall have agreed in writing to be subject
to the confidentiality provisions of this Section 11.7, (f) to other financial
institutions with respect to which the respective Lender has a contractual
relationship in accordance with such Lender's regular banking procedures,
provided that each such other financial institution agrees to be bound by the
confidentiality provisions contained in this Section 11.7, (g) as may be
required in protecting, preserving, exercising or enforcing any of its rights
in, under or related to the Collateral or the Credit Documents and (h) as may be
required in consulting with any Person with respect to any of the foregoing
matters, provided that, to the extent permitted pursuant to applicable
Requirements of Law, and other than in connection with credit and other bank
examinations conducted in the ordinary course with respect to such Lender, in
the case of any disclosure pursuant to the foregoing clauses (b), (c) or (d),
such Lender will use its reasonable best efforts to notify the Funds
Administrator in advance of such disclosure so as to afford the Funds
Administrator or the relevant Borrower the opportunity to protect the
confidentiality of the information proposed to be so disclosed.
11.8 INDEMNIFICATION. The Borrowers shall and hereby agree jointly
and severally to indemnify, defend and hold harmless the Agent, each Issuing
Lender and each of the Lenders (in each case acting in their respective
capacities as such), and their respective directors, officers, agents,
employees, counsel, advisors and Affiliates (in each case to the extent incurred
or arising as a result of or in connection with actions taken or omitted to be
taken by such Person for or on behalf of the Agent, Issuing Lender or Lender, as
the case may be, acting in their respective capacities as such), from and
against (a) any and all losses, claims, damages, liabilities, deficiencies,
judgments or expenses (other than with respect to Taxes which shall be governed
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by Section 2.8) incurred by any of them (except to the extent that it is finally
judicially determined to have resulted from their own gross negligence or
willful misconduct or from the gross negligence or willful misconduct of their
directors, officers, agents, employees, counsel, advisors or Affiliates, as the
case may be) arising out of or by reason of any litigations, investigations,
claims or proceedings which arise out of or are in any way related to (i) this
Credit Agreement or the transactions contemplated thereby; (ii) the issuance of
Letters of Credit; (iii) the failure of an Issuing Lender to honor a Drawing
under any Letter of Credit, as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto government or
Governmental Authority; (iv) any actual or proposed use by any Borrower of (A)
the proceeds of any Loans or (B) any Letter of Credit; (v) the Agent's, the
Lenders' or any Issuing Lender's entering into this Credit Agreement, the other
Credit Documents or any other agreements and documents relating thereto,
including amounts paid in any settlement consented to by the Borrower (which
consent shall not be unreasonably withheld or delayed), court costs and the
reasonable fees and disbursements of counsel incurred in connection with any
such litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing; or (vi) any of the Related Transactions
Documents or Related Transactions; and (b) any such losses, claims, damages,
liabilities, deficiencies, judgments or expenses that arise directly or
indirectly from or in connection with any federal, state or local environmental
laws, acts, rules, regulations, orders, directions, ordinances, criteria or
guidelines (except to the extent that such losses, claims, damages, liabilities,
deficiencies, judgments or expenses are finally judicially determined to have
resulted from the gross negligence or willful misconduct of the Person seeking
such indemnification, defense or holding harmless, or the gross negligence or
willful misconduct of such Person's directors, officers, agents, employees,
counsel, advisors or Affiliates). If and to the extent that the Obligations of
the Borrowers under this Section 11.8 are unenforceable for any reason, the
Borrowers hereby jointly and severally agree to make the maximum contribution to
the payment and satisfaction of such Obligations which is permissible under
applicable law. The Borrowers' joint and several Obligations under this Section
11.8 shall survive any termination of this Credit Agreement and the other Credit
Documents and the payment in full of the Obligations, and are in addition to,
and not in substitution of, any other of its Obligations. In addition, the
Borrowers shall, upon demand, pay to the Agent and each Lender all costs and
expenses (including the reasonable fees and disbursements of counsel and other
professionals) paid or incurred by the Agent or such Lender in (i) enforcing or
defending its rights under or in respect of this Credit Agreement, the other
Credit Documents or any other document or instrument now or hereafter executed
and delivered in connection herewith, (ii) collecting the Loans, (iii)
foreclosing or otherwise collecting upon the Collateral or any part thereof and
(iv) obtaining any legal, accounting or other advice in connection with any of
the foregoing.
11.9 ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS. This Credit Agreement
and the other Credit Documents constitute the entire agreement among the Funds
Administrator, the Borrowers, the Agent and the Lenders (in their capacities as
such and not in their capacity, if any, as an Issuing Lender), supersedes any
prior agreements among them, and shall bind and benefit the Funds Administrator,
the Borrowers, the Agent and the Lenders and their respective successors and
permitted assigns.
11.10 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Credit Agreement or any Collateral Document, nor consent to any departure by any
Credit Party
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therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders (or by the Agent on their behalf), or if the
Lenders shall not be parties thereto, by the parties thereto and consented to by
the Majority Lenders (or by the Agent on their behalf), and each such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, that, notwithstanding the foregoing:
(a) no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (i) increase the Commitments
of the Lenders or subject the Lenders to any additional obligations; (ii) except
as otherwise expressly provided in this Credit Agreement, reduce the principal
of the Notes, or interest on the Notes, or any Drawing under any Letter of
Credit or any fees hereunder; (iii) postpone any date fixed for any payment in
respect of principal of, or interest on, the Notes or any Drawing under any
Letter of Credit or any fees hereunder; (iv) change the percentage of the
Commitments, or any minimum requirement necessary for the Lenders or the
Majority Lenders to take any action hereunder; (v) amend or waive this Section
11.10, or change the definition of Majority Lenders; (vi) increase the advance
rates set forth in clauses (a)(ii), (iii) and (iv) of the definition of the term
"Borrowing Base" from the advance rates in effect on the Closing Date, or
increase the Fixed Asset Sublimit; (vii) except in connection with the
financing, refinancing, sale or other disposition of any Collateral of a
Borrower permitted under this Credit Agreement, or as otherwise expressly
provided in this Credit Agreement, release Agent's Liens on all or substantially
all of the Collateral and, provided that no amendment, waiver or consent
affecting the rights or duties of the Agent or any Issuing Lender under, (x) in
the case of the Agent, any term or provision of this Credit Agreement and (y) in
the case of any Issuing Lender, (1) Article 3 of this Credit Agreement, (2) any
Letter of Credit or (3) any application in respect of any Letter of Credit,
shall in any event be effective, unless in writing and signed by the Agent or
such Issuing Lender, as applicable, in addition to the Lenders required
hereinabove to take such action.
The Borrowers and the Lenders hereby authorize the Agent to modify this Credit
Agreement by unilaterally amending or supplementing Annex II from time to time
in the manner requested by the Borrowers, the Agent or any Lender solely in
order to reflect any assignments or transfers of the Loans as provided for
hereunder and to the extent in accordance with the terms of this Credit
Agreement; however, provided that the Agent shall promptly deliver a copy of any
such modification to the Funds Administrator and each Lender.
11.11 NONLIABILITY OF AGENT AND LENDERS. The relationship between the
Borrowers and the Lenders and the Agent shall be solely that of borrower and
lender. Neither the Agent, any Lender or any Issuing Lender shall have any
fiduciary responsibilities to any Credit Party. Neither the Agent, any Lender or
any Issuing Lender undertakes any responsibility to any Credit Party to review
or inform such Credit Party of any matter in connection with any phase of any
other Credit Party's business or operations.
11.12 COUNTERPARTS. This Credit Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
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11.13 EFFECTIVENESS. This Credit Agreement shall become effective on
the date on which all of the parties hereto shall have signed a copy hereof
(whether the same or different copies) and shall have delivered the same to the
Agent pursuant to Section 11.5 or, in the case of the Lenders, shall have given
to the Agent written or facsimile notice (actually received) at such a office
that the same has been signed and mailed to it.
11.14 SEVERABILITY. In case any provision in or obligation under this
Credit Agreement or the Notes or the other Credit Documents shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
11.15 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Credit Agreement, and the Table of Contents, are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Credit Agreement.
11.16 MAXIMUM RATE. Notwithstanding anything to the contrary contained
elsewhere in this Credit Agreement or in any other Credit Document, the
Borrowers, the Agent and the Lenders hereby agree that all agreements among them
under this Credit Agreement and the other Credit Documents, whether now existing
or hereafter arising and whether written or oral, are expressly limited so that
in no contingency or event whatsoever shall the amount paid, or agreed to be
paid, to the Agent or any Lender for the use, forbearance, or detention of the
money loaned to the Borrowers and evidenced hereby or thereby or for the
performance or payment of any covenant or obligation contained herein or
therein, exceed the Highest Lawful Rate. If due to any circumstance whatsoever,
fulfillment of any provisions of this Credit Agreement or any of the other
Credit Documents at the time performance of such provision shall be due shall
exceed the Highest Lawful Rate, then, automatically, the obligation to be
fulfilled shall be modified or reduced to the extent necessary to limit such
interest to the Highest Lawful Rate, and if from any such circumstance any
Lender should ever receive anything of value deemed interest by applicable law
which would exceed the Highest Lawful Rate, such excessive interest shall be
applied to the reduction of the principal amount then outstanding hereunder or
on account of any other then outstanding Obligations and not to the payment of
interest, or if such excessive interest exceeds the principal unpaid balance
then outstanding hereunder and such other then outstanding Obligations, such
excess shall be refunded to the Borrowers. All sums paid or agreed to be paid to
the Agent or any Lender for the use, forbearance, or detention of the
Obligations and other Indebtedness of the Borrowers to the Agent or any Lender
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such Indebtedness until payment
in full so that the actual rate of interest on account of all such Indebtedness
does not exceed the Highest Lawful Rate throughout the entire term of such
Indebtedness. The terms and provisions of this Section shall control every other
provision of this Credit Agreement and all agreements among the Borrowers, the
Agent and the Lenders.
11.17 RIGHT OF SETOFF. In addition to and not in limitation of all
rights of offset that any Lender may have under applicable law, each Lender
shall, upon the occurrence and during the continuance of any Event of Default
and whether or not such Lender has made any demand or all of the Obligations of
any Credit Party are matured, have the right to appropriate and apply to the
payment of the Obligations (other than contingent indemnification Obligations to
the extent that
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no claim giving rise thereto has been asserted and remains unresolved or
unsatisfied) of such Credit Party then due and payable all deposits (general or
special, time or demand, provisional or final) then or thereafter held by and
other Indebtedness or property then or thereafter owing by such Lender,
including any and all amounts in any Depositary Account, the DBTCo Account or
the Disbursement Account. For purposes of this Section 11.17, the Obligations of
a Credit Party to a Lender shall include, as fully as though such Obligations
were the direct Obligations of such Credit Party to such Lender, the Obligations
of such Credit Party in which such Lender has a participation interest in any
Letter of Credit pursuant to Article 3, in each case, to the extent of such
participation. Each Lender exercising such rights shall notify the Agent thereof
and any amount received as a result of the exercise of such rights shall be
reallocated as set forth in Section 2.10.
11.18 DEFAULTING LENDER.
(a) Unless the Agent shall have received notice from a Lender, prior
to the time specified in such Section, that such Lender will not make available
to the Agent a Loan required to be made by it pursuant to Section 2.2 or its
funding with respect to any participation interest in any Letter of Credit
pursuant to Article 3, the Agent may assume that such Lender has made such
amounts available to the Agent in accordance with such Sections and the Agent in
its sole discretion may, in reliance upon such assumption, make available to the
Borrowers or the applicable Issuing Lender a corresponding amount on behalf of
such Lender.
(b) If any amount referred to in subsection (a) of this Section
11.18 or in Section 2.3 is not made available to the Agent by a Lender (a
"Defaulting Lender") and the Agent has made such amount available to the
Borrowers or an Issuing Lender, the Agent shall be entitled to recover such
amount on demand from such Defaulting Lender together with interest as
hereinafter provided. If such Defaulting Lender does not pay such amount
forthwith upon the Agent's demand therefor, the Agent shall promptly notify the
Funds Administrator and the Borrowers shall immediately (but in no event later
than five Business Days after such demand) pay such amount to the Agent together
with interest calculated as hereinafter provided. The Agent shall also be
entitled to recover from such Defaulting Lender and/or the Borrowers, as the
case may be, (i) interest on such amount in respect of each day from the date
such corresponding amount was made available by the Agent to the Borrowers to
the date such amount is recovered by the Agent, at a rate per annum equal to
either (A) if paid by such Defaulting Lender, the overnight Federal Funds Rate
or (B) if paid by the Borrowers, the then applicable rate of interest,
calculated in accordance with Section 4.1 or Section 4.2, plus (ii) in each
case, an amount equal to any costs (including reasonable legal expenses) and
losses incurred as a result of the failure of such Defaulting Lender to provide
such amount as provided in this Credit Agreement. Nothing herein shall be deemed
to relieve any Lender from its duty to fulfill its obligations hereunder or to
prejudice any rights which the Borrowers or any Issuing Lender, may have against
any Lender as a result of any default by such Lender hereunder, including the
right of the Borrowers to seek reimbursement from any Defaulting Lender for any
amounts paid by the Borrowers under clause (ii) above on account of such
Defaulting Lender's default.
(c) (i) Notwithstanding anything contained herein to the
contrary, so long as any Lender is a Defaulting Lender or has rejected its
Commitment, the Agent shall not be obligated to transfer to such Lender (and
such Lender shall not be entitled to seek payment directly from
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the Borrowers of): (A) any payments made by the Borrowers to the Agent for the
benefit of such Lender or (B) any amounts contemplated by Section 2.3(b)(i);
and, such Lender shall not be entitled to the sharing of any payments pursuant
to Section 2.10. Amounts otherwise payable to such Lender under Section 2.10
shall instead be paid to the Agent.
(ii) For purposes of voting or consenting to matters with
respect to the Credit Documents and determining Proportionate Share, such
Defaulting Lender shall be deemed not to be a "Lender" and such Lender's
Commitment shall be deemed to be zero (0).
(iii) This Section 11.18(c) shall remain effective with
respect to a Defaulting Lender until (A) the Obligations under this Credit
Agreement shall have been declared or shall have become immediately due and
payable or (B) the Majority Lenders, the Agent and the Borrowers shall have
waived such Lender's default in writing.
(iv) No Lender's Commitment shall be increased or otherwise
affected, and performance by the respective Borrowers shall not be excused, by
the operation of this Section 11.18(c). Any payments of principal or interest
which would, but for this subsection (c), be paid to any Lender, shall be paid
to the Lenders who shall not be in default under their respective Commitments
and who shall not have rejected any Commitment, for application to the Loans
then due and payable or to the other Obligations (other than contingent
indemnification Obligations to the extent that no claim giving rise thereto has
been asserted and remains unresolved or unsatisfied) then due and payable or to
provide cash collateral to secure Obligations (other than contingent
indemnification Obligations to the extent that no claim giving rise thereto has
been asserted and remains unresolved or unsatisfied) not then due and payable in
such manner and order as shall be determined by the Agent. The amount of any
such payments remaining after the payment of all Obligations (other than
contingent indemnification Obligations to the extent that no claim giving rise
thereto has been asserted and remains unresolved or unsatisfied), unless
otherwise required pursuant to applicable law, shall be paid by the Agent to the
Funds Administrator.
11.19 RIGHTS CUMULATIVE. Each of the rights and remedies of the Agent,
each Issuing Lender, the Lenders and the Credit Parties under the Credit
Documents shall be in addition to all of their other rights and remedies under
the Credit Documents and applicable law, and nothing in the Credit Documents
shall be construed as limiting any such rights or remedies.
11.20 THIRD PARTY BENEFICIARIES. Each Issuing Lender shall be deemed
to be a third party beneficiary of its rights under this Credit Agreement,
provided that, except as otherwise provided in Section 11.10, such rights may be
amended or waived, and any departure therefrom by any Credit Party consented to,
without their respective consents.
11.21 JOINT AND SEVERAL LIABILITY OF BORROWERS. Each of the Borrowers
shall be jointly and severally liable hereunder and under each of the other
Credit Documents with respect to all Obligations, regardless of which of the
Borrowers actually receives the proceeds of the Loans or the benefit of any
other extensions of credit hereunder, or the manner in which the Funds
Administrator, the Borrowers, the Agent, the Lenders or any of the Issuing
Lenders account therefor in their respective books and records. In furtherance
and not in limitation of the foregoing, (i) each Borrower's obligations and
liabilities with respect to proceeds of Loans which
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it receives or Letters of Credit issued on its behalf, and related fees, costs
and expenses, and (ii) each Borrower's obligations and liabilities arising as a
result of the joint and several liability of the Borrowers hereunder with
respect to proceeds of Loans received by, or Letters of Credit issued for the
account of, any of the other Borrowers, together with the related fees, costs
and expenses, shall be separate and distinct obligations, both of which are
primary obligations of such Borrower. Neither the joint and several liability
of, nor the Liens granted to the Agent under the Collateral Documents by, any of
the Borrowers shall be impaired or released by (A) the failure of the Agent, any
Lender or any Issuing Lender, any successors or assigns thereof, or any holder
of any Note or any of the Obligations to assert any claim or demand or to
exercise or enforce any right, power or remedy against the Funds Administrator,
any Borrower, any Subsidiary of any Borrower, any other Person, the Collateral
or otherwise; (B) any extension or renewal for any period (whether or not longer
than the original period) or exchange of any of the Obligations or the release
or compromise of any obligation of any nature of any Person with respect
thereto; (C) the surrender, release or exchange of all or any part of any
property (including, without limitation, any Collateral consisting of property
of any other Borrower) securing payment, performance and/or observance of any of
the Obligations or the compromise or extension or renewal for any period
(whether or not longer than the original period) of any obligations of any
nature of any Person with respect to any such property; (D) except to the extent
such action or inaction constitutes a breach of any Credit Document (as
determined by a court of competent jurisdiction in a final and non-appealable
decision), or any action or inaction on the part of the Agent, any Lender or any
Issuing Lender, or any other event or condition with respect to any other
Borrower, including any such action or inaction or other event or condition,
which might otherwise constitute a defense available to, or a discharge of, such
Borrower, or a guarantor or surety of or for any or all of the Obligations; and
(E) any other act, matter or thing (other than payment or performance of the
Obligations) which would or might, in the absence of this provision, operate to
release, discharge or otherwise prejudicially affect the obligations of such or
any other Borrower.
11.22 APPOINTMENT AND AUTHORIZATION OF FUNDS ADMINISTRATOR.
(a) Each Borrower hereby designates, appoints, authorizes and
empowers BWAY as its agent to act as specified in the capacity of Funds
Administrator under this Credit Agreement and each of the other Credit Documents
and BWAY hereby acknowledges such designation, authorization and empowerment,
and accepts such appointment. Each Borrower hereby irrevocably authorizes and
directs the Funds Administrator to take such action on its behalf under the
respective provisions of this Credit Agreement and the other Credit Documents,
and any other instruments, documents and agreements referred to herein or
therein, and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Funds
Administrator by the respective terms and provisions hereof and thereof, and
such other powers as are reasonably incidental thereto, including, without
limitation, to take the following actions for and on such Borrower's behalf:
(i) to submit Notices of Borrowing, Notices of Conversion
and Notices of Continuation to Agent in accordance with the provisions of this
Credit Agreement, each such notice to be submitted by the Funds Administrator to
Agent as soon as practicable after its receipt of a request to do so from such
Borrower; and
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(ii) to receive the proceeds of the Loans in accordance with
the provisions of this Credit Agreement, such proceeds to be disbursed to such
Borrower by the Funds Administrator as soon as practicable after its receipt
thereof; and
(iii) to submit requests for the issuance of Letters of Credit
in accordance with the provisions of this Credit Agreement, each such request
for the issuance of a Letter of Credit to be submitted by the Funds
Administrator as soon as practicable after its receipt of a request to do so
from such Borrower.
The Funds Administrator is further authorized and directed by each of the
Borrowers to take all such actions on behalf of such Borrower necessary to
exercise the specific powers granted in clauses (i) through (iii) above and to
perform such other duties hereunder and under the other Credit Documents, and
deliver such documents as delegated to or required of the Funds Administrator by
the terms hereof or thereof.
(b) The Funds Administrator may perform any of its duties hereunder
or under any of the other Credit Documents by or through its agents or
employees.
-Remainder of Page Intentionally Left Blank-
-Signature Page Follows-
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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be executed and delivered by their proper and duly authorized officers as of
the date set forth above.
BORROWERS:
XXXXXXXXX CONTAINERS, INC.
BWAY CORPORATION
BWAY MANUFACTURING, INC.,
each a Delaware corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President and Treasurer
FUNDS ADMINISTRATOR:
BWAY CORPORATION, in its capacity
as Funds Administrator
By: /s/ Xxxxx X. Xxxx
-------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Financial Officer
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AGENT AND LENDER:
DEUTSCHE BANK TRUST COMPANY
AMERICAS, in the respective
capacities of Agent and Lender
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Director
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LENDER:
BANK OF AMERICA, N.A
By: /s/ Xxxxx X. Love
-------------------------------
Name: Xxxxx X. Love
Title: Assistant Vice President
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LENDER:
FLEET CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X Xxxxxxxx
Title: Assistant Vice President
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LENDER:
XXXXXX FINANCIAL, INC., a GE Capital
Company
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Duly Authorized Signer
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LENDER:
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxxx
-------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
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LENDER:
TRANSAMERICA BUSINESS CAPITAL
CORPORATION
By: /s/ Xxx Xxxxxx
-------------------------------
Name: Xxx Xxxxxx
Title: Vice President
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LENDER:
WHITEHALL BUSINESS CREDIT
CORPORATION
By: /s/ Xxxxx Xxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxx
Title: Assistant Vice President
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