CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of October 28, 2002, among THE
PACIFIC LUMBER COMPANY, a Delaware corporation (the "Company"), EACH LENDER FROM
TIME TO TIME PARTY HERETO (collectively, the "Lenders" and individually, a
"Lender"), and BANK OF AMERICA, N.A., as Administrative Agent and as L/C Issuer.
WHEREAS, the Company has requested that the Lenders provide a revolving
credit facility with a letter of credit subfacility, and the Lenders are willing
to do so on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms have the following meanings:
"Acceptable Inventory" means inventory (as defined in the UCC) which:
(a) Is owned by the Company free and clear of all security interests, liens,
encumbrances, and rights of others, except the security interest in favor of the
Administrative Agent for the benefit of the Secured Parties;
(b) Is located at permanent locations acceptable to the Administrative Agent, in
its Permitted Discretion, and is not covered by a negotiable document of title
unless such document has been delivered to the Administrative Agent for the
benefit of the Secured Parties;
(c) The Administrative Agent, in its Permitted Discretion, believes is not
obsolete, unsalable, damaged, or unfit for further processing;
(d) Is not placed by the Company on consignment;
(e) Consists of wood chips, lumber, or log inventory or, if the Administrative
Agent approves in writing in advance in its sole discretion, consists of gravel
inventory and, in any case, is of a type held for sale in the Company's ordinary
course of business; and
(f) Is otherwise acceptable to the Administrative Agent in its Permitted
Discretion.
The value of Acceptable Inventory shall be the lesser of the Company's cost
(determined under GAAP) or the Administrative Agent's Permitted Discretion of
the resale value of such inventory in such quantities and on such terms as the
Administrative Agent may deem appropriate in its Permitted Discretion. Until
further written notice from the Administrative Agent to the Company, the value
(y) of the lumber component of Acceptable Inventory shall be determined by the
resale value of such inventory in such quantities and on such terms as the
Administrative Agent may reasonably deem appropriate in its Permitted Discretion
and (z) of the log component of such Acceptable Inventory shall be determined by
the Company's cost (determined under GAAP) of such inventory.
"Acceptable Receivable" means an Account:
(a) Arising from the sale of inventory or power produced by the Company's
cogeneration plant in Scotia, California, by the Company in its ordinary course
of business; and if arising from the sale of inventory, is in an amount equal to
or less than $2,000,000. The Administrative Agent may, from time to time, exempt
specific Accounts from this $2,000,000 limit;
(b) Upon which the Company's right to receive payment is absolute and not
contingent upon the fulfillment of any condition whatever;
(c) Against which is asserted no defense, counterclaim or setoff, whether
well-founded or otherwise;
(d) That is a true and correct statement of a bona fide indebtedness incurred in
the amount of the Account for merchandise sold and accepted by the Receivable
Debtor obligated upon such Account;
(e) With respect to which an invoice has been sent;
(f) That is owned by the Company and not subject to any right, claim, or
interest of another other than the security interest in favor of the
Administrative Agent for the benefit of the Secured Parties;
(g) That does not arise from a sale to an employee, Affiliate, parent, or
Subsidiary of the Company, or an entity which has common officers or directors
with the Company; except that up to 20% of the total balance of Acceptable
Receivables may include Accounts on which the Receivable Debtor is Xxxxx Lumber
Co., Inc.;
(h) That is not the obligation of a Receivable Debtor that is the federal
government or a political subdivision thereof unless the Administrative Agent,
in its Permitted Discretion, has agreed to the contrary in writing and the
Company has complied with the Federal Assignment of Claims Act of 1940 with
respect to such obligation;
(i) That is not the obligation of a Receivable Debtor that is any state of the
United States or any city, town, municipality or division thereof; except for
Accounts up to an aggregate outstanding amount at any one time of $100,000 which
arise in one of the following ways:
(1) The sale of power produced by the Company's cogeneration plant in Scotia,
California; or
(2) The sale of lumber to cities and towns;
(j) That is not the obligation of a Receivable Debtor located in a foreign
country;
(k) That is not the obligation of a Receivable Debtor to whom the Company is or
may become liable for goods sold or services rendered by the Receivable Debtor
to the Company except to the extent that it exceeds the amount of the Company's
obligation to such Receivable Debtor;
(l) That does not arise with respect to goods which are delivered on a
cash-on-delivery basis or placed on consignment, guaranteed sale or other terms
by reason of which the payment by the Receivable Debtor may be conditional;
(m) That is not in default. An Account shall be deemed in default upon the
occurrence of any of the following:
(1) The Account is not paid within the 60 day period starting on its
invoice date. This 60 day limitation shall not apply to an Account
which is not paid within such period because payment is subject to the
Company's "winter terms" previously approved by the Administrative
Agent;
(2) Any Receivable Debtor obligated upon such Account suspends business,
makes a general assignment for the benefit of creditors, or fails to
pay its debts generally as they come due; or
(3) Any petition is filed by or against any Receivable Debtor obligated
upon such Account under any bankruptcy law or any other law or laws for
the relief of debtors;
(n) That does not arise from the sale or lease of goods which remain in the Company's possession or under
the Company's control; and
(o) That is otherwise acceptable to the Administrative Agent in its Permitted Discretion.
"Account" means any right to the payment of money owned by the Company and
arising out of the sale of goods or the rendering of services by the Company
which is not evidenced by an instrument or chattel paper.
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Restricted Subsidiary) provided that the Company or a Restricted
Subsidiary is the surviving entity.
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify the
Company and the Lenders.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Except
with respect to any Lender, the Administrative Agent or L/C Issuer or any
Affiliate (defined without regard to this sentence) thereof, any director,
executive officer or beneficial owner of 10% or more of the equity of a Person
shall for the purposes of this Agreement, be deemed to control the other Person.
"Agent-Related Persons" means the Administrative Agent, together with its
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of the Administrative Agent and its Affiliates.
"Aggregate Commitments" means the Commitments of all the Lenders.
"Agreement" means this Credit Agreement, dated as of October 28, 2002, as
it may be amended, supplemented or otherwise modified from time to time.
"Anniversary Date" has the meaning specified in Section 2.17(a).
"Applicable Margin" means 2.75% with respect to Eurodollar Rate Loans and
1.75% with respect to Base Rate Loans.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit E.
"Assuming Lender" has the meaning specified in Section 2.17(d).
"Attorney Costs" means and includes all fees, expenses and disbursements
of any law firm or other external counsel, the allocated cost of internal legal
services and all expenses and disbursements of internal counsel.
"Auto-Renewal Letter of Credit" shall have the meaning specified in
Section 2.16(b)(3).
"Bank of America" means Bank of America, N.A. and its successors.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C.ss.101, et seq.).
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 0.625% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its "prime rate." The "prime rate" is a rate set by Bank of America based
upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"Borrowing" means a borrowing consisting of simultaneous Revolving Loans
of the same Type and, in the case of Eurodollar Rate Loans, having the same
Interest Period made by each of the Lenders pursuant to Section 2.01.
"Borrowing Base" means:
(a) the sum of:
(1) 80% of the balance due on Acceptable Receivables; plus
(2) 60% of the value of Acceptable Inventory;
minus
(b) the aggregate of the Company's open payables for contracted logging and
hauling;
in each case as of the time of computation.
"Borrowing Base Certificate" means a certificate, in form and detail
acceptable to the Administrative Agent, from the Company and signed by a
Responsible Officer of the Company, setting forth the computations which form
the basis for the Borrowing Base contained in the certificate.
"Borrowing Date" means any date on which a Loan is disbursed.
"Xxxxx Lumber Agreement" means the agreement dated as of March 23, 1993,
among the Company and Xxxxx Lumber Co., Inc.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in San Francisco, California are authorized or required
by law to close and, if the applicable Business Day relates to any Eurodollar
Rate Loan, means such a day on which dealings are carried on in the applicable
eurodollar dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capital Lease" has the meaning specified in the definition of Capital
Lease Obligations.
"Capital Lease Obligations" means all monetary obligations of the Company
or any of its Subsidiaries under any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease ("Capital Lease").
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of equity
interests in (however designated) such Person, including any Preferred Stock of
such Person but excluding any Redeemable Stock of such Person.
"Cash Collateralize" has the meaning specified in Section 2.16(g).
"Cash Equivalents" means at any time (i) any evidence of any obligation
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided, that the full faith and credit of
the United States is pledged in support thereof); (ii) demand or time deposits
with, and certificates of deposit or acceptances issued by, any bank or trust
company organized under the laws of the United States or any State thereof
(including Bank of America) whose unsecured, unguaranteed long-term debt
obligations are rated "A" by Samp;P and "A2" by Moody's or higher, or whose
unsecured, unguaranteed commercial paper obligations are rated "A-2" by S&P and
"P-2" by Moody's or higher; (iii) repurchase agreements entered into with
entities whose unsecured, unguaranteed long-term debt obligations are rated "A"
by S&P and "A2" by Moody's or higher, or whose unsecured, unguaranteed
commercial paper obligations are rated "A-2" by S&P and "P-2" by Moody's or
higher, pursuant to a written agreement with respect to any obligation described
in clauses (i), (ii) or (iv) of this definition; (iv) commercial paper
(including both noninterest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not later than 180 days
from the date of acquisition thereof) and having a rating of "A-2" by S&P and
"P-2" by Moody's or higher; (v) direct obligations of any money market fund or
other similar investment company all of whose investments consist primarily of
obligations described in the foregoing clauses of this definition and that is
rated "AAm" by S&P and "Aam" by Moody's or higher; (vi) taxable auction rate
securities commonly known as "money market notes" that at the time of purchase
have been rated and the ratings for which (A) for direct issues, must not be
less than "P2" if rated by Moody's and not less than "A2" if rated by S&P, or
(B) for collateralized issues which follow the asset coverage tests set forth in
the Investment Company Act of 1940, as amended, must have long-term ratings of
at least "AAA" if rated by S&P and "Aaa" if rated by Moody's; or (vii) any
investments hereafter developed which are substantially comparable to those
described above.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980.
"Change in Control" means the occurrence of any of the following events:
(a) MAXXAM Inc. not being the sole beneficial owner, directly or indirectly, of
at least 51% of the total common equity of the Company. For purposes of this
clause, a beneficial owner shall have the meaning ascribed in Regulation 13d-3
of the Exchange Act as in effect on the date of this Agreement. The provisions
of this clause shall not apply if MAXXAM Inc. should not hold the requisite
beneficial ownership interest because of bankruptcy, reorganization, insolvency,
or similar proceedings; or
(b) MAXXAM Inc., through direct representation or through persons nominated by
it, not controlling a majority of the Board of Directors of the Company
necessary to effectuate any actions by the Board of Directors of the Company; or
(c) Any person or group directly or indirectly owning more than MAXXAM Inc. of
the total voting power entitled to vote generally in the election of directors
of the Company. For purposes of this clause, person or group shall have the
meaning ascribed in Section 13(d)(3) of the Exchange Act as in effect on the
date of this Agreement; or
(d) Xxxxxxx Xxxxxxx, members of his immediate family and trusts for the benefit
thereof (each such person, including Xx. Xxxxxxx and any trustee of such trusts,
a "Beneficiary") not having (other than by reason of resolution of any
litigation outstanding as of the date of this Agreement or any similar
litigation or the existence of a Lien but including by reason of the foreclosure
of or other realization upon a Lien) direct or indirect sole beneficial
ownership (as defined under Regulation 13d-3 of the Exchange Act as in effect on
the date of this Agreement) of at least the Minimum Percentage of the total
equity of MAXXAM Inc. other than as a result of new issuances of equity
securities by MAXXAM Inc. to third parties (other than to a third party who is
not a Beneficiary and who controls MAXXAM Inc.). For purposes of this
definition, "Minimum Percentage" means the product of (x) the percentage of the
total equity of MAXXAM Inc. directly or indirectly beneficially owned by the
Beneficiaries as of December 18, 1998 times (y) 80%.
"Claiming Lender" has the meaning specified in Section 3.07.
"Closing Date" means October 28, 2002.
"Code" means the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Company in or upon which a Lien
now or hereafter exists in favor of the Administrative Agent for the benefit of
the Secured Parties securing all or part of the Obligations, whether under this
Agreement or under any other documents executed and delivered to the
Administrative Agent.
"Collateral Documents" means, collectively, (i) the Company Security
Agreement, and all other security agreements, mortgages, deeds of trust, patent
and trademark assignments, lease assignments, guarantees and other similar
agreements between the Company and the Administrative Agent for the benefit of
the Secured Parties now or hereafter delivered to the Administrative Agent for
the benefit of the Secured Parties pursuant to or in connection with the
transactions contemplated hereby, granting the Administrative Agent for the
benefit of the Secured Parties a Lien on the Collateral and all financing
statements (or comparable documents now or hereafter filed in accordance with
the UCC or comparable law) against the Company as debtor in favor of the
Administrative Agent for the benefit of the Secured Parties as secured party,
and (ii) any amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions and extensions of any of the foregoing.
"Commitment" means, as to each Lender, its obligation to (a) make
Revolving Loans to the Company pursuant to Section 2.01 and (b) purchase
participations in L/C Obligations, in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender's name
on Schedule 2.01 or in the Assignment and Assumption, as the case maybe,
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted from time to time in accordance with this Agreement.
"Commitment Fee" has the meaning specified in Section 2.10(a).
"Commitment Fee Percentage" means, with respect to the Commitment, a per
annum rate of 0.625%.
"Company Security Agreement" means the Security Agreement (Receivables and
Inventory) between the Company and the Administrative Agent of even date
herewith.
"Compensation Period" has the meaning specified in Section 2.13(c)(2).
"Compliance Certificate" means a certificate substantially in form of
Exhibit C.
"Consenting Lenders" has the meaning specified in Section 2.17(c).
"Contingent Obligation" means, as to any Person, (a) any Guaranty
Obligation of that Person; and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any letter
of credit or similar instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings, or (ii) in
respect of any Swap Contract that is not entered into in connection with a bona
fide hedging operation that provides offsetting benefits to such Person. The
amount of any Contingent Obligation shall (subject, in the case of Guaranty
Obligations, to the last sentence of the definition of "Guaranty Obligation") be
deemed equal to the maximum reasonably anticipated liability in respect thereof,
and shall, with respect to item (b)(ii) of this definition, be marked to market
on a current basis, excluding any obligations pursuant to contracts with
Subsidiaries of the Company or with Xxxxx Lumber Co., Inc.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under Section
2.03, the Company (a) converts Loans of one Type to another Type, or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"Credit Extension" means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.
"Debt" means, at any date of determination, the sum of the following,
computed on an Unconsolidated Basis: all outstanding Loans plus any other
interest bearing Indebtedness, the face amount of undrawn letters of credit, and
any Guaranty Obligation on account of interest bearing Indebtedness or undrawn
letters of credit.
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Revolving Loans or participations in L/C Obligations required to
be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject of
a good faith dispute, or (c) has been deemed insolvent or become the subject of
an Insolvency Proceeding.
"Default Rate" has the meaning specified in Section 2.09(d).
"Dollar" and "$" mean lawful money of the United States.
"Early Termination Date" with respect to a Specified Swap Contract shall
have the meaning specified in such contract.
"EBITDA" means, for any fiscal period, the following, computed on an
Unconsolidated Basis for such period, total revenues less cash operating
expenses, less corporate administration expenses as reported on the EBITDA line
of page ES-3, or its equivalent, of the "Forest Products Operations Consolidated
Financial Report," or its equivalent, provided monthly to the Administrative
Agent pursuant to Section 6.01(d).
"Effective Amount" means (i) with respect to any Revolving Loans on any
date, the aggregate outstanding principal amount thereof after giving effect to
any Borrowings and prepayments or repayments of Revolving Loans occurring on
such date; and (ii) with respect to any outstanding L/C Obligations on any date,
the amount of such L/C Obligations on such date after giving effect to any L/C
Credit Extension occurring on such date and any other changes in the aggregate
amount of the L/C Obligations as of such date, including as a result of any
reimbursements of outstanding unpaid drawings under any Letters of Credit or any
reductions in the maximum amount available for drawing under Letters of Credit
taking effect on such date.
"Eligible Assignee" has the meaning specified in Section 10.07(g).
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or by any other Person in good faith and upon a
reasonable basis alleging potential liability or responsibility for violation of
any Environmental Law or for release or injury to the environment or threat to
public health, personal injury (including sickness, disease or death), property
damage, natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup, removal, remedial
or response costs, restitution, civil or criminal penalties, injunctive relief,
or other type of relief, resulting from or based upon (a) the presence,
placement, discharge, emission or release (including intentional and
unintentional, negligent and non-negligent, sudden or non-sudden, accidental or
non-accidental placement, spills, leaks, discharges, emissions or releases) of
any Hazardous Material at, in, or from property, whether or not owned by the
Company, or (b) any other circumstances forming the basis of any violation, or
violation alleged in good faith and upon a reasonable basis, of any
Environmental Law.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, licenses, authorizations and permits of,
and agreements with, any Governmental Authorities, in each case relating to
environmental, health, safety and land use matters; including CERCLA, the Clean
Air Act, the Federal Water Pollution Control Act of 1972, the Solid Waste
Disposal Act, the Endangered Species Act (16 U.S.C. ss.1531 et seq.), the
Migratory Bird Treaty Act (16 U.S.C. 703 et seq.), the Forest and Rangeland
Renewable Resources Act of 1974, the National Forest Management Act of 1976, the
Federal Resource Conservation and Recovery Act, the Toxic Substances Control
Act, the Emergency Planning and Community Right-to-Know Act, the California
Hazardous Waste Control Law, the California Solid Waste Management, Resource,
Recovery and Recycling Act, the California Water Code and the California Health
and Safety Code, the Z'xxxx-Xxxxxxx Forest Practices Act of 1973 and the
California Public Resources Code.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is, or at any time within six years of the time in question
has been, under common control with the Company within the meaning of Section
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the treatment of a Pension Plan amendment as a
termination under Section 4041 or 4041A of ERISA, or the filing of a notice of
intent to terminate or the commencement of proceedings by the PBGC to terminate
a Pension Plan or Multiemployer Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Company or any ERISA Affiliate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by the Administrative Agent
to be the offered rate that appears on the page of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a) does not appear on such
page or service or such page or service shall not be available, the rate per
annum equal to the rate determined by the Administrative Agent to be the offered
rate on such other page or other service that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Administrative Agent as the rate
of interest at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America's London
Branch to major banks in the London interbank eurodollar market at their request
at approximately 4:00 p.m. (London time) two Business Days prior to the first
day of such Interest Period.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate based on
the Eurodollar Rate.
"Event of Default" means any of the events or circumstances specified in
Section 8.01.
"Excess Cash Flow" means, for any fiscal period, the following, computed
for the four fiscal quarters ending at the end of such period: (i) Free Cash
Flow less (ii) the sum, without duplication, of the following computed on an
Unconsolidated Basis: (A) interest expense, plus (B) other net reductions in
Indebtedness of the type described in clauses (a) through (f) of the definition
thereof, less (iii) any net increase in working capital, plus (iv) any net
decrease in working capital. Working capital for this purpose shall mean
accounts receivable, plus inventory, minus accounts payable.
"Exchange Act" means the Securities Exchange Act of 1934, and regulations
promulgated thereunder.
"Existing Letters of Credit" means those letters of credit identified on
Schedule 1.01.
"Extension Effective Date" has the meaning specified in Section 2.17(b).
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.
"Fee Letter" means the letter agreement dated July 25, 2002 between the
Company and Bank of America.
"Foreign Lender" has the meaning specified in Section 10.15(a).
"FRB" means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.
"Free Cash Flow" means, for any fiscal period, the following, computed for
the four fiscal quarters ending at the end of such period: EBITDA, plus SPC's
distributions to the Company on account of its membership interest in SPC, minus
capital expenditures computed on an Unconsolidated Basis, provided, however that
the foregoing shall be computed without giving effect to a direct or indirect
dividend or distribution to the stockholders of the Company or any of its
Subsidiaries of any Salmon Creek Proceeds.
"GAAP" means generally accepted accounting principles in the United
States, as set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession) and which are applicable to the
circumstances.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that Person,
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, or (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, or (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, or (d) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof. The amount of any Guaranty
Obligation shall be deemed equal to the stated or determinable amount of the
primary obligation in respect of which such Guaranty Obligation is made or, if
not stated or if indeterminable, the maximum reasonably anticipated liability in
respect thereof.
"Hazardous Materials" means all those substances that are regulated by, or
which may form the basis of liability under, any Environmental Law, including
any substance identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"Honor Date" has the meaning specified in Section 2.16(c)(1)
"Incur" means, directly or indirectly, create, incur, issue, assume,
guarantee or become liable with respect to, contingently or otherwise (and the
terms "Incurred" and "Incurrence" have correlative meanings).
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary terms and
other than compensation, pension obligations, and other obligations arising from
employee benefits and employee arrangements); (c) all non-contingent
reimbursement or payment obligations with respect to all letters of credit
(including standby and commercial), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments; (d) all obligations
evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the Person (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property); (f) all
obligations with respect to Capital Leases; (g) all indebtedness referred to in
clauses (a) through (f) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including accounts and contracts rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness; and (h) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses (a)
through (g) above.
"Indemnified Liabilities" has the meaning specified in Section 10.05(a).
"Indemnified Person" has the meaning specified in Section 10.05(a).
"Insolvency Proceeding" means (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; undertaken under U.S. Federal, state or foreign law, including
the Bankruptcy Code.
"Interest Payment Date" means, as to any Eurodollar Rate Loan, the last
day of each Interest Period applicable to such Loan and the Maturity Date, and,
as to any Base Rate Loan, the last Business Day of each calendar quarter and the
Maturity Date; provided, however, that if any Interest Period applicable to an
Eurodollar Rate Loan exceeds three months, the date that falls three months
after the beginning of such Interest Period and after each Interest Payment Date
thereafter is also an Interest Payment Date.
"Interest Period" means, as to any Eurodollar Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Eurodollar Rate
Loan, and ending on the date one, two, three or six months thereafter as
selected by the Company in its Notice of Borrowing or Notice of
Conversion/Continuation; provided that:
(i) If any Interest Period would otherwise end on a day that is not a Business
Day, that Interest Period shall be extended to the following Business Day
unless, the result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on the
preceding Business Day;
(ii) Any Interest Period pertaining to an Eurodollar Rate Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and
(iii) No Interest Period for any Revolving Loan shall extend beyond the
Revolving Termination Date.
"Investments" has the meaning specified in Section 7.04.
"IRS" means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Issuance Date" means the date of issuance of any Letter of Credit.
"Joint Venture" means a single-purpose corporation, partnership, limited
liability company, joint venture or other similar legal arrangement (whether
created by contract or conducted through a separate legal entity) now or
hereafter formed by the Company or any of its Subsidiaries with another Person
in order to conduct a common venture or enterprise with such Person.
"Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, binding and enforceable guidelines,
regulations, ordinances, codes and administrative or judicial precedents or
authorities and all applicable administrative orders, directed duties, decrees,
licenses, authorizations and permits of, and agreements with, any Governmental
Authority.
"L/C Advance" means, with respect to each Lender, such Lender's funding of
its participation in any L/C Borrowing in accordance with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which shall not have been reimbursed on the date when
made nor converted into a Borrowing of Revolving Loans.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means at any time the sum of (a) the aggregate undrawn
amount of all Letters of Credit then outstanding, plus (b) the amount of all
Unreimbursed Amounts, including all outstanding L/C Borrowings.
"L/C-Related Documents" means the Letters of Credit, the Letter of Credit
Applications, and any other document relating to any Letter of Credit, including
any of the L/C Issuer's standard form documents for L/C Credit Extensions.
"Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the L/C Issuer.
"Lending Office" means, as to any Lender, the office or offices of such
Lender specified as its "Lending Office" or "Domestic Lending Office" or
"Eurodollar Lending Office", as the case may be, opposite its name on Schedule
10.02 or in the Assignment and Assumption pursuant to which such Lender becomes
a party hereto, or such other office or offices as a Lender may from time to
time notify the Company and the Administrative Agent.
"Letter of Credit Application" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days prior
to the Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).
"Letter of Credit Fee" has the meaning specified in Section 2.16(i).
"Letter of Credit Fee Percentage" means with respect to the Letters of
Credit, a per annum rate equal to 2.75%.
"Letter of Credit Sublimit" means an amount equal to $20,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
"Letters of Credit" means the Existing Letters of Credit and letters of
credit issued pursuant to this Agreement.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a Capital Lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the UCC or any comparable law) and any contingent or other
agreement to provide any of the foregoing, but not including the interest of a
lessor under an operating lease.
"Loan" means an extension of credit by a Lender to the Company under
Article II, and may be a Base Rate Loan or an Eurodollar Rate Loan (each, a
"Type" of Loan), and includes any Revolving Loan.
"Loan Documents" means this Agreement, the Collateral Documents, the
L/C-Related Documents, any documents evidencing or relating to Specified Swap
Contracts with a Swap Provider, and all other documents delivered to the
Administrative Agent in connection with the transactions contemplated by this
Agreement.
"Margin Stock" means "margin stock" as such term is defined in Regulation
T, U or X of the ------------ FRB.
"Material Adverse Effect" means a material adverse change in, or a
material adverse effect upon, any of: (a) the operations, business, properties,
condition (financial or otherwise) or financial prospects of the Company or the
Company and its Subsidiaries taken as a whole or as to SPC; (b) the ability of
the Company to perform under any Loan Document and avoid any Event of Default;
(c) the legality, validity, binding effect or enforceability of any Loan
Document; or (d) the perfection or priority of any Lien granted to the
Administrative Agent for the benefit of the Secured Parties under any of the
Collateral Documents.
"Material Indebtedness" has the meaning specified in Section 8.01(d).
"Maturity Date" means August 13, 2004, or such later date as extended from
time to time pursuant to Section 2.17.
"Maximum Rate" has the meaning specified in Section 10.10.
"MGHI" means MAXXAM Group Holdings Inc.
"Moody's" means Xxxxx'x Investor Service, Inc. and any successor thereto.
"Multiemployer Plan" means a "multiemployer plan", within the meaning of
Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes,
is making, or is obligated to make contributions or, during the preceding three
calendar years, has made, or been obligated to make, contributions.
"Net Worth" means for any fiscal period, the following, computed on an
Unconsolidated Basis for such period, total stockholders' equity as reported by
the Company on page PL-6, or its equivalent, of the "Forest Products Operations
Consolidated Financial Report," or its equivalent, provided monthly to the
Administrative Agent pursuant to Section 6.01(d).
"Non-Consenting Lenders" has the meaning specified in Section 2.17(c).
"Nonrenewal Notice Date" shall have the meaning set forth in Section
2.16(b)(3).
"Note" means a promissory note made by the Company in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit D.
"Notice of Borrowing" means a notice in substantially the form of Exhibit
A.
"Notice of Conversion/Continuation" means a notice in substantially the
form of Exhibit B.
"Notice of Lien" has the meaning specified in Section 7.01(c).
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, the Company arising under any Loan Document or
otherwise with respect to any Loan, Letters of Credit or Specified Swap
Contract, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
the Company or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding.
"Organization Documents" (a) means, with respect to any corporation, the
certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred shareholders of
such corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of such
corporation; (b) with respect to any limited liability company, the certificate
or articles of formation or organization and operating agreement; and (c) with
respect to any partnership, joint venture, trust or other form of business
entity, the partnership, joint venture or other applicable agreement of
formation or organization and any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" has the meaning specified in Section 3.01(b).
"Participant" has the meaning specified in Section 10.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA (excluding any Multiemployer Plan) which the
Company sponsors, maintains, or to which it makes, is making, or is obligated to
make contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding five (5) plan years.
"Permitted Discretion" means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured lender) business
judgment.
"Permitted Liens" has the meaning specified in Section 7.01.
"Permitted Salmon Creek Transaction" means any or all of the following:
the contribution, transfer, or sale (whether or not for fair market value) by
the Company or any of its Restricted Subsidiaries to Salmon Creek LLC, any of
its Subsidiaries, or any Special Purpose Subsidiary of any standing timber,
timber rights, or timberlands or of any equity interest in any Special Purpose
Subsidiary, or Investments by the Company or any of its Restricted Subsidiaries
to or in Salmon Creek LLC, any of its Subsidiaries, or any Special Purpose
Subsidiary of up to an additional $5,000,000 in cash or other assets in
aggregate cumulative amount after the date hereof.
"Permitted Swap Obligations" means all obligations (contingent or
otherwise) of the Company existing or arising under Swap Contracts, provided
that each of the following criteria is satisfied: (a) such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly or indirectly mitigating risks associated with liabilities,
commitments or assets held by such Person, or changes in the value of securities
issued by such Person in conjunction with a securities repurchase program not
otherwise prohibited hereunder, and not for purposes of speculation or taking a
"market view;" (b) such Swap Contracts do not contain (i) any provision
("walk-away" provision) exonerating the non-defaulting party from its obligation
to make payments on outstanding transactions to the defaulting party, or (ii)
with respect to any Swap Contract that is not a Specified Swap Contract, any
provision creating or permitting the declaration of an event of default,
termination event or similar event upon the occurrence of an Event of Default
hereunder (other than an Event of Default under Section 8.01(a).
"Person" means an individual, a sole proprietorship, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Company sponsors or maintains or to which the Company makes, is
making, or is obligated to make contributions and includes any Multiemployer
Plan or Pension Plan.
"Preferred Stock" as applied to the Capital Stock or Redeemable Stock of
any corporation, means Capital Stock or Redeemable Stock of any class or classes
(however designated) which is preferred as to the payment of dividends, or as to
the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over shares of Capital Stock or Redeemable
Stock, as the case may be, of any other class of such corporation.
"Prior Credit Agreement" means the Amended and Restated Credit Agreement,
dated as of November 10, 1995, as amended by the First Amendment thereto, dated
as of February 10, 1997, and the Second Amendment thereto, dated as of October
2, 1997, and as amended and restated by the Amended and Restated Credit
Agreement, dated as of December 18, 1998, as amended by the First Amendment
thereto, dated as of January 31, 2000, and as further amended and restated by
the Amended and Restated Credit Agreement, dated as of August 14, 2001, as
amended, between the Company and Bank of America.
"Pro Rata Share" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment of such Lender at such
time and the denominator of which is the amount of the Aggregate Commitments at
such time; provided that if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to the terms hereof. The initial Pro Rata Share of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Receivable Debtor" means the person or entity obligated upon a
Receivable.
"Receivables" has the meaning given such term in the Company Security
Agreement. "Redeemable Stock" of any Person means any equity security of such
Person that by its terms is required to be redeemed prior to the date four years
after the Revolving Termination Date, or is redeemable at the option of the
holder thereof at any time prior to such date.
"Register" has the meaning specified in Section 10.07(c).
"Replacement Lender" has the meaning specified in Section 3.07.
"Reportable Event" means, any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.
"Required Lenders" means, as of any date of determination, Lenders having
more than 50% of the Aggregate Commitments or, if the commitment of each Lender
to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender's risk participation and funded participation in L/C Obligations being
deemed "held" by such Lender for purposes of this definition); provided that the
Commitment of, and the portion of the Total Outstandings held or deemed held by,
any Defaulting Lender shall be excluded for purposes of making a determination
of Required Lenders.
"Requirement of Law" means, as to any Person, any Law or determination of
an arbitrator or of a Governmental Authority, in each case applicable to or
binding upon the Person or any of its property or to which the Person or any of
its property is subject.
"Responsible Officer" of a Person means the chief executive officer or the
president, the chief financial officer, the Vice President - Finance and
Administration, the treasurer, assistant treasurer, or any other officer of such
Person having substantially the same authority and responsibility or designated
by the chief executive officer or the chief financial officer of such Person as
having the appropriate authority and responsibility.
"Restricted Payment" has the meaning specified in Section 7.12.
"Restricted Subsidiary" means, as of any determination date, each of the
Subsidiaries of the Company which is not as of such determination date an
Unrestricted Subsidiary of the Company.
"Revolving Loan" has the meaning specified in Section 2.01.
"Revolving Termination Date" means the earlier to occur of:
(a) Maturity Date;
(b) the date of termination of the Aggregate Commitments pursuant to Section
2.05; and
(c) the date of termination of the commitment of each Lender to make Loans and
of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to
Section 8.02.
"Salmon Creek LLC" means Salmon Creek LLC, a Delaware limited liability
company, or any successor entity, by way of merger, consolidation, purchase of
all or substantially all of its assets, or otherwise.
"Salmon Creek Proceeds" means any consideration received by the Company or
any of its Subsidiaries from any Person (A) in respect of all or any part of the
equity of Salmon Creek LLC, any of its Subsidiaries, or any Special Purpose
Subsidiary, or (B) in respect of all or any part of the real property
constituting Salmon Creek Property, or (C) otherwise in connection with Salmon
Creek LLC, any of its Subsidiaries, or any Special Purpose Subsidiary, or Salmon
Creek Property (including, without limitation, amounts distributed by SPC to the
Company to the extent that such distributions are funded with funds released
from the Scheduled Amortization Reserve Account, as such term is defined in the
Scotia Pacific Indenture), except in each case proceeds of the harvesting of
timber constituting Salmon Creek Property.
"Salmon Creek Property" means any standing timber, timber rights, or
timberlands (including structures and improvements thereon and related interests
in real property) owned as of December 19, 1998 or on the date hereof by the
Company, SPC, or Salmon Creek LLC or any of its Subsidiaries, any asset held by
Salmon Creek LLC or any of its Subsidiaries as of December 19, 1998 or on the
date hereof, and any other assets obtained in exchange for or out of the
proceeds of the sale or disposition of any of the foregoing.
"S&P" means Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"Scotia Pacific Indenture" means the Indenture, dated as of July 20, 1998,
as amended and in effect on the date hereof, between Scotia Pacific Company LLC
and State Street Bank and Trust Company.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Secured Parties" means, collectively, the Administrative Agent, the
Lenders and the Swap Providers.
"Solvent" means, as to any Person at any time, that (a) the fair value of
the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
California Uniform Fraudulent Transfer Act; (b) the present fair saleable value
of the property of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become
absolute and matured; (c) such Person is able to realize upon its property and
pay its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business; (d)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"SPC" means Scotia Pacific Company LLC, a Wholly-Owned Subsidiary of the
Company.
"Special Purpose Subsidiary" means a Subsidiary of the Company created
after December 18, 1998, capitalized with no material assets other than standing
timber, timber rights, or timberlands owned by the Company or any of its
Subsidiaries on December 18, 1998, and designated by the Company as an
Unrestricted Subsidiary in connection with such capitalization.
"Specified Swap Contract" means any Swap Contract made or entered into at
any time, or in effect at any time (whether heretofore or hereafter), whether
directly or indirectly, and whether as a result of assignment or transfer or
otherwise, between the Company and any Swap Provider which Swap Contract is or
was intended by the Company to have been entered into, in part or entirely, for
purposes of mitigating interest rate risk relating to any Loan (which intent
shall conclusively be deemed to exist if the Company so represents to the Swap
Provider in writing), and as to which the final scheduled payment by the Company
is not later than the sixth anniversary of this Agreement.
"Subsidiary" means, with respect to any Person, (i) any corporation of
which more than 50% of the outstanding Capital Stock and Redeemable Stock having
ordinary voting power to elect a majority of the board of directors of the
corporation (irrespective of whether at the time Capital Stock or Redeemable
Stock of any other class or classes of such corporation shall or might have
voting power upon the occurrence of any contingency) is at the time owned,
directly or indirectly, by such Person, or by one or more other Subsidiaries of
such Person, or by such Person and one or more other Subsidiaries of such
Person, or (ii) any other entity of which more than 50% of the outstanding
equity ownership interests are at the time owned, directly or indirectly, by
such Person, or by one or more other Subsidiaries of such Person, or by such
Person and one or more other Subsidiaries of such Person.
"Swap Contract" means any agreement, whether or not in writing, relating
to any transaction that is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap or option, bond,
note or xxxx option, interest rate option, forward foreign exchange transaction,
cap, collar or floor transaction, currency swap, cross-currency rate swap,
swaption, currency option or any other, similar transaction (including any
option to enter into any of the foregoing) or any combination of the foregoing,
and, unless the context otherwise clearly requires, any master agreement
relating to or governing any or all of the foregoing.
"Swap Provider" means any Lender, or any Affiliate of such Lender, that is
at the time of determination party to a Swap Contract with the Company.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined by the Company
based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such Swap Contracts (which may include any Lender or
any Affiliate of a Lender.)
"Taxes" has the meaning specified in Section 3.01(a).
"Tax Sharing Agreement" means the Tax Allocation Agreement, dated May 21,
1988, by and among MAXXAM Inc., the Company, and certain other subsidiaries of
MAXXAM Inc., as amended by (a) the Tax Allocation Agreement, dated as of March
23, 1993, by and among MAXXAM Inc., the Company, Scotia Pacific Holding Company,
and Salmon Creek Corporation, and (b) the Amendment of Tax Allocation Agreement,
dated as of December 31, 2001.
"Timber Notes" means the 6.55% Series B Class A-1, 7.11% Series B Class
A-2 and 7.71% Series B Class A-3 Timber Collateralized Notes due 2028, issued by
SPC pursuant to the Indenture dated as of July 20, 1998, as amended by the First
Supplemental Indenture dated as July 16, 1999 and the Second Supplemental
Indenture dated as of November 18, 1999, between SPC and State Street Bank and
Trust Company, as trustee.
"Total Outstandings" means the aggregate Effective Amount of all Loans and
all L/C Obligations.
"Type" has the meaning specified in the definition of "Loan."
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of California.
"Unconsolidated Basis" means the Company and its Restricted Subsidiaries
other than SPC on a consolidated basis.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.16(c)(1).
"Unrestricted Subsidiary" means (a) each of the Subsidiaries of the
Company so designated after the date hereof by a resolution adopted by the
Company's Board of Directors and as to which designation the Administrative
Agent and the Required Lenders have given their prior written approval, (b) any
Subsidiary of an Unrestricted Subsidiary, (c) Salmon Creek LLC, and (d) any
Special Purpose Subsidiary. The Board of Directors may designate an Unrestricted
Subsidiary to be a Restricted Subsidiary if no Default or Event of Default would
arise by virtue of such designation.
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary that
is a Wholly-Owned Subsidiary.
"Wholly-Owned Subsidiary" means (i) a corporation of which all of the
outstanding shares of Capital Stock and Redeemable Stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time Capital Stock or Redeemable Stock of any
other class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency) are owned at the time, directly or indirectly
(through one or more Wholly-Owned Restricted Subsidiaries), by the Company
(except for director's qualifying shares), or (ii) any other entity of which all
of the outstanding equity ownership interests are owned at the time, directly or
indirectly (through one or more Wholly-Owned Restricted Subsidiaries), by the
Company.
1.02 OTHER INTERPRETIVE PROVISIONS.
(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
subsection, Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(c) Terms:
(1) The term "documents" includes any and all instruments, documents,
agreements, certificates, indentures, notices and other writings, however
evidenced.
(2) The term "including" is not limiting and means "including without
limitation."
(3) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including"; the words "to"
and "until" each mean "to but excluding", and the word "through" means "to
and including."
(4) The term "property" includes any kind of property or asset, real, personal
or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references to Organization
Documents, agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, but only to the extent
such amendments, restatements, extensions, supplements and other modifications
are not prohibited by the terms of any Loan Document, and (ii) references to any
Law include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such Law.
(e) The captions and headings of this Agreement are for convenience of reference
only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of negotiations
among, and have been reviewed by counsel to, the Administrative Agent, the
Company and the other parties, and are the products of all parties. Accordingly,
they shall not be construed against the Administrative Agent, the Lenders or the
L/C Issuer merely because of the Administrative Agent's, the Lenders' or the L/C
Issuer's involvement in their preparation.
1.03 Accounting Principles.
(a) Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied.
(b) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Company or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Company shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Company shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
(c) References herein to "fiscal year" and "fiscal quarter" refer to such fiscal
periods of the Company.
1.04 LETTER OF CREDIT AMOUNTS. Unless otherwise specified, all references herein
to the amount of a Letter of Credit at any time shall be deemed to mean the
maximum face amount of such Letter of Credit after giving effect to all
increases thereof contemplated by such Letter of Credit or the Letter of Credit
Application therefor, whether or not such maximum face amount is in effect at
such time.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 The Revolving Credit. Subject to the terms and conditions set forth herein,
each Lender severally agrees to make loans (each such loan, a "Revolving Loan")
to the Company from time to time, on any Business Day during the period from and
including the Closing Date to the Revolving Termination Date, in an aggregate
amount not to exceed at any time outstanding the amount of such Lender's
Commitment; provided, however, that after giving effect to any Borrowing, (i)
the Total Outstandings shall not exceed the lesser of the Aggregate Commitments
or the Borrowing Base, and (ii) the aggregate Effective Amount of the Revolving
Loans of any Lender, plus such Lender's Pro Rata Share of the Effective Amount
of all L/C Obligations, shall not exceed such Lender's Commitment. Within the
limits of each Lender's Commitment and the Borrowing Base, and subject to the
other terms and conditions hereof, the Company may, pursuant to the terms of
this Agreement, borrow, reborrow under this Section 2.01, prepay under Section
2.06 and reborrow under this Section 2.01.
2.02 Procedure for Borrowing. Each Loan shall be made upon the Company's
irrevocable written notice (including notice via facsimile transmission
confirmed immediately by a telephone call) delivered to the Administrative Agent
in the form of a Notice of Borrowing (which notice must be received by the
Administrative Agent prior to (i) 9:00 a.m. (San Francisco, California time)
three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Rate Loan, and (ii) 11:00 a.m. (San Francisco, California time) on
the requested Borrowing Date, in the case of Base Rate Loans, in each case
specifying:
(a) The principal amount of the Revolving Loan to be borrowed, which shall be in
minimum amounts of $500,000 for Eurodollar Rate Loans and $100,000 for Base Rate
Loans;
(b) The requested Borrowing Date, which shall be a Business Day;
(c) Whether each Loan is to be an Eurodollar Rate Loan or a Base Rate Loan; and
(d) The duration of the Interest Period applicable to the Eurodollar Rate Loans
included in such notice. If the Notice of Borrowing fails to specify the
duration of the Interest Period for any Eurodollar Rate Loans, such Interest
Period shall be three months.
2.03 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Company may, upon irrevocable written notice to the Administrative Agent
in accordance with Section 2.03(b):
(1) Elect to convert on any Business Day, any Base Rate Loans (or any part
thereof in a minimum amount of $500,000) into Eurodollar Rate Loans; or
(2) Elect to convert on any Interest Payment Date any Eurodollar Rate Loans
maturing on such Interest Payment Date (or any part thereof in a minimum
amount of $100,000) into Base Rate Loans; or
(3) Elect to continue on any Interest Payment Date any Eurodollar Rate Loans
maturing on such Interest Payment Date (or any part thereof in a minimum
amount of $500,000);
provided, that if at any time an Eurodollar Rate Loan is reduced, by payment,
prepayment, or conversion of part thereof to be less than $500,000, such
Eurodollar Rate Loan shall automatically convert into a Base Rate Loan, and on
and after such date the right of the Company to continue such Loan as, and
convert such Loan into, an Eurodollar Rate Loan shall terminate.
(b) The Company shall deliver by telex, cable or facsimile, confirmed
immediately in writing, a Notice of Conversion/Continuation to be received by
the Administrative Agent not later than (i) 9:00 a.m. (San Francisco, California
time) at least three Business Days in advance of the Conversion/Continuation
Date, if the Loans are to be converted into or continued as Eurodollar Rate
Loans; and (ii) 12:00 noon (San Francisco, California time) one Business Day in
advance of the Conversion Date, if the Loans are to be converted into or
continued as Base Rate Loans, specifying:
(1) The proposed Conversion/Continuation Date;
(2) The aggregate principal amount of Revolving Loans to be converted or
continued;
(3) The nature of the proposed conversion or continuation; and
(4) If applicable, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to Eurodollar Rate
Loans, the Company has failed to select a new Interest Period or the duration of
the Interest Period to be applicable to such Eurodollar Rate Loans, or if any
Default or Event of Default shall then exist, the Company shall be deemed to
have elected to convert such Eurodollar Rate Loans into Base Rate Loans
effective as of the expiration date of such current Interest Period. Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable Eurodollar
Rate Loans.
(d) Unless the Required Lenders otherwise consent, during the existence of a
Default or Event of Default, the Company may not elect to have a Loan converted
into or continued as an Eurodollar Rate Loan.
2.04 NOTIFICATIONS WITH RESPECT TO BORROWINGS, CONVERSIONS AND CONTINUATIONS OF
REVOLVING LOANS; NUMBER OF INTEREST PERIODS.
(a) Following receipt of a Notice of Borrowing or Notice of
Conversion/Continuation, the Administrative Agent shall promptly notify each
Lender of the amount of its Pro Rata Share of the applicable Revolving Loans,
and if no timely notice of a conversion or continuation is provided by the
Company, the Administrative Agent shall notify each Lender of the details of any
automatic conversion to Base Rate Loans described in the preceding subsection.
In the case of a Borrowing, each Lender shall make the amount of its Revolving
Loan available to the Administrative Agent in immediately available funds at the
Administrative Agent's Office not later than 1:00 p.m. (San Francisco,
California time) on the Business Day specified in the applicable Notice of
Borrowing. Upon satisfaction of the applicable conditions set forth in Section
4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the Company
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Company on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Company; provided, however, that if, on the date the Notice of Borrowing,
with respect to such Borrowing is given by the Company, there are L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied, first, to the
payment in full of any such L/C Borrowings, and second, to the Company as
provided above.
(b) The Administrative Agent shall promptly notify the Company and the Lenders
of the interest rate applicable to any Interest Period for Eurodollar Rate Loans
upon determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Company and the Lenders
of any change in Bank of America's prime rate used in determining the Base Rate
promptly following the public announcement of such change.
(c) After giving effect to all Borrowings, all conversions of Revolving Loans
from one Type to the other, and all continuations of Revolving Loans as the same
Type, unless the Required Lenders shall otherwise consent, there shall not be
more than ten Interest Periods in effect with respect to Revolving Loans.
2.05 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENT. The Company may, upon
notice to the Administrative Agent, terminate the Aggregate Commitments, or from
time to time permanently reduce the Aggregate Commitments; provided that (i) any
such notice shall be received by the Administrative Agent not later than 9:00
a.m. (San Francisco, California time) five Business Days prior to the date of
termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $1,000,000 or any whole multiple of $1,000,000 in excess
thereof, (iii) the Company shall not terminate or reduce the Aggregate
Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments and
(iv) if, after giving effect to any reduction of the Aggregate Commitments, the
Letter of Credit Sublimit exceeds the amount of the Aggregate Commitments, such
Letter of Credit Sublimit shall be automatically reduced by the amount of such
excess. The Administrative Agent will promptly notify the Lenders of any such
notice of termination or reduction of the Aggregate Commitments. Any reduction
of the Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Pro Rata Share. Once reduced in accordance with this Section
2.05, the Commitment may not be increased. If the Commitment is terminated in
its entirety, all accrued Commitment Fees to the effective date of such
termination shall be payable on the effective date of such termination without
any premium or penalty.
2.06 OPTIONAL PREPAYMENTS. Subject to Section 3.04, the Company may, upon notice
to the Administrative Agent, at any time or from time to time voluntarily prepay
Revolving Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Administrative Agent not later than 9:00
a.m. (San Francisco, California time) (A) three Business Days prior to any date
of prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base
Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal
amount of $500,000 or a whole multiple of 100,000 in excess thereof; and (iii)
any prepayment of Base Rate Loans shall be in a principal amount of $100,000 or
a whole multiple of $100,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding. Each notice of prepayment
shall specify the date and amount of such prepayment and the Type(s) of Loans to
be prepaid, and in the case of Eurodollar Rate Loans, which Eurodollar Rate
Loans are to be prepaid. The Administrative Agent will promptly notify each
Lender of its receipt of each such notice, and of the amount of such Lender's
Pro Rata Share of such prepayment. If such notice is given by the Company, the
Company shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein, together with any
additional amounts required pursuant to Section 3.04. Each such prepayment shall
be applied to the Revolving Loans of the Lenders in accordance with their
respective Pro Rata Shares.
2.07 MANDATORY PREPAYMENTS OF LOANS.
(a) Mandatory Prepayments, Cash Collateral. If for any reason the Total
Outstandings at any time exceed the lesser of Aggregate Commitments then in
effect or the Borrowing Base then in effect, the Company shall immediately
prepay to the Lenders Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such excess; provided, however, that the Company shall
not be required to Cash Collateralize the L/C Obligations pursuant to this
Section 2.07(a) unless after the prepayment in full of the Revolving Loans the
Total Outstandings exceed the lesser of the Aggregate Commitments then in effect
or the Borrowing Base then in effect. Payments under this Section 2.07(a) shall
be applied to the obligations of the Company relating to the Loans and L/C
Obligations in such order and manner as the Company in its discretion may
determine.
(b) Clean-up Period. The Company agrees to borrow, repay, and reborrow under the
Revolving Credit such that in each calendar year there shall be at least one
period of 30 consecutive days in which there are no outstanding Revolving Loans
under this Agreement.
(c) General. Any prepayments relating to the Loans made pursuant to this Section
2.07 shall be applied as instructed by the Company; provided, however, that the
Company may, at its option, place any amounts which it would otherwise be
required to use to prepay Eurodollar Rate Loans on a day other than the last day
of the Interest Period therefor in an interest-bearing account pledged to the
Administrative Agent for the benefit of the Secured Parties until the end of
such Interest Period at which time such pledged amounts will be credited to the
prepayment of such Eurodollar Rate Loans. The Company shall pay, together with
each prepayment under this Section, accrued interest on the amount prepaid and
any amounts required under Section 3.04.
2.08 SCHEDULED REPAYMENT. The Company shall repay to the Lenders in full on the
Revolving Termination Date the aggregate principal amount of Revolving Loans
outstanding on such date.
2.09 INTEREST.
(a) Subject to Section 2.09(c), each Loan shall bear interest on the outstanding
principal amount thereof from its Borrowing Date through maturity (whether at
stated maturity or by acceleration or otherwise) at a rate per annum equal to
the Eurodollar Rate for the then applicable Interest Period or the Base Rate, as
the case may be (and subject to the Company's right to convert to other Types of
Loans under Section 2.03), plus the Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein. Interest
hereunder shall also be due and payable on the date of any prepayment of
Eurodollar Rate Loans under Sections 2.06 or 2.07 for the portion of the
Eurodollar Rate Loans so prepaid and upon payment (including prepayment) in full
thereof and, during the existence of any Event of Default, interest shall be due
and payable on demand. Interest hereunder shall be due and payable in accordance
with the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
(c) While any Event of Default exists or after acceleration, the Company shall
pay interest on the principal amount of all Obligations hereunder, at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.
(d) As used herein, "Default Rate" means an interest rate equal to (a) the Base
Rate plus (b) the Applicable Margin applicable to Base Rate Loans plus (c) 2%
per annum; provided, however, that with respect to any Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including the
Applicable Margin) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws; provided, further,
however, that, with respect to any Eurodollar Rate Loan, on and after the
expiration of any Interest Period applicable to such Eurodollar Rate Loan
outstanding on the date of occurrence of such Event of Default or acceleration,
the Default Rate shall be an interest rate equal to the Base Rate plus the
Applicable Margin applicable to Base Rate Loans plus 2% per annum to the fullest
extent permitted by applicable Laws.
2.10 FEES.
(a) Commitment Fee.
(1) The Company shall pay to the Administrative Agent for the account of each
Lender in accordance with its Pro Rata Share, a commitment fee (the
"Commitment Fee") for each day from the Closing Date through the Revolving
Termination Date in an amount equal to the product of (i) the amount of
the Aggregate Commitments in effect on such date less the sum of (a) the
Effective Amount of all Revolving Loans then outstanding and (b) the
Effective Amount of all L/C Obligations then outstanding multiplied by
(ii) 1/360th of the Commitment Fee Percentage in effect on such day. Such
Commitment Fee shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter commencing with the first such date
to occur after the date of this Agreement through the Revolving
Termination Date, with the final payment to be made on the Revolving
Termination Date. The Commitment Fee shall be calculated quarterly in
arrears.
(2) The Commitment Fee provided in this subsection shall accrue at all times
after the above-mentioned commencement date, including at any time during
which one or more conditions in Article IV are not met.
(b) Other Fees. The Company shall pay to Bank of America for its own account the
fee in the amount and at the time specified in the Fee Letter.
2.11 COMPUTATION OF FEES AND INTEREST.
(a) All computations of interest for Base Rate Loans when the Base Rate is
determined by Bank of America's "prime rate" shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more interest and fees being paid than
if computed on the basis of a 365-day year). Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof, provided that any Loan that is repaid
on the same day on which it is made shall bear interest for one day.
(b) Any change in the interest rate on a Loan resulting from a change in the
Applicable Margin shall become effective as of the opening of business on the
day on which such change in the Applicable Margin becomes effective.
(c) Each determination of an interest rate by the Administrative Agent shall be
conclusive and binding on the Company in the absence of manifest error.
2.12 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Company and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Company hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Company shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender's
Loans in addition to such accounts or records. Each Lender may attach schedules
to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection (a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit. In the event of any conflict between the
accounts and records maintained by the Administrative Agent and the accounts and
records of any Lender in respect of such matters, the accounts and records of
the Administrative Agent shall control in the absence of manifest error.
2.13 PAYMENT GENERALLY.
(a) All payments to be made by the Company shall be made without condition or
deduction for any defense, set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Company hereunder shall
be made to the Administrative Agent, for the account of the respective Lenders
to which such payment is owed, at the Administrative Agent's Office in Dollars
and in immediately available funds, no later than 10:00 a.m. (San Francisco,
California time) for Eurodollar Rate Loans and no later than 1:00 p.m. (San
Francisco, California time) for Base Rate Loans, in each case on the date
specified herein. The Administrative Agent will promptly distribute to each
Lender its Pro Rata Share (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender's Lending
Office. Any payment received by the Administrative Agent later than such
specified times shall be deemed to have been received on the following Business
Day and any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest Period"
herein, whenever any payment is due on a day other than a Business Day, such
payment shall be made on the following Business Day, and such extension of time
shall in such case be included in the computation of interest or fees, as the
case may be.
(c) Unless the Company or any Lender has notified the Administrative Agent,
prior to the date any payment is required to be made by it to the Administrative
Agent hereunder, that the Company or such Lender, as the case may be, will not
make such payment, the Administrative Agent may assume that the Company or such
Lender, as the case may be, has timely made such payment and may (but shall not
be so required to), in reliance thereon, make available a corresponding amount
to the Person entitled thereto. If and to the extent that such payment was not
in fact made to the Administrative Agent in immediately available funds, then:
(1) if the Company failed to make such payment, each Lender shall forthwith on
demand repay to the Administrative Agent the portion of such assumed payment
that was made available to such Lender in immediately available funds, together
with interest thereon in respect of each day from and including the date such
amount was made available by the Administrative Agent to such Lender to the date
such amount is repaid to the Administrative Agent in immediately available funds
at the Federal Funds Rate from time to time in effect; and
(2) if any Lender failed to make such payment, such Lender shall forthwith on
demand pay to the Administrative Agent the amount thereof in immediately
available funds, together with interest thereon for the period from the date
such amount was made available by the Administrative Agent to the Company to the
date such amount is recovered by the Administrative Agent (the "Compensation
Period") at a rate per annum equal to the Federal Funds Rate from time to time
in effect. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender's Revolving Loan included in the
applicable Borrowing. If such Lender does not pay such amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent may make a
demand therefor upon the Company, and the Company shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation Period
at a rate per annum equal to the rate of interest applicable to the applicable
Borrowing. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Company may have against any Lender as a result of
any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Company with
respect to any amount owing under this subsection (c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent funds for any Loan
to be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to the Company by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make Revolving Loans and to fund
participations in Letters of Credit are several and not joint. The failure of
any Lender to make any Revolving Loan or to fund any such participation on any
date required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Revolving Loan or purchase its
participation.
(f) Nothing herein shall be deemed to obligate any Lender to obtain the funds
for any Loan in any particular place or manner or to constitute a representation
by any Lender that it has obtained or will obtain the funds for any Loan in any
particular place or manner.
2.14 SHARING OF PAYMENTS. If, other than as expressly provided elsewhere herein,
any Lender shall obtain on account of the Revolving Loans made by it, or the
participations in L/C Obligations held by it, any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share (or other share contemplated hereunder) thereof,
such Lender shall immediately (a) notify the Administrative Agent of such fact,
and (b) purchase from the other Lenders such participations in the Revolving
Loans made by them and/or such subparticipations in the participations in L/C
Obligations held by them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment in respect of such Revolving
Loans or such participations, as the case may be, pro rata with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender under any of the circumstances
described in Section 10.06 (including pursuant to any settlement entered into by
the purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon. The Company agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Company in the amount of such participation. The
Administrative Agent will keep records (which shall be conclusive and binding in
the absence of manifest error) of participations purchased under this Section
and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
2.15 SECURITY.
(a) All obligations of the Company under this Agreement, and all other Loan
Documents shall be secured in accordance with the Collateral Documents. The
Company hereby ratifies and reaffirms all of the Liens granted in favor of the
Administrative Agent for the benefit of the Secured Party pursuant to the
Company Security Agreement, which Liens are and continue to be perfected and of
first priority.
(b) The Administrative Agent agrees to release its security interest under the
Collateral Documents upon (i) the termination of Lenders' commitment to make
Loans hereunder and (ii) the Effective Amount of all L/C Obligations and
Revolving Loans being reduced to $0.
2.16 THE LETTER OF CREDIT SUBFACILITY.
(a) The Letter of Credit Commitment.
(1) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the other Lenders set forth in this
Section 2.16, (1) from time to time on any Business Day during the period from
the Closing Date until the Letter of Credit Expiration Date to issue Letters of
Credit for the account of the Company, and to amend or renew Letters of Credit
previously issued by it, in accordance with subsection (b) below, and (2) to
honor drafts under the Letters of Credit; and (B) the Lenders severally agree to
participate in Letters of Credit issued for the account of the Company; provided
that the L/C Issuer shall not be obligated to make any L/C Credit Extension with
respect to any Letter of Credit, and no Lender shall be obligated to participate
in any Letter of Credit if as of the date of such L/C Credit Extension, (x) the
Total Outstandings would exceed the lesser of the Aggregate Commitments or the
Borrowing Base, (y) the aggregate Effective Amount of the Revolving Loans of any
Lender, plus such Lender's Pro Rata Share of the Effective Amount of all L/C
Obligations would exceed such Lender's Commitment, or (z) the Effective Amount
of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the
foregoing limits, and subject to the terms and conditions hereof, the Company's
ability to obtain Letters of Credit shall be fully revolving, and accordingly
the Company may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit that have expired or that have been drawn upon and
reimbursed. All Existing Letters of Credit shall be deemed to have been issued
pursuant hereto, and from and after the Closing Date shall be subject to and
governed by the terms and conditions hereof.
(2) The L/C Issuer shall be under no obligation to issue any Letter of Credit or
make any L/C Credit Extension if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from
issuing such Letter of Credit, or any Law applicable to the L/C Issuer or
any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer shall
prohibit, or request that the L/C Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or
shall impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is
not otherwise compensated hereunder) not in effect on the Closing Date, or
shall impose upon the L/C Issuer any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which the L/C Issuer in
good xxxxx xxxxx material to it;
(B) subject to Section 2.16(b)(3), the expiry date of such requested Letter of
Credit would occur more than twelve months after the date of issuance or
last renewal unless the Required Lenders have approved such expiry date in
writing;
(C) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date unless all the Lenders have approved such
expiry date in writing;
(D) any requested Letter of Credit does not provide for drafts, or is not
otherwise in form and substance acceptable to the L/C Issuer, or the
making of a L/C Credit Extension would violate one or more policies of the
L/C Issuer;
(F) the expiry date of any requested Letter of Credit is prior to the maturity
date of any financial obligation to be supported by the requested Letter
of Credit;
(G) any Letter of Credit is for the purpose of supporting the issuance of any
letter of credit by any other Person; or
(H) such Letter of Credit is to be denominated in a currency other than
Dollars.
(3) The L/C Issuer shall be under no obligation to amend any Letter of Credit if
(A) the L/C Issuer would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Renewal Letters of Credit.
(1) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the Company delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Company. Such
Letter of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 9:00 a.m. (San Francisco, California time)
at least two Business Days (or such later date and time as the L/C Issuer may
agree in a particular instance in its sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name
and address of the beneficiary thereof; (E) the documents to be presented by
such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the L/C Issuer may require. In the
case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory to
the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may require.
(2) Promptly after receipt of any Letter of Credit Application, the L/C Issuer
will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Company and, if not, the L/C Issuer will provide the Administrative
Agent with a copy thereof. Upon receipt by the L/C Issuer of confirmation from
the Administrative Agent that the requested issuance or amendment is permitted
in accordance with the terms hereof, then, subject to the terms and conditions
hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit
for the account of the Company or enter into the applicable amendment, as the
case may be, in each case in accordance with the L/C Issuer's usual and
customary business practices. Immediately upon the issuance of each Letter of
Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a risk participation in
such Letter of Credit in an amount equal to the product of such Lender's Pro
Rata Share times the amount of such Letter of Credit.
(3) If the Company so requests in any applicable Letter of Credit Application,
the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter
of Credit that has automatic renewal provisions (each, an "Auto-Renewal Letter
of Credit"); provided that any such Auto-Renewal Letter of Credit must permit
the L/C Issuer to prevent any such renewal at least once in each twelve-month
period (commencing with the date of issuance of such Letter of Credit) by giving
prior notice to the beneficiary thereof not later than a day (the "Nonrenewal
Notice Date") in each such twelve-month period to be agreed upon at the time
such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer,
the Company shall not be required to make a specific request to the L/C Issuer
for any such renewal. Once an Auto-Renewal Letter of Credit has been issued, the
Lenders shall be deemed to have authorized (but may not require) the L/C Issuer
to permit the renewal of such Letter of Credit at any time to an expiry date not
later than the Letter of Credit Expiration Date; provided, however, that the L/C
Issuer shall not permit any such renewal if (A) the L/C Issuer has determined
that it would have no obligation at such time to issue such Letter of Credit in
its renewed form under the terms hereof (by reason of the provisions of Section
2.16(a)(2) or otherwise), or (B) it has received notice (which may be by
telephone or in writing) on or before the day that is two Business Days before
the Nonrenewal Notice Date (1) from the Administrative Agent that the Required
Lenders have elected not to permit such renewal or (2) from the Administrative
Agent, any Lender or the Company that one or more of the applicable conditions
specified in Section 4.02 is not then satisfied.
(4) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to the Company and the Administrative
Agent a true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(1) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify the Company and
the Administrative Agent thereof. Not later than 9:00 a.m. (San Francisco,
California time) on the date of any payment by the L/C Issuer under a Letter of
Credit (each such date, an "Honor Date"), the Company shall reimburse the L/C
Issuer through the Administrative Agent in an amount equal to the amount of such
drawing. If the Company fails to so reimburse the L/C Issuer by such time, the
Administrative Agent shall promptly notify each Lender of the Honor Date, the
amount of the unreimbursed drawing (the "Unreimbursed Amount"), and the amount
of such Lender's Pro Rata Share thereof. In such event, the Company shall be
deemed to have requested a Borrowing of Base Rate Loans to be disbursed on the
Honor Date in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Sections 2.02 and 2.03 for the principal
amount of Base Rate Loans, but subject to the amount of the unutilized portion
of the Aggregate Commitments and the conditions set forth in Section 4.02 (other
than the delivery of a Notice of Borrowing or Notice of
Conversion/Continuation). Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.16(c)(1) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.
(2) Each Lender (including the Lender acting as L/C Issuer) shall upon any
notice pursuant to Section 2.16(c)(1) make funds available to the Administrative
Agent for the account of the L/C Issuer at the Administrative Agent's Office in
an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than
12 noon (San Francisco, California time) on the Business Day specified in such
notice by the Administrative Agent, whereupon, subject to the provisions of
Section 2.16(c)(3), each Lender that so makes funds available shall be deemed to
have made a Base Rate Loan to the Company in such amount. The Administrative
Agent shall remit the funds so received to the L/C Issuer.
(3) With respect to any Unreimbursed Amount that is not fully refinanced by a
Borrowing of Base Rate Loans because the conditions set forth in Section 4.02
cannot be satisfied or for any other reason, the Company shall be deemed to have
incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the Default Rate.
In such event, each Lender's payment to the Administrative Agent for the account
of the L/C Issuer pursuant to Section 2.16(c)(2) shall be deemed payment in
respect of its participation in such L/C Borrowing and shall constitute an L/C
Advance from such Lender in satisfaction of its participation obligation under
this Section 2.16.
(4) Until each Lender funds its Revolving Loan or L/C Advance pursuant to this
Section 2.16(c) to reimburse the L/C Issuer for any amount drawn under any
Letter of Credit, interest in respect of such Lender's Pro Rata Share of such
amount shall be solely for the account of the L/C Issuer.
(5) Each Lender's obligation to make Revolving Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.16(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Company or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default or Event of Default,
or (C) any other occurrence, event or condition, whether or not similar to any
of the foregoing; provided, however, that each Lender's obligation to make
Revolving Loans pursuant to this Section 2.16(c) is subject to the conditions
set forth in Section 4.02 (other than delivery by the Company of a Notice of
Borrowing or Notice of Conversion/Continuation). No such making of an L/C
Advance shall relieve or otherwise impair the obligation of the Company to
reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer
under any Letter of Credit, together with interest as provided herein.
(6) If any Lender fails to make available to the Administrative Agent for the
account of the L/C Issuer any amount required to be paid by such Lender pursuant
to the foregoing provisions of this Section 2.16(c) by the time specified in
Section 2.16(c)(2), the L/C Issuer shall be entitled to recover from such Lender
(acting through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the date on
which such payment is immediately available to the L/C Issuer at a rate per
annum equal to the Federal Funds Rate from time to time in effect. A certificate
of the L/C Issuer submitted to any Lender (through the Administrative Agent)
with respect to any amounts owing under this clause (6) shall be conclusive
absent manifest error.
(d) Repayment of Participations.
(1) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Lender such Lender's L/C Advance in respect of
such payment in accordance with Section 2.16(c), if the Administrative Agent
receives for the account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from the Company or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such Lender
its Pro Rata Share thereof (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender's L/C Advance
was outstanding) in the same funds as those received by the Administrative
Agent.
(2) If any payment received by the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.16(c)(1) is required to be returned under any
of the circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Lender shall
pay to the Administrative Agent for the account of the L/C Issuer its Pro Rata
Share thereof on demand of the Administrative Agent, plus interest thereon from
the date of such demand to the date such amount is returned by such Lender, at a
rate per annum equal to the Federal Funds Rate from time to time in effect.
(e) Obligations Absolute. The obligation of the Company to reimburse the L/C
Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:
(1) any lack of validity or enforceability of such Letter of Credit, any other
L/C-Related Document, this Agreement, or any other agreement or instrument
relating thereto;
(2) the existence of any claim, counterclaim, set-off, defense or other right
that the Company may have at any time against any beneficiary or any transferee
of such Letter of Credit (or any Person for whom any such beneficiary or any
such transferee may be acting), the L/C Issuer or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by such
Letter of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
(3) any draft, demand, certificate or other document presented under such 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; or
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under such Letter of Credit;
(4) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law;
(5) any change in the time, manner or place of payment of, or in any other term
of, all or any of the obligations of the Company in respect of any Letter of
Credit or any other amendment or waiver of or any consent to departure from all
or any of the L/C-Related Documents;
(6) any exchange, release or non-perfection of any collateral, or any release or
amendment or waiver of or consent to departure from any other guarantee, for all
or any of the obligations of the Company in respect of any Letter of Credit; or
(7) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Company or a
guarantor;
The Company shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Company's instructions or other irregularity, the Company
will immediately notify the L/C Issuer. The Company shall be conclusively deemed
to have waived any such claim against the L/C Issuer and its correspondents
unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Company agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application. The
Company hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Company's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, any
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the L/C Issuer, shall be liable or responsible for any of the
matters described in clauses (1) through (7) of Section 2.16(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the
Company may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Company, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Company which the
Company proves were caused by the L/C Issuer's willful misconduct or gross
negligence or the L/C Issuer's willful failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent, if, as of the
Revolving Termination Date, any Letter of Credit may for any reason remain
outstanding and partially or wholly undrawn, the Company shall immediately Cash
Collateralize the then Effective Amount of all L/C Obligations (in an amount
equal to such Effective Amount determined as of the Revolving Termination Date).
For purposes hereof, "Cash Collateralize" (or any forms thereof) means to pledge
and deposit with or deliver to the Administrative Agent, for the benefit of the
L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or
deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the L/C Issuer (which documents are
hereby consented to by the Lenders). Derivatives of such term have corresponding
meanings. The Company hereby grants to the Administrative Agent, for the benefit
of the L/C Issuer and the Lenders, a security interest in all such cash, deposit
accounts and all balances therein and all proceeds of the foregoing. Cash
collateral shall be maintained in blocked, interest bearing deposit accounts at
Bank of America.
(h) Applicability of Uniform Customs and Practice. Unless otherwise expressly
agreed by the L/C Issuer and the Company when a Letter of Credit is issued, the
rules of the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce (the "ICC") at the
time of issuance (including the ICC decision published by the Commission on
Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each Letter of Credit.
(i) Letter of Credit Fees. The Company shall pay to the Administrative Agent for
the account of each Lender in accordance with its Pro Rata Share a per annum
Letter of Credit fee (the "Letter of Credit Fee") for each Letter of Credit
equal to the Letter of Credit Fee Percentage times the daily maximum amount
available to be drawn under such Letter of Credit (whether or not such maximum
amount is then in effect under such Letter of Credit). Such Letter of Credit
Fees shall be computed on a quarterly basis in arrears and on the basis of a 360
day year. Such Letter of Credit fees shall be due and payable on the first
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If
an Event of Default occurs under this Agreement, at the option of the Required
Lenders, the amount of such Letter of Credit fee shall be increased by an
additional 2.00% per annum during the continuance of such Event of Default,
commencing on the day the Administrative Agent provides notice of the increase
to the Company.
(j) Documentary and Processing Charges Payable to L/C Issuer. The Company shall
pay directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time in
effect. Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any conflict
between the terms hereof and the terms of any Letter of Credit Application, the
terms hereof shall control.
2.17 EXTENSION OF MATURITY DATE.
(a) Not earlier than 120 days prior to, nor later than 60 days prior to, each
anniversary of this Agreement (each, an "Anniversary Date"), the Company may,
upon notice to the Administrative Agent (which shall promptly notify the
Lenders), request a 364-day extension of the Maturity Date then in effect.
Within thirty (30) days of delivery of such notice, each Lender shall notify the
Administrative Agent whether or not it consents to such extension (which consent
may be given or withheld in such Lender's sole and absolute discretion). Any
Lender not responding within the above time period shall be deemed not to have
consented to such extension. The Administrative Agent shall promptly notify the
Company and the Lenders of the Lenders' responses.
(b) If all of the Lenders consent in writing to any such request in accordance
with subsection Section 2.17(a), then the Maturity Date shall be extended to a
date 364 days from the Maturity Date then in effect, effective as of the
Maturity Date then in effect (such existing Maturity Date being the "Extension
Effective Date"). The Administrative Agent and the Company shall promptly
confirm to the Lenders such extension and the Extension Effective Date.
(c) If less than all of the Lenders consent in writing to any such request in
accordance with Section 2.17(a), the Maturity Date in effect at such time shall,
effective as at the applicable Extension Effective Date and subject to
subsection (e) of this Section 2.17, be extended as to those Lenders that so
consented (each a "Consenting Lender") but shall not be extended as to any other
Lender (each a "Non-Consenting Lender"). To the extent that the Maturity Date is
not extended as to any Non-Consenting Lender pursuant to this Section 2.17 and
the Commitment of such Non-Consenting Lender is not assumed in accordance with
Section 2.17(d) on or prior to the applicable Extension Effective Date, the
Commitment of such Non-Consenting Lender shall automatically terminate in whole
on such unextended Maturity Date without any further notice or other action by
the Company, such Lender or any other Person; provided that such Non-Consenting
Lender's rights under Sections 3.01, 3.03, 3.04, 3.05, 3.06, 10.04 and 10.05,
and its obligations under Section 9.07, shall survive the Maturity Date for such
Non-Consenting Lender as to matters occurring prior to such date. It is
understood and agreed that no Lender shall have any obligation whatsoever to
agree to any request made by the Company for any requested extension of the
Maturity Date.
(d) If less than all of the Lenders consent to any such request pursuant to
Section 2.17(a), the Administrative Agent shall promptly so notify the
Consenting Lenders, and each Consenting Lender may, in its sole discretion, give
written notice to the Administrative Agent not later than 10 days prior to the
applicable Anniversary Date of the amount of each Non-Consenting Lenders'
Commitments for which it is willing to accept an assignment. If the Consenting
Lenders notify the Administrative Agent that they are willing to accept
assignments of Commitments in an aggregate amount that exceeds the amount of the
Commitments of the Non-Consenting Lenders, such Commitments shall be allocated
among the Consenting Lenders willing to accept such assignments in such amounts
as are agreed between the Company and the Administrative Agent. If after giving
effect to the assignments of Commitments described above there remains any
Commitments of Non-Consenting Lenders, the Company may arrange for one or more
Consenting Lenders or other Eligible Assignees (each such Eligible Assignee, an
"Assuming Lender") to assume, effective as of the Extension Effective Date, any
Non-Consenting Lender's Commitment and all of the obligations of such
Non-Consenting Lender under this Agreement thereafter arising, without recourse
to or warranty by, or expense to, such Non-Consenting Lender; provided, however,
that the amount of the Commitment of any such Assuming Lender as a result of
such substitution shall in no event be less than $5,000,000 unless the amount of
the Commitment of such Non-Consenting Lender is less than $5,000,000, in which
case such Assuming Lender shall assume all of such lesser amount; and provided
further that:
(1) any such Consenting Lender or Assuming Lender shall have paid to such
Non-Consenting Lender (A) the aggregate principal amount of, and any interest
accrued and unpaid to the effective date of the assignment on, the outstanding
Loans and L/C Advances, if any, of such Non-Consenting Lender plus (B) any
accrued but unpaid fees owing to such Non-Consenting Lender as of the effective
date of such assignment;
(2) all additional costs reimbursements, expense reimbursements and indemnities
payable to such Non-Consenting Lender, and all other accrued and unpaid amounts
owing to such Non-Consenting Lender hereunder, as of the effective date of such
assignment, shall have been paid to such Non-Consenting Lender; and
(3) with respect to any such Assuming Lender, the applicable processing and
recordation fee required under Section 10.07(a) for such assignment shall have
been paid;
provided, further, that such Non-Consenting Lender's rights under Sections 3.01,
3.03, 3.04, 3.05, 3.06, 10.04 and 10.05, and its obligations under Section 9.07,
shall survive such substitution as to matters occurring prior to the date of
substitution. At least three Business Days prior to any Extension Effective
Date, (A) each such Assuming Lender, if any, shall have delivered to the Company
and the Administrative Agent an Assignment and Assumption, duly executed by such
Assuming Lender, such Non-Consenting Lender, the Company and the Administrative
Agent, (B) each such Consenting Lender shall have delivered confirmation in
writing satisfactory to the Company and the Administrative Agent as to the
increase in the amount of its Commitment and (C) each Non-Consenting Lender
being replaced pursuant to this Section 2.17 shall have delivered to the
Administrative Agent any Note held by such Non-Consenting Lender. Upon the
payment or prepayment of all amounts referred to in clauses (1), (2) and (3) of
the second preceding sentence, each such Consenting Lender or Assuming Lender
will be substituted, as of the Extension Effective Date, for such Non-Consenting
Lender under this Agreement and shall be a Lender for all purposes of this
Agreement, without any further acknowledgment by or the consent of the other
Lenders, and the obligations of each such Non-Consenting Lender hereunder shall,
by the provisions hereof, be released and discharged.
(e) If (after giving effect to any assignments or assumptions pursuant to
Section 2.17(d) Lenders having Commitments equal to 100% of the Commitments in
effect immediately prior to the Extension Effective Date consent in writing to a
requested extension (whether by execution or delivery of an Assumption Agreement
or otherwise) not later than one Business Day prior to such Extension Effective
Date, the Administrative Agent shall so notify the Company, and, subject to the
satisfaction of the conditions precedent set forth in Section 2.17(f), the
Maturity Date then in effect shall be extended for the additional 364-day period
as described in Section 2.17(a), and all references in this Agreement, and in
the Notes, if any, to the "Maturity Date" shall, with respect to each Consenting
Lender and each Assuming Lender for such Extension Effective Date, refer to the
Maturity Date as so extended. Promptly following each Extension Effective Date,
the Administrative Agent shall notify the Lenders (including, without
limitation, each Assuming Lender) of the extension of the scheduled Maturity
Date in effect immediately prior thereto and shall thereupon record in the
Register the relevant information with respect to each such Consenting Lender
and each such Assuming Lender.
(f) As a condition precedent to any such extension in this Section 2.17, the
Company shall deliver to the Administrative Agent a certificate of the Company
dated as of the Extension Effective Date (in sufficient copies for each Lender)
signed by a Responsible Officer of the Company (i) certifying and attaching the
resolutions adopted by the Company approving or consenting to such extension and
(ii) in the case of the Company, certifying that, before and after giving effect
to such extension, (A) the representations and warranties contained in Article V
and the other Loan Documents are true and correct in all respects on and as of
the Extension Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case such
representations and warranties are true and correct as of such earlier date, and
(B) no Default or Event of Default exists or would result from such extension.
(g) This Section shall supersede any provisions in Section 2.14 or 10.01 to the contrary.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by the Company to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of taxes on net
income), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Lender, as the case may be, is
organized or maintains a lending office and excluding any taxes, levies,
assessments, imposts, duties, deductions, and fees, including withholding taxes,
to which such Lender or the Administrative Agent is subject at the time such
Lender or the Administrative Agent becomes a party to this Agreement or to which
such Lender or the Adminstrative Agent becomes subject for reasons other than as
a result of any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation, administration or
application thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and liabilities
being hereinafter referred to as "Taxes"). If the Company shall be required by
any Laws to deduct any Taxes from or in respect of any sum payable under any
Loan Document to the Administrative Agent or any Lender, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section),
each of the Administrative Agent and such Lender receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Company
shall make such deductions, (iii) the Company shall pay the full amount deducted
to the relevant Governmental Authority or other appropriate authority in
accordance with applicable Laws, and (iv) within 30 days after the date of such
payment, the Company shall furnish to the Administrative Agent (which shall
forward the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Company agrees to pay any and all present or future stamp,
court or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under any Loan Document or from
the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Loan Document (hereinafter referred to as "Other
Taxes").
(c) If the Company shall be required to deduct or pay any Taxes or Other Taxes
from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Company shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.
(d) The Company agrees to indemnify the Administrative Agent and each Lender for
(i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section)
paid by the Administrative Agent and such Lender in connection with payments
made under this Agreement or any other Loan Document, (ii) amounts payable under
Section 3.01(c) and (iii) any liability (including additions to tax, penalties,
interest and expenses) arising therefrom or with respect thereto, in each case
whether or not such Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. Payment under this subsection
(d) shall be made within 30 days after the date the Lender of the Administrative
Agent makes a demand therefor.
(e) If any Lender or the Administrative Agent determines, in its sole and
reasonable discretion, that it has received a refund in respect of Taxes or
Other Taxes as to which it has been indemnified by the Borrower pursuant to this
Section, it shall promptly notify the Borrower of such refund and shall, within
30 days after receipt of a request by the Borrower, repay such refund (including
any interest actually received from the taxing authority with respect to such
refund) to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section with respect to the
Taxes or Other Taxes giving rise to such refund), net of all reasonable out-of
pocket expenses of such Lender or the Administrative Agent and other costs
(including Taxes or Other Taxes) imposed with respect to such refund, provided,
that the Borrower, upon the request of such Lender (or the Administrative Agent,
agrees to return such refund (plus penalties, interest or other charges ) to
such Lender or the Administrative Agent in the event such Lender or the
Administrative Agent is required to repay such refund. If any Lender is entitled
to foreign tax credits as a result of payments of Taxes or other Taxes as to
which it has been indemnified by the Borrower pursuant to this Section, such
Lender shall refund the amount of such foreign tax credit to the Borrower, but
not in excess of the amount of tax benefit actually realized by such Lender as a
result of such foreign tax credit (and only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section with
respect to the Taxes or Other Taxes giving rise to such credit). Such payment
shall be net of all reasonable out-of-pocket expenses of such Lender or the
Administrative Agent and other costs imposed with respect to such credit and
shall be made in the manner set forth in this subsection (e) as to refunds of
tax. The agreements and obligations of the Lender and Administrative Agent in
this Section 3.01(e) shall survive the repayment of the Obligations.
(f) Each Lender shall use reasonable efforts to seek refunds of any amounts paid
or indemnified by the Company pursuant to this Section 3.01 that are reasonably
believed not to have been correctly or legally asserted so long as such Lender
determines that such efforts shall not otherwise be detrimental to such Lender.
Neither the provisions of this Section 3.01(f), nor the provisions of Section
3.01(e) nor any other provisions of this Agreement shall be construed to require
the Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential in its sole
discretion) to the Company or any other Person.
(g) If the Company is required to pay additional amounts to any Lender (or a
Participant) or the Administrative Agent pursuant to Section 3.01(a) or (b),
then such Lender shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document reasonably
requested by the Company or to change the jurisdiction of its Lending Office so
as to minimize or eliminate any such additional payment by the Company which may
thereafter accrue, if such change in the sole and reasonable judgment of such
Lender is not otherwise disadvantageous to such Lender (or Participant).
3.02 ILLEGALITY.
(a) If any Lender reasonably determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Eurodollar Rate
Loans, or to determine or charge interest rates based upon the Eurodollar Rate,
then, on notice thereof by such Lender to the Company through the Administrative
Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans
or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until
such Lender notifies the Administrative Agent and the Company that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, the Company shall, upon demand from such Lender (with a copy to the
Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
prepayment or conversion, the Company shall also pay accrued interest on the
amount so prepaid or converted, together with any amounts required to be paid
pursuant to Section 3.04. Each Lender agrees to designate a different Lending
Office if such designation will avoid the need for such notice and will not, in
the good faith judgment of such Lender, otherwise be materially disadvantageous
to such Lender.
(b) If the Company is required to prepay any Eurodollar Rate Loan as provided in
Section 3.02(a), then concurrently with such prepayment, the Company may borrow
from such Lender, in the amount of such repayment, a Base Rate Loan.
(c) If the obligation of a Lender to make, fund or maintain Eurodollar Rate
Loans has been so terminated or suspended, the Company may elect, by giving
notice to Administrative Agent, that all Loans which would otherwise be made by
such Lender as Eurodollar Rate Loans shall be instead Base Rate Loans.
3.03 INCREASED COSTS AND REDUCTION OF RETURN; CAPITAL ADEQUACY.
(a) If any Lender shall determine that as a result of (i) the introduction,
after the date of this Agreement, of or any change in or in the interpretation
of any Law or (ii) such Lender's compliance therewith or with any guideline or
request, made after the date of this Agreement, from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any Eurodollar Rate Loans or (as the case may be) issuing or
participating in Letters of Credit, or a reduction in the amount received or
receivable by such Lender in connection with any of the foregoing (excluding for
purposes of this subsection (a) any such increased costs or reduction in amount
resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall govern),
(ii) changes in the basis of taxation of overall net income or overall gross
income by the United States or any foreign jurisdiction or any political
subdivision of either thereof under the Laws of which such Lender is organized
or has its Lending Office, and (iii) reserve requirements contemplated by
Section 3.06), then the Company shall be liable for, and shall from time to
time, upon demand therefor by such Lender (with a copy of such demand to the
Administrative Agent), pay to such Lender additional amounts as are sufficient
to compensate such Lender for such increased costs or reduction; provided that
Lender shall have given the Company prompt notice of such introduction,
guideline, or request, as applicable.
(b) If any Lender shall have determined that (i) the introduction, after the
date of this Agreement, of any Capital Adequacy Regulation, (ii) any change,
after the date of this Agreement, in any Capital Adequacy Regulation, (iii) any
change, after the date of this Agreement, in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by any Lender (or its Lending Office) or any
corporation controlling such Lender, with any Capital Adequacy Regulation
enacted or adopted after the date of this Agreement affects or would affect the
amount of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender and (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy and such
Lender's desired return on capital) such Lender determines in good faith that
the amount of such capital is increased as a consequence of its loans, credits
or obligations under this Agreement, then, upon demand of such Lender (with a
copy to the Administrative Agent) the Company shall immediately pay to such
Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender for such increase. Such Lender agrees to
give the Company (with a copy to the Administrative Agent) prompt notice of any
such Capital Adequacy Regulation, change in Capital Adequacy Regulation, change
in the interpretation or administration of Capital Adequacy Regulation.
3.04 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Company shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise); or
(b) any failure by the Company (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Company;
including any such loss or expense (but excluding any loss of anticipated
profits and profits associated with interest rate margins) arising from the
liquidation or reemployment of funds obtained by it to maintain its Eurodollar
Rate Loans or from fees payable to terminate the deposits from which such funds
were obtained. The Company shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Company to the Lenders under
this Section 3.04 and under Section 3.03(a), each Eurodollar Rate Loan made by
each Lender (and each related reserve, special deposit or similar requirement)
shall be conclusively deemed to have been funded at the Eurodollar Rate for such
Eurodollar Rate Loan by a matching deposit or other borrowing in the interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan is in fact so funded.
3.05 INABILITY TO DETERMINE RATES. If, on or prior to the commencement of any
Interest Period for any Eurodollar Rate Loan, the Required Lenders reasonably
determine that for any reason adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan, or that the Eurodollar Rate applicable
pursuant to Section 2.09(a) for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Company and each Lender. Thereafter, the obligation of the Lenders to
make or maintain Eurodollar Rate Loans hereunder shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice in writing. Upon receipt of such notice, the Company may revoke any
Notice of Borrowing or Notice of Conversion/Continuation then submitted by it.
If the Company does not revoke such Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, the Lenders shall make, convert or
continue the Loans, as proposed by the Company, in the amount specified in the
applicable notice submitted by the Company, but such Loans shall be made,
converted or continued as Base Rate Loans instead of Eurodollar Rate Loans.
3.06 RESERVES ON EURODOLLAR RATE LOANS. The Company shall pay to each Lender, as
long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as "Eurocurrency liabilities"), additional costs on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive), which shall be due and
payable on each date on which interest is payable on such Loan, provided the
Company shall have received at least 15 days' prior written notice (with a copy
to the Administrative Agent) of such additional costs from such Lender. If a
Lender fails to give notice 15 days prior to the relevant Interest Payment Date,
such additional costs shall be due and payable 15 days from receipt of such
notice.
3.07 Replacement of Lenders Claiming Compensation.
If any Lender (or any Participant to whom the Lender has sold a
participation) makes a claim for compensation under Section 3.01 or 3.03 (a
"Claiming Lender"), the Company may, upon notice to such Claiming Lender and the
Administrative Agent, replace such Claiming Lender. If the Company exercises its
right to replace a Claiming Lender pursuant to the immediately preceding
sentence, the Company shall arrange for one or more other Lenders or Eligible
Assignees (each a "Replacement Lender") to assume such Claiming Lender's
Commitment and all obligations of such Claiming Lender under this Agreement
thereafter arising, without recourse to or warranty by, or expense to, such
Claiming Lender; provided, however, that the amount of the Commitment of any
such Replacement Lender as a result of such replacement shall in no event be
less than $5,000,000 unless the amount of the Commitment of such Claiming Lender
is less than $5,000,000, in which case such Replacement Lender shall assume all
of such lesser amount; provided, further, that:
(1) any such Replacement Lender shall have paid to such Claiming Lender (A) the
aggregate principal amount of, and any interest accrued and unpaid to the
effective date of the assignment on, the outstanding Loans and L/C Advances, if
any, of such Claiming Lender plus (B) any accrued but unpaid fees owing to such
Claiming Lender as of the effective date of such assignment;
(2) all additional costs reimbursements, expense reimbursements and indemnities
payable to such Claiming Lender, and all other accrued and unpaid amounts owing
to such Claiming Lender hereunder, as of the effective date of such assignment,
shall have been paid to such Claiming Lender; and
(3) with respect to any such Replacement Lender, the applicable processing and
recordation fee required under Section 10.07(a) for such assignment shall have
been paid;
provided, further, that such Claiming Lender's rights under Sections 10.04 and
10.05, and its obligations under Section 9.07, shall survive such substitution
as to matters occurring prior to the date of substitution. At least three
Business Days prior to the effective date of each applicable assignment pursuant
to this Section 3.07, (A) each such Replacement Lender, if any, shall have
delivered to the Company and the Administrative Agent an Assignment and
Assumption, duly executed by such Replacement Lender, such Claiming Lender, the
Company and the Administrative Agent, (B) each such Replacement Lender that is
an existing Lender shall have delivered confirmation in writing satisfactory to
the Company and the Administrative Agent as to the increase in the amount of its
Commitment and (C) each Claiming Lender being replaced pursuant to this Section
3.07 shall have delivered to the Administrative Agent any Note held by such
Claiming Lender. Upon the payment or prepayment of all amounts referred to in
clauses (1), (2) and (3) of the second preceding sentence, each such Replacement
Lender will be substituted, as of the effective date of the applicable
assignment pursuant to this Section 3.07, for such Claiming Lender under this
Agreement and shall be a Lender for all purposes of this Agreement, without any
further acknowledgment by or the consent of the other Lenders, and the
obligations of each such Claiming Lender hereunder shall, by the provisions
hereof, be released and discharged.
3.08 SURVIVAL. The agreements and obligations of the Company in this Article III shall survive the payment
of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS OF INITIAL LOANS. The obligation of (x) the L/C Issuer to make
the first L/C Credit Extension after the date of this Agreement, and (y) each
Lender to make its initial Loan hereunder is subject to the condition that the
Administrative Agent has received on or before the Closing Date all of the
following, in form and substance satisfactory to the Administrative Agent:
(a) Credit Agreement. This Agreement executed by each party thereto.
(b) Company Security Agreement. The Company Security Agreement executed by each
party thereto.
(c) Evidence of Filings. Evidence of all filings and lien searches to perfect
and establish the first priority liens created by the Company Security
Agreement.
(d) Resolutions; Incumbency; Organization Documents.
(1) Copies of the resolutions of the board of directors of the Company
authorizing the transactions contemplated hereby, certified as of the Closing
Date by the Secretary or an Assistant Secretary of the Company;
(2) A certificate of the Secretary or Assistant Secretary of the Company,
certifying the names and true signatures of the officers of the Company
authorized to execute, deliver and perform, as applicable, this Agreement and
all other Loan Documents to be delivered by it hereunder;
(3) The certificate of incorporation of the Company as is in effect on the
Closing Date, certified by the Secretary of State or similar applicable
Governmental Authority of the state of organization or incorporation, as the
case may be, of the Company as of a recent date, and by the Secretary or
Assistant Secretary of the Company, and a certificate of the Secretary or
Assistant Secretary of the Company attaching copies of the Organization
Documents of the Company certifying that such Organization Documents are true,
correct, and complete as of the Closing Date; and
(4) A good standing certificate for the Company from the Secretary of State (or
similar, applicable Governmental Authority) of its state of incorporation or
organization, as the case may be, as of a recent date.
(e) Legal Opinion. An opinion of Xxxxxxx X. Xxxxxx, Senior Assistant General
Counsel of the Company and addressed to the Administrative Agent and each
Lender, in form and substance reasonably acceptable to the Administrative Agent.
(f) Payment of Fees, Costs and Expenses. Evidence of payment by the Company of
all accrued and unpaid fees, costs and expenses to the extent then due and
payable on the Closing Date, and all fees, costs and expenses accrued through
the Closing Date under the Prior Credit Agreement and the fee in the amount set
forth in the Fee Letter, together with Attorney Costs of Bank of America to the
extent invoiced prior to or on the Closing Date, plus such additional amounts of
Attorney Costs as shall constitute the Administrative Agent's reasonable
estimate of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude final
settling of accounts between the Company and the Administrative Agent) including
any such costs, fees and expenses arising under or referenced in Sections 2.10
and 10.04.
(g) Certificate. A certificate signed by a Responsible Officer of the Company,
dated as of the Closing Date, stating that:
(1) the representations and warranties contained in Article V are true and
correct on and as of such date, as though made on and as of such date;
(2) no Default or Event of Default exists or would result from the making of the
first Loan; and
(3) there has occurred since June 30, 2002, no event or circumstance that has
resulted or could reasonably be expected to result in a Material Adverse Effect.
(h) Notes. A Note, dated as of the Closing Date, executed by the Company in
favor of each Lender requesting a Note.
(i) Repayment of Existing Loans. Evidence satisfactory to the Administrative
Agent that all principal of and interest on the extensions of credits
outstanding under, and all other amounts owing under, the Prior Credit Agreement
shall have been (or shall be simultaneously) paid in full, or the Company shall
have irrevocably directed the Administrative Agent to apply the proceeds from
the initial Credit Extension hereunder toward such repayment in full, and that
any commitments to extend credit under the Prior Credit Agreement shall have
been (or shall be simultaneously) canceled or terminated and that all guarantees
in respect of, and all Liens securing, such Indebtedness shall have been
released (or arrangements for such release reasonably satisfactory to the
Administrative Agent shall have been made).
4.02 CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT. The obligation of each
Lender to make any Loan to be made by it (including its initial Loan), to
continue any Eurodollar Rate Loan or convert any Loan into an Eurodollar Rate
Loan, and the obligation of the L/C Issuer to make any L/C Credit Extension
(including the initial L/C Credit Extension) from and after the date of this
Agreement, in each case is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date, Conversion/Continuation
Date, or Issuance Date:
(a) Notice of Borrowing or Conversion/Continuation; Letter of Credit
Application. The Administrative Agent and, if applicable, the L/C Issuer, shall
have received a Notice of Borrowing, Notice of Conversion/Continuation, or a
properly completed Letter of Credit Application for the making of an L/C Credit
Extension, as applicable.
(b) Continuation of Representations and Warranties. The representations and
warranties of the Company in Article V and in any other Loan Documents shall be
true and correct on and as of such Borrowing Date, Conversion/Continuation Date,
or Issuance Date as though made on and as of such Borrowing Date,
Conversion/Continuation Date, or Issuance Date (except to the extent any such
representations and warranties relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all respects as
of such earlier date, and except that, in respect of the representations and
warranties made in Sections 5.11(a) and 5.11(b), the dates specified therein
shall be deemed instead to refer to the last day of the most recent fiscal year
and fiscal quarter for which financial statements have then been delivered).
(c) No Existing Default. No Default or Event of Default shall exist or shall
result from the making of such Loan or its continuation or conversion, or from
the making of an L/C Credit Extension of such Letter of Credit.
(d) No Future Advance Notice. The Administrative Agent shall not have received
from the Company any notice that any Collateral Document will no longer secure
on a first priority basis future advances or future Loans to be made or
extended, and L/C Credit Extensions under this Agreement.
(e) Other Documents. Such other approvals, opinions, documents or materials as
the Administrative Agent may reasonably request (each in form and substance
satisfactory to the Administrative Agent).
Each Notice of Borrowing, Notice of Conversion/Continuation with respect to the
continuation of or conversion into an Eurodollar Rate Loan, or Letter of Credit
Application submitted by the Company hereunder shall constitute a representation
and warranty by the Company hereunder, as of the date of each such notice, as of
each Borrowing Date, Conversion/Continuation Date, or Issuance Date, as
applicable, that the conditions set forth in Section 4.02 are satisfied on and
as of the relevant Borrowing Date, Conversion/Continuation Date, or Issuance
Date, as the case may be.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Administrative Agent, the
Lenders and the L/C Issuer that, except as disclosed in MGHI's Form 10-K for the
year ended December 31, 2001 or the Form 10-Q for the quarter ended June 30,
2002 or the Schedules attached hereto:
5.01 CORPORATE EXISTENCE AND POWER. The Company and each of its Subsidiaries:
(a) Is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization;
(b) Has the power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business and to execute,
deliver, and perform its obligations under the Loan Documents;
(c) Is duly qualified as a foreign corporation or other entity and is licensed
and in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification or license; and
(d) Is in compliance with all Requirement of Law;
except, in each case referred to in clause (c) or clause (d), to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
5.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the Company of this Agreement and each other Loan Document to
which the Company is party, have been duly authorized by all necessary corporate
action, and do not and will not:
(a) Contravene the terms of any of the Company's Organization Documents;
(b) Conflict with or result in any breach or contravention of, or the creation
of any Lien under, any document evidencing any material Contractual Obligation
to which the Company or any of its Subsidiaries is a party or any order,
injunction, writ or decree of any Governmental Authority to which Company or any
of its Subsidiaries or its property is subject; or
(c) Violate, to the Company's knowledge, any Requirement of Law.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption, authorization,
or other action by, or notice to, or filing with, any Governmental Authority
(except for recordings or filings in connection with the Liens granted to the
Administrative Agent for the benefit of the Secured Parties under the Collateral
Documents) is necessary or required to be obtained, given, or filed by the
Company in connection with the execution, delivery or performance by, or
enforcement against, the Company of this Agreement or any other Loan Document.
5.04 BINDING EFFECT. This Agreement and each other Loan Document to which the
Company is a party constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
5.05 LITIGATION. Except as specifically disclosed in Schedule 5.05, there are no
actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective properties which:
(a) Purport to affect or pertain to this Agreement or any other Loan Document,
or any of the transactions contemplated hereby or thereby; or
(b) Has a reasonable probability of being determined adversely to the Company or
its Subsidiaries and, if so determined, would reasonably be expected to have a
Material Adverse Effect. No injunction, writ, temporary restraining order or any
order of any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement or any other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.
5.06 NO DEFAULT. No Default or Event of Default exists or would result from the
incurring of any Obligations by the Company or from the grant or perfection of
the Liens of the Administrative Agent for the benefit of the Secured Parties on
the Collateral. As of the Closing Date, neither the Company nor any Subsidiary
of the Company is in default under or with respect to any Contractual Obligation
in any respect which, individually or together with all such defaults, could
reasonably be expected to have a Material Adverse Effect, or that would, if such
default had occurred after the Closing Date, create an Event of Default under
Section 8.01(d).
5.07 ERISA COMPLIANCE. Except as specifically disclosed in Schedule 5.07:
(a) To the Company's knowledge, each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law. Each Plan which is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS at the time of
Plan adoption and to the best knowledge of the Company, nothing has occurred
which would cause the loss of such qualification. The Company and each ERISA
Affiliate has made all required contributions to any Plan subject to Section 412
of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan within the five plan years preceding the Closing Date. In
connection with the foregoing, the PALCO Retirement Plan has been amended and
restated as of December 1, 1989, has been subsequently amended three times to
date, and received a favorable determination letter from the IRS dated January
10, 1996.
(b) There are no pending or, to the best knowledge of Company, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan which has resulted or could reasonably be expected to result
in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) Within the five years preceding the Closing Date, (i) no ERISA Event has
occurred or is reasonably expected to occur; (ii) no Pension Plan has any
Unfunded Pension Liability that would reasonably be expected to have a Material
Adverse Effect; (iii) neither the Company nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any liability under Title IV of ERISA with
respect to any Pension Plan (other than premiums due and not delinquent under
Section 4007 of ERISA); (iv) neither the Company nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither the Company nor any ERISA Affiliate has
engaged in a transaction that could be reasonably be expected to be subject to
Section 4069 or 4212(c) of ERISA.
5.08 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans are to be
used solely for the purposes set forth in and permitted by Section 6.12 and
Section 7.07. Neither the Company nor any Subsidiary of the Company is generally
engaged in the business of purchasing or selling Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock.
5.09 TITLE TO PROPERTIES. The Company and each of its Subsidiaries have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
5.10 TAXES. The Company and its Subsidiaries have filed all Federal and other
material tax returns and reports required to be filed, and have paid all Federal
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP. There is no proposed tax assessment against the Company or any of its
Subsidiaries that would, if made, have a Material Adverse Effect.
5.11 FINANCIAL CONDITION.
(a) The reviewed consolidated balance sheet of the Company and its Subsidiaries
dated December 31, 2001 and the related consolidated statements of income or
operations, shareholders' equity or members' capital and cash flows for the
fiscal year ended on that date and the unaudited quarterly balance sheet of the
Company and its Subsidiaries dated June 30, 2002, and the related consolidated
statements of income or operations, shareholders' equity or members' capital and
cash flows for the fiscal quarter ended on that date,
(1) Were (except for the exclusion of notes in connection with the unaudited
quarterly financial statements) prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, subject, in the case of the quarterly financial statements, to
ordinary, good faith year-end audit adjustments;
(2) Are, in all material respects, complete and accurate, and fairly present the
financial condition of the Company and its Subsidiaries as of the date thereof
and results of operations for the period covered thereby; and
(3) Show all material indebtedness and other liabilities, direct or contingent,
of the Company and its consolidated Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Contingent
Obligations.
(b) Since June 30, 2002, there has been no Material Adverse Effect.
5.12 ENVIRONMENTAL MATTERS.
(a) Except as specifically disclosed in Schedule 5.12, the on-going operations
of the Company and each of its Subsidiaries comply in all respects with all
Environmental Laws, except such non-compliance which would not (if enforced in
accordance with applicable law) reasonably be expected to result in liability
which would cause a Material Adverse Effect;
(b) Except as specifically disclosed in Schedule 5.12, the Company and each of
its Subsidiaries have obtained all material licenses, permits, authorizations
and registrations required under any Environmental Law ("Environmental Permits")
and necessary for their respective ordinary course operations, all such material
Environmental Permits are in good standing, and the Company and each of its
Subsidiaries are in compliance with all material terms and conditions of such
Environmental Permits.
(c) Except as specifically disclosed in Schedule 5.12, none of the Company, any
of its Subsidiaries or any of their respective present property or operations,
is subject to any outstanding written order from or agreement with any
Governmental Authority, nor subject to any judicial or docketed administrative
proceeding, respecting any Environmental Law, Environmental Claim or Hazardous
Material, the non-compliance with which could be reasonably be expected to have
a Material Adverse Effect.
(d) Except as specifically disclosed in Schedule 5.12, there are no Hazardous
Materials or other conditions or circumstances existing with respect to any
property of the Company or any of its Subsidiaries, or arising from operations
prior to the Closing Date, of the Company or any of its Subsidiaries that would
reasonably be expected to give rise to Environmental Claims for any such
condition, circumstance or property that could reasonably be expected to have a
Material Adverse Effect. In addition, to the best of the Company's knowledge,
(i) neither the Company nor any of its Subsidiaries has any underground storage
tanks (x) that are not properly registered or permitted in all material respects
under applicable Environmental Laws, or (y) that are leaking or disposing of
Hazardous Materials off-site in a manner that could reasonably be expected to
cause a Material Adverse Effect, and (ii) the Company and its Subsidiaries have
notified all of their employees of the existence, if any, of any health hazard
arising from the conditions of their employment and have met all notification
requirements under Title III of CERCLA and all other Environmental Laws.
5.13 COLLATERAL DOCUMENTS.
(a) The provisions of each of the Collateral Documents are effective to create
in favor of the Administrative Agent for the benefit of the Secured Parties, a
legal, valid and enforceable first priority security interest in all right,
title and interest of the Company in the collateral described therein.
(b) All representations and warranties of the Company contained in the
Collateral Documents are true and correct.
5.14 REGULATED ENTITIES. None of the Company, any Person controlling the
Company, or any Subsidiary of the Company, is (a) an "Investment Company" within
the meaning of the Investment Company Act of 1940; or (b) subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
5.15 NO BURDENSOME RESTRICTIONS. Neither the Company nor any of its Subsidiaries
is a party to or bound by any Contractual Obligation, or subject to any
restriction in any Organization Document of the Company or any of its
Subsidiaries, or any Requirement of Law, which could reasonably be expected to
have a Material Adverse Effect.
5.16 SUBSIDIARIES. As of the Closing Date, the Company has no Subsidiaries other
than those specifically disclosed in part (a) of Schedule 5.16 hereto and has no
material equity investments in any other corporation or entity other than those
specifically disclosed in part (b) of Schedule 5.16.
5.17 INSURANCE. The properties of the Company and its Subsidiaries are insured
with financially sound and reputable insurance companies, and to the knowledge
of the Company, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Company or such Subsidiary operates.
5.18 SOLVENCY. The Company and SPC are each Solvent.
5.19 SWAP OBLIGATIONS.
(a) As of the Closing Date, neither the Company nor any of its Subsidiaries has
incurred any outstanding obligations under any Swap Contracts. With respect to
any Swap Contracts that may be entered into by the Company after the Closing
Date, the Company represents and warrants that it has undertaken its own
independent assessment of its consolidated assets, liabilities and commitments
and has considered appropriate means of mitigating and managing risks associated
with such matters and has not relied on any Swap Provider or any Affiliate of
any Swap Provider, swap counterparty or any Affiliate of any swap counterparty,
in determining whether to enter into any Swap Contract.
(b) The Company has not entered into any master agreement relating to Swap
Contracts and under which termination values resulting from Swap Contracts that
are Specified Swap Contracts are nettable against termination values resulting
from Swap Contracts that are not Specified Swap Contracts unless only Specified
Swap Contracts are outstanding under such master agreement.
(c) None of the Subsidiaries of the Company has entered into any Swap Contracts
other than as disclosed in the SEC filings of SPC.
5.20 FULL DISCLOSURE. None of the representations or warranties made by the
Company in the Loan Documents as of the date such representations and warranties
are made or deemed made, and none of the statements contained in any exhibit,
report, statement or certificate furnished by or on behalf of the Company in
connection with the Loan Documents, contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
are made, not misleading as of the time when made or delivered.
5.21 LABOR RELATIONS. There are no material strikes, lockouts or other labor
disputes against the Company or any of its Subsidiaries, or, to the best of the
Company's knowledge, threatened against or affecting the Company or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them before any Governmental Authority.
5.22 COMPLIANCE WITH LAWS. The Company has complied in all material respects
with all federal, state, and local laws, rules, and regulations applicable to
the business of the Company including, but not limited to, laws regulating the
Company's sales or the furnishing of services to Receivable Debtors and
disclosures in connection therewith.
5.23 MERCHANTABLE INVENTORY. All inventory which is included in the Borrowing
Base is of good and merchantable quality in all material respects.
5.24 LOCATION OF THE COMPANY. On the Closing Date, the Company's place of
business (or, if the Company has more than one place of business, its chief
executive office) is located at 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Lender shall have
any Commitment hereunder to extend credit hereunder, or any Loan, L/C
Obligation, or other outstanding monetary Obligation shall remain unpaid or
unsatisfied, unless the Required Lenders waive compliance in writing:
6.01 FINANCIAL STATEMENTS. The Company shall deliver to the Administrative Agent
and each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:
(a) As soon as available, but not later than 105 days after the end of each
fiscal year, a copy of the audited consolidated balance sheets of MGHI or, if
MGHI no longer prepares such balance sheet, of MAXXAM Inc., and of SPC as at the
end of such year and the related consolidated statements of income,
shareholders' equity or members' capital and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
year, and accompanied by the opinion of a nationally-recognized independent
public accounting firm which report shall state that such consolidated financial
statements present fairly the financial position for the periods indicated in
conformity with GAAP;
(b) As soon as available, but not later than 105 days after the end of each
fiscal year, a copy of the consolidated balance sheet of the Company as at the
end of such year and the related consolidated statements of income,
shareholders' equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous year, together with a
review report issued by the independent public accounting firm that audited the
financial statements being simultaneously delivered pursuant to Section 6.01(a)
(it being understood that such review report by the Company's new public
accounting firm, Deloitte & Touche LLP, will not address fiscal years prior to
fiscal year 2002);
(c) (i) As soon as available, but not later than 60 days after the end of each
of the first three fiscal quarters of each year, the Forms 10-Q for the relevant
fiscal quarters for each of MGHI, or, if MGHI no longer prepares such Forms
10-Q, of MAXXAM Inc., and of SPC, and (ii) as soon as available, but not later
than 60 days after the end of each fiscal quarter, on an Unconsolidated Basis,
the unaudited balance sheet of the Company at the end of such quarter and the
related statements of income, shareholders' equity and cash flows for the
Company on an Unconsolidated Basis for the year to date ending such fiscal
quarter, each certified by a Responsible Officer of the Company as having been
used or as shall be used in connection with the preparation of the financial
statements referred to in Sections 6.01(b) and (c)(i);
(d) Within 45 days after the end of each monthly accounting period, and as of
the last day of such period, a Company-prepared balance sheet for the Company
for such month and the related consolidated statements of income or operations,
shareholders' equity or members' capital and cash flows for such month (each
excluding notes); and
(e) Promptly upon each request of the Administrative Agent and any Lender, such
other statements, lists of property and accounts, budgets, forecasts or reports
as to the Company as the Administrative Agent or any Lender may reasonably
request.
6.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders:
(a) Concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b) above, a Compliance Certificate executed by a
Responsible Officer of the Company;
(b) Within 45 days after the end of each monthly accounting period, and as of
the last day of such period:
(1) A Borrowing Base Certificate;
(2) A description of lumber and log inventories with book and market value;
(3) Statements showing an aging and reconciliation of Receivables;
(c) Promptly after the same are sent, copies of all financial statements and
reports which the Company sends to its public shareholders, if any; and promptly
after the same are filed, copies of all financial statements and regular,
periodical or special reports which the Company may make to, or file with, the
SEC or any similar Governmental Authority;
(d) On or before each March 31, the following prepared on a consolidated basis
(which information shall be considered as confidential information pursuant to
Section 10.08, whether or not identified as "confidential" or "secret"):
(1) The Company's annual business plan, and if requested by the Administrative
Agent or any Lender, the Company's key operating assumptions, such as timber
harvest volumes, log consumption and lumber production, wood product shipments,
projected prices of logs, lumber and other products sold by the Company, capital
expenditures, and expected debt repayments and/or borrowings. The Company agrees
to meet with the Administrative Agent and the Lenders, at least once a year, to
discuss the foregoing matters;
(2) The Company's "Category of species and inventory of timber", the annual
harvest plan indicating timber harvest volumes by major categories, and a
listing of approved timber harvest plans;
(e) Within the 60 day period commencing on the first day of each calendar
quarter, an updated status report of the Company's approved timber harvest plans
(which information shall be considered as confidential information pursuant to
Section 10.08, whether or not identified as "confidential" or "secret"); and
(f) Promptly, such additional business, financial, corporate affairs and other
information as the Administrative Agent or any Lender may from time to time
reasonably request (which information shall be considered as confidential
information pursuant to Section 10.08, whether or not identified as
"confidential" or "secret").
Documents required to be delivered pursuant to Section 6.01(a) or
6.01(b) or Section 6.02(c) (to the extent any such documents are included in
materials otherwise filed with the SEC) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date (i) on which
the Company posts such documents, or provides a link thereto on the Company's
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Company's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided that: (i)
the Company shall deliver paper copies of such documents to the Administrative
Agent or any Lender that requests the Company to deliver such paper copies until
a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (ii) the Company shall notify (which may
be by facsimile or electronic mail) the Administrative Agent and each Lender of
the posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Company shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.02(a) to the Administrative Agent and each of the Lenders. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Company with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
6.03 NOTICES. The Company shall promptly notify the Administrative Agent and each Lender:
(a) Of the occurrence of any Default or Event of Default, and of the occurrence
or existence of any event or circumstance that foreseeably will become a Default
or Event of Default;
(b) Of (i) any breach or non-performance of, or any default under, any
Contractual Obligation of the Company or any of its Subsidiaries which could
reasonably be expected to result in a Material Adverse Effect; and (ii) any
dispute, litigation, investigation, proceeding or suspension which may exist at
any time between the Company or any of its Subsidiaries and any Governmental
Authority which could reasonably be expected to result in a Material Adverse
Effect;
(c) Of the commencement of, or any material adverse development in, any
litigation or proceeding affecting the Company or any Subsidiary of the Company
which, if adversely determined, would reasonably be expected to have a Material
Adverse Effect, or in which the relief sought is an injunction or other stay of
the performance of this Agreement or any Loan Document (such obligation to give
notice shall be deemed satisfied by the Company giving the Administrative Agent
and each Lender, pursuant to Section 6.02(c), the reports containing the
required information furnished by the Company, MGHI, or SPC to the SEC);
(d) Promptly upon becoming aware of any of the following that could reasonably
be expected to have a Material Adverse Effect: (i) any and all enforcement,
cleanup, removal or other governmental or regulatory actions instituted,
completed or threatened against the Company or any of its Subsidiaries or any of
their respective properties pursuant to any applicable Environmental Laws, (ii)
all other Environmental Claims, and (iii) any environmental or similar condition
on any real property adjoining or in the vicinity of the property of the Company
or any of its Subsidiaries that could reasonably be anticipated to cause such
property or any part thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such property under any Environmental Laws;
(e) Of any other litigation or proceeding affecting the Company or any of its
Subsidiaries which the Company, MGHI, or SPC would be required to report to the
SEC pursuant to the Exchange Act, promptly after reporting the same to the SEC;
(f) Of any of the following events affecting the Company, together with a copy
of any notice with respect to such event that may be required to be filed with a
Governmental Authority and any notice delivered by a Governmental Authority to
the Company with respect to such event:
(1) An ERISA Event;
(2) If any of the representations and warranties in Section 5.07 ceases to be
true and correct in any material respect;
(3) The adoption of any new Pension Plan or other Plan subject to Section 412
of the Code;
(4) The adoption of any amendment to a Pension Plan or other Plan subject to
Section 412 of the Code, if such amendment results in a material increase
in contributions or Unfunded Pension Liability; or
(5) The commencement of contributions to any Pension Plan or other Plan
subject to Section 412 of the Code;
(g) Any Material Adverse Effect subsequent to the date of the most recent
audited financial statements delivered to the Administrative Agent and the
Lenders pursuant to Section 6.01(a);
(h) Of any material change in accounting policies or financial reporting
practices by the Company or any of its Subsidiaries;
(i) Of any labor controversy resulting in or which could reasonably be expected
to result in any strike, work stoppage, boycott, shutdown or other labor
disruption against or involving the Company or any of its Subsidiaries;
(j) Of any change in the Company's name, business or legal structure, place of
business, or chief executive office if the Company has more than one place of
business; each such notice to be given in writing and not less than 45 days
prior to such change;
(k) Of the entry by the Company into any Specified Swap Contract, together with
the details thereof;
(l) Of the occurrence of any default, event of default, termination event or
other event under any Specified Swap Contract that after the giving of notice,
passage of time or both, would permit either counterparty to such Specified Swap
Contract to terminate early any or all trades relating to such contract.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer of the Company setting forth details of the
occurrence referred to therein, and stating what action the Company or any
affected Subsidiary of the Company proposes to take with respect thereto and at
what time. Each notice under Section 6.03(a) shall describe with particularity
any and all clauses or provisions of this Agreement or other Loan Document that
have been (or foreseeably will be) breached or violated.
6.04 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company shall, and shall
cause each of its Restricted Subsidiaries to:
(a) Preserve and maintain in full force and effect its legal existence and good
standing under the laws of its state or jurisdiction of organization (other than
as to Restricted Subsidiaries other than SPC whose dissolution could not
reasonably be expected to cause a Material Adverse Effect) ;
(b) Preserve and maintain in full force and effect all material rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the ordinary course of business except in connection with
transactions permitted by Section 7.03 and dispositions of assets permitted by
Section 7.02;
(c) Use reasonable efforts, in the ordinary course of business, to preserve its
business organization and preserve the goodwill and business of the customers,
suppliers, and others having material business relations with it.
6.05 MAINTENANCE OF PROPERTY. The Company shall maintain, and shall cause each
of its Subsidiaries to maintain, and preserve all its property which is used or
useful in its business in good working order and condition, ordinary wear and
tear excepted and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect, except as permitted by Section 7.02.
The Company and each Subsidiary of the Company shall use the standard of care
typical in the industry in the operation and maintenance of its facilities and
in the care and preservation of its timberlands.
6.06 INSURANCE.
(a) In addition to insurance requirements set forth in the Collateral Documents,
the Company shall maintain and shall cause each of its Subsidiaries to maintain,
with financially sound and reputable independent insurers, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons; including workers' compensation insurance,
comprehensive general liability and property insurance. The Company may
self-insure any or all Workers' Compensation liabilities.
(b) To the extent that any of the insurance required by this clause ceases to be
available at commercially reasonable rates, the Company may effect substitute
insurance coverage therefor in accordance with the prudent standards then being
followed by other companies engaged in the same or similar business or having
comparable properties. In the event that the Company wishes to effect substitute
coverage pursuant to the foregoing proviso, it will notify the Administrative
Agent and each Lender of such intent as soon as reasonably practicable, and not
less than five Business Days prior to the termination of the coverage for which
substitution is to be made, furnish the Administrative Agent and each Lender
with a report describing in reasonable detail the nature of such substitute
coverage and the reasons why the Company believes that such substitute coverage
is appropriate.
(c) Upon request of the Administrative Agent or any Lender, the Company shall
furnish the Administrative Agent and each Lender at reasonable intervals (but
not more than once per calendar year) a certificate of a Responsible Officer of
the Company or any insurance broker of the Company setting forth the nature and
extent of all insurance maintained by the Company and its Subsidiaries in
accordance with this Section or any Collateral Documents (and which, in the case
of a certificate of a broker, were placed through such broker).
6.07 PAYMENT OF OBLIGATIONS. With only such exceptions as could not reasonably
be expected to have a Material Adverse Effect, the Company shall, and shall
cause its Subsidiaries to, pay and discharge as the same shall become due and
payable, all their respective obligations and known liabilities, including:
(a) All tax liabilities, assessments and governmental charges or levies upon it
or its properties or assets, unless the same are being contested in good faith
by appropriate proceedings and adequate reserves in accordance with GAAP are
being maintained by the Company or such Subsidiary;
(b) All lawful claims which, if unpaid, would by law become a Lien upon its
property unless such claims are contested in good faith by appropriate
proceedings and adequate reserves in accordance with GAAP are being maintained
by the Company and such Subsidiaries;
(c) All Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness; and
(d) All Obligations.
6.08 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause each of its
Subsidiaries to comply, in all material respects with all Requirement of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except in such instances in
which (a) such Requirement of Law is being contested in good faith or as to
which a bona fide dispute may exist or (b) the failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect.
6.09 COMPLIANCE WITH ERISA. The Company shall, and to the fullest extent
permitted by applicable law shall cause each of its ERISA Affiliates to: (a)
maintain each Plan in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state law; (b) cause each
Plan which is qualified under Section 401(a) of the Code to maintain such
qualification; and (c) make all required contributions to any Plan subject to
Section 412 of the Code.
6.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company shall maintain
and shall cause each of its Subsidiaries to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company and such Subsidiary. The
Company shall permit, and shall cause each of its Subsidiaries to permit,
representatives of the Administrative Agent and each Lender to visit, inspect,
and audit any of their respective properties, to examine their respective
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective directors, officers, and independent public accountants, all at
the expense of the Company and at such reasonable times during normal business
hours and as often as may be reasonably desired, upon reasonable advance notice
to the Company; provided, however, when an Event of Default exists the
Administrative Agent or any Lender may do any of the foregoing at the expense of
the Company at any time during normal business hours and without advance notice.
6.11 ENVIRONMENTAL LAWS.
(a) The Company shall, and shall cause each of its Subsidiaries to, conduct its
operations and keep and maintain its property in compliance in all material
respects with all applicable Environmental Laws, except such as may be contested
in good faith by appropriate proceedings or as to which a bona fide dispute may
exist and resolution of which is being sought by appropriate proceedings.
(b) Upon the written request of the Administrative Agent or Required Lenders,
the Company shall submit and cause each of its Subsidiaries to submit, to the
Administrative Agent and the Lenders, at the Company's sole cost and expense, at
reasonable intervals, a report providing an update of the status of any
environmental, health or safety compliance, hazard or liability issue identified
in any notice or report required pursuant to Section 6.03(d), that could,
individually or in the aggregate, result in liability having a Material Adverse
Effect.
6.12 USE OF PROCEEDS. The Company shall use the proceeds of the Revolving Loans
for working capital and other general corporate purposes and not in
contravention of any Requirement of Law or of any Loan Document.
6.13 SOLVENCY. The Company shall at all times be, and shall cause SPC to be,
Solvent.
6.14 PROTECTION OF COLLATERAL; ACCESS. The Company shall take all steps
reasonably necessary or advisable to preserve and protect the Collateral and
ensure that the Administrative Agent's rights and access to and interests in the
Collateral are not in any way materially impaired or adversely affected.
6.15 FURTHER ASSURANCES.
(a) The Company shall ensure that all written information, exhibits and reports
furnished to the Administrative Agent and the Lenders do not and will not
contain any untrue statement of a material fact and do not and will not omit to
state any material fact or any fact necessary to make the statements contained
therein not misleading in light of the circumstances in which made, and will
promptly disclose to the Administrative Agent and the Lenders and correct any
defect or error that may be discovered therein or in any Loan Document or in the
execution, acknowledgement or recordation thereof.
(b) Promptly upon request by the Administrative Agent or Required Lenders, the
Company shall do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, assignments, estoppel certificates,
financing statements and continuations thereof, termination statements, notices
of assignment, transfers, certificates, assurances and other instruments the
Administrative Agent or Required Lenders may reasonably require from time to
time in order (i) to carry out more effectively the purposes of this Agreement
or any other Loan Document, (ii) to subject to the Liens created by any of the
Collateral Documents any of the properties, rights or interests covered by any
of the Collateral Documents, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Administrative Agent and
the Lenders the rights granted or now or hereafter intended to be granted to the
Administrative Agent and the Lenders under any Loan Document or under any other
document executed in connection therewith.
ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any Lender
shall have any Commitment to extend credit hereunder, or any Loan, L/C
Obligation, or other outstanding monetary Obligation shall remain unpaid or
unsatisfied, unless the Required Lenders waive compliance in writing:
7.01 LIMITATION ON LIENS. The Company shall not, and shall not suffer or permit
any of its Restricted Subsidiaries to, directly or indirectly, make, create,
incur, assume or suffer to exist any Lien upon or with respect to any part of
its property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
(a) Any Lien (other than Liens on the Collateral) existing on the property of
the Company or its Subsidiaries on the Closing Date and set forth in Schedule
7.01 securing Indebtedness outstanding on such date or refinancings thereof
provided that each such refinancing of an Indebtedness shall not result in any
of the following: (1) an increase in the interest rate and/or the then
outstanding principal amount of the Indebtedness being refinanced, (2) any
additional assets of the Company or any of its Restricted Subsidiaries securing
the Indebtedness being refinanced, (3) the Company or any Restricted Subsidiary
incurring any Guaranty Obligation in connection therewith; and (4) an increase,
during the term of this Agreement and for one year thereafter, in the principal
payments of the Indebtedness being refinanced, and (5) any restriction on the
ability of the Company to perform its obligations under this Agreement and any
other Loan Document;
(b) Any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges which are
not delinquent or remain payable without penalty, or to the extent that
non-payment thereof is permitted by Section 6.07, provided that no Notice of
Lien has been filed or recorded. For purposes of this subsection, "Notice of
Lien" means any "notice of lien" or similar document intended to be filed or
recorded with any court, registry, recorder's office, central filing office or
other Governmental Authority for the purpose of evidencing, creating, perfecting
or preserving the priority of a Lien securing obligations owing to a
Governmental Authority;
(d) Carriers', warehousemen's, mechanics', landlords', materialmen's, loggers',
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other social security legislation;
(f) Liens (other than Liens on the Collateral) on the property of the Company or
any of its Restricted Subsidiaries securing (i) the non-delinquent performance
of bids, trade contracts (other than for borrowed money), leases, statutory
obligations, (ii) contingent obligations on surety and appeal bonds, and (iii)
other non-delinquent obligations of a like nature; in each case, incurred in the
ordinary course of business, provided all such Liens in the aggregate would not
(even if enforced) cause a Material Adverse Effect;
(g) Liens (other than Liens on the Collateral) consisting of judgment or
judicial attachment liens, provided that the enforcement of such Liens is
effectively stayed;
(h) Easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the businesses of the Company and its Restricted Subsidiaries;
(i) Liens on assets of Persons which become Restricted Subsidiaries after the
date of this Agreement, provided, however, that such Liens existed at the time
the respective Persons became Subsidiaries and were not created in anticipation
thereof;
(j) Security interests on any property acquired or held by the Company or its
Restricted Subsidiaries in the ordinary course of business, other than the
Collateral, securing Indebtedness in an aggregate outstanding principal amount
which cannot exceed at any time $25,000,000;
(k) Liens securing Capital Lease Obligations on assets subject to such Capital
Leases, provided that such Capital Leases are permitted under Section 7.11;
(l) Liens arising solely by virtue of any statutory or common law provision
relating to banker's liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution; provided that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by the Federal
Reserve Board, and (ii) such deposit account is not intended by the Company or
any of its Restricted Subsidiaries to provide collateral to the depository
institution. The provisions of this subsection shall not apply to cash
collateral accounts maintained by SPC with any third Person;
(m) Liens on property other than the Collateral securing Indebtedness permitted
under Section 7.05(d);
(n) Liens upon the Collateral described in the Company Security Agreement to
secure Indebtedness permitted by Section 7.05(j); and
(o) Liens upon the assets of SPC permitted pursuant to the Indenture referenced
in the definition of "Timber Notes".
7.02 DISPOSITION OF ASSETS. The Company shall not, and shall not suffer or
permit any of its Restricted Subsidiaries to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one or a
series of transactions) any property (including accounts and notes receivable,
with or without recourse) or enter into any agreement to do any of the
foregoing, except:
(a) Dispositions of inventory, or used, worn-out or surplus equipment, all in
the ordinary course of business;
(b) The sale of equipment to the extent that such equipment is exchanged for
credit against the purchase price of similar replacement equipment, or the
proceeds of such sale are reasonably promptly applied to the purchase price of
such replacement equipment;
(c) Dispositions of all or part of Salmon Creek LLC or Salmon Creek Property;
(d) Trading in short-term investment securities in the ordinary course of
business;
(e) Dispositions of assets by any Restricted Subsidiary to the Company or any
Wholly-Owned Restricted Subsidiary or by the Company to any Wholly-Owned
Restricted Subsidiary;
(f) Dispositions of assets by the Company in payment of a dividend or
distribution permitted by Section 7.12;
(g) Other dispositions of assets with an aggregate book value, on a cumulative
basis, not to exceed $25,000,000 during the term of this Agreement and which
assets are not subject to any Collateral Document;
(h) Dispositions of assets in the Scheduled Amortization Reserve Account (as
such term is defined in the Scotia Pacific Indenture); and
(i) Any Permitted Salmon Creek Transaction.
7.03 CONSOLIDATIONS AND MERGERS. The Company shall not, and shall not suffer or
permit any of its Restricted Subsidiaries to, merge, consolidate with or into,
or convey, transfer, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired) to or in favor of any Person, except:
(a) Any Restricted Subsidiary of the Company may merge with or into the Company
or any one or more Restricted Subsidiaries of the Company, provided that (i) if
any transaction shall be between a Restricted Subsidiary and a Wholly-Owned
Restricted Subsidiary, the Wholly-Owned Subsidiary shall be the continuing or
surviving corporation, and (ii) if any transaction shall be between a Restricted
Subsidiary and the Company, the Company shall be the continuing or surviving
corporation; and
(b) Any Restricted Subsidiary of the Company may sell or otherwise dispose of
all or substantially all of its assets (upon voluntary liquidation or
otherwise), to the Company or another Wholly-Owned Restricted Subsidiary of the
Company.
7.04 LOANS AND INVESTMENTS. The Company shall not purchase or acquire, or suffer
or permit any Restricted Subsidiary to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, or make or commit to make
any Acquisitions, or make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Company (collectively, "Investments"), except
for:
(a) Investments in Cash Equivalents;
(b) Extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
(c) Investments by the Company or any Restricted Subsidiary in the Company, any
Wholly-Owned Restricted Subsidiary, or any other Person that, after giving
effect to such Investment, becomes a Wholly-Owned Restricted Subsidiary;
(d) Investments made pursuant to cash management arrangements consistent with
the investment policy adopted by the Board of Directors of the Company and
reasonably satisfactory to the Administrative Agent and the Lenders;
(e) Extensions of credit in the ordinary course of business to its employees and
independent contractors which in the aggregate outstanding amount do not exceed
$1,000,000 at any time; and
(f) Investments to the extent that such Investments are funded by Salmon Creek
Proceeds;
(g) Investments of funds in the Scheduled Amortization Reserve Account in SAR
Eligible Investments (as such term is defined in the Scotia Pacific Indenture);
(h) Any Permitted Salmon Creek Transaction; and
(i) Other Investments that do not exceed $1,000,000 in the aggregate at any time
outstanding (without giving effect to any write-downs thereof).
7.05 LIMITATION ON INDEBTEDNESS. The Company shall not, and shall not suffer or
permit any of its Restricted Subsidiaries to, create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Accounts payable to trade creditors for goods and services and current
operating liabilities (not the result of the borrowing of money) incurred in the
ordinary course of business of the Company or such Restricted Subsidiary in
accordance with customary terms and paid within the specified time, unless
contested in good faith by appropriate proceedings and reserved for in
accordance with GAAP;
(c) Indebtedness consisting of Contingent Obligations permitted pursuant to
Section 7.08;
(d) Up to an aggregate outstanding principal amount of $5,000,000 in tax-free
financing, which amount shall be an aggregate limit for the period covered by
this Agreement;
(e) Indebtedness existing on the Closing Date and set forth in Schedule 7.05,
which Indebtedness may be refinanced on terms and conditions no less favorable
than those existing on the Closing Date;
(f) Indebtedness secured by Liens permitted by Section 7.01(i), (j) and (k);
(g) Indebtedness incurred in connection with leases permitted pursuant to
Section 7.11;
(h) Extensions of credit permitted under Sections 7.04(c) and 7.04(e);
(i) Indebtedness incurred in connection with investments permitted under Section
7.04(d); and
(j) Other Indebtedness in aggregate principal amount at any time outstanding not
to exceed $5,000,000.
7.06 TRANSACTIONS WITH AFFILIATES.
(a) The Company shall not, and shall not suffer or permit any of its Restricted
Subsidiaries to, enter into any transaction with any Affiliate of the Company or
of any such Restricted Subsidiary, except (i) as expressly permitted by this
Agreement, or (ii) in its ordinary course of business and pursuant to the
reasonable requirements of the business of the Company or such Restricted
Subsidiary; in each case with respect to clauses (i) and (ii) above, upon fair
and reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would obtain in a comparable arm's-length transaction with a
Person not an Affiliate of the Company or such Restricted Subsidiary.
(b) The provisions contained in Section 7.06(a) shall not apply to: (i) any
transaction permitted by Section 7.12, (ii) the execution and delivery of, the
performance of, and the making of any payments required by, the Tax Sharing
Agreement, (iii) the execution and delivery of, the performance of, and the
making of any payments required by, the Xxxxx Lumber Agreement, (iv) any
Permitted Salmon Creek Transaction; (v) the making of payments to MAXXAM Group
Inc., MAXXAM Inc. and their Affiliates for reimbursement for actual services
provided thereby to the Company and its Restricted Subsidiaries based on actual
costs and an allocable share of overhead expenses consistent with prior
practices, (vi) compensation, indemnification and other benefits paid or made
available to officers, directors, managers and employees of the Company or a
Restricted Subsidiary for services rendered in such person's capacity as an
officer, director, manager, or employee (including reimbursement or advancement
of reasonable out-of-pocket expenses and directors' and officers' liability
insurance), (vii) any transaction between the Company and any Wholly-Owned
Restricted Subsidiary or between Wholly-Owned Restricted Subsidiaries or (viii)
Investments permitted by clause (f) of Section 7.04.
(c) The Company shall not amend or modify the Xxxxx Lumber Agreement without the
prior written consent of the Required Lenders if such amendment would materially
alter the obligations or rights of the Company thereunder.
7.07 USE OF PROCEEDS. The Company shall not and shall not suffer or permit any
of its Subsidiaries to use any portion of the proceeds of any extension of
credit under this Agreement, directly or indirectly, (i) to purchase or carry
Margin Stock, (ii) to repay or otherwise refinance indebtedness of the Company
or others incurred to purchase or carry Margin Stock, (iii) to extend credit for
the purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any
security in any transaction that is subject to Section 13 or 14 of the Exchange
Act.
7.08 CONTINGENT OBLIGATIONS. The Company shall not, and shall not suffer or
permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to
exist any Contingent Obligations except:
(a) Endorsements for collection or deposit in the ordinary course of business;
(b) Contingent Obligations of the Company and its Restricted Subsidiaries
existing as of the Closing Date and listed in Schedule 7.08;
(c) Contingent Obligations entered into in the ordinary course of business;
(d) Contingent Obligations relating to Letters of Credit;
(e) Permitted Swap Obligations;
(f) Guaranty Obligations of the Company with respect to obligations of
Wholly-Owned Restricted Subsidiaries that are not prohibited hereby; and
(g) Other Contingent Obligations in aggregate amount not to exceed $5,000,000 at
any time outstanding.
7.09 JOINT VENTURES. The Company shall not, and shall not suffer or permit any
of its Restricted Subsidiaries to enter into any Joint Venture with any Person
other than the Company or a Wholly-Owned Restricted Subsidiary, other than in
the ordinary course of business.
7.10 ERISA. The Company shall not, and to the fullest extent permitted by
applicable law shall not suffer or permit any of its ERISA Affiliates to: (a)
engage in a prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Plan which has resulted or could reasonably be
expected to result in liability of the Company in an aggregate amount in excess
of $5,000,000; or (b) engage in a transaction that could reasonably be expected
to be subject to Section 4069 or 4212(c) of ERISA and that could reasonably be
expected to have a Material Adverse Effect.
7.11 LEASE OBLIGATIONS. The Company shall not, and shall not suffer or permit
any of its Restricted Subsidiaries to, create or suffer to exist any obligations
for the payment of rent for any property under lease or agreement to lease,
except for:
(a) Leases of the Company and its Restricted Subsidiaries in existence on the
Closing Date and any renewal, extension or refinancing thereof;
(b) Capital Leases other than those permitted under subsection (a) of this
Section, entered into by the Company or any of its Restricted Subsidiaries after
the Closing Date to finance the acquisition of equipment; provided that the
aggregate annual rental payments for all such Capital Leases shall not exceed
$10,000,000 in the aggregate; and
(c) Operating leases entered into by the Company and its Restricted Subsidiaries
in the ordinary course of business.
7.12 RESTRICTED PAYMENTS. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock or other equity
interest, or purchase, redeem or otherwise acquire for value any shares of its
capital stock or other equity interest or any warrants, rights or options to
acquire such shares or interests, now or hereafter outstanding (any of the
foregoing, a "Restricted Payment"), except:
(a) The Company or any Restricted Subsidiary may declare and make Restricted
Payments payable solely in its common stock or other equity interest;
(b) The Company or any Restricted Subsidiary may purchase, redeem or otherwise
acquire shares of its common stock or warrants or options to acquire any such
shares with the proceeds received from the substantially concurrent issue of new
shares of its common stock;
(c) Any Restricted Subsidiary may declare and make Restricted Payments to the
Company or any other Wholly-Owned Restricted Subsidiary;
(d) The Company may declare and make Restricted Payments for any fiscal quarter,
as long as (x) no Default or Event of Default exists at the time of such
Restricted Payment, (y) the financial statements with respect to such fiscal
quarter have been delivered to the Administrative Agent in compliance with
Section 6.01(c), and (z) the aggregate Restricted Payments for that fiscal
quarter and the three preceding fiscal quarters, excluding from such aggregation
all Restricted Payments permitted by Section 7.12(b) or (e), does not exceed the
Excess Cash Flow for the four most recent fiscal quarters for which financial
statements have been delivered pursuant to Section 6.01(c) hereof.
(e) Any Restricted Subsidiary of the Company can make Restricted Payments to the
extent funded with Salmon Creek Proceeds to the Company or to any other
Subsidiary of the Company and the Company can make Restricted Payments to the
extent funded with Salmon Creek Proceeds.
7.13 CHANGE IN BUSINESS. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, engage in any material line of business
substantially different from those lines of business carried on by it on the
date hereof.
7.14 ACCOUNTING CHANGES. The Company shall not, and shall not suffer or permit
any of its Restricted Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP or the SEC or
change the fiscal year of the Company or of any of its consolidated Restricted
Subsidiaries; provided, however, that the Company or any of its consolidated
Restricted Subsidiaries may change any of its significant accounting methods or
reporting practices provided that the alternative accounting method chosen
conforms with GAAP and the Company or any of its consolidated Restricted
Subsidiaries has obtained a "preferability letter" from its independent public
accountants stating that each such significant change in accounting method is
preferable in the circumstances.
7.15 OTHER CONTRACTS. The Company shall not enter into any employment contracts
or other employment or service-retention arrangements whose terms, including
salaries, benefits and other compensation, are not normal and customary in the
industry.
7.16 MINIMUM NET WORTH. The Company shall maintain, as of the end of each fiscal
quarter, a Net Worth of not less than $(296,000,000) (negative two hundred
ninety six million Dollars), provided, however that the foregoing shall be
computed without giving effect to a direct or indirect dividend or distribution
to the stockholders of the Company or any of its Subsidiaries of any Salmon
Creek Proceeds.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute an "Event of Default":
(a) Non-Payment. The Company fails to make, (i) when and as required to be made
herein, payments of any amount of principal of any Loan, or (ii) when and as
required to be paid under any Specified Swap Contract, any payment or transfer
under such Specified Swap Contract, or (iii) within five days after the same
becomes due, payment of any interest, fee or any other amount payable hereunder
or under any other Loan Document (other than a Specified Swap Contract); or
(b) Representation or Warranty. Any representation or warranty by the Company or
any Subsidiary of the Company made or deemed made herein, in any other Loan
Document other than a Specified Swap Contract, or which is contained in any
certificate, document or financial or other statement by the Company, any
Subsidiary of the Company, or any Responsible Officer of the Company, SPC, or
MGHI, furnished at any time under this Agreement, or in or under any other Loan
Document other than a Specified Swap Contract, is incorrect in any material
respect on or as of the date made or deemed made; or
(c) Other Defaults. The Company fails to perform or observe any other term or
covenant contained in this Agreement or any Loan Document, or any default or
event of default shall occur thereunder and such default shall continue
unremedied for a period of 30 days (the "30-Day Period") after the earlier of
(i) the date upon which a Responsible Officer of the Company knew or should have
known of such failure or (ii) the date upon which written notice thereof is
given to the Company by the Administrative Agent (as directed by the Required
Lenders), unless (in both (i) and (ii)) the default is curable, the Company has
started to cure such default and continues to try to cure such default, and the
default is cured within the 60 days starting on the first day of the 30-Day
Period;
(d) Cross-Default. (i) The Company or any of its Restricted Subsidiaries (A)
fails to make any payment in respect of any Indebtedness or Contingent
Obligation (other than in respect of Swap Contracts), having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $5,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) ("Material
Indebtedness") and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure;
or (B) fails to perform or observe any other condition or covenant, or any other
event shall occur or condition exist, under any agreement or instrument relating
to any Material Indebtedness, and such failure continues after the applicable
grace or notice period, if any, specified in the relevant document on the date
of such failure if the effect of such failure, event or condition is to cause,
or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; or (ii) there occurs under any Specified Swap Contract an Early
Termination Date resulting from (1) any event of default under such Specified
Swap Contract as to which the Company is the Defaulting Party (as defined in
such Specified Swap Contract) or (2) any Termination Event (as defined in such
Specified Swap Contract) as to which the Company is an Affected Party (as
defined in such Specified Swap Contract), and, in either event, the Swap
Termination Value owed by the Company as a result thereof is greater than
$5,000,000; or (iii) an "Event of Default" exists as defined in the Indenture
referenced in the definition of "Timber Notes" herein; or
(e) Insolvency; Voluntary Proceedings. The Company, SPC, or any of the Company's
Restricted Subsidiaries (i) ceases or fails to be solvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the ordinary
course; (iii) commences any Insolvency Proceeding with respect to itself; or
(iv) takes any action to effectuate or authorize any of the foregoing; or
(f) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Company or any of its Restricted Subsidiaries or
SPC, or any writ, judgment, warrant of attachment, execution or similar process,
is issued or levied against a substantial part of the Company's or SPC's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Company or SPC admits the material allegations of a petition
against it in any Insolvency Proceeding, or an order for relief (or similar
order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) the
Company or SPC acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its property or business;
or
(g) ERISA. (i) An ERISA Event shall occur with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $5,000,000;
or (ii) the aggregate amount of Unfunded Pension Liability among all Pension
Plans at any time exceeds $5,000,000; or (iii) the Company or any ERISA
Affiliate shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of $5,000,000; or
(h) Monetary Judgments. One or more final (non-interlocutory) judgments, orders,
decrees or arbitration awards is entered against the Company or any of its
Restricted Subsidiaries involving in the aggregate a liability (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related series of transactions,
incidents or conditions, that would reasonably be expected to have a Material
Adverse Effect, and the same shall remain unsatisfied, unvacated and unstayed
pending appeal for a period of 30 days after the entry thereof; or
(i) Non-Monetary Judgments. Any non-monetary judgment, order or decree is
entered against the Company or any of its Restricted Subsidiaries which does or
would reasonably be expected to have a Material Adverse Effect, and there shall
be any period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(j) Change in Control. There occurs any Change in Control; or
(k) Collateral.
(1) (A) Any material provision of any Collateral Document shall for any reason
other than pursuant to the terms thereof cease to be valid and binding on or
enforceable against the Company thereto; or
(B) Any Collateral Document shall for any reason (other than pursuant to the
terms thereof) cease to create a valid security interest or Lien in the
Collateral purported to be covered thereby; or
(C) The Administrative Agent for the benefit of the Secured Parties ceases to
have, for any reason, a perfected and first priority security interest or Lien
on any item of Collateral (subject only to Permitted Liens) and the failure to
have such perfected first priority security interest or Lien is not caused by
the Administrative Agent's failure to timely file a UCC continuation statement;
and the Effective Amount of all Loans and L/C Obligations is more than the
amount computed pursuant to clause (a) of the definition of the Borrowing Base
(excluding, in the computation of the Borrowing Base for purposes of this clause
the Collateral encumbered by the Collateral Documents covered by clauses (A),
(B), and (C) of this Section 8.01(k)(1)); or
(2) The Company shall state in writing its belief that any material provision of
any Collateral Document is not valid and binding or the Company shall bring an
action to limit its obligations or liabilities thereunder; or
(3) All the Lenders, in good faith, consider any Collateral to be unsafe or in
danger of misuse to the extent that the Administrative Agent's and the Lender's
prospect of or right to payment or performance under this Agreement or any Loan
Document is materially impaired; or
(l) Regulatory Action. Any Governmental Authority takes or institutes action
which could reasonably be expected to have, on an Unconsolidated Basis, a
Material Adverse Effect on the Company's financial condition or results of
operations or ability to perform its obligations under this Agreement or any
other Loan Document.
8.02 REMEDIES. If any Event of Default exists, the Administrative Agent shall,
at the request of, or may, with the consent of, the Required Lenders, take any
or all of the following actions:
(a) Declare the commitment of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitment and obligation shall be terminated;
(b) Declare the unpaid principal amount of all outstanding Loans, all
Outstanding Letters of Credit (including the Company's reimbursement obligations
for Outstanding Letters of Credit), all L/C Obligations, all interest accrued
and unpaid thereon, and all other amounts owing or payable hereunder or under
any other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Company;
(c) Require that the Company Cash Collateralize the L/C Obligations (in an
amount equal to the then Effective Amount thereof); and
(d) Exercise on behalf of itself all rights and remedies available to it under
the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(e) or (f) of Section 8.01 (in the case of clause (i) of subsection (f) upon the
expiration of the 60-day period mentioned therein), the obligation of each
Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit
Extensions shall automatically terminate and the unpaid principal amount of all
outstanding Loans, all Outstanding Letters of Credit (including the Company's
reimbursement obligations for Outstanding Letters of Credit), all L/C
Obligations, and all interest and other amounts as aforesaid shall automatically
become due and payable without further act of the Administrative Agent, any
Lender or the L/C Issuer, and the obligation of the Company to Cash
Collateralize the L/C Obligations as aforesaid shall automatically become
effective, in each case without further act of the Administrative Agent, any
Lender or the L/C Issuer.
Amounts paid by the Company to be applied to prepayment of L/C Obligations and
to the Company's reimbursement obligations for Outstanding Letters of Credit
may, with the consent of the Lenders, be held by the Administrative Agent as
cash collateral for such Obligations.
8.03 SPECIFIED SWAP CONTRACT REMEDIES. Notwithstanding any other provision of
this Article, each Swap Provider shall have the right, with prior notice to the
Administrative Agent and each Lender, with respect to any Specified Swap
Contract of such Swap Provider, (a) to declare an event of default, termination
event or other similar event thereunder and to create an Early Termination Date,
(b) to determine net termination amounts in accordance with the terms of such
Specified Swap Contracts and to set-off amounts in accordance with the terms of
such Specified Swap Contracts, and (c) to prosecute any legal action against the
Company to enforce net amounts owing to such Swap Provider. The Company hereby
grants the Administrative Agent for the benefit of the Secured Parties a
security interest in all of the Company's rights, title, and interests in the
Company's rights to payment and performance by the Swap Provider in each of the
Specified Swap Contracts.
8.04 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter arising.
8.05 CERTAIN FINANCIAL COVENANT DEFAULTS. In the event that, after taking into
account any extraordinary charge to earnings taken or to be taken as of the end
of any fiscal period of the Company (a "Charge"), and if solely by virtue of
such Charge, there would exist an Event of Default due to the breach of Section
7.16 as of such fiscal period end date, such Event of Default shall be deemed to
arise upon the earlier of (a) the date after such fiscal period end date on
which the Company announces publicly it will take, is taking or has taken such
Charge (including an announcement in the form of a statement in a report filed
with the SEC) or, if such announcement is made prior to such fiscal period end
date, the date that is such fiscal period end date, and (b) the date the Company
delivers to the Administrative Agent its audited annual or unaudited quarterly
financial statements in respect of such fiscal period reflecting such Charge as
taken.
8.06 APPLICATION of Funds.
After the exercise of remedies provided for in Section 8.02 (or after
the Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set
forth in the proviso to Section 8.02), any amounts received on account of the
Obligations shall be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs, amounts
payable under Article III, and costs and expenses of taking possession of the
Collateral and of holding, leasing, operating, using, repairing, improving, and
selling the same) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Loans and L/C Borrowings, ratably among the Lenders
in proportion to the respective amounts described in this clause Third payable
to them;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth held by
them;
Fifth, to the Administrative Agent for the account of the L/C Issuer, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been paid in
full in cash, to the Company or as otherwise required by Law.
Subject to Section 2.16(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article IX with respect to any acts taken or
omissions suffered by the L/C Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and the applications and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in this Article IX and in the definition of
"Agent-Related Person" included the L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the L/C
Issuer.
9.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.
9.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by the Company or any officer thereof, contained
herein or in any other Loan Document, or in any certificate, report, statement
or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Company or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Company or any Affiliate thereof.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Company), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions specified in
Section 4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
9.05 NOTICE OF DEFAULT The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Company referring to this Agreement, describing such Default and stating that
such notice is a "notice of default". The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT. Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by the Administrative Agent hereafter taken,
including any consent to and acceptance of any assignment or review of the
affairs of the Company or any Affiliate thereof, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender as to
any matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank or other regulatory Laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to the Company hereunder. Each
Lender also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Company. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent herein, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Company or any of its Affiliates
which may come into the possession of any Agent-Related Person.
9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that no Lender shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person's own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Lender shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this Section shall survive termination of the
Aggregate Commitments, the payment of all other Obligations and the resignation
of the Administrative Agent.
9.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the
Company and its Affiliates as though Bank of America were not the Administrative
Agent or the L/C Issuer hereunder and without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, Bank of
America or its Affiliates may receive information regarding the Company or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Company or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Loans, Bank of America shall have the same rights and
powers under this Agreement as any other Lender and may exercise such rights and
powers as though it were not the Administrative Agent or the L/C Issuer, and the
terms "Lender" and "Lenders" include Bank of America in its individual capacity.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign as
Administrative Agent upon 30 days' notice to the Lenders; provided that any such
resignation by Bank of America shall also constitute its resignation as L/C
Issuer. If the Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders, which successor administrative agent shall be consented to by
the Company at all times other than during the existence of an Event of Default
(which consent of the Company shall not be unreasonably withheld or delayed). If
no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Company, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, the Person acting as
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the L/C Issuer and the
respective terms "Administrative Agent" and "L/C Issuer" shall mean such
successor administrative agent, Letter of Credit issuer and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall be terminated and the retiring L/C Issuer's rights, powers and duties as
such shall be terminated, without any other or further act or deed on the part
of such retiring L/C Issuer or any other Lender, other than the obligation of
the successor L/C Issuer to issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or to make
other arrangements satisfactory to the retiring L/C Issuer to effectively assume
the obligations of the retiring L/C Issuer with respect to such Letters of
Credit. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article IX and Sections 10.04 and
10.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.
9.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company, the Administrative Agent (irrespective of whether the principal of
any Loan or L/C Obligation shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Company) shall be entitled and empowered, by
intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.10, 2.16(i), 2.16(j) and 10.04)
allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.10 and 10.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
9.11 Collateral Matters. The Lenders irrevocably authorize the Administrative
Agent, to release, and the Administrative Agent shall release, any Lien on any
property granted to or held by the Administrative Agent under any Loan Document
(a) upon termination of the Aggregate Commitments and payment in full of all
monetary Obligations (other than contingent indemnification obligations) and
either (i) the expiration or termination of all Letters of Credit or (ii) the
Cash Collateralization of all Letters of Credit, (b) that is sold or to be sold
as part of or in connection with any sale permitted hereunder or under any other
Loan Document, or (c) if approved, authorized or ratified in writing by all of
the Lenders. Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to release
its interest in particular types or items of property pursuant to this Section
9.11.
ARTICLE X
MISCELLANEOUS
10.01 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Company therefrom, shall
be effective unless in writing signed by the Required Lenders and the Company,
as the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:
(a) waive any condition set forth in Section 4.01 without the written consent of
each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender;
(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees or other amounts due to the Lenders (or any
of them) hereunder or under any other Loan Document without the written consent
of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein on, any
Loan or L/C Borrowing, or any fees or other amounts payable hereunder or under
any other Loan Document without the written consent of each Lender directly
affected thereby; provided, however, that only the consent of the Required
Lenders shall be necessary (i) to amend the definition of "Default Rate" or to
waive any obligation of the Company to pay interest at the Default Rate or to
pay the increase in the Letter of Credit Fee provided for in the last sentence
of Section 2.16(i), or (ii) to amend any financial covenant hereunder (or any
defined term used therein);
(e) change Section 2.14 or Section 8.06 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;
(f) change any provision of this Section or the definition of "Required Lenders"
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender; or
(g) subject to Section 9.11, release all or any portion of the Collateral;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it; and (ii) no amendment, waiver or consent shall, unless in writing and signed
by the Administrative Agent in addition to the Lenders required above, affect
the rights or duties of the Administrative Agent under this Agreement or any
other Loan Document. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.
10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including by
facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to subsection
(c) below) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(1) if to the Company, the Administrative Agent or the L/C Issuer, to the
address, facsimile number, electronic mail address or telephone number specified
for such Person on Schedule 10.02 or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by such party
in a notice to the other parties; and
(2) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the Company, the
Administrative Agent and the L/C Issuer.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; provided, however, that notices and other communications
to the Administrative Agent and the L/C Issuer pursuant to Article II shall not
be effective until actually received by such Person. In no event shall a
voicemail message be effective as a notice, communication or confirmation
hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be
transmitted and/or signed by facsimile. The effectiveness of any such documents
and signatures shall, subject to applicable Law, have the same force and effect
as manually-signed originals and shall be binding on the Company, the
Administrative Agent and the Lenders. The Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and intranet
websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Notice of Borrowing or Notice of Conversion/Continuation) purportedly
given by or on behalf of the Company even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. The Company shall
indemnify each Agent-Related Person and each Lender from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Company. All telephonic notices
to and other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Company agrees (a) to pay or
reimburse the Administrative Agent for all reasonable costs and expenses
incurred in connection with the development, preparation, negotiation and
execution of this Agreement and the other Loan Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all reasonable Attorney Costs, and
the initial syndication of the revolving credit facility evidenced by this
Agreement and the other Loan Documents, and (b) to pay or reimburse the
Administrative Agent, the L/C Issuer, and each Lender for all costs and expenses
incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any "workout"
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs. The foregoing costs and expenses shall include all search, filing,
recording, title insurance and appraisal charges and fees and taxes related
thereto, and other out-of-pocket expenses incurred by the Administrative Agent
and the cost of independent public accountants and other outside experts
reasonably retained by the Administrative Agent or any Lender. All amounts due
under this Section 10.04 shall be payable within twenty Business Days after
demand therefor. The agreements in this Section shall survive the termination of
the Aggregate Commitments and repayment of all other Obligations.
10.05 INDEMNIFICATION BY THE COMPANY. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, members, partners, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Party") from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including reasonable
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Indemnified Party in any
way relating to or arising out of or in connection with (a) the execution,
delivery, enforcement, performance or administration of any Loan Document or any
other agreement, letter or instrument delivered in connection with the
transactions contemplated thereby or the consummation of the transactions
contemplated thereby; provided, however, that with respect to any Attorney Costs
relating to such enforcement, the reasonable standard shall not apply, (b) any
Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the L/C Issuer to honor a demand for payment
under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), (c) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory
(including any investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation or proceeding) and regardless of
whether any Indemnified Party is a party thereto, or (d) the initial syndication
of the revolving credit facility evidenced by this Agreement and the other Loan
Documents (all the foregoing, collectively, the "Indemnified Liabilities");
provided that such indemnity shall not, as to any Indemnified Party, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnified Party. No Indemnified Party shall be liable for
any damages arising from the use by others of any information or other materials
obtained through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnified Party have any
liability for any indirect or consequential damages relating to this Agreement
or any other Loan Document or arising out of its activities in connection
herewith or therewith (whether before or after the Closing Date). All amounts
due under this Section 10.05 shall be payable within ten Business Days after
demand therefor. The agreements in this Section shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.
10.06 MARSHALLING; PAYMENTS SET ASIDE. Neither the Administrative Agent nor any
Lender nor the L/C Issuer shall be under any obligation to xxxxxxxx assets in
favor of the Company or any other Person or against or in payment of any or all
of the Obligations. To the extent that any payment by or on behalf of the
Company is made to the Administrative Agent or any Lender, or the Administrative
Agent or any Lender exercises its right of set-off, and such payment or the
proceeds of such set-off or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Administrative Agent or such
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
10.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Company may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Indemnified Parties) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in L/C Obligations) at the time owing to it);
provided that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitment and the Loans at the time owing to
it or in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund (as defined in subsection (g) of this Section) with respect to a
Lender, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) subject to each such assignment, determined as of
the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000 unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Company otherwise consents (each
such consent not to be unreasonably withheld or delayed); (ii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement with respect to
the Loans or the Commitment assigned; (iii) any assignment of a Commitment must
be approved by the Administrative Agent and the L/C Issuer unless the Person
that is the proposed assignee is itself a Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of
$3,500. Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.03, 3.04, 3.06, 10.04 and
10.05 with respect to facts and circumstances occurring prior to the effective
date of such assignment). Upon request, the Company (at its expense) shall
execute and deliver a Note to the assignee Lender. Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an agent of the
Company, shall maintain at the Administrative Agent's Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, absent manifest error, and the Company, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Company and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to, the
Company or the Administrative Agent, sell participations to any Person (other
than a natural person or the Company or any of the Company's Affiliates or
Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participations in L/C
Obligations) owing to it); provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Company, the Administrative 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 Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 10.01
that directly affects such Participant. Subject to subsection (e) of this
Section, the Company agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.03, 3.04 and 3.06 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to subsection (b)
of this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.14 as though it were a
Lender.
(e) A Participant shall not be entitled to receive any greater payment under
Section 3.01, 3.03 or 3.06 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Company's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Company
is notified of the participation sold to such Participant and such Participant
agrees to comply with Section 10.15 as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement (including under its Note, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent and the L/C Issuer, and (ii) unless an
Event of Default has occurred and is continuing, the Company (each such approval
not to be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, "Eligible Assignee" shall not include the Company or any of the
Company's Affiliates or Subsidiaries.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, if, at any time,
Bank of America (i) becomes a Non-Consenting Lender or (ii) assigns all of its
Commitment and Loans pursuant to Section 10.07(b), Bank of America may resign as
L/C Issuer upon no less than 30 days' notice to the Company and the Lenders
prior to any Maturity Date. In the event of any such resignation as L/C Issuer
pursuant to this subsection (h), the Company shall be entitled to appoint from
among the Lenders a successor L/C Issuer hereunder. The resignation of the L/C
Issuer pursuant to this subsection (h) shall be effective on the earlier of (i)
when the successor L/C Issuer has accepted to act as the successor L/C Issuer or
(ii) the Maturity Date then in effect when such notice of resignation was given
by the L/C Issuer. If Bank of America resigns as L/C Issuer and, if as of such
Maturity Date, any Letter of Credit issued by Bank of America may for any reason
remain outstanding and partially or wholly undrawn, the Company shall
immediately Cash Collateralize the then Effective Amount of all L/C Obligations
in respect of such Letters of Credit issued by Bank of America (in an amount
equal to such Effective Amount determined as of the date of such Maturity Date).
In addition, if Bank of America resigns as L/C Issuer, it shall retain all the
rights and obligations of the L/C Issuer hereunder with respect to all Letters
of Credit outstanding as of the effective date of its resignation as L/C Issuer
and all L/C Obligations with respect thereto (including the right to require the
Lenders to make Base Rate Loans or fund risk participations in Unreimbursed
Amounts pursuant to Section 2.16(c)).
10.08 CONFIDENTIALITY. Each of the Administrative Agent and the Lenders agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates' directors,
officers, members, partners, employees and agents, including accountants, legal
counsel and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to the
extent requested by any regulatory authority; (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process; (d)
to any other party to this Agreement; (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any Eligible
Assignee of or Participant in, or any prospective Eligible Assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii)
any direct or indirect contractual counterparty or prospective counterparty (or
such contractual counterparty's or prospective counterparty's professional
advisor) to any credit derivative transaction relating to obligations of the
Loan Parties; (g) with the consent of the Company; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than the Company; or (i) to the
National Association of Insurance Commissioners or any other similar
organization. In addition, the Administrative Agent and the Lenders may disclose
the existence of this Agreement and information about this Agreement to market
data collectors, similar service providers to the lending industry, and service
providers to the Administrative Agent and the Lenders in connection with the
administration and management of this Agreement, the other Loan Documents, the
Commitments, and the Credit Extensions. For the purposes of this Section,
"Information" means all information received from the Company relating to the
Company or its business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Company; provided that, in the case of information received
from the Company after the date hereof, such information is clearly identified
in writing at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
10.09 SET-OFF. In addition to any rights and remedies of the Lenders provided by
law, upon the occurrence and during the continuance of any Event of Default,
each Lender is authorized at any time and from time to time, without prior
notice to the Company, any such notice being waived by the Company to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the Company against any and all Obligations owing to such Lender
hereunder or under any other Loan Document, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Document and although
such Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or indebtedness. Each Lender
agrees promptly to notify the Company and the Administrative Agent after any
such set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.
10.10 INTEREST RATE LIMITATION. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Company. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
10.11 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.12 INTEGRATION. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
10.14 SEVERABILITY. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.15 TAX FORMS.
(a) Each Lender that is not a "United States person" within the meaning of
Section 7701(a)(30) of the Code (a "Foreign Lender") shall deliver to the
Administrative Agent (which shall forward a copy to the Company), prior to
receipt of any payment subject to withholding under the Code (or upon accepting
an assignment of an interest herein), two duly signed completed copies of either
IRS Form W-8BEN or any successor thereto (relating to such Foreign Lender and
entitling it to an exemption from, or reduction of, withholding tax on all
payments to be made to such Foreign Lender by the Company pursuant to this
Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments
to be made to such Foreign Lender by the Company pursuant to this Agreement) or
such other evidence satisfactory to the Company and the Administrative Agent
that such Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including, in the case of a Foreign Lender claiming exemption
from withholding tax pursuant to Section 871(h) or Section 881(c) of the Code,
such certificates or other documentation as are satisfactory to the Company and
the Administrative Agent to establish the exemption under such sections.
Thereafter and from time to time (including on or before the expiration of
previously delivered forms), each such Foreign Lender shall (A) promptly submit
to the Administrative Agent (which shall forward a copy to the Company) such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to the
Company and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by the Company pursuant to this Agreement, or (B)
promptly notify the Administrative Agent (which shall in turn notify the
Company) of any change in circumstances which would modify or render invalid any
claimed exemption or reduction.
(b) Each Foreign Lender, to the extent it does not act or ceases to act for its
own account with respect to any portion of any sums paid or payable to such
Lender under any of the Loan Documents (for example, in the case of a typical
participation by such Lender), shall deliver to the Administrative Agent (which
shall forward a copy to the Company) on the date when such Foreign Lender ceases
to act for its own account with respect to any portion of any such sums paid or
payable, and at such other times as may be necessary in the determination of the
Administrative Agent (in the reasonable exercise of its discretion), (A) two
duly signed completed copies of the forms or statements required to be provided
by such Lender as set forth above, to establish the portion of any such sums
paid or payable with respect to which such Lender acts for its own account that
is not subject to U.S. withholding tax, and (B) two duly signed completed copies
of IRS Form W-8IMY (or any successor thereto), together with any information
such Lender chooses to transmit with such form, and any other certificate or
statement of exemption or reduction required under the Code, to establish that
such Lender is not acting for its own account with respect to a portion of any
such sums payable to such Lender and to establish the proper tax treatment of
amounts paid to such Lender.
(c) The Company shall not be required to pay any additional amount to any
Foreign Lender under Section 3.01 (A) with respect to and only to the extent of
any deduction or withholding required pursuant to Section 3.01(a) that is
applicable as of the date hereof (in the case of each Lender listed on the
signature pages hereof) or the date of the Assignment and Assumption pursuant to
which such Lender became a Lender (in the case of each other Lender), in respect
of payments to such Lender, or (B) to the extent the obligation to pay such
additional amounts would not have arisen but for such Lender's failure to comply
with the foregoing provisions for the submission of documentation set forth in
Sections 10.15(a) and (b); provided that if such Lender shall have satisfied the
requirement of Sections 10.15(a), (b), (c) and (d) on the date such Lender
became a Lender or ceased to act for its own account with respect to any payment
under any of the Loan Documents, nothing in Sections 10.15(a), (b), (c) and (d)
shall relieve the Company of its obligation to pay any amounts pursuant to
Section 3.01 in the event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender or other Person for the
account of which such Lender receives any sums payable under any of the Loan
Documents is not subject to withholding or is subject to withholding at a
reduced rate.
(d) To the extent that the Company has not withheld such Taxes pursuant to
Section 3.01(a), the Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of the
Loan Documents with respect to which the Company is not required to pay
additional amounts under Sections 10.15(a), (b), (c) and (d) and, if the
Administrative Agent so withholds such such Taxes, then the Administrative
Agent, to the extent required by applicable Law, pay such amounts to the
relevant Governmental Authority in accordance with applicable Law.
(e) Upon the request of the Administrative Agent, each Lender that is a "United
States person" within the meaning of Section 7701(a)(30) of the Code shall
deliver to the Administrative Agent (which shall forward a copy to the Company)
two duly signed completed copies of IRS Form W-9. If such Lender fails to
deliver such forms, then the Administrative Agent may withhold from any interest
payment to such Lender an amount equivalent to the applicable back-up
withholding tax imposed by the Code, without reduction. In addition, the
Administrative Agent shall request such forms at the reasonable request of the
Company.
(f) If any Governmental Authority asserts that the Administrative Agent did not
properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender shall
indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
reasonable Attorney Costs) of the Administrative Agent. The obligation of the
Lenders under this Section shall survive the termination of the Aggregate
Commitments, repayment of all other Obligations hereunder and the resignation of
the Administrative Agent.
10.16 GOVERNING LAW; JURISDICTION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF CALIFORNIA; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH
LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA SITTING IN
SAN FRANCISCO OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF SUCH STATE,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY, THE ADMINISTRATIVE
Agent AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE COMPANY, THE ADMINISTRATIVE
Agent AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.
THE COMPANY, THE ADMINISTRATIVE Agent AND EACH LENDER WAIVES PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.
(c) Nothing contained in this Section shall override any contrary provision
contained in any Specified Swap Contract.
10.17 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.18 VERIFICATION OF RECEIVABLES. The Administrative Agent (at the request of
the Required Lenders) may at any time, either orally or in writing, request
confirmation from any Receivable Debtor of the current amount and status of the
Receivable upon which such Receivable Debtor is obligated.
[Signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the date first above written.
THE PACIFIC LUMBER COMPANY
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Vice President-Finance and Administration
BANK OF AMERICA, N.A., as Administrative Agent
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
BANK OF AMERICA, N.A., as a Lender and
as L/C Issuer
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
