CREDIT AGREEMENT
$70,000,000.00
among
OUTSOURCING SERVICES GROUP, INC.,
As Guarantor
AEROSOL SERVICES COMPANY, INC., AND
PIEDMONT LABORATORIES, INC.,TOGETHER WITH
SUBSIDIARIES OF OSG WHICH BECOME
ADDITIONAL BORROWERS HEREUNDER,
as Borrowers,
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 11.8 HEREOF,
as Lenders,
BT COMMERCIAL CORPORATION,
as Agent.
and
XXXXXX FINANCIAL, INC.,
as Co-Agent
DATED AS OF JANUARY 8, 1998
TABLE OF CONTENTS
ANNEXES
Annex I - List of Lenders and Commitment Amounts
EXHIBITS
Exhibit A - Form of Revolving Note
Exhibit B - Form of Borrower Security Agreement
Exhibit C - Form of Lock Box Agreement and Blocked Account
Agreement
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Notice of Borrowing
Exhibit G - Form of Assignment and Assumption Agreement
Exhibit H - Form of Collateral Access Agreement
Exhibit I - Forms of Joinder Agreement(s)
Exhibit J - Form of Guarantor Security Agreement
Exhibit K - Form of OSG Guarantee
Exhibit L - Form of Borrower Guarantee
Exhibit M - Form of Subsidiary Guarantee
Exhibit N - Form of Pledge Agreement
Exhibit O - Form of Intercompany Note
Exhibit P - Form of Letter of Credit Request
SCHEDULES
Schedule A - Closing Document List
Schedule B - Disclosure Schedule
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is entered into as of
January 8, 1998, among OUTSOURCING SERVICES GROUP, INC., a Delaware
corporation, as a Guarantor ("OSG"), its wholly-owned Subsidiaries AEROSOL
SERVICES COMPANY, INC., a California corporation ("ASC"), and PIEDMONT
LABORATORIES, INC., a Georgia corporation ("PLI"), as the initial Borrowers
and, following consummation of the Kolmar Acquisition, KOLMAR LABORATORIES,
INC., a Delaware corporation ("Kolmar"), as an additional Borrower, each
financial institution identified on Annex I (together with its successors
and assigns, a "Lender"), and BT COMMERCIAL CORPORATION acting as agent for
the Lenders and the Issuing Bank (the "Agent") and XXXXXX FINANCIAL, INC.
acting as co-agent (the "Co-Agent").
W I T N E S S E T H
WHEREAS, OSG owns all of the issued and outstanding capital
stock of ASC and PLI;
WHEREAS, OSG has entered into that certain Share and Asset
Purchase Agreement dated October 28, 1997, among CCL Industries, Inc.
("CCL"), CCL Industries Corporation and OSG (the "Purchase Agreement")
pursuant to which OSG will purchase all of the issued and outstanding
capital stock of Kolmar and certain assets of CCL (the "Kolmar
Acquisition") on the terms set forth therein;
WHEREAS, in order to fund the purchase price for the Kolmar
Acquisition, OSG will borrow at least $70,000,000 (the "Bridge Loan") and
certain existing shareholders of OSG will purchase at least $20,900,000 of
additional common stock of OSG;
WHEREAS, OSG, ASC and PLI have requested that the Lenders make
loans and other financial accommodations available to Borrowers to
refinance certain Indebtedness of OSG, ASC and PLI and for other working
capital and corporate purposes of the Borrowers as provided herein,
including future acquisitions, and that, in connection therewith, the Agent
act as agent for the Lenders;
WHEREAS, OSG, ASC and PLI have requested that additional
Subsidiaries of OSG, including Kolmar, may become Borrowers or Borrower
Parties hereunder; and
WHEREAS, the Lenders are willing to make loans and other
financial accommodations available to the Borrowers, including future
Subsidiaries of OSG, and the Agent is willing to act as agent in connection
therewith, in each case on the terms and subject to the conditions set
forth herein;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I.
DEFINITIONS.
1.1 General Definitions.
Accounts means (i) with respect to any Borrower, as defined in the Security
Agreement, and (ii) with respect to any Guarantor, as defined in the
Guarantor Security Agreement.
Acquisition means (i) the acquisition by any Credit Party of all of the
issued and outstanding capital stock or other equity interests of a Person,
(ii) the acquisition by any Credit Party of all or substantially all of the
assets of a Person or a line of business of a Person or (iii) the merger or
consolidation of any Credit Party with a Person other than a Person that
was a Subsidiary of such Credit Party immediately prior to such merger.
Acquisition Documents means, (i) as to the Kolmar Acquisition, the Purchase
Agreement (including all schedules and exhibits thereto) and all other
agreements or instruments entered into by any Credit Party pursuant to or
in connection therewith or in connection with the Kolmar Acquisition, and
(ii) as to any other Permitted Acquisition, the stock or asset purchase
agreement (including all schedules and exhibits thereto) and all other
agreements or instruments entered into by any Credit Party pursuant to or
in connection therewith or with the Permitted Acquisition, in each case as
amended, supplemented or otherwise modified from time to time to the extent
not prohibited by the terms of any Credit Document.
Adjusted Eurodollar Rate means, with respect to each Interest Period for
any Eurodollar Rate Loan, the rate obtained by dividing (i) the Eurodollar
Rate for such Interest Period by (ii) a percentage equal to 1 minus the
stated maximum rate (stated as a decimal) of all reserves, if any, required
to be maintained against "Eurocurrency liabilities" as specified in
Regulation D of the Board of Governors of the Federal Reserve System (or
against any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Rate Loans is determined
or any category of extensions of credit or other assets which includes
loans by a non-United States office of any Lender to United States
residents).
Affiliate of a Person means another Person who directly or indirectly
controls, is controlled by, is under common control with or is a director
or officer of such Person. For purposes of this definition, "control"
means the possession, directly or indirectly, of the power to vote ten
percent (10%) or more of the securities having ordinary voting power for
the election of directors or the direct or indirect power to direct the
management and policies of a business; provided, however, that entities
controlled by HVP shall not be Affiliates of the Credit Parties within the
meaning of this definition based upon HVP's direct or indirect ownership of
equity interests or voting stock of OSG on the Closing Date.
Agent is defined in the preamble to this Credit Agreement, and shall
include any successor appointed pursuant to Section 10.8.
Agent Advance is defined in Section 2.2.
Applicable Eurodollar Rate Margin means 2.25% per annum; provided that if
the Funded Debt Ratio for the applicable period ending with the then most
recently ended fiscal quarter (as shown on the quarterly Compliance
Certificate delivered pursuant to Section 7.1) is within the ranges set out
below and no Default or Event of Default exists as of the end of such
fiscal quarter (as shown on such Compliance Certificate or otherwise), the
Applicable Eurodollar Rate Margin shall be the per annum rate set out
opposite the applicable range below:
Funded Debt Ratio Applicable Eurodollar Rate Margin
----------------- ----------------------------------
less than or equal to 3.75:1.0
but greater than 3.25:1.0 2.0%
less than or equal to 3.25:1.0
but greater than 2.75:1.0 1.75%
less than or equal to 2.75:1.0 1.5%
In the event of the delivery of a Compliance Certificate showing an
increase or decrease in the Funded Debt Ratio which requires a change in
the Applicable Eurodollar Rate Margin, the change in the Applicable
Eurodollar Rate Margin shall be effective from the first day of the
calendar month immediately following receipt of the Compliance Certificate
(provided that the Compliance Certificate is received by the Agent no later
than 10:00 A.M. Los Angeles time at least one (1) Business Day prior to the
first of such calendar month) until the next such date on which the
Applicable Eurodollar Margin Rate is subject to change following the
delivery of (or failure to deliver) a Compliance Certificate showing an
increase or decrease in the Funded Debt Ratio which requires a change in
the Applicable Eurodollar Rate Margin. The failure to deliver any
Compliance Certificate by the date required hereunder (after giving effect
to any applicable grace period) shall automatically cause the Applicable
Eurodollar Rate Margin to be the maximum per annum rate described above,
effective as of the first day of the calendar month immediately following
the date on which the delivery of the Compliance Certificate was otherwise
required.
Applicable Lending Office means, with respect to each Lender, such Lender's
Eurodollar Lending Office in the case of a Eurodollar Rate Loan, and such
Lender's Domestic Lending Office in the case of a Prime Rate Loan.
Applicable Prime Rate Margin means 0.75% per annum; provided that if the
Funded Debt Ratio for the applicable period ending with the then most
recent ended fiscal quarter (as shown on the quarterly Compliance
Certificate delivered pursuant to Section 7.1) is within the ranges set out
below and no Default or Event of Default exists as of the end of such
fiscal quarter (as shown on such Compliance Certificate or otherwise), the
Applicable Prime Rate Margin shall be the per annum rate set out opposite
the applicable range below:
Funded Debt Ratio Applicable Prime Rate Margin
----------------- ----------------------------
less than or equal to 3.75:1.0
but greater than 3.25:1.0 0.50%
less than or equal to 3.25:1.0
but greater than 2.75:1.0 0.25%
less than or equal to 2.75:1.0 0%
In the event of the delivery of a Compliance Certificate showing an
increase or decrease in the Funded Debt Ratio which requires a change in
the Applicable Prime Rate Margin, the change in the Applicable Prime Rate
Margin shall be effective from the first day of the calendar month
immediately following receipt of the Compliance Certificate (provided that
the Compliance Certificate is received by the Agent no later than 10:00
A.M. Los Angeles time at least one (1) Business Day prior to the first day
of such calendar month) until the next such date on which the Applicable
Prime Rate Margin is subject to change following the delivery of (or
failure to deliver) a Compliance Certificate showing an increase or
decrease in the Funded Debt Ratio which requires a change in the Applicable
Prime Rate Margin. The failure to deliver any Compliance Certificate by
the date required hereunder (after giving effect to any applicable grace
period) shall automatically cause the Applicable Prime Rate Margin to be
the maximum per annum rate described above, effective as of the first day
of the calendar month immediately following the date on which the delivery
of the Compliance Certificate was otherwise required.
ASC is defined in the preamble to this Credit Agreement.
Assignment and Assumption Agreement is defined in Section 11.8.
Auditors means a nationally recognized firm of independent public
accountants selected by the Borrowers and satisfactory to the Agent in its
sole discretion. For purposes of this Credit Agreement, the firm of
Deloitte & Touche LLP or KPMG Peat Marwick shall be deemed to be
satisfactory to the Agent.
Bankruptcy Code means Title 11 of the U.S. Code (11 U.S.C. sections 101 et
seq.), as amended from time to time, and any successor statute.
Benefit Plan means a "defined benefit plan" (as defined in Section 3(35) of
ERISA) for which OSG, any Subsidiary of OSG or any ERISA Affiliate has been
an "employer" (as defined in Section 3(5) of ERISA) within the past six
years.
Blocked Account Agreement is defined in Section 4.11.
Borrower Guarantee means the Borrower Guarantee and Contribution Agreement
executed by the Borrowers in favor of the Agent, the Lenders and the
Issuing Bank pursuant to Section 5.1(a), substantially in the form of
Exhibit L.
Borrower Party means any of the Borrowers, Kolmar Canada and any Foreign
Subsidiary of a Borrower designated as a "Borrower Party" in accordance
with Sections 8.17 or Section 8.20 hereof as to which all conditions set
forth in such Sections have been met.
Borrower Security Agreement means the Security Agreement executed by the
Borrowers pursuant to Section 5.1(a) substantially in the form of Exhibit
B.
Borrowers means (i) prior to consummation of the Kolmar Acquisition, ASC
and PLI, collectively, (ii) upon consummation of the Kolmar Acquisition,
ASC, PLI and Kolmar, collectively, and (iii) upon consummation of a
Permitted Acquisition, any Subsidiary of OSG designated as a "Borrower" in
accordance with Section 8.20 hereof and as to which all conditions set
forth in such Section 8.20 have been met, collectively with the other
Persons then Borrowers hereunder.
Borrowing means a borrowing consisting of Revolving Loans of the same Type
made, continued or converted on the same day.
Borrowing Base means, as to each Borrower Party, the sum of:
(i) up to eighty-five percent (85%) of its Eligible
Accounts Receivable, plus
(ii) the lesser of $20,000,000.00 and up to sixty percent
(60%) of its Eligible Inventory, plus
(iii) the lesser of $16,500,000 and
(A) from the Closing Date to and including December
31, 1999 the sum of (x) up to sixty-five percent (65%)
of the Equipment Value of its Eligible Equipment and
(y) up to thirty percent (30%) of the Real Estate
Value of its Eligible Real Property; and
(B) in 2000, the sum of (x) up to fifty-five percent
(55%) of the Equipment Value of its Eligible Equipment
and (y) up to twenty percent (20%) of the Real Estate
Value of its Eligible Real Property ; and
(C) in 2001, the sum of (x) up to forty-five percent
(45%) of the Equipment Value of its Eligible Equipment
and (y) up to ten percent (10%) of the Real Estate
Value of its Eligible Real Property; and
(D) thereafter, up to thirty-five percent (35%) of
the Equipment Value of its Eligible Equipment; minus
(iv) the aggregate amount of reserves, if any, established
by the Agent under Section 2.1(b).
The Borrowing Base of each Borrower shall be determined for
such Borrower and each of its Subsidiaries which are Borrower Parties (but
not Borrowers).
Borrowing Base Certificate means a certificate of Borrowers showing the
Borrowing Base of each Borrower Party provided under Section 5.1 or Section
7.2 and substantially in the form of Exhibit E.
Bridge Loan is defined in the preamble to this Credit Agreement, and shall
include any "Term Loan" made in accordance with the terms of the Bridge
Loan Documents in a principal amount not to exceed the then outstanding
principal amount of the Bridge Loan.
Bridge Loan Documents means the Senior Subordinated Credit Agreement dated
as of the Closing Date among OSG, certain of its Subsidiaries as
guarantors, the lenders named therein and Bankers Trust Company, as Agent
pursuant to which the Bridge Loan is to be made, which shall contain such
terms and conditions as approved by the Agent and the Majority Lenders, as
amended, supplemented or otherwise modified from time to time to the extent
permitted under Section 8.11(c) hereof.
Business Day means any day that is not a Saturday, Sunday or a day on which
commercial banks in Los Angeles, California or New York, New York are
required or permitted by law to be closed. When used in connection with
Eurodollar Rate Loans, this definition will also exclude any day on which
commercial banks are not open for dealing in U.S. dollar deposits in the
London (England, U.K.) interbank market.
Capital Expenditures for a period means, the sum of all expenditures
capitalized for financial statement purposes in accordance with GAAP
(whether payable in cash or other property or accrued as a liability),
including the capitalized portion of Capital Leases and that portion of
Investments allocable to property, plant or equipment. Capital
Expenditures shall exclude proceeds of a Casualty Loss applied to the
repair or replacement of the property affected by the Casualty Loss.
Capital Lease means, as to any Person, any lease of property, whether real,
personal or mixed, under which such Person is the lessee or sublessee
which, in conformity with GAAP, should be accounted for as a capital lease
on such Person's balance sheet.
Cash Equivalents means any of the following, so long as the same are
maintained in accounts in which the Agent has a perfected first priority
security interest and, to the extent constituting Investment Property,
Control: (i) securities issued, guarantied or insured by the United States
or any of its agencies and having maturities of not more than one year;
(ii) certificates of deposit having maturities of not more than one year
issued by the Agent, any Lender or by a U.S. federal or state chartered
commercial bank of recognized standing whose capital and unimpaired surplus
is in excess of $200,000,000 and whose short-term commercial paper rating,
or that of its parent holding company, is at least A-1 or the equivalent by
Standard & Poor's Rating Group, a division of McGraw Hill, Inc. ("S&P") and
at least P-1 or the equivalent by Xxxxx'x Investors Services, Inc.; and
(iii) commercial paper maturing no more than one (1) year from the date
issued and, at the time of acquisition, having a rating of at least A-1
from S&P or at least P-1 from Xxxxx'x Investors Services, Inc.
Casualty Loss means (i) the loss, damage, or destruction of any asset owned
or used by any Credit Party, (ii) the condemnation, confiscation, or other
taking, in whole or in part, of any such asset, or (iii) the diminishment
of such asset so as to render use for its intended purpose impracticable or
unreasonable.
Change of Control means the occurrence of one or more of the following
events:
(i) G+M and HVP or entities controlled by or under
common control with such Persons shall cease to have the power, by
ownership of stock, pursuant to the Stockholder Agreement or
otherwise, collectively, to elect a majority of the board of
directors of OSG; or
(ii) any "person" or "group" (as those terms are defined
in the Securities Exchange Act of 1934, in effect on the date
hereof) other than G + M or HVP or entities controlled by or under
common control with such Persons shall acquire or become the
beneficial owner of shares representing 25% or more of the shares
of OSG's stock having the power to elect directors; or
(iii) OSG shall cease to be the legal and beneficial owner,
directly or indirectly, of all of the issued and outstanding
capital stock of any Borrower; or
(iv) a "change of control" occurs within the meaning of
such term (or similar term) in any Subordinated Debt or the
Governing Documents of OSG.
Closing Date means, the date, if any, prior to January 31, 1998 on which
the conditions set forth in Sections 5.1 and 5.2 have been satisfied or
waived and the initial Revolving Loans are made.
Closing Document List is defined in Section 5.1.
Co-Agent is defined in the preamble to this Credit Agreement.
Code is defined in Section 1.3.
Collateral means, collectively, all property and interests in property,
real, personal or mixed, identified as security for the Obligations under
the Collateral Documents.
Collateral Access Agreement means any landlord waiver, mortgagee waiver,
bailee letter or any similar acknowledgement agreement of any warehouseman
or processor in possession of Inventory, substantially in the form of
Exhibit H or such other form as is approved by the Agent.
Collateral Documents means, collectively, the Borrower Security Agreement,
the Guarantor Security Agreement, the Intellectual Property Security
Agreements, all Pledge Agreements, all Pledge Amendments, all Joinder
Agreements, all Mortgages, all Lockbox Agreements, all Blocked Account
Agreements and all other contracts, instruments and other documents
pursuant to which Liens or Control are now or hereafter granted to the
Agent to secure the Obligations.
Collection Account is defined in Section 4.11.
Collections means all cash, funds, checks, notes, instruments and any other
form of remittance tendered by account debtors in payment of Accounts.
Commitment of a Lender means its commitment to make Revolving Loans and to
participate in Letters of Credit, up to the amount set forth opposite its
name on Annex I or in the applicable Assignment and Assumption Agreement,
as such amount may be reduced from time to time.
Compliance Certificate means a certificate delivered by Borrowers pursuant
to Section 7.1 substantially in the form attached hereto as Exhibit D,
including a calculation in reasonable detail of compliance with the
covenants set forth in Article 8.
Concentration Account is defined in Section 4.11.
Contingent Obligation means, without duplication, any direct, indirect,
contingent or non-contingent guaranty or obligation for the Indebtedness of
another, except endorsements in the ordinary course of business.
Contractual Obligation, as applied to any Person, means any provision of
any securities issued by that Person or any indenture, mortgage, deed of
trust, security agreement, pledge agreement, guaranty, lease, contract,
undertaking, agreement or instrument to which that Person is a party or by
which it or any of its properties is bound, or to which it or any of its
properties is subject.
Control means "control" over Investment Property within the meaning of
Section 8-106 of the Code.
Credit Agreement means this Credit Agreement, as it may be supplemented,
amended, extended, amended and restated or otherwise modified from time to
time.
Credit Documents means, collectively, this Credit Agreement, the Revolving
Notes, the Letters of Credit, each Guarantee, each Intercompany Note, each
Joinder Agreement, each of the Collateral Documents and all other
documents, agreements, instruments, opinions and certificates now or
hereafter executed and delivered in connection herewith or therewith, as
modified, amended, extended, restated or supplemented from time to time.
Credit Parties means, collectively, OSG, the Borrowers, all Subsidiaries of
OSG and any other parties to the Credit Documents (except the Lenders, the
Agent, the Co-Agent and issuers of opinions).
Default means an event, condition or default which with the giving of
notice, the passage of time or both would be an Event of Default.
Defaulting Lender is defined in Section 2.8.
Disbursement Account means, as to each Borrower, its operating account
maintained with the Disbursement Account Bank.
Disbursement Account Bank means Bankers Trust (Delaware).
Dollars or $ means United States Dollars.
Domestic Lending Office means, with respect to any Lender, the office of
such Lender specified as its "Domestic Lending Office" opposite its name on
Annex I hereto or in the applicable Assignment and Assumption Agreement, as
such annex may be amended from time to time.
Domestic Subsidiary means each Subsidiary of OSG organized under the laws
of the United States or any state thereof.
EBITDA for a period means the consolidated net income (loss) of OSG and its
Subsidiaries for the period (i) plus all Interest Expense, income and
franchise tax expense, depreciation and amortization (including
amortization of any goodwill or other intangibles) for the period, (ii)
minus gains or plus losses attributable to any fixed asset sales in the
period, (iii) plus or minus any other non-cash charges which have been
subtracted or added in calculating consolidated net income for the period,
(iv) minus extraordinary gains or plus extraordinary losses, net of taxes
and (v) plus any expenses incurred in connection with the Transactions on
or prior to the Closing Date (excluding those expenses which have been
capitalized) paid in such period.
Eligible Accounts Receivable means, as to any Borrower Party, Accounts of
such Borrower Party deemed by the Agent in the exercise of its Permitted
Discretion to be eligible for inclusion in the calculation of the Borrowing
Base. In determining the amount to be so included, the face amount of such
Accounts shall be reduced by the amount of all returns, discounts,
deductions, claims, credits, charges, or other allowances. Whenever
proceeds of a Revolving Loan are to be used by a Borrower, immediately and
directly, to purchase Accounts in any Permitted Acquisition or to acquire a
Person which will be a Borrower Party in accordance with Section 8.20 then,
subject to (i) such arrangements as the Agent may reasonably request to
ensure that the proceeds are so used, (ii) the Borrower's compliance with
Section 8.20 and (iii) the satisfaction of all other conditions of
eligibility, such Accounts shall be added to Eligible Accounts for purposes
of determining the Borrowing Base of such Borrower. Unless otherwise
approved in writing by the Agent, an Account shall not be an Eligible
Account Receivable if (without duplication):
(a) it arises out of a sale made by the Borrower Party to an
Affiliate; or
(b) it is unpaid more than 90 days after the original date of
invoice; or
(c) it is owed by an account debtor as to which fifty percent
(50%) or more of all Accounts owed by that account debtor (and its
Affiliates) are ineligible under clause (b) above; or
(d) when aggregated with all other Accounts of an account
debtor, the Account exceeds fifteen percent (15%), or thirty percent (30%)
for Sebastian International, in face value of all Accounts of all Borrower
Parties then outstanding, but only to the extent of such excess, unless
supported by an irrevocable letter of credit satisfactory to the Agent (as
to form, substance and issuer) and assigned to and directly drawable by the
Agent; or
(e) the account debtor for the Account is a creditor of the
Borrower Party, has asserted a right of setoff, has disputed its liability
or made any claim with respect to the Account or any other Account which
has not been resolved, but only to the extent of the amount owed by the
Borrower Party to the account debtor, the amount of such actual or asserted
right of setoff, or the amount of such dispute or claim, as the case may
be; or
(f) the account debtor is (or its assets are) the subject of
an Insolvency Event; or
(g) the Account is not payable in Dollars or the account
debtor for the Account is located outside the continental United States or
Canada, unless the Account is supported by an irrevocable letter of credit
satisfactory to the Agent (as to form, substance and issuer) and assigned
to and directly drawable by the Agent; or
(h) the sale to the account debtor is on a xxxx-and-hold,
guarantied sale, sale-and-return, sale on approval or consignment basis or
made pursuant to any other written agreement providing for repurchase or
return; provided that Accounts in an aggregate amount of up to $3,000,000
for all Borrower Parties may be Eligible Accounts Receivable hereunder if
the goods have been completed and stored at the direction of the account
debtor, which has been confirmed in writing; or
(i) the Agent reasonably determines in good faith by its own
credit analysis that collection of the Account is uncertain or the Account
may not be paid; or
(j) the account debtor is the United States of America or
Canada or any department, agency or instrumentality thereof, unless the
Borrower Party duly assigns its rights to payment of such Account to the
Agent pursuant, in the case of the United States of America, to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. sections 3727
et seq.) and, in the case of Canada, pursuant to any corresponding
Requirements of Law; or
(k) the goods giving rise to such Account have not been
shipped and delivered to, or as directed by, and accepted by the account
debtor, the services giving rise to such Account have not been performed
and accepted, or the Account otherwise does not represent a final sale; or
(l) the Account does not comply with all Requirements of Law,
including without limitation the Federal Consumer Credit Protection Act,
the Federal Truth in Lending Act and Regulation Z of the Board of Governors
of the Federal Reserve System; or
(m) the Account is subject to any adverse security deposit,
progress payment or other similar advance made by or for the benefit of the
applicable account debtor, but only to the extent of such security deposit,
progress payment or other similar advance; or
(n) the Account is not subject to a valid and perfected first
priority Lien in favor of the Agent or does not otherwise conform to the
representations and warranties contained in the Credit Documents.
Eligible Equipment means, as to any Borrower Party, Equipment owned by such
Borrower Party deemed by the Agent in the exercise of its Permitted
Discretion to be eligible for inclusion in the Borrowing Base. Whenever
proceeds of a Revolving Loan are to be used by a Borrower, immediately and
directly, to purchase Equipment (including, without limitation, in any
Permitted Acquisition or to acquire a Person which will be a Borrower Party
in accordance with Section 8.20) then, subject to (i) such arrangements as
the Agent may reasonably request to ensure that the proceeds are so used,
(ii) compliance by the Borrower with Section 8.20 to the extent applicable,
and (iii) the satisfaction of all other conditions of eligibility, such
Equipment shall be added to Eligible Equipment for purposes of determining
the Borrowing Base of such Borrower. Unless otherwise approved in writing
by the Agent, an item of Equipment shall not be Eligible Equipment if
(without duplication):
(a) it is not owned solely by such Borrower Party or such
Borrower Party does not have good, valid and marketable title thereto; or
(b) it is not located in the United States or Ontario, Canada;
or
(c) it is not located on property owned by such Borrower
Party, or if located on property leased by such Borrower Party is not
subject to a Collateral Access Agreement executed by the lessor; or
(d) it is not subject to a valid and perfected first priority
Lien in favor of the Agent or is subject to any other Liens (other than
Permitted Encumbrances described in clauses (d), (e), or (k) of Section
8.8) which are not prior to the Liens in favor of the Agent; or
(e) it is fixtures or accessions to Equipment; or
(f) it has not been appraised and an appraisal meeting the
requirements of Section 7.2(c) has not been delivered to the Agent;
provided that with respect to new Equipment purchased by a Borrower Party
in an arm's length transaction from a Person that is not an Affiliate of
any Credit Party, no appraisal shall be required at the time of
acquisition.
Eligible Inventory means, as to any Borrower Party, the aggregate amount of
Inventory deemed by the Agent in the exercise of its Permitted Discretion
to be eligible for inclusion in the calculation of the Borrowing Base. In
determining the amount to be so included, Inventory shall be valued at the
lower of cost or market in accordance with GAAP consistent with the
Borrower Party's current and historical accounting practice. Whenever
proceeds of a Revolving Loan are to be used by a Borrower, immediately and
directly, to purchase Inventory (including, without limitation, in any
Permitted Acquisition or to acquire a Person which will be a Borrower Party
in accordance with Section 8.20), then, subject to (i) such arrangements as
the Agent may reasonably request to ensure that the proceeds are so used,
(ii) compliance by the Borrower with Section 8.20 to the extent applicable,
and (iii) the satisfaction of all other conditions of eligibility, such
Inventory shall be added to Eligible Inventory for purposes of determining
the Borrowing Base of such Borrower. Unless otherwise approved in writing
by the Agent, an item of Inventory shall not be included in Eligible
Inventory if (without duplication):
(a) it is not owned solely by such Borrower Party or such
Borrower Party does not have good, valid and marketable title thereto; or
(b) it is not located in the United States or Ontario, Canada;
or
(c) it is not located on property owned by such Borrower Party
or, if located on property leased by such Borrower Party or in a contract
warehouse, is not subject to a Collateral Access Agreement executed by the
mortgagee, lessor or the contract warehouseman, as the case may be, and
segregated or otherwise separately identifiable from goods of others, if
any, stored on the premises; or
(d) it is not subject to a valid and perfected first priority
Lien in favor of the Agent or is subject to any other Liens (other than
Permitted Encumbrances described in clauses (d), (e) or (k) of Section
8.8); or
(e) it consists of goods returned or rejected by the Borrower
Party's customers or goods in transit to third parties (other than to
warehouse sites covered by a Collateral Access Agreement); or
(f) it is proprietary shipping packaging, but only to the
extent the value of such proprietary shipping packaging exceeds $1,250,000
for all Borrower Parties; or
(g) it is located on property owned or leased by an outside
processor or is otherwise held by such outside processors but only to the
extent that the aggregate amount of such Inventory exceeds $100,000 for all
Borrower Parties; or
(h) it is not first-quality finished goods, work-in-process,
or raw materials, is obsolete or slow moving, or does not otherwise conform
to the representations and warranties contained in the Credit Documents.
Eligible Real Property means, as to any Borrower Party, real property as to
which such Borrower Party owns fee simple title and which is deemed by the
Agent in the exercise of its Permitted Discretion to be eligible for
inclusion in the Borrowing Base. Unless otherwise approved in writing by
the Agent, no parcel of real property shall be Eligible Real Property if
(without duplication):
(i) it is not owned solely by such Borrower Party or such
Borrower Party does not have good, valid, marketable and insurable title
thereto; or
(ii) it is not located in the United States or Ontario,
Canada; or
(iii) it is not subject to a valid and perfected first priority
Lien in favor of the Agent, which Lien has been insured by title insurance
(to the extent available in such jurisdiction) in form, substance and
amount acceptable to the Agent subject only to such exceptions to title as
are acceptable to the Agent; or
(iv) it has not been appraised and an appraisal meeting the
requirements of Section 5.a(l) (or other valuation method approved by the
Agent in its Permitted Discretion) has not been delivered to the Agent.
Environmental Laws means all federal, state, provincial, local and foreign
laws, statutes, ordinances, regulations, rules, judgments, orders, notice
requirements, decrees, guidelines, policies or Requirements of Law, or
common law requirements and bases of liability, relating to or imposing
liability or standards of conduct concerning pollution or protection of
human health or the environment (including, without limitation, ambient
air, surface water, ground water, land surface, flora, fauna or subsurface
strata), including, without limitation, those relating to emissions,
discharges, releases or threatened releases or Hazardous Materials or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials,
in each case as now or at any time hereafter in effect.
Environmental Reports means those environmental assessments described on
Schedule B, Part 6.17.
Equipment means (i) as to any Borrower, as defined in the Borrower Security
Agreement or (ii) as to any Guarantor, as defined in the Guarantor Security
Agreement.
Equipment Value means, as to Equipment owned by any Borrower Party, the
orderly liquidation value of such Borrower's Eligible Equipment as
established in the most recent appraisal delivered pursuant to Section 5.1,
Section 7.2(b) or Section 8.20 hereof (or any other valuation method
approved by the Agent in its Permitted Discretion); provided that the
Equipment Value of any new Equipment purchased by a Borrower Party in an
arms length transaction from a Person that is not an Affiliate of a Credit
Party shall initially be the purchase price thereof.
ERISA means the Employee Retirement Income Security Act of 1974, 29 U.S.C.
sections 1000 et seq., amendments thereto, successor statutes, and
regulations or guidance promulgated thereunder.
ERISA Affiliate means any entity required to be aggregated with OSG or any
of its Subsidiaries under Sections 414(b), (c), (m) or (o) of the Internal
Revenue Code.
Eurodollar Lending Office means, with respect to any Lender, the office of
such Lender specified as its "Eurodollar Lending Office" opposite its name
on Annex I, as such annex may be amended from time to time (or, if no such
office is specified, its Domestic Lending Office), or as specified in on
Assignment and Assumption Agreement, or such other office or Affiliate of
such Lender as such Lender may from time to time specify to the Borrowers
and the Agent.
Eurodollar Rate means, with respect to the Interest Period for each
Eurodollar Rate Loan comprising part of the same Borrowing, an interest
rate per annum equal to the rate (rounded upward to the nearest whole
multiple of one-sixteenth (1/16) of one percent (1.00%) per annum, if such
rate is not such a multiple) of the offered quotation, if any, to first
class banks in the Eurodollar market by Bankers Trust Company for U.S.
dollar deposits of amounts in immediately available funds comparable to the
principal amount of the Eurodollar Rate Loan for which the Eurodollar Rate
is being determined with maturities comparable to the Interest Period for
which such Eurodollar Rate will apply as of approximately 10:00 A.M. New
York time two (2) Business Days prior to the commencement of such Interest
Period.
Eurodollar Rate Loan means a Revolving Loan that bears interest as provided
in Section 4.2 hereof.
Event of Default is defined in Article 9.
Excess Availability of the Borrowers, at any time, means the remaining
amount then available to be borrowed by the Borrowers in accordance with
Section 2.1(a).
Expenses means all reasonable costs and expenses of the Agent incurred in
connection with the Credit Documents and the transactions contemplated
herein or therein, including, without limitation, (i) the costs of
conducting record searches, examining collateral, opening bank accounts and
lockboxes, depositing checks, receiving and transferring funds (including
charges for checks for which there are insufficient funds), and other out-
of-pocket costs of administration and costs and expenses incurred in
enforcement of the Credit Documents, (ii) the fees and expenses of legal
counsel and paralegals (including the allocated cost of internal counsel
and paralegals), accountants, appraisers and other consultants, experts or
advisors retained by the Agent, (iii) fees and expenses incurred in
connection with the assignments of or sales of participations in the
Revolving Loans (but excluding any fees and expenses payable by a Lender
pursuant to Section 11.8(b) in connection with an assignment of its rights
hereunder), (iv) the cost of title insurance premiums, real estate survey
costs, fees and taxes in connection with the filing of financing
statements, and (v) the costs of preparing and recording Collateral
Documents, releases of Collateral, and waivers, amendments, and
terminations of any of the Credit Documents.
Expiration Date means December 31, 2002.
Federal Funds Rate means, for any period, a fluctuating interest rate per
annum equal, for each day during such period, to the weighted average of
the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or if such rate is
not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from
three Federal Funds brokers of recognized standing selected by it.
Fees means, collectively, the Unused Line Fee, the Letter of Credit Fees,
the L/C Facing Fee, the Documentary L/C Fees, the Issuing Bank Fees, and
the fees provided in the Fee Letter.
Fee Letter means the letter dated October 30, 1997 between OSG and BT
Commercial Corporation providing for the payment of certain fees in
connection with this Credit Agreement.
Financial Statements means the consolidated and consolidating balance
sheets, statements of operations, statements of cash flows and statements
of changes in shareholder's equity of OSG and its Subsidiaries for the
period specified (or for periods prior to the Closing Date, of ASC or PLI,
as applicable), prepared in accordance with GAAP and consistently with
prior periods.
Fiscal Year means the fiscal year of the Credit Parties for accounting and
tax purposes, which for all years after the Closing Date shall end on
December 31.
Fixed Charges means, without duplication, for the relevant period the sum
of the following: (i) Interest Expenses paid in cash, (ii) provision for
income and franchise taxes (excluding deferred taxes), (iii) scheduled
payments of principal with respect to all Indebtedness, including payments
under Capital Leases, but excluding payments of Revolving Loans which do
not reduce the Commitments, (iv) Capital Expenditures, (v) dividends and
distributions paid in cash to holders of any capital Stock of OSG or any
warrants or options to purchase such capital stock, and (vi) amounts paid
to redeem, repurchase or retire any capital stock of OSG or any warrants or
options to purchase such capital stock.
Foreign Lender means any Lender organized under the laws of a jurisdiction
outside of the United States.
Foreign Subsidiary means each Subsidiary of OSG other than a Domestic
Subsidiary.
Funded Debt means all Indebtedness payable more than one year after the
creation thereof determined on a consolidated basis, including without
limitation the Revolving Loans and the principal portion of Capital Leases,
but excluding Indebtedness from one Credit Party to another.
Funded Debt Ratio means, as of any date of determination, the ratio of (i)
the aggregate amount of all Funded Debt of OSG and its Subsidiaries
outstanding on such date to (ii) EBITDA of OSG and its Subsidiaries for the
four fiscal quarters ending on such date; provided (a) with respect to any
Subsidiary acquired in a Permitted Acquisition during such period, if OSG
has delivered to the Agent financial statements audited by the Auditors
including quarterly information for each fiscal quarter to be included in
the calculation of EBITDA, EBITDA for such four fiscal quarter period shall
be calculated after giving pro forma effect to such Permitted Acquisition
as if it had been consummated on the first day of such period and (b) with
respect to any Subsidiary whose stock or assets are sold during such
period, EBITDA for such four fiscal quarter period shall be reduced by an
amount equal to the EBITDA (if positive) of such Subsidiary or the assets
sold or increased by an amount equal to the EBITDA (if negative) of such
Subsidiary or the assets sold. For purposes of calculating pro forma
compliance with this covenant in connection with a Permitted Acquisition,
Funded Debt shall include all Funded Debt incurred in connection with such
Permitted Acquisition (including any Indebtedness of any acquired
Subsidiary which will remain outstanding after the Acquisition or any
Indebtedness assumed in such Permitted Acquisition), and EBITDA shall be
calculated as of the end of the most recent fiscal quarter, but giving
effect to the Permitted Acquisition as if it had been consummated on the
first day of the four fiscal quarter period ending on such date.
G+M means The Xxxxxx + Xxxxxx Group.
GAAP means generally accepted accounting principles in the United States as
in effect from time to time.
Governing Documents means, with respect to any Person, its certificate or
articles of incorporation, by-laws, partnership agreement, membership
agreement, and other organizational or governing documents, including any
document establishing the rights, preferences and privileges of any capital
stock or other equity interests and any shareholder's or similar agreement
among holders of any equity interests.
Governmental Authority means any nation or government, any state, province,
territory or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
Guarantees means, collectively, the OSG Guarantee, the Borrower Guarantee
and the Subsidiary Guarantee.
Guarantor means, collectively, OSG and each of its Domestic Subsidiaries
and each Borrower Party (other than a Borrower).
Guarantor Security Agreement means a Security Agreement executed by a
Guarantor in favor of the Agent pursuant to Section 5.1(a), Section 7.15 or
Section 8.20, substantially in the form of Exhibit J.
HVP means Harbour Vest Partners LLC.
HVP Agreement means the letter agreement concerning Advisory and Financial
Services Fees dated as of January 8, 1998 between OSG and HVP, as amended
or modified to the extent permitted under Section 8.21 hereof.
Hazardous Materials means (i) any chemical, material or substance (whether
solid, liquid or gas) at any time defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," "infectious
waste," "toxic substances" or any other formulations intended to define,
list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, "TCLP toxicity" or words of similar import under any
applicable Environmental Laws; (ii) any oil, petroleum, petroleum fraction
or petroleum derived substance; (iii) any drilling fluids, produced waters
and other wastes associated with the exploration, development or production
of crude oil, natural gas or geothermal resources; (iv) any flammable
substances or explosives; (v) any radioactive materials; (vi) asbestos in
any form; (vii) urea formaldehyde foam insulation; (viii) electrical
equipment which contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty parts per million; (ix)
pesticides and (x) radon.
Highest Lawful Rate means, as to any Lender at any given time during which
any Obligations shall be outstanding hereunder, the maximum nonusurious
interest rate that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the Obligations, under the laws of
the State of New York (or the law of any other jurisdiction whose laws may
be mandatorily applicable notwithstanding other provisions of this Credit
Agreement and the other Credit Documents), or under applicable federal laws
which may presently or hereafter be in effect and which allow a higher
maximum nonusurious interest rate than under New York (or such other
jurisdiction's) law, in any case after taking into account, to the extent
permitted by applicable law, any and all relevant payments or charges under
this Credit Agreement and any other Credit Documents executed in connection
herewith, and any available exemptions, exceptions and exclusions.
Indebtedness of a Person means, without duplication, (i) indebtedness for
borrowed money or for the deferred purchase price of property or services
(other than current liabilities incurred in connection with the purchase of
goods and services in the ordinary course of business and payable in
accordance with customary practices), whether on open account or evidenced
by a note, bond, debenture or similar instrument, (ii) that portion of
obligations under Capital Leases that is properly classified as a liability
on a balance sheet in conformity with GAAP, (iii) reimbursement obligations
for letters of credit, banker's acceptances or other credit accommodations,
(iv) liabilities, as determined by the Agent, under any Interest Rate
Agreement, (v) Contingent Obligations, and (vi) obligations secured by any
Lien on that Person's property, even if that Person has not assumed such
obligations or if such obligations are nonrecourse to the credit of such
Person.
Insolvency Event means, with respect to any Person, the occurrence of any
of the following under the laws of any applicable jurisdiction: (i) such
Person shall be adjudicated insolvent or bankrupt, or shall generally fail
to pay or admit in writing its inability to pay its debts as they become
due, (ii) such Person shall seek dissolution or reorganization or
liquidation or the appointment of a receiver, trustee, custodian,
administrator or liquidator or similar person for it or a substantial
portion of its property, assets or business or to effect a plan or other
arrangement with its creditors, (iii) such Person shall make a general
assignment for the benefit of its creditors, or consent to or acquiesce in
the appointment of a receiver, trustee, custodian, administrator or
liquidator or similar person for a substantial portion of its property,
assets or business, (iv) such Person shall file a voluntary petition under
any bankruptcy, insolvency or similar law, or (v) such Person, or a
substantial portion of its property, assets or business shall become the
subject of an involuntary proceeding or petition for its dissolution,
reorganization, or liquidation or the appointment of a receiver, trustee,
custodian, administrator or liquidator or shall become subject to any writ,
judgment, warrant of attachment, execution or similar process, and any such
proceeding, petition, writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 45
days after commencement, filing or levy, as the case may be, or any order
for relief shall be entered in any such proceeding.
Intellectual Property Security Agreements means, collectively, any Patent
Security Agreement, Trademark Security Agreement or Copyright Security
Agreement executed and delivered by a Credit Party to secure its
Obligations.
Intercompany Note means any promissory note executed by one or more Credit
Parties evidencing loans or advances from one or more Credit Parties to
another Credit Party, substantially in the form attached hereto as Exhibit
O, together with any Allonge thereto.
Interest Expense means, without duplication, the consolidated expense of
OSG and its Subsidiaries for interest on Indebtedness, including, without
limitation, amortization of original issue discount, incurrence fees (to
the extent included in interest expense), the interest portion of any
deferred payment obligation and the interest component of any Capital Lease
obligation, but excluding any interest payable in kind, and net of interest
income.
Interest Period means for any Eurodollar Rate Loan the period commencing on
the date of such Borrowing and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of
each such Interest Period shall be one, two, three or, if approved by all
Lenders, six months, in each case as the applicable Borrower may, in an
appropriate Notice of Borrowing, Notice of Continuation or Notice of
Conversion, select; provided, however, that no Borrower may select any
Interest Period that ends after the Expiration Date. Whenever the last day
of any Interest Period would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be extended to occur on the
next succeeding Business Day, provided that if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the
next preceding Business Day.
Interest Rate Agreement means any interest rate protection or hedge
agreement, including, without limitation, interest rate future, option,
swap, and cap agreements.
Internal Revenue Code means the Internal Revenue Code of 1986, amendments
thereto, successor statutes, and regulations or guidance promulgated
thereunder.
Inventory means (i) as to any Borrower, as defined in the Security
Agreement and (ii) as to any Guarantor, as defined in the Guarantor
Security Agreement.
Investment means all expenditures made and all liabilities incurred
(including Contingent Obligations) for or in connection with the
acquisition of stock or Indebtedness of a Person, loans, advances, capital
contributions or transfers of cash or other property to a Person, or
acquisition of substantially all the assets of a Person or any line of
business of a Person. In determining the aggregate amount of Investments
outstanding at any particular time, (i) a guaranty shall be valued at not
less than the principal amount guaranteed and outstanding; (ii) returns of
capital (but only by repurchase, redemption, retirement, repayment,
liquidating dividend or liquidating distribution) shall be deducted; (iii)
earnings, whether as dividends, interest or otherwise, shall not be
deducted; and (iv) decreases in the market value shall not be deducted and
increases in market value shall not be included.
Investment Property means all "investment property" as defined in Section
9-115 of the Code.
Issuing Bank means Bankers Trust Company or any Lender, Affiliate of any
Lender or other financial institution acceptable to the Agent and the
Borrowers which may at any time issue a Letter of Credit for the account of
any Borrower (or for the joint account of any Borrower and the Agent or any
Lender) under this Credit Agreement. If there is more than one Issuing
Bank, all references to "the Issuing Bank" shall be deemed to refer to each
Issuing Bank or to all Issuing Banks, as the context requires.
Issuing Bank Fees is defined in Section 4.4.
Joinder Agreement means, as applicable (i) an agreement duly executed and
delivered by each additional Borrower (including by Kolmar immediately
following the consummation of the Kolmar Acquisition), substantially in the
form attached hereto as Exhibit I-1 or (ii) an agreement duly executed and
delivered by any Subsidiary of OSG acquired after the Closing Date, other
than a Borrower (and not designated an additional Borrower under Section
8.20), substantially in the form attached hereto as Exhibit I-2.
Kolmar means Kolmar Laboratories, Inc., a Delaware corporation.
Kolmar Acquisition is defined in the recitals to this Credit Agreement.
Kolmar Australia means Kolmar (Aust.) Pty Ltd, a corporation organized
under the laws of New South Wales, Australia and a Wholly-owned Subsidiary
of Kolmar.
Kolmar Canada means Kolmar Canada Inc., a corporation organized pursuant to
the Business Corporations Act (Ontario) and initially a Wholly-owned
Subsidiary of OSG and then a Wholly-owned Subsidiary of Kolmar following
the Kolmar Acquisition.
Kolmar Mexico means Kolmar de Mexico, S.A. de C.V., a corporation organized
under the laws of the United Mexican States and a Wholly-owned Subsidiary
of Kolmar.
Lender is defined in the preamble to this Credit Agreement.
Lender Advance is defined in Section 2.2.
L/C Facing Fees, Letter of Credit Fees and Documentary L/C Fees are defined
in Section 4.4.
Letter of Credit Obligations means, without duplication, the sum of the
aggregate undrawn amount of all Letters of Credit outstanding, plus the
aggregate amount of all drawings under Letters of Credit for which
Borrowers have not reimbursed the Issuing Bank, plus the aggregate amount
of all payments made by the Lenders to the Issuing Bank for participations
in Letters of Credit for which the Borrowers have not reimbursed the
Lenders.
Letter of Credit Request is defined in Section 3.3.
Letters of Credit means all letters of credit issued for the account of the
Borrowers or any of them under Article 3 and all amendments, renewals,
extensions or replacements thereof.
Lien means any lien, claim, charge, pledge, security interest, assignment,
hypothecation, deed of trust, mortgage, lease, conditional sale, retention
of title, or other preferential arrangement having substantially the same
economic effect as any of the foregoing, whether voluntary or imposed by
law, and any agreement to give any such Lien.
Loan means a Revolving Loan.
Loan Account is defined in Section 4.9.
Lockboxes, Lockbox Agreements, and Lockbox Bank are defined in Section
4.11.
Majority Lenders means those Lenders owed or holding in the aggregate more
than fifty percent (50%) of the total Commitments or, if the Commitments
are terminated, more than fifty percent (50%) of the Revolving Loans and/or
Letter of Credit Obligations then outstanding.
Management Agreement means the Amended and Restated Management Services
among OSG, ASC, PLI and G + M dated as of January 8, 1998, as amended or
modified to the extent permitted under Section 8.21 hereof.
Mandatory Redeemable Obligation means an obligation of OSG or any of its
Subsidiaries (or guaranteed by any of them) which must be redeemed or
repaid (i) at a fixed or determinable date, whether by operation of sinking
fund or otherwise, (ii) at the option of any Person other than OSG or such
Subsidiary, or (iii) upon the occurrence of a condition not solely within
the control of OSG or such Subsidiary, such as a redemption required to be
made out of future earnings.
Material Adverse Effect means (i) a material adverse effect on the
business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of the Credit Parties, taken as a
whole, (ii) a material adverse effect on the legality, validity or
enforceability of this Agreement or any Credit Document; (iii) the
impairment of the ability of the Credit Parties taken as a whole to repay
the Obligations or perform the other obligations under the Credit Documents
or of the Agent or the Lenders to enforce the Obligations or realize upon
the Collateral, or (iv) a material adverse effect on the value of the
Collateral or the amount which the Agent or the Lenders would be likely to
receive (after giving consideration to delays in payment and costs of
enforcement) in the liquidation of such Collateral.
Material Contract means any Contractual Obligation to which any Credit
Party is a party (other than the Credit Documents) for which breach,
nonperformance, cancellation or failure to renew could have a Material
Adverse Effect.
Mortgaged Properties means, collectively, all real property and interests
in real property subject to the Mortgages.
Mortgages means, collectively, all mortgages, deeds of trust, deeds to
secure debt, assignments of rents and leases, or similar agreements
pursuant to which a Credit Party grants to the Agent a Lien on real
property or interests in real property to secure the Obligations.
Multiemployer Plan means a "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) to which OSG, any of its Subsidiaries or any ERISA
Affiliate has contributed within the past six years or with respect to
which OSG or any of its Subsidiaries may incur any liability.
Notice of Borrowing is defined in Section 2.2.
Notice of Continuation is defined in Section 4.14(a).
Notice of Conversion is defined in Section 4.14(b).
Obligations means, collectively, all present and future obligations and
liabilities of the Credit Parties arising under or in connection with this
Credit Agreement or any other Credit Document, due or to become due to the
Agent, any Issuing Bank, any Lender or any other Person entitled to
indemnification pursuant to Section 11.10, or (to the extent permitted by
the Credit Documents) any of their respective successors, transferees or
assigns, and shall include, without limitation, (i) unpaid principal and
interest hereunder and under the Revolving Notes (including interest
accruing on or after the occurrence of an Insolvency Event, whether or not
allowed as a claim in any proceeding relating to the Insolvency Event),
(ii) reimbursement obligations under Letters of Credit, (iii) Fees,
Expenses and indemnification and expense reimbursement obligations arising
under Section 11.10, (iv) the Obligations of OSG under the OSG Guarantee,
(v) the Obligations of the Borrowers (in their capacity as guarantors)
under the Borrower Guarantee, (vi) the Obligations of the Subsidiary
Guarantors under the Subsidiary Guarantee and (vii) all obligations and
liabilities of the Borrowers to any Lender in respect of Interest Rate
Agreements permitted hereunder. Obligations of any Credit Party means all
Obligations, as defined above, of such Credit Party.
Operating Lease means, as to any Person, any lease of property, whether
real, personal or mixed, under which such Person is the lessee or sublessee
which is not a Capital Lease.
OSG is defined in the preamble to this Credit Agreement.
OSG Guarantee means the Guarantee executed by OSG in favor of the Agent,
the Lenders and the Issuing Bank pursuant to Section 5.1(a), substantially
in the form of Exhibit K.
Permitted Acquisition means an Acquisition consummated by OSG or a Borrower
permitted under Section 8.20 or otherwise approved by the Agent and the
Majority Lenders.
Permitted Discretion means the Agent's reasonable good faith judgment based
upon any factor which it believes in good faith: (i) will or could
reasonably be expected to adversely affect the value of any Collateral, the
enforceability or priority of the Agent's Liens thereon or the amount which
the Agent and the Lenders would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the
liquidation of such Collateral; (ii) reasonably suggests that any
collateral report or financial information delivered to the Agent by any
Person on behalf of any Borrower Party is incomplete, inaccurate or
misleading in any material respect; (iii) materially increases the
likelihood of a bankruptcy, reorganization or other insolvency proceeding
involving OSG or any of its Subsidiaries or any of the Collateral, or
(iv) creates or reasonably could be expected to create a Default or Event
of Default. In exercising such judgment, the Agent may reasonably consider
such factors already included in or tested by the definition of Eligible
Accounts Receivable, Eligible Inventory, Eligible Equipment or Eligible
Real Property, as well as any of the following: (i) the financial and
business climate of the Borrower Party's industry and general macroeconomic
conditions, (ii) changes in collection history and dilution with respect to
the Accounts, (iii) changes in demand for, and pricing of, Inventory, (iv)
adverse changes in any concentration of risk with respect to Accounts or
Inventory, and (v) any other factors that adversely change the credit risk
of lending to the Borrowers on the security of the Accounts, the Inventory,
Equipment or real estate of any Borrower Party. The burden of establishing
lack of good faith shall be on the Borrowers.
Permitted Encumbrance means any Lien permitted under Section 8.8.
Person means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, entity, party or government
(including any division, agency or department thereof), and its successors,
heirs and assigns.
Plan means any employee benefit plan, program or arrangement maintained or
contributed to by OSG or any of its Subsidiaries, or with respect to which
any of them may incur liability.
Pledge Agreement means any Pledge Agreement executed by a Credit Party in
favor of the Agent pursuant to Section 5.1(a) or 8.20 substantially in the
form of Exhibit N, together with any Pledge Amendment thereto.
Pledge Amendment means any amendment to a Pledge Agreement to add
additional "Pledged Collateral."
PLI is defined in the preamble to this Credit Agreement.
Prime Lending Rate means the rate which Bankers Trust Company announces as
its prime lending rate from time to time. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Bankers Trust Company and each of the
Lenders may make commercial loans or other loans at rates of interest at,
above or below the Prime Lending Rate.
Prime Rate Loan means a Revolving Loan that bears interest as provided in
Section 4.1 hereof.
Pro Forma means the unaudited pro forma opening consolidated and
consolidating balance sheet of OSG and its Subsidiaries, prepared in
accordance with GAAP, and giving effect to the Kolmar Acquisition, the
repayment of Indebtedness on the Closing Date and the incurrence of the
Obligations and other Transactions occurring on the Closing Date.
Projections means OSG's forecasted consolidated and consolidating balance
sheets, income statements, cash flow statements and capitalization
statements, prepared by management of OSG on a basis consistent with OSG's
historical financial statements, for the period commencing on January 1,
1998 and ending on the fifth anniversary thereof, together with appropriate
supporting details and a statement of underlying assumptions and including,
without limitation, a calculation of compliance with the covenants
contained in Sections 8.1 through 8.6, inclusive.
Proportionate Share of a Lender means a fraction, expressed as a decimal,
obtained by dividing its Commitment by the total Commitments of all the
Lenders or, if the Commitments are terminated, by dividing its then
outstanding Revolving Loans and/or Letter of Credit participations by the
aggregate Revolving Loans and/or Letter of Credit Obligations of all
Lenders then outstanding.
Purchase Agreement is defined in the recitals to this Credit Agreement.
Purchase Money Liens is defined in Section 8.7.
Real Estate Value means, as to a Borrower Party, the fair market value of
such Borrower Party's fee interest in Eligible Real Property, as
established pursuant to an appraisal delivered under Section 5.1(l), 7.2(b)
or 8.20 hereof, or other valuation method approved by the Agent in its
Permitted Discretion.
Register is defined in Section 11.8.
Reportable Event means any of the events described in Section 4043 of ERISA
and the regulations thereunder.
Requirement of Law means (i) the Governing Documents of a Person, (ii) any
law, treaty, rule or regulation or determination of an arbitrator, court or
other Governmental Authority, or (iii) any franchise, license, lease,
permit, certificate, authorization, qualification, easement, right of way,
right or approval binding on a Person or any of its property.
Retiree Health Plan means an "employee welfare benefit plan" within the
meaning of Section 3(1) of ERISA that provides benefits to persons after
termination of employment, other than as required by Section 601 of ERISA.
Revolving Loans is defined in Section 2.1.
Revolving Note means, as to a Borrower, a promissory note of such Borrower
payable to the order of any Lender, substantially in the form of Exhibit A,
and Revolving Notes means the Revolving Notes of a Borrower or all
Borrowers, as applicable.
Security Agreement mean any Security Agreement executed by a Credit Party
in favor of the Agent pursuant to Section 5.1(a), substantially in the form
of Exhibit B or G, as applicable.
Sellers means, collectively CCL Industries, Inc. and CCL Industries
Corporation as sellers under the Purchase Agreement, and any additional
Person named as a "seller" thereunder.
Series A Preferred Stock means OSG's Series A Preferred Stock, par value
$0.001 per share issued and outstanding on the Closing Date.
Series B Preferred Stock means OSG's Series B Preferred Stock par value
$0.001 per share, issued and outstanding on the Closing Date.
Settlement Date is defined in Section 2.6.
Stockholder Agreement means the Amended and Restated Stockholder Agreement
dated as June 30, 1997 among OSG and its stockholders and warrant holders,
as amended by the Amendment to Stockholder Agreement dated as of January 8,
1998.
Subordinated Debt means (i) all Indebtedness of OSG and its Subsidiaries
under the Bridge Loan Documents and (ii) all other Indebtedness of OSG (and
guarantees thereof by its Domestic Subsidiaries) which is subordinated in
right of payment to the Obligations on such terms and conditions as
approved in writing by the Agent and the Majority Lenders, and contains
such payment terms, covenants and events of default as approved in writing
by the Agent and the Majority Lenders, as the same may be amended,
supplemented or otherwise modified in accordance with Section 8.11(c).
Subsidiary of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns
or controls the shares of stock, partnership interests, membership
interests, or other ownership interests having ordinary voting power to
elect a majority of the board of directors or appoint other managers of
such corporation partnership, limited liability company, or other entity.
Subsidiary Guarantee means each Subsidiary Guarantee and Contribution
Agreement or Subsidiary Guarantee executed by a Subsidiary Guarantor in
favor of the Agent, the Lenders and the Issuing Bank pursuant to Section
7.15 or Section 8.20, substantially in the form of Exhibit M (with
appropriate modifications required for any Foreign Subsidiary).
Subsidiary Guarantor means each present and future Domestic Subsidiary of
OSG (other than a Borrower) and each Foreign Subsidiary of OSG which is a
Borrower Party (other than a Borrower).
Syndication Date means the earlier of 90 days after the Closing Date and
the date on which the Agent notifies the Borrowers that the primary
syndication of the Revolving Loans and the Commitments has been completed,
as determined by the Agent in its sole discretion.
Termination Event means (i) a Reportable Event with respect to any Benefit
Plan or Multiemployer Plan; (ii) the withdrawal of OSG, any of its
Subsidiaries or any ERISA Affiliate from a Benefit Plan during a plan year
in which it was a "substantial employer" (as defined in Section 4001(a)(2)
of ERISA); (iii) the providing of notice of intent to terminate a Benefit
Plan in a distress termination (as described in Section 4041(c) of ERISA);
(iv) the institution by the Pension Benefit Guaranty Corporation of
proceedings to terminate a Benefit Plan or Multiemployer Plan; (v) any
event or condition (a) which could reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan or Multiemployer
Plan, or (b) that could reasonably be expected to result in termination of
a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205
of ERISA, of OSG, any of its Subsidiaries or any ERISA Affiliate from a
Multiemployer Plan.
Test Period means, for any determination made under Section 8.1, 8.2 or
8.3, the four consecutive fiscal quarters of OSG and its Subsidiaries then
last ended; provided, however, that for the first Fiscal Year following the
Closing Date, the Test Period shall be (i) for March 31, 1998, the fiscal
quarter then ended, (ii) for June 30, 1998, the two consecutive fiscal
quarters then ended, and (iii) for September 30, 1998, the three
consecutive fiscal quarters then ended.
Transactions means the Kolmar Acquisition, the funding of Revolving Loans
and the Bridge Loan on the Closing Date, the purchase of OSG's common stock
on the Closing Date, the repayment of Indebtedness on the Closing Date and
the payment of all fees and costs and expenses associated therewith.
Transaction Documents means, collectively, the Purchase Agreement, the
Credit Documents, the Bridge Loan Documents, the stock purchase agreement
and all related agreements, instruments and documents executed and
delivered in connection with the Transactions.
Type means, in reference to a Revolving Loan, that it is a Eurodollar Rate
Loan or a Prime Rate Loan.
United States means the United States of America.
Unused Line Fee is defined in Section 4.3.
Wholly-owned Subsidiary of a Person means a Subsidiary of such Person as to
which all shares of capital stock or other ownership interests of all
classes are owned by such Person except for directors' qualifying shares or
similar shares in an immaterial amount required to be owned by other
Persons under applicable Requirements of Law.
1.2 Accounting Terms and Determinations. Unless otherwise
defined or specified herein, all accounting terms used in this Credit
Agreement shall be construed in accordance with GAAP, applied on a basis
consistent in all material respects with the Financial Statements delivered
to the Agent on or before the Closing Date. All accounting determinations
for purposes of determining compliance with Sections 8.1 through 8.5 hereof
shall be made in accordance with generally accepted accounting principles
as in effect on the Closing Date and applied on a basis consistent in all
material respects with the audited Financial Statements delivered to the
Agent on or before the Closing Date. The Financial Statements required to
be delivered hereunder from and after the Closing Date, and all financial
records, shall be maintained in accordance with GAAP. If GAAP shall change
from the basis used in preparing the audited Financial Statements delivered
to the Agent on or before the Closing Date, the certificates required to be
delivered pursuant to Section 7.1 demonstrating compliance with the
covenants contained herein shall, at the election of the Borrowers or upon
the request of the Majority Lenders, include calculations setting forth the
adjustments necessary to demonstrate how the Credit Parties are in
compliance with the financial covenants based upon GAAP as in effect on the
Closing Date.
1.3 Other Terms; Headings. Terms used herein that are defined
in the Uniform Commercial Code in effect in the State of New York (the
"Code") shall have the meanings given in the Code. Each of the words
"hereof," "herein," and "hereunder" refer to this Credit Agreement as a
whole. An Event of Default shall "continue" or be "continuing" until such
Event of Default has been waived in accordance with Section 11.11 hereof.
References to Articles, Sections, Annexes, Schedules, and Exhibits are
internal references to this Credit Agreement, and to its attachments,
unless otherwise specified. The headings and the Table of Contents are for
convenience only and shall not affect the meaning or construction of any
provision of this Credit Agreement. Except as provided otherwise, all
references to documents and agreements shall mean such documents and
agreements as amended, supplemented, waived or otherwise modified,
including, without limitation, as to any Credit Document, as amended by any
Joinder Agreement or Pledge Amendment.
ARTICLE 2.
REVOLVING LOANS.
2.1 Revolving Credit Commitments.
(a) Subject to the terms and conditions set forth in this
Credit Agreement, on and after the Closing Date and to and excluding the
Expiration Date, each Lender severally agrees to make loans and advances to
the Borrowers ("Revolving Loans") in an amount not to exceed at any time
its Proportionate Share of the lesser of (x) the total Commitments and (y)
the sum of the Borrowing Bases of all Borrower Parties, minus, in each
case, the then outstanding Letter of Credit Obligations of all Borrowers,
and to each Borrower in an amount not to exceed at any time its
Proportionate Share of the Borrowing Base of such Borrower and any
Subsidiary of such Borrower which is a Borrower Party minus the then
outstanding Letter of Credit Obligations of such Borrower.
(b) The Agent may, but shall not be obligated to, rely on each
Borrowing Base Certificate and any other schedules or reports in
determining the eligibility of Accounts, Inventory, Equipment and real
property. The Agent, in the exercise of its Permitted Discretion, may
(i) establish and increase or decrease reserves against Eligible Accounts
Receivable, Eligible Inventory, Eligible Equipment and Eligible Real
Property, (ii) reduce the advance rates provided for in the definition of
"Borrowing Base", or restore such advance rates to any level equal to or
below the advance rates in effect as of the date of this Credit Agreement,
and (iii) impose additional restrictions (or eliminate the same) to the
standards of eligibility set forth in the definitions of "Eligible Accounts
Receivable" "Eligible Inventory," "Eligible Equipment" and "Eligible Real
Property".
(c) Subject to the provisions of this Credit Agreement, each
Borrower may repay any outstanding Revolving Loan made to that Borrower on
any day which is a Business Day and any amounts so repaid may be
reborrowed, up to the amount available under Section 2.1(a) at the time of
such Borrowing, to the Expiration Date.
2.2 Borrowing of Revolving Loans. It is contemplated that
Revolving Loans will be made available to each Borrower directly by the
Lenders ("Lender Advances") and, in the circumstances described in Section
2.2(b), from the Agent acting on behalf of the Lenders ("Agent Advances").
(a) Lender Advances of Revolving Loans. Subject to the
determination by the Agent and the Lenders that the conditions for
borrowing contained in Section 5.1 and 5.2 are satisfied, upon notice in
accordance with Section 2.4 from a Borrower to the Agent in the form
attached hereto as Exhibit F ("Notice of Borrowing") received by the Agent,
in accordance with Section 2.4, Lender Advances of Revolving Loans shall be
made to the extent of each Lender's Proportionate Share of the requested
Borrowing. The Notice of Borrowing shall specify whether the requested
Borrowing is of Prime Rate Loans or Eurodollar Rate Loans.
(b) Agent Advances of Revolving Loans. In addition to
Revolving Loans made pursuant to Section 2.2(a) above, the Agent is
authorized by the Lenders, but is not obligated, to make Agent Advances
upon (i) a Notice of Borrowing received by the Agent before 10:00 A.M. Los
Angeles time on a Business Day or (ii) upon advice received by the Agent on
a Business Day from the Disbursement Account Bank of the face amount of
checks drawn on the Disbursement Account of a Borrower, which have been or
will be presented for payment on that day, minus the amount of funds then
available in such Disbursement Account. All Agent Advances shall be Prime
Rate Loans. Except during the period provided in clause (ii) below, Agent
Advances will not at any time exceed the amount available for borrowing
under Section 2.1(a). Agent Advances will be subject to periodic
settlement with the Lenders under Section 2.6. Agent Advances may be made
only in the following circumstances:
(i) For administrative convenience, the Agent may, but is not
obligated to, make Agent Advances in reliance upon a Borrower's
actual or deemed representations under Section 5.2 that the
conditions for borrowing are satisfied.
(ii) If the conditions for borrowing under Section 5.2 cannot
be fulfilled, a Borrower shall in its Notice of Borrowing or
otherwise give immediate written notice thereof to the Agent, with
a copy to each of the Lenders, and the Agent may, but is not
obligated to, continue to make Agent Advances for twenty (20)
Business Days from the date the Agent first receives such notice,
or until sooner instructed by the Majority Lenders to cease. All
Agent Advances made pursuant to this clause (ii) shall be due and
payable within one Business Day after demand.
2.3 Disbursement of Revolving Loans. The proceeds of
Revolving Loans shall be transmitted by the Agent in the circumstances
described in Section 3.5, directly to the Issuing Bank and in all other
circumstances, to the applicable Borrower's Disbursement Account or as
otherwise directed by the applicable Borrower in writing.
2.4 Notices of Borrowing. Notices of Borrowing may be given
under this Section by telephone or facsimile transmission, and, if by
telephone, promptly confirmed in writing. Each Borrower shall specify in
each Notice of Borrowing whether the conditions for the requested Borrowing
are satisfied. The Borrowers may request one or more Borrowings of Prime
Rate Loans on the same Business Day by delivery of a Notice of Borrowing
not later than 10:00 A.M. Los Angeles time. Notice of Borrowing for
Eurodollar Rate Loans shall be given not later than 10:00 A.M. Los Angeles
time on the third Business Day prior to the proposed Borrowing. Each
Notice of Borrowing shall, unless otherwise specifically provided herein,
consist entirely of Revolving Loans of the same Type and, if such Borrowing
is to consist of Eurodollar Rate Loans, shall be in an aggregate amount for
all Lenders of not less than $1,000,000 or an integral multiple of $100,000
in excess thereof. The right of the Borrowers to choose Eurodollar Rate
Loans is subject to the provisions of Section 4.14. Once given, a Notice
of Borrowing that requests a Lender Advance is irrevocable by and binding
on the Borrowers. The Borrowers shall provide to the Agent a certificate
of the chief executive or chief financial officer as to those officers or
other employees of a Borrower authorized to request Revolving Loans and
Letters of Credit, with specimen signatures. The Agent, the Lenders and
the Issuing Bank are entitled to rely upon such certificate until it is
replaced by the Borrowers. None of the Agent, the Lenders or the Issuing
Bank shall incur any liability to any Borrower or any other Credit Party or
any other Person in acting in good faith upon any telephonic or facsimile
notice referred to above which the Agent, such Lender, or the Issuing Bank
believes to have been given by a duly authorized officer or other person
authorized by the Borrowers as provided herein to request Revolving Loans
or Letters of Credit on behalf of a Borrower.
2.5 Same Day Settlement of Lender Advances. The Agent shall
give each Lender prompt notice by telephone or facsimile transmission of a
Notice of Borrowing that requests Lender Advances of Revolving Loans. No
later than noon, Los Angeles time on the date of receipt of the Notice of
Borrowing for Prime Rate Loans or on the proposed Borrowing date for
Eurodollar Rate Loans, each Lender shall make available to the Agent at the
Agent's address its Proportionate Share of such Borrowing in immediately
available funds. Unless the Agent receives contrary written notice prior
to the date of any such Borrowing of Revolving Loans, it is entitled to
assume that each Lender will make available its Proportionate Share of the
Borrowing and in reliance upon that assumption, but without any obligation
to do so, may advance such Proportionate Share on behalf of the Lender.
2.6 Periodic Settlement of Agent Advances and Repayments.
(a) The Settlement Date. The amount of each Lender's
Proportionate Share of Revolving Loans of a Borrower shall be computed
weekly (or more frequently in the Agent's discretion) and shall be adjusted
upward or downward based on all Revolving Loans (including Agent Advances)
and repayments received by the Agent as of noon Los Angeles time on the
last Business Day of the period specified by the Agent (such date, the
"Settlement Date").
(b) Summary Statements; Settlements of Principal. The Agent
shall deliver to each of the Lenders promptly after the Settlement Date a
summary statement of the amount of outstanding Revolving Loans (including
Agent Advances) of a Borrower for the period and the amount of repayments
received for the period. As reflected on the summary statement: (i) the
Agent shall transfer to each Lender its Proportionate Share of repayments;
and (ii) each Lender shall transfer to the Agent, or the Agent shall
transfer to each Lender, such amounts as are necessary to insure that,
after giving effect to all such transfers, the amount of Revolving Loans
made by each Lender to a Borrower shall be equal to such Lender's
Proportionate Share of the aggregate amount of Revolving Loans outstanding
to such Borrower as of such Settlement Date. If the summary statement
requires transfers to be made to the Agent by the Lenders and is received
prior to 10:00 A.M. Los Angeles time on a Business Day, such transfers
shall be made in immediately available funds no later than 2:00 P.M. Los
Angeles time that day; and, if received after 10:00 A.M. Los Angeles time,
then no later than 2:00 P.M. Los Angeles time on the next Business Day.
The obligation of each Lender to transfer such funds is irrevocable,
unconditional and without recourse to or warranty by the Agent.
(c) Distribution of Interest and Unused Line Fees. Interest
on the Revolving Loans (including Agent Advances) together with the amount
of the Unused Line Fee, shall be allocated by the Agent to each Lender in
accordance with the Proportionate Share of Revolving Loans actually
advanced by and repaid to each Lender, and shall accrue from and including
the date such Revolving Loans are so advanced and to but excluding the date
such Revolving Loans are either repaid by the applicable Borrower or
actually settled under this Section. Promptly after the end of each month,
the Agent shall distribute to each Lender its Proportionate Share of the
interest and Unused Line Fee accrued during that month. The Agent shall
distribute interest on Eurodollar Rate Loans promptly after it is received.
2.7 Sharing of Payments. If any Lender obtains any payment in
excess of its Proportionate Share of payments on account of the Revolving
Loans or Letter of Credit Obligations, it will immediately purchase from
the other Lenders portions of their Revolving Loans and Letter of Credit
participations sufficient to cause that Lender to share the excess payment
ratably with all the other Lenders.
2.8 Defaulting Lenders.
(a) A Lender who fails to pay the Agent its Proportionate
Share of any Revolving Loans (including Agent Advances) made available by
the Agent on such Lender's behalf, or who fails to pay any other amount
owing by it to the Agent, is a "Defaulting Lender." The Agent may recover
all such amounts owing by a Defaulting Lender on demand. If the Defaulting
Lender does not pay such amounts on the Agent's demand, the Agent shall
promptly notify the Borrowers and the Borrowers shall pay such amounts
within five Business Days. In addition, the Defaulting Lender or the
Borrowers shall pay the Agent interest on such amount for each day from the
date it was made available by the Agent to the Borrowers to the date it is
recovered by the Agent at a rate per annum equal to (x) the overnight
Federal Funds Rate, if paid by the Defaulting Lender, or (y) the then
applicable rate of interest calculated under Section 4.1, if paid by the
Borrowers; plus, in each case, the Expenses and losses, if any, incurred as
a result of the Defaulting Lender's failure to perform its obligations.
(b) The failure of any Lender to fund its Proportionate Share
of any Revolving Loan (including Agent Advances) shall not relieve any
other Lender of its obligation to fund its Proportionate Share of such
Revolving Loan. Conversely, no Lender shall be responsible for the failure
of another Lender to fund its Proportionate Share of a Revolving Loan.
(c) The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by the Borrowers to the Agent for the
Defaulting Lender's benefit; nor shall a Defaulting Lender be entitled to
the sharing of any payments hereunder. Amounts payable to a Defaulting
Lender shall instead be paid to or retained by the Agent. The Agent may
hold and, in its discretion, re-lend to the Borrowers the amount of all
such payments received or retained by it for the account of such Defaulting
Lender. For purposes of voting or consenting to matters with respect to
the Credit Documents and determining Proportionate Shares, such Defaulting
Lender shall be deemed not to be a "Lender" and such Lender's Commitment
shall be deemed to be zero (-0-). This section shall remain effective with
respect to all amounts owed to such Lender until (x) the Obligations under
this Credit Agreement shall have been declared or shall have become
immediately due and payable or (y) the Majority Lenders, the Agent and the
Borrowers shall have waived such Lender's default in writing. The
operation of this Section shall not be construed to increase or otherwise
affect the Commitment of any Lender, or relieve or excuse the performance
by the Borrowers of their duties and obligations hereunder.
ARTICLE 3.
LETTERS OF CREDIT.
3.1 Issuance of Letters of Credit. Subject to the terms and
conditions hereunder and in reliance on the representations and warranties
of the Borrowers set forth herein, the Agent may from time to time cause
the Issuing Bank to issue Letters of Credit hereunder at the request of a
Borrower and for its account, as more specifically described below. The
Agent shall not be obligated to cause the Issuing Bank to issue any Letter
of Credit if:
(a) Issuance of the requested Letter of Credit (i) would cause
the Letter of Credit Obligations then outstanding to exceed $5,000,000.00
or (ii) would cause the sum of the Revolving Loans plus the Letter of
Credit Obligations then outstanding to exceed the lesser of (x) the total
Commitments then in effect and (y) the sum of the Borrowing Bases of all
Borrowers then in effect or (iii) would cause the sum of the Revolving
Loans of a Borrower plus the Letter of Credit Obligations of a Borrower to
exceed its Borrowing Base then in effect; or
(b) Issuance of the Letter of Credit is enjoined, restrained
or prohibited by any Governmental Authority, Requirement of Law or any
request or directive of any Governmental Authority (whether or not having
the force of law) or would impose upon the Agent or the Issuing Bank any
material restriction, reserve, capital requirement, loss, cost or expense
(for which the Agent or the Issuing Bank is not otherwise compensated) not
in effect or known as of the Closing Date.
3.2 Terms of Letters of Credit. The proposed amount, terms
and conditions, and form of each Letter of Credit (and of any drafts or
acceptances thereunder) shall be subject to approval by the Agent and the
Issuing Bank. The term of each standby Letter of Credit shall not exceed
364 days, but may be subject to annual renewal. The term of each
documentary Letter of Credit shall not exceed 120 days. No standby Letter
of Credit shall have an expiry date later than the Business Day prior to
the Expiration Date and no documentary Letter of Credit shall have an
expiry date later than 90 days prior to the Expiration Date.
3.3 Notice of Issuance. A request for issuance of a Letter
of Credit shall be substantially in the form attached hereto as Exhibit P
(a "Letter of Credit Request") and may be given in writing or
electronically and, if requested by the Agent, promptly confirmed in
writing. A Letter of Credit Request must be received by the Agent no later
than 10:00 A.M. Los Angeles time at least ten (10) Business Days (or such
shorter period as may be agreed to by the Issuing Bank) in advance of the
proposed date of issuance.
3.4 Lenders' Participation. Immediately upon issuance or
amendment of any Letter of Credit, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuing
Bank, without recourse or warranty, an undivided interest and participation
in all rights and obligations under such Letter of Credit (other than fees
and other amounts owing to the Issuing Bank) in accordance with such
Lender's Proportionate Share.
3.5 Payment of Amounts Drawn Under Letters of Credit. Upon
notice from the Issuing Bank of any drawing under any Letter of Credit, the
Agent shall notify the Borrowers of such drawing not later than 10:00 A.M.
Los Angeles time on the Business Day immediately prior to the date on which
the Issuing Bank intends to honor such drawing. The applicable Borrower
will be deemed to have concurrently given a Notice of Borrowing to the
Agent for Revolving Loans to be made as Prime Rate Loans in the amount of
and at the time of such drawing. The proceeds of such Revolving Loans
shall be applied directly by the Agent to reimburse the Issuing Bank for
the amount of such drawing.
3.6 Payment by Lenders. If Revolving Loans are not made in an
amount sufficient to reimburse the Issuing Bank in full for the amount of
any draw, the Agent shall promptly notify each Lender of the unreimbursed
amount of such drawing and of such Lender's respective participation
therein. Each Lender shall make available to the Agent, for the account of
the Issuing Bank, the amount of its participation in immediately available
funds not later than 10:00 A.M. Los Angeles time on the next Business Day.
If any Lender fails to make available to the Agent the amount of such
Lender's participation, the Issuing Bank shall be entitled to recover such
amount on demand from such Lender together with interest at the Federal
Funds Rate for the first three Business Days and thereafter at the Prime
Lending Rate. For each Letter of Credit, the Agent shall promptly
distribute to each Lender which has funded the amount of its participation
its Proportionate Share of all payments subsequently received by the Agent
from the Borrowers in reimbursement of honored drawings.
3.7 Nature of Issuing Bank's Duties. In determining whether
to pay under any Letter of Credit, the Issuing Bank shall be responsible
only to determine that the documents and certificates required to be
delivered under that Letter of Credit have been delivered and that they
comply on their face with the requirements of that Letter of Credit. As
among the Borrowers, the Issuing Bank and each other Lender, the Borrowers
assume all risks of the acts and omissions of the Issuing Bank, or misuse
of the Letters of Credit by the respective beneficiaries of such Letters of
Credit. Any action taken or omitted to be taken by the Issuing Bank under
or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for the
Issuing Bank any liability to the Borrowers, the Agent or any Lender.
3.8 Obligations Absolute. The obligations of the Borrowers to
reimburse the Issuing Bank for drawings honored under the Letters of Credit
and the obligations of the Lenders under Section 3.6 hereof shall be
unconditional and irrevocable and shall be paid strictly in accordance with
the terms of this Credit Agreement under all circumstances including,
without limitation, the fact that a Default or an Event of Default shall
have occurred and be continuing.
3.9 Agent's Execution of Applications and Other Issuing Bank
Documentation; Reliance on Credit Agreement by Issuing Bank. The Agent
shall be authorized to execute, deliver and perform on behalf of the
Lenders such letter of credit applications, shipping indemnities, letter of
credit modifications and consents and other undertakings for the benefit of
the Issuing Bank as may be reasonably necessary or appropriate in
connection with the issuance or modification of Letters of Credit requested
by the Borrowers hereunder. The Lenders, the Agent and the Borrowers all
expressly agree that the terms of this Article 3 and various other
provisions of this Credit Agreement identifying the Issuing Bank are also
intended to benefit the Issuing Bank and the Issuing Bank shall be entitled
to enforce the provisions hereof which are for its benefit.
3.10 Additional Payments. If by reason of (a) any change in
any Requirement of Law or any change in the interpretation or application
by any Governmental Authority of any Requirement of Law or (b) compliance
by the Issuing Bank or any Lender with any direction, request or
requirement (whether or not having the force of law) of any Governmental
Authority or monetary authority including, without limitation, Regulation D
of the Board of Governors of the Federal Reserve System as from time to
time in effect (and any successor thereto):
(a) any reserve, deposit or similar requirement is or shall
be applicable, imposed or modified in respect of any Letters of Credit
issued by the Issuing Bank or participations therein purchased by any
Lender; or
(b) there shall be imposed on the Issuing Bank or any Lender
any other condition regarding this subsection 3.10, any Letter of Credit or
any participation therein;
and the result of the foregoing is to directly or indirectly increase the
cost to the Issuing Bank or any Lender of issuing, making or maintaining
any Letter of Credit or of purchasing or maintaining any participation
therein, or to reduce the amount receivable in respect thereof by such
Issuing Bank or any Lender, then, and in any such case, the Issuing Bank or
such Lender may, at any time within a reasonable period after the
additional cost is incurred or the amount received is reduced, notify the
Borrowers, and the Borrowers shall pay on demand such amounts as the
Issuing Bank or such Lender may specify to be necessary to compensate the
Issuing Bank or such Lender for such additional cost or reduced receipt,
together with interest on such amount from 10 days after the date of such
demand until payment in full thereof at a rate equal at all times to the
Prime Lending Rate per annum. The determination by the Issuing Bank or any
Lender, as the case may be, of any amount due pursuant to this Section, as
set forth in a certificate setting forth the calculation thereof in
reasonable detail, shall, in the absence of manifest or demonstrable error,
be final and conclusive and binding on all of the parties hereto.
ARTICLE 4.
COMPENSATION, REPAYMENT AND REDUCTION OF COMMITMENTS.
4.1 Interest on Prime Rate Loans and other Obligations. Each
Borrower shall pay to the Lenders on the first Business Day of each month
interest on outstanding Prime Rate Loans and any other outstanding
Obligations of such Borrower (other than Eurodollar Rate Loans), calculated
monthly in arrears at an interest rate per annum equal to the Prime Lending
Rate plus the Applicable Prime Rate Margin on the average net balances of
such Prime Rate Loans or other Obligations owing to the Agent and the
Lenders at the close of business each day during such month. The rate
hereunder shall change each day the Prime Lending Rate changes.
4.2 Interest on Eurodollar Rate Loans. Interest on
outstanding Eurodollar Rate Loans of each Borrower shall be payable on the
last day of each Interest Period with respect to such Eurodollar Rate Loans
(and, in the case of any Eurodollar Rate Loan with an Interest Period of
six months, on the three-month anniversary of the commencement of that
Interest Period), at the date of conversion of such Eurodollar Rate Loans
(or a portion thereof) to a Prime Rate Loan and at maturity of such
Eurodollar Rate Loans at an interest rate per annum equal during the
Interest Period for such Eurodollar Rate Loans to the Adjusted Eurodollar
Rate for the Interest Period in effect for such Eurodollar Rate Loans plus
the Applicable Eurodollar Rate Margin. After maturity of such Eurodollar
Rate Loans (whether by acceleration or otherwise), interest shall be
payable upon demand. The Agent upon determining the Adjusted Eurodollar
Rate for any Interest Period shall promptly notify the applicable Borrower
and the Lenders by telephone (confirmed promptly in writing) or in writing
thereof. Each determination by the Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent manifest error.
4.3 Unused Line Fee. The Borrowers shall pay to the Lenders
on the first Business Day of each month and on the Expiration Date a fee
equal to 0.375% per annum calculated monthly in arrears on the average
unused portion of the total Commitments at the close of business each day
during such month or occurring prior to the Expiration Date (the "Unused
Line Fee").
4.4 Letter of Credit Fees.
(a) The Borrowers shall pay to the Lenders on the first
Business Day of each month a fee, in an amount equal to the rate per annum
equal to the Applicable Eurodollar Rate Margin of the daily weighted
average amount of Letter of Credit Obligations outstanding during the
immediately preceding month. In addition, the Borrowers shall pay the
Agent, for its own benefit, on the date of issuance of any standby Letter
of Credit, a facing fee in the amount specified in the Fee Letter (the "L/C
Facing Fee"). With respect to each documentary letter of credit the
Borrower shall pay the Agent for its own benefit a fee on the first
Business Day of each month (i) an opening fee equal to 0.125% of the
initial face amount of each documentary Letter of Credit issued for the
account of any Borrower during the immediately preceding month, (ii) a
negotiation fee equal to 0.125% of the amount drawn under each documentary
Letter of Credit issued for the account of any Borrower during the
immediately preceding month and (iii) a guaranty fee equal to 0.125% of the
daily weighted average of the maximum amount available to be drawn under
each documentary Letter of Credit guaranteed for the account of any
Borrower hereunder and outstanding during the immediately preceding month.
The fees payable under this Section 4.4(a) are collectively referred to as
the "Letter of Credit Fees." Notwithstanding the foregoing, Letter of
Credit Fees on Letter of Credit Obligations outstanding after the
occurrence and during the continuance of an Event of Default shall be
payable on demand at a rate equal to the rate at which the Letter of Credit
Fees are charged pursuant to the first sentence of this Section 4.4(a),
plus 2.0%.
(b) The Borrowers shall also pay the customary charges, fees
and expenses of the Issuing Bank for the issuance, administration and
negotiation of each Letter of Credit and the Agent shall be entitled to
charge to the Loan Account such fees, charges and expenses of the Issuing
Bank as and when incurred by the Agent or any Lender (in each case, the
"Issuing Bank Fees") (but not duplicating the fees payable under 4.4(a)
above). Each determination by the Agent of Letter of Credit Fees, L/C
Facing Fees, Issuing Bank Fees and other fees, charges and expenses under
this Section shall be conclusive and binding for all purposes, absent
manifest error.
4.5 Interest After Event of Default. From the date of
occurrence of an Event of Default until the earlier of (i) the date all
Obligations have been paid and satisfied in full or (ii) the date such
Event of Default is waived, the Borrowers shall be obligated to pay to the
Lenders interest on the Revolving Loans and on other Obligations calculated
at rates per annum equal to the rates in effect under Sections 4.1 and 4.2
plus in each case 2.0%. Upon the expiration of any Interest Period in
effect for Eurodollar Rate Loans, such Revolving Loans shall thereafter
become Prime Rate Loans.
4.6 Expenses; Fees. The Borrowers shall be obligated to
reimburse the Agent's Expenses promptly upon demand and to pay the fees
provided in the Fee Letter in accordance therewith.
4.7 Mandatory Payment; Reduction of Commitments.
(a) Mandatory Payment. (i) Except during the period described
in Section 2.2(b)(ii), the aggregate balance of all Revolving Loans to a
Borrower and all Letter of Credit Obligations of such Borrower outstanding
at any time in excess of the Borrowing Base of such Borrower and any of its
Subsidiaries which is a Borrower Party then in effect shall be immediately
due and payable without the necessity of any demand.
(ii) If any Credit Party issues Subordinated Debt to
refinance or repay the Bridge Loan, all net proceeds thereof in excess of
the repayment amount shall be applied to the Revolving Loans on the
Business Day received, but without reduction of the Commitments.
(iii) All proceeds of any Casualty Loss shall be applied to
the Revolving Loans on the Business Day received, but without reduction of
the Commitments; provided, however, that the Agent, in the exercise of its
Permitted Discretion, in accordance with Section 2.1(b) may establish
reserves for repair or replacement of the property subject to such Casualty
Loss.
(b) Reduction of Commitments. On the Expiration Date, the
Commitment of each Lender shall automatically reduce to zero and may not be
reinstated. The Borrowers may reduce or terminate the Commitments on a pro
rata basis among all Lenders at any time and from time to time in whole or
in part. Each such reduction must be in an aggregate amount for all the
Lenders of not less than $5,000,000 (and in increments of $1,000,000
thereafter). Once reduced, no portion of the Commitments may be
reinstated.
4.8 Several Obligations. The obligations of each Borrower
hereunder to repay the outstanding principal of and interest on its
Revolving Loans and Letter of Credit Obligations are several. All other
Obligations of Borrowers shall be joint and several.
4.9 Maintenance of Loan Account; Statements of Account. The
Agent shall maintain an account on its books in the name of each Borrower
(each, a "Loan Account") in which the Borrower will be charged with all
loans and advances made by the Lenders to such Borrower or for such
Borrower's account, including the Revolving Loans, and all Letter of Credit
Obligations, the Fees, the Expenses and any other Obligations of such
Borrower. Each Loan Account will be credited with all payments received by
the Agent from such Borrower or for such Borrower's account, including all
amounts received in such Borrower's Concentration Account from any Lockbox
Bank. The Agent shall send the Borrowers a monthly statement reflecting
the activity in the Loan Accounts. Absent manifest error, each monthly
statement shall be an account stated and shall be final, conclusive and
binding on the Borrowers.
4.10 Payment Procedures. Each Borrower hereby authorizes the
Agent to charge its Loan Account with the amount of all interest, Fees and
Expenses and other payments to be made by it hereunder and under the other
Credit Documents. Each Borrower's obligations to the Agent and the Lenders
with respect to such payments shall be discharged by the Agent's charging
the Loan Account as provided herein.
4.11 Collection of Accounts. By no later than March 31, 1998
and at all times thereafter, each Borrower Party shall maintain lockboxes
(the "Lockboxes") and shall instruct all account debtors on the Accounts of
such Borrower Party to remit all Collections to such Lockboxes. The
applicable Borrower Parties, the Agent and financial institutions selected
by the Borrowers and acceptable to the Agent (the "Lockbox Banks") shall
enter into lockbox agreements or blocked account agreements, as required by
the Agent, substantially in the form attached hereto as Exhibit C or in
such other form satisfactory to the Agent (a "Lockbox Agreement" or
"Blocked Account Agreement," as applicable), which among other things shall
provide for the opening of an account for the deposit of Collections (a
"Collection Account") at a Lockbox Bank. All Collections and other amounts
received by the Borrower Parties from any account debtor, in addition to
all other cash received from any other source, shall upon receipt be
deposited into a Collection Account. Termination of such arrangements
shall also be subject to approval by the Agent. Upon the terms and subject
to the conditions set forth in the Lockbox Agreements, all available
amounts held in each Collection Account shall be wired each Business Day
into an account for each Borrower Party (each, a "Concentration Account")
maintained by the Agent at Bankers Trust (Delaware).
4.12 Application of Payments. All amounts received in its
Concentration Account of a Borrower from the Lockbox Banks shall be
credited to the Loan Account daily. All amounts received in the
Concentration Account of any Subsidiary which is a Borrower Party (but not
a Borrower) shall be transferred to the Concentration Account of its direct
or indirect parent corporation which is a Borrower and credited by the
applicable Borrower to the outstanding balance of the Indebtedness of such
Borrower Party to the Borrower. If no Revolving Loans are then outstanding
and no other Obligations are then due, amounts received in a Concentration
Account in accordance with the preceding sentences shall be transmitted to
the applicable Borrower's Disbursement Account or as otherwise directed by
the applicable Borrower in writing. Except as provided in Section 9.5,
after the occurrence of an Event of Default, and until it is waived, all
amounts received by the Agent from the Lockbox Banks, from liquidation of
Collateral or otherwise, shall be applied in the following order: first,
to the payment of any Fees, Expenses or other Obligations due and payable
to the Agent under any of the Credit Documents, including Agent Advances
and any other amounts advanced by the Agent on behalf of the Lenders;
second, to the payment of any Fees, expenses or other Obligations due and
payable to the Issuing Bank under any of the Credit Documents; third, to
the ratable payment of any Fees, Expenses or other Obligations due and
payable to the Lenders under any of the Credit Documents other than those
Obligations specifically referred to in this Section; fourth, to the
ratable payment of interest due on the Revolving Loans; and, fifth, to the
ratable payment of principal due on the Revolving Loans.
4.13 Calculations. All calculations of (i) interest hereunder
and (ii) Fees, including, without limitation, Unused Line Fees and Letter
of Credit Fees, shall be made by the Agent, on the basis of a year of 360
days for the actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which such interest or
Fees are payable. Each determination by the Agent of an interest rate, Fee
or other payment hereunder shall be conclusive and binding for all
purposes, absent manifest error.
4.14 Special Provisions Relating to Eurodollar Rate Loans.
(a) Continuation. With respect to any Borrowing consisting of
Eurodollar Rate Loans, the Borrowers may (so long as no Default or Event of
Default has occurred and is continuing), subject to the provisions of
Section 4.14(c), elect to maintain such Borrowing or any portion thereof as
consisting of Eurodollar Rate Loans by selecting a new Interest Period for
such Borrowing, which new Interest Period shall commence on the last day of
the immediately preceding Interest Period. Each selection of a new
Interest Period shall be made by notice given not later than 10:00 A.M. Los
Angeles time on the third Business Day prior to the date of any such
continuation relating to Eurodollar Rate Loans, by the applicable Borrower
to the Agent. Such notice by a Borrower of a continuation (a "Notice of
Continuation") shall be by telephone or facsimile transmission, and if by
telephone, promptly confirmed in writing substantially in the form of
Exhibit I, in each case specifying (i) the date of such continuation,
(ii) the Type of Loans subject to such continuation, (iii) the aggregate
amount of Loans subject to such continuation and (iv) the duration of the
selected Interest Period. A Borrower may elect to maintain more than one
Borrowing consisting of Eurodollar Rate Loans by combining such Borrowings
into one Borrowing and selecting a new Interest Period pursuant to this
Section 4.14(a). If Borrower shall fail to select a new Interest Period
for any Borrowing consisting of Eurodollar Rate Loans in accordance with
this Section 4.14(a), such Revolving Loans will automatically, on the last
day of the then existing Interest Period therefore, convert into Prime Rate
Loans. The Agent shall give each Lender prompt notice by telephone or
facsimile transmission of each Notice of Continuation.
(b) Conversion. A Borrower may on any Business Day (so long
as no Default or Event of Default has occurred and is continuing), upon
notice (each such notice, a "Notice of Conversion") given to the Agent, and
subject to the provisions of Section 4.14(c), convert the entire amount of
or a portion of all Loans of one Type comprising the same Borrowing into
Loans of another Type; provided, however, that any conversion of any
Eurodollar Rate Loans into Loans of another Type shall be made on, and only
on, the last day of an Interest Period for such Eurodollar Rate Loans and,
upon conversion of any Prime Rate Loans into Loans of another Type, the
applicable Borrower shall pay accrued interest to the date of conversion on
the principal amount converted. Each such Notice of Conversion shall be
given not later than 10:00 A.M. Los Angeles time on the Business Day prior
to the date of any proposed conversion into Prime Rate Loans and on the
third Business Day prior to the date of any proposed conversion into
Eurodollar Rate Loans. Subject to the restrictions specified above, each
Notice of Conversion shall be by telephone or facsimile transmission, and
if by telephone, promptly confirmed in writing substantially in the form of
Exhibit J, in each case specifying (i) the requested date of such
conversion, (ii) the Type of Loans to be converted, (iii) the portion of
such Type of Loan to be converted, (iv) the Type of Loan such Loans are to
be converted into and (v) if such conversion is into Eurodollar Rate Loans,
the duration of the Interest Period of such Loan. Each conversion shall be
in an aggregate amount for the Loans of all Lenders of not less than
$2,000,000 or an integral multiple of $100,000 in excess thereof. A
Borrower may elect to convert the entire amount of or a portion of all
Loans of one Type comprising more than one Borrowing into Loans of another
Type by combining such Borrowings into one Borrowing; provided, however,
that if the Borrowings so combined consist of Eurodollar Rate Loans, such
Loans shall have Interest Periods ending on the same date.
(c) Certain Limitations on Eurodollar Rate Loans. The right
of the Borrowers to maintain, select, continue or convert Eurodollar Rate
Loans shall be limited as follows:
(i) If the Agent is advised by Bankers Trust Company that
it is not offering U.S. dollar deposits (in the applicable
amounts) in the London interbank market, or the Agent determines
that adequate and fair means do not otherwise exist for
ascertaining the Eurodollar Rate for Eurodollar Rate Loans
comprising any requested Borrowing, continuation or conversion,
the right of the Borrowers to select or maintain Eurodollar Rate
Loans for such Borrowing or any subsequent Borrowing shall be
suspended until the Agent shall notify the Borrowers and the
Lenders that the circumstances causing such suspension no longer
exist, and each Loan comprising such Borrowing shall be made as a
Prime Rate Loan.
(ii) If the Majority Lenders shall, at least one Business
Day before the date of any requested Borrowing, continuation or
conversion, notify the Agent that the Eurodollar Rate for Loans
comprising such Borrowing will not adequately reflect the cost to
such Lenders of making or funding their respective Loans for such
Borrowing, the right of the Borrowers to select Eurodollar Rate
Loans for such Borrowing shall be suspended until the Agent shall
notify the Borrowers and the Lenders that the circumstances
causing such suspension no longer exist, and each Loan comprising
such Borrowing shall be made as a Prime Rate Loan.
(iii) If at any time any Lender determines (which
determination shall, absent manifest error, be conclusive and
binding on all parties) that the making, continuation or
conversion of any Loan as a Eurodollar Rate Loan has become
unlawful or impermissible by reason of compliance by that Lender
with any law, governmental rule, regulation or order of any
Governmental Authority (whether or not having the force of law or
would result in costs or penalties), then, and in any such event,
such Lender may give notice of that determination in writing, to
the Borrowers and the Agent and the Agent shall promptly transmit
the notice to each other Lender. Until such Lender gives notice
otherwise, the right of the Borrowers to select Eurodollar Rate
Loans from that Lender shall be suspended and each Eurodollar Rate
Loan outstanding from that Lender shall automatically and
immediately convert to a Prime Rate Loan.
(iv) The right of the Borrowers to select Eurodollar Rate
Loans for any Borrowing is suspended until the first Business Day
following the Syndication Date.
(v) There shall not be outstanding at any one time for each
Borrower more than an aggregate of 3 Borrowings of Loans which
consist of Eurodollar Rate Loans, or for all Borrowers more than
an aggregate of 12 Borrowings of Loans which consist of Eurodollar
Rate Loans.
(vi) No Agent Advance shall be made as a Eurodollar Rate
Loan.
(d) Compensation. (i) Each Notice of Continuation and Notice
of Conversion shall be irrevocable by and binding on the Borrowers. In the
case of any Borrowing, continuation or conversion that the related Notice
of Borrowing, Notice of Continuation or Notice of Conversion specifies is
to be comprised of Eurodollar Rate Loans, the Borrowers shall indemnify
each Lender against any loss, cost or expense incurred by such Lender as a
result of any failure to fulfill, on or before the date for such Borrowing,
continuation or conversion specified in such Notice of Borrowing, Notice of
Continuation or Notice of Conversion, the applicable conditions set forth
in Article 5, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation
or re-employment of deposits or other funds acquired by such Lender to fund
the Loan to be made by such Lender as part of such Borrowing, continuation
or conversion.
(ii) If any payment of principal of, or conversion or
continuation of, any Eurodollar Rate Loan is made other than on the last
day of the Interest Period for such Loan as a result of a payment,
prepayment, conversion or continuation of such Loan or acceleration of the
maturity of the Revolving Notes pursuant to Article 9 hereof or for any
other reason, the Borrowers shall, upon demand by any Lender (with a copy
of such demand to the Agent), pay to the Agent for the account of such
Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses which it may reasonably incur as a result of such
payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by any Lender to fund
or maintain such Loan.
(iii) Calculation of all amounts payable to a Lender under
this Section 4.14(d) shall be made as though such Lender elected to fund
all Eurodollar Rate Loans by purchasing U.S. dollar deposits in its
Eurodollar Lending Office's interbank eurodollar market.
4.15 Indemnification in Certain Events. If after the Closing
Date, either (i) any change in or in the interpretation of any law or
regulation is introduced, including, without limitation, with respect to
reserve requirements, applicable to the Agent, to any of the Lenders, or to
Bankers Trust Company, BT Delaware or any other banking or financial
institution from whom any of the Lenders borrows funds or obtains credit (a
"Funding Bank"), or (ii) the Agent, a Funding Bank or any of the Lenders
complies with any future guideline or request from any central bank or
other Governmental Authority or (iii) the Agent, a Funding Bank or any of
the Lenders determines that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the
interpretation or administration thereof has or would have the effect
described below, or the Agent, a Funding Bank or any of the Lenders
complies with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, and in the case of any event set forth in this
clause (iii), such adoption, change or compliance has or would have the
direct or indirect effect of reducing the rate of return on any of the
Lenders' capital as a consequence of its obligations hereunder to a level
below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration the Agent's or such Funding
Bank's or Lender's policies as the case may be with respect to capital
adequacy) by an amount deemed by such Lender to be material, and any of the
foregoing events described in clauses (i), (ii) or (iii) increases the cost
to the Agent, the Issuing Bank or any of the Lenders of (A) funding or
maintaining the Commitments or (B) issuing, making or maintaining any
Letter of Credit or of purchasing or maintaining any participation therein,
or reduces the amount receivable in respect thereof by the Agent, the
Issuing Bank or any Lender, then the Borrowers shall upon demand by the
Agent, pay to the Agent, for the account of each applicable Lender or, as
applicable, the Issuing Bank or a Funding Bank, additional amounts
sufficient to indemnify the Lenders against such increase in cost or
reduction in amount receivable. A certificate as to the amount of such
increased cost and setting forth in reasonable detail the calculation
thereof shall be submitted to the Borrowers by the Agent, or the applicable
Lender, Issuing Bank or Funding Bank, and shall be conclusive absent
manifest error.
4.16 Taxes.
(a) Payment of Taxes. Except as specifically provided
to the contrary in Section 4.16(b) or Section 4.16(d)(iii), any and all
payments by a Credit Party hereunder or under any Revolving Note or other
document evidencing any Obligations shall be made free and clear of, and
without reduction for, any and all present or future taxes, levies,
imposts, deductions, charges, withholdings, and all stamp or documentary
taxes, excise taxes, ad valorem taxes and other taxes imposed on the value
of the assets of any Credit Party or any Subsidiary of a Credit Party,
charges or levies which arise from the execution, delivery or registration,
or from payment or performance under, or otherwise with respect to, any of
the Credit Documents or the Commitments and all other liabilities with
respect thereto excluding, in the case of each Lender, the Issuing Bank and
the Agent, taxes imposed on or measured by net income or overall gross
receipts and capital and franchise taxes imposed on it by (i) the United
States, (ii) the Governmental Authority of the jurisdiction in which such
Lender's Domestic Lending Office or Eurodollar Lending Office, as
applicable, is located or any political subdivision thereof or (iii) the
Governmental Authority in which such Person is organized, managed and
controlled or is otherwise doing business or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges
and withholdings being hereinafter referred to as "Taxes"). If a Credit
Party shall be required by law to withhold or deduct any Taxes from or in
respect of any sum payable hereunder or under any such Revolving Note or
document to any Lender, the Issuing Bank or the Agent, (x) the sum payable
to such Lender, the Issuing Bank, or the Agent shall be increased as may be
necessary so that after making all required withholding or deductions
(including withholding or deductions applicable to additional sums payable
under this Section 4.16) such Lender, the Issuing Bank or the Agent (as the
case may be) receives an amount equal to the sum it would have received had
no such withholding or deductions been made, (y) the Credit Parties shall
make such withholding or deductions, and (z) the Credit Parties shall pay
the full amount withheld or deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(b) Indemnification. The Borrowers jointly and severally
agree (and, in the case of payments made by OSG under the OSG Guaranty, OSG
agrees) to indemnify each Lender, the Issuing Bank and the Agent against,
and reimburse each on demand for, the full amount of all Taxes imposed
because of any change in any Requirement of Law or any change in the
interpretation, administration or application by any Governmental Authority
of any Requirement of Law arising after the date hereof (in the case of the
Agent and any Lender or Issuing Bank listed on the signature pages hereof)
or the date of the Assignment and Assumption Agreement pursuant to which
such other Lender or Issuing Bank became a Lender or Issuing Bank (in the
case of each other Lender or Issuing Bank), including, without limitation,
any Taxes imposed by any Governmental Authority or amounts payable under
this Section 4.16 and any additional income, capital or franchise taxes
resulting therefrom actually incurred or paid by such Lender, the Issuing
Bank or the Agent (as the case may be) or any of their respective
Affiliates and any liability (including penalties, interest, and reasonable
out-of-pocket expenses paid to third parties) arising therefrom or with
respect thereto; provided, that the calculation of such amount is set forth
in reasonable detail in a written statement delivered to the Borrowers (or,
if applicable, OSG) by the Agent or such Lender or Issuing Bank, which
statement shall, absent manifest error, be final, conclusive and binding
upon all parties hereto.
(c) Receipts. Promptly upon the request of the Agent
therefor, each Credit Party will furnish to the Agent the original or a
certified copy of a receipt evidencing payment of Taxes by such Credit
Party.
(d) Foreign Bank Certifications.
(i) Each Lender that is not created or organized
under the laws of the United States or a political subdivision thereof (a
"Foreign Lender") shall deliver to the Borrowers and the Agent on the
Effective Date (or the date on which such Foreign Lender becomes a Lender
pursuant to Section 11.8) a true and accurate certificate executed in
duplicate by a duly authorized officer of such Foreign Lender to the effect
that such Foreign Lender is eligible to receive payments hereunder and
under the Revolving Notes without deduction or withholding of United States
federal income tax (A) under the provisions of an applicable tax treaty
concluded by the United States (in which case the certificate shall be
accompanied by two duly completed copies of IRS Form 1001 (or any successor
or substitute form or forms)), (B) under Sections 1442(c)(1) and 1442(a) of
the Internal Revenue Code (in which case the certificate shall be
accompanied by two duly completed copies of IRS Form 4224 (or any successor
or substitute form or forms)), or (C) due to such Foreign Lender's not
being a "bank" as such term is used in Section 881(c)(3)(A) of the Internal
Revenue Code (in which case, the certificate shall be accompanied by two
accurate and complete original signed copies of IRS Form W-8 (or any
successor substitute form or forms)).
(ii) Each Foreign Lender further agrees to deliver
to the Borrowers and the Agent, from time to time, a true and accurate
certificate executed in duplicate by a duly authorized officer of such
Foreign Lender before or promptly upon the occurrence of any event
requiring a change in the most recent certificate previously delivered by
it to the Borrowers and the Agent pursuant to this Section 4.16(d). Each
certificate required to be delivered pursuant to this Section 4.16(d)(ii)
shall certify as to one of the following:
(A) that such Foreign Lender can continue to
receive payments hereunder and under the Revolving Notes without
deduction or withholding of United States federal income tax;
(B) that such Foreign Lender cannot continue to
receive payments hereunder and under the Revolving Notes without
deduction or withholding of United States federal income tax as
specified therein but does not require additional payments
pursuant to Section 4.16(a) because it is entitled to recover the
full amount of any such deduction or withholding from a source
other than the Borrowers; or
(C) that such Foreign Lender is no longer capable
of receiving payments hereunder and under the Revolving Notes
without deduction or withholding of United States federal income
tax as specified therein and that it is not capable of recovering
the full amount of the same from a source other than the
Borrowers.
Each Foreign Lender agrees to deliver to the Borrowers and the Agent
further duly completed copies of the above-mentioned IRS forms on or before
the earlier of (x) the date that any such form expires or becomes obsolete
or otherwise is required to be resubmitted as a condition to obtaining an
exemption from withholding from United States federal income tax and (y)
fifteen (15) days after the occurrence of any event requiring a change in
the most recent form previously delivered by such Foreign Lender to the
Borrowers and Agent, unless any change in any Requirement of Law, or
official interpretation thereof which would render such form inapplicable
or which would prevent the Foreign Lender from duly completing and
delivering such form has occurred prior to the date on which any such
delivery would otherwise be required and the Foreign Lender promptly
advised the Borrowers that it is not capable of receiving payments
hereunder and under the Revolving Notes without any deduction or
withholding of United States federal income tax.
(iii) The Credit Parties shall not be required to pay
any additional amount to any Foreign Lender under Section 4.16(b) if such
Foreign Lender shall have failed to satisfy the requirements of Section
4.16(d)(i), it being agreed and understood that nothing in this Section
4.16(d)(iii) shall relieve the Credit Parties of their obligations to pay
any additional amounts pursuant to Section 4.16(b) in the event that, as a
result of any change after the date of such satisfaction in any Requirement
of Law or any change after the date of such satisfaction in the
interpretation, administration or application by any Governmental Authority
of any Requirement of Law, such Foreign Lender is no longer capable of
receiving payments hereunder and under the Revolving Notes without any
deduction or withholding of United States federal income tax.
ARTICLE 5.
CONDITIONS PRECEDENT
5.1 Conditions to Initial Loans and Letters of Credit. The
obligation of each Lender to fund its Proportionate Share of the initial
Revolving Loans, and the obligation of the Agent to cause the Issuing Bank
to issue the initial Letter of Credit, is subject to the satisfaction or
waiver of the following conditions precedent on or before January 31, 1998:
(a) Closing Document List. The Agent and the Lenders shall
have received this Credit Agreement, the Revolving Notes, the other Credit
Documents and each of the other agreements, opinions, reports, approvals,
consents, certificates and other documents set forth on the "Closing
Document List" attached hereto as Schedule A, each duly executed by all
applicable parties.
(b) Material Adverse Change. (i) No change, occurrence,
event or development or event involving a prospective change that is
reasonably likely to have a Material Adverse Effect shall have occurred and
be continuing, and (ii) there shall not have occurred a substantial
impairment of the financial markets generally that is reasonably likely to
materially and adversely affect the transactions contemplated hereby, in
each case as determined by the Agent and each Lender in its sole
discretion.
(c) Fees and Expenses. All Fees and Expenses payable on or
before the Closing Date shall have been paid.
(d) Borrowing Base; Unused Availability. The Borrowing Base
of the Borrowers and any Subsidiary which is a Borrower Party shall be
appropriate, in the Agent's Permitted Discretion, for Borrowers' overall
business and working capital requirements. On the Closing Date, after
giving effect to the consummation of the Kolmar Acquisition and the
repayment of Indebtedness, Borrowers shall have an aggregate Excess
Availability of not less than $5,000,000.
(e) Kolmar Acquisition; Bridge Loans; Stock Issuance. OSG
shall have received at least $70,000,000 in gross proceeds from the
issuance of the Bridge Loan and at least $20,900,000 from the issuance of
OSG's common stock to G+M and other Persons acceptable to the Agent and the
Majority Lenders, and all Transaction Documents related thereto shall be in
form and substance satisfactory to the Agent and the Majority Lenders. The
Kolmar Acquisition shall be consummated concurrently with the initial
Revolving Loans in accordance with all applicable Requirements of Law on
the terms and conditions set forth in the Acquisition Documents, each of
which shall be satisfactory in form and substance to the Agent and the
Majority Lenders, with no amendments or waivers thereto except as approved
by the Agent and the Majority Lenders.
(f) Perfection of Liens. The Liens and all other security
interests in favor of the Agent for the benefit of the Lenders and the
Issuing Bank on the assets of the Credit Parties shall have been duly
perfected and shall constitute first and prior Liens, except as otherwise
permitted hereunder. The Borrowers shall have delivered payoff demands
with respect to all Indebtedness to be repaid, together with releases of
all Liens with respect thereto, and all such Indebtedness shall be repaid
in full from the proceeds of the initial Revolving Loans.
(g) Completion of Due Diligence. The Agent and the Lenders
and counsel to the Agent shall have completed their due diligence
investigation of the Credit Parties and the Collateral (including all
appraisals) and shall be satisfied with the results thereof.
(h) Capitalization and Corporate Structure. The capital and
corporate structure of OSG and its Subsidiaries, after giving effect to the
Kolmar Acquisition, and all Governing Documents shall be acceptable to the
Agent and the Lenders in all respects.
(i) Consents and Approvals. The waiting period under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 or other applicable
Requirements of Law shall have expired without any adverse action and
Borrowers and Sellers shall have obtained and delivered to the Agent all
consents and approvals of all Governmental Authorities or parties to
Contractual Obligations required to consummate the Kolmar Acquisition, to
incur the Obligations, to grant Liens to the Agent, and to consummate the
Transactions.
(j) Litigation. There shall not be pending or, to the best
knowledge of any Borrower, threatened any litigation, proceeding,
investigation or other action seeking an injunction or other restraining
order, damages or other relief with respect to the Transactions, the
Transaction Documents, the transactions contemplated by this Credit
Agreement or the other Credit Documents or the business activities of any
Credit Party. No Requirement of Law shall prohibit, enjoin or restrain the
consummation of the Transactions.
(k) Solvency. The Agent shall have received a certificate of
the chief financial officer of each Borrower and the opinion of Xxxxxxxx
Xxxxx Xxxxxx & Xxxxx and addressed to the Agent and the Lenders in form and
substance satisfactory to the Agent and the Lenders, attesting that, on a
pro forma basis, after giving effect to the Kolmar Acquisition and the
Transactions, each Borrower shall not be insolvent or rendered insolvent,
be left with an unreasonably small capital with which to engage in its
business or have incurred debts beyond its ability to pay as such debts
mature.
(l) Appraisals. The Agent and the Lenders shall have
received appraisals of the Mortgaged Properties satisfying the requirements
of Regulation Y of the Board of Governors of the Federal Reserve System and
the Financial Institutions Reform, Recovery and Enforcement Act of 1989 and
appraisals of the Equipment of each Borrower Party, in each case from firms
and in form, scope and substance acceptable to the Agent and Lenders.
(m) Insurance and Title Insurance. The Agent shall have
received evidence satisfactory to it that the Credit Parties maintain
insurance meeting the requirements of the Credit Documents and that the
Agent, for the benefit of the Lenders and the Issuing Bank, has been named
loss payee for all property insurance and additional insured for all
liability insurance (including any environmental liability insurance), and,
except as agreed by the Agent, shall have received ALTA extended coverage
mortgagee policies of title insurance (or commitments therefor) for the
Mortgaged Properties from an insurer, in amounts, and in form and substance
satisfactory to Agent.
(n) Environmental Reports. The Agent shall have received the
Environmental Reports, in scope and substance satisfactory to the Agent,
concerning the properties and businesses of the Borrowers and their
Subsidiaries, including all properties acquired in the Kolmar Acquisition
and all Mortgaged Properties.
(o) Opinions of Counsel. The Agent and the Lenders shall
have received favorable legal opinions from Paul, Hastings, Xxxxxxxx &
Xxxxxx, counsel to the Credit Parties, and from such local counsel as the
Agent may reasonably request, covering such matters as may be reasonably
requested by the Agent or the Lenders in connection with the Kolmar
Acquisition, the Credit Documents and the Transactions. The Agent shall
have received a reliance letter from counsel to the Sellers with respect to
the opinions delivered in connection with the Kolmar Acquisition.
(p) Financial Statements and Projections. The Agent and the
Lenders shall have received and approved (i) the audited Financial
Statements of each of ASC and PLI for the Fiscal Year ended December 31,
1996, together with the unqualified opinions of Deloitte & Touche LLP
thereon, (ii) the audited combined financial statements of Kolmar and its
Subsidiaries and the assets to be acquired by Kolmar Canada for the fiscal
year ended December 31, 1996, together with the unqualified opinion of KPMG
Peat Marwick thereon; (iii) interim Financial Statements for OSG and its
Subsidiaries for the nine months ending September 30, 1997 and Kolmar and
its Subsidiaries for the nine months ending September 27, 1997; each
reviewed by the Auditors in scope and substance satisfactory to the Agent
and the Lenders; (iv) the Pro Forma; and (v) Projections; and the Agent and
the Lenders shall have determined that the financial condition of the
Credit Parties does not differ in any material adverse respect from the
financial condition existing prior to October 30, 1997 and that the Credit
Parties will be able to comply with the financial covenants set forth in
this Credit Agreement.
(q) Closing Certificate. The Borrowers shall deliver a
certificate of their chief executive officer or chief financial officer
certifying that (i) all conditions to the closing have been satisfied, and
(ii) no change, occurrence, event or development or event involving a
prospective change that is reasonably likely to have a Material Adverse
Effect has occurred and is continuing.
(r) Borrowing Base Certificates, etc. The Agent shall have
received from Borrowers a consolidating and consolidated Borrowing Base
Certificate for each Borrower and its Subsidiaries which are Borrower
Parties (but not Borrowers) and a Notice of Borrowing for all Revolving
Loans to be made on the Closing Date, together with wire transfer
instructions for all disbursements to be made on such date.
(s) Amendments to Transaction Documents. The amendments to
the Management Agreement and the Stockholder Agreement shall be in form and
substance satisfactory to the Agent and the Lenders.
(t) Additional Documents. The Credit Parties shall have
executed and delivered to the Agent and the Lenders all documents which the
Agent determines are reasonably necessary to consummate the transactions
contemplated hereby.
5.2 Conditions Precedent to All Revolving Loans and Letters of
Credit. The obligation of each Lender to fund its Proportionate Share of
any requested Revolving Loan, of the Agent to make Agent Advances or of the
Agent to cause the Issuing Bank to issue any requested Letter of Credit is
subject to the conditions precedent set forth below. Each Notice of
Borrowing and each Letter of Credit Request shall constitute a
representation and warranty that such conditions are satisfied.
(a) All representations and warranties of any Credit Party
contained in this Credit Agreement and the other Credit Documents shall be
true and correct on and as of the date of such Notice of Borrowing or
Letter of Credit Request or issuance of a check drawn against or request
for transfer from any Disbursement Account, as if then made, other than
representations and warranties that relate solely to an earlier date;
(b) No Default or Event of Default shall have occurred, or
would result from the making of the requested Revolving Loan or the
issuance of the requested Letter of Credit, which has not been waived; and
(c) No event has occurred which has had or could reasonably be
expected to have a Material Adverse Effect.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES.
To induce the Agent and the Lenders to enter into this Credit
Agreement and to make the Revolving Loans and other financial
accommodations described herein, and to induce the Issuing Bank to issue
Letters of Credit, OSG and the Borrowers hereby jointly and severally
represent and warrant to the Agent, the Lenders and the Issuing Bank that
the following are true, correct and complete, both before and after giving
effect to the Acquisition and any other Permitted Acquisition. Such
representations and warranties, and all other representations and
warranties made by the Credit Parties in any other Credit Document, shall
survive the execution and delivery of the Credit Documents.
6.1 Organization and Qualification. Each Credit Party (i) is
a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, (ii) has the power and
authority to own its properties and assets and to transact the businesses
in which it presently is, or proposes to be, engaged and (iii) is duly
qualified and is authorized to do business and is in good standing in each
jurisdiction where it presently is, or proposes to be, engaged in business.
Schedule B, Part 6.1 lists all jurisdictions in which the Credit Parties
are qualified to do business as foreign corporations.
6.2 Authority. Each Credit Party has the requisite corporate
power and authority to execute, deliver and perform each of the Credit
Documents and Transaction Documents to which it is a party. All corporate
action necessary for the execution, delivery and performance of any of the
Credit Documents and Transaction Documents has been taken.
6.3 Enforceability. This Credit Agreement and each other
Credit Document, each Transaction Document and each Acquisition Document is
(or will upon due execution be) the legal, valid and binding obligation of
each Credit Party which is a party thereto, enforceable in accordance with
its terms, except as enforceability may be affected by bankruptcy,
insolvency or similar proceedings affecting the rights of creditors
generally.
6.4 No Conflict. The execution, delivery and performance of
each Credit Document, Transaction Document and Acquisition Document by the
Credit Parties are not in contravention of any Requirement of Law material
to any Credit Party or any material Contractual Obligation to which it is a
party or by which it or any of its properties are bound and will not,
except as contemplated herein, result in the imposition of any Liens upon
any of its properties.
6.5 Consents and Filings. No consent, authorization, permit
or filing with any Government Authority or under any Contractual Obligation
is required in connection with the execution, delivery and performance of
this Credit Agreement or any Credit Document or Transaction Document or
Acquisition Document, or the continuing operations of the Credit Parties,
except (i) those that have been obtained or made prior to the date hereof
or, with respect to any Permitted Acquisition, prior to its consummation,
(ii) filings necessary to create, perfect or retain the perfection of Liens
of the Agent against the Collateral, (iii) filings in respect of the Kolmar
Acquisition which will be made promptly after the Closing Date which will
not create a Material Adverse Effect if not so made or approved, and (iv)
filings in respect of any other Permitted Acquisition which will be made
promptly after the closing of each such Permitted Acquisition which will
not create a Material Adverse Effect if not so made or approved.
6.6 Government Regulation. Neither OSG nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
the Investment Company Act of 1940, or any other Requirement of Law that
limits its ability to incur indebtedness or its ability to consummate the
transactions contemplated in this Credit Agreement and the other Credit
Documents and Transaction Documents.
6.7 Solvency. Before and after giving effect to the
Transactions and any Permitted Acquisition, (i) the fair saleable value of
the assets of each Credit Party exceeds all its probable liabilities,
including those to be incurred pursuant to this Credit Agreement and the
other Credit Documents and Transaction Documents; (ii) no Credit Party has
unreasonably small capital in relation to the business in which it is or
proposes to be engaged; (iii) no Credit Party has incurred, nor does it
believe that it will incur debts beyond its ability to pay as such debts
become due; and (iv) no Credit Party believes that it will be unable to
satisfy any final judgment against it in accordance with its terms.
6.8 Rights in Collateral; Priority of Liens. Each Credit
Party has good and marketable title to all property which constitutes part
of the Collateral, free and clear of any and all Liens in favor of third
parties except Permitted Encumbrances. Upon the proper filing of the UCC
financing statements, filings under the Ontario and any other applicable
Requirements of Law and the Intellectual Property Security Agreements and
recordation or registration, as applicable, of the Mortgages listed in the
Closing Document List or delivered in connection with any Permitted
Acquisition, the security interests granted pursuant to the Credit
Documents constitute valid and enforceable first, prior and perfected Liens
on the Collateral, to the extent such Liens can be perfected by the filing
of such financing statements filings and Intellectual Property Security
Agreements or recordation of such Mortgages.
6.9 Financial Data. OSG has provided to the Agent and each of
the Lenders complete and accurate copies of (i) annual audited Financial
Statements of each of ASC and PLI for the Fiscal Year ended December 31,
1996 and unaudited consolidated and consolidating Financial Statements of
OSG and its Subsidiaries for the nine months ended September 30, 1997 and
(ii) audited combined Financial Statements of Kolmar and its Subsidiaries
(including the assets to be acquired by Kolmar Canada) for the fiscal year
ended December 31, 1996 and audited combined and unaudited consolidating
Financial Statements of Kolmar and its Subsidiaries for the nine months
ended September 27, 1997. Such Financial Statements have been prepared in
accordance with GAAP consistently applied throughout the periods involved
and fairly present the respective financial positions, results of
operations and cash flows of the applicable Persons for each of the periods
covered (subject in the case of interim statements, to normal year-end
audit adjustments and the absence of footnotes). The Projections have been
made in good faith, based upon assumptions which the Borrowers believe to
be reasonable. Except as set forth on Schedule B, Part 6.9, to the best of
Borrowers' knowledge (after due inquiry), no Credit Party has any
Contingent Obligation, contingent liability or liability for taxes, long-
term leases or commitments, which is not reflected in such Financial
Statements or the most recent Financial Statements delivered under Section
7.1 hereof.
6.10 FEIN; Locations of Offices, Records and Inventory. The
Federal Employee Identification Number (if applicable), the comparable
identification number in Canada and the address of the principal place of
business and chief executive office of each Credit Party and all locations
of Collateral is set forth on Schedule B, Part 6.10. The books and records
of the Credit Parties, and all their chattel paper and records of Accounts,
are maintained exclusively at such locations. There is no jurisdiction in
which the Credit Parties have any Collateral (except for vehicles and
Inventory in transit for processing or to customers) other than those
jurisdictions identified on Schedule B, Part 6.10. A complete list of the
name of the lessor or warehouse company and address of each leased premises
or warehouse not owned by a Credit Party at which Inventory is stored is
set forth on Schedule B, Part 6.10. None of the receipts received and to
be received by any Credit Party from any warehouseman state that the
Inventory covered thereby is to be delivered to bearer or to the order of a
named person or to a named person and such named person's assigns.
6.11 Subsidiaries; Ownership of Stock. After giving effect to
the Kolmar Acquisition, the only direct or indirect Subsidiaries of OSG are
those listed on Schedule B, Part 6.11. OSG or its Subsidiary specified in
Schedule B, Part 6.11 is the record and beneficial owner of all of the
shares of capital stock of each of the Subsidiaries listed on Schedule B,
Part 6.11, except as set forth on such Schedule. There are no proxies,
irrevocable or otherwise, with respect to such shares, and no equity
securities of any of such Subsidiaries are or may become required to be
issued by reason of any options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of any capital stock
of any such Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any such Subsidiary is or may
become bound to issue additional shares of its capital stock or securities
convertible into or exchangeable for such shares. All of such shares so
owned by the Credit Parties are owned by the Credit Parties free and clear
of any Liens.
6.12 No Judgments or Litigation. Except as set forth on
Schedule B, Part 6.12, no judgments, orders, writs or decrees are
outstanding against any Credit Party nor is there now pending or, to the
best of the Borrowers' knowledge after diligent inquiry, threatened, any
litigation, contested claim, investigation, arbitration, or governmental
proceeding by or against any Credit Party, which could reasonably be
expected to have a Material Adverse Effect.
6.13 No Defaults. No Credit Party is in default under any
term of any Contractual Obligation to which any of them is a party or by
which any of them is bound, which could, individually or in the aggregate,
have a Material Adverse Effect. Neither OSG nor the Borrower know of any
material dispute regarding any such Contractual Obligation.
6.14 Labor Matters. Schedule B, Part 6.14 accurately sets
forth all labor contracts to which any Credit Party is a party and their
dates of expiration. There are no existing or threatened strikes, lockouts
or other disputes relating to any collective bargaining or similar
agreement to which any Credit Party is a party.
6.15 Compliance with Law. No Credit Party has violated or
failed to comply with any Requirement of Law, including, without
limitation, ERISA, Environmental Laws or the regulations of the United
States Food and Drug Administration or its equivalent is foreign countries,
which could, individually or in the aggregate, have a Material Adverse
Effect.
6.16 ERISA. Schedule B, Part 6.16 provides a complete list of
the pension, retirement, profit sharing and other employee benefit and
fringe benefit plans, including medical and life insurance, workers'
compensation, and vacation benefits, that cover employees of OSG or any
Subsidiary of OSG (collectively the "Employee Plans").
(a) Each Employee Plan is in compliance with all
applicable Requirements of Law and has been maintained
in compliance with the terms of such Plan. Full and
timely payment has been made of all amounts required
to be contributed under the terms of each Employee
Plan and applicable law or required to be paid as
expenses under such Employee Plan. Each Employee Plan
intended to be qualified under Code Section 401(a) has
received a determination letter to that effect from
the Internal Revenue Service and no event has occurred
and no amendment has been made that would adversely
affect such qualified status.
(b) The current value of the assets of each Employee Plan
subject to Title IV of ERISA, based on the actuarial
assumptions presently used by the Employee Plan,
exceeds the present value of the accrued benefits
under such Plan. No Employee Plan subject to Title IV
of ERISA or to Code Section 412 has incurred any
accumulated funding deficiency, whether or not waived,
and no other actual or contingent liability for any
other expenses or obligations of any Employee Plan
exists.
(c) Neither OSG nor any ERISA Affiliate is making
contributions, obligated to make contributions, or
within the six calendar years prior to the closing
date, made or been obligated to make contributions to
any multiemployer plan within the meaning of Section
4001(a)(3) of ERISA.
(d) Neither any Employee Plan nor any fiduciary for any
Employee Plan has participated in, engaged in or been
a party to any non-exempt Prohibited Transaction, and
neither OSG, or any of its Subsidiaries nor any
Employee Plan has had asserted against it any claim
for taxes under Chapter 43 Subtitle D or Section 5000
of the Code or for penalties under ERISA Section
502(c), (i) or (l), with respect to any Employee Plan,
nor is there a basis for any such claim. No officer,
director or employee of OSG or any of its Subsidiaries
has committed a material breach of any responsibility
or obligation imposed on fiduciaries by Title I of
ERISA with respect to any Employee Plan. As to Plans
not subject to ERISA, no conduct has occurred that
would constitute a material breach of those provisions
if the Plan were subject to those requirements.
(e) Other than routine claims for benefits, there is no
claim pending, or, to the knowledge of OSG or any
Borrower, threatened, involving any Employee Plan.
There is no proceeding pending, or, to the knowledge
of OSG or any Borrower, threatened, involving any
Employee Plan before the Internal Revenue Service, the
U.S. Department of Labor, the Pension Benefit Guaranty
Corporation, or any other Governmental Authority,
domestic or foreign. No proceedings have been
instituted by any Governmental Authority to terminate
any Plan in a manner that could create a liability or
obligation of OSG, any of its Subsidiaries or any
ERISA Affiliate, and no condition exists that presents
a material risk that such proceedings will be
instituted. No Termination Event has occurred and no
other event on circumstance has occurred that may
result in a Termination Event.
(f) No reporting or disclosure requirement imposed by
ERISA, the Code, or any other law, has been violated
with respect to any Employee Plan.
(g) With respect to each Plan that is a welfare plan (as
defined in ERISA section 3(1), OSG, each of its
Subsidiaries and each ERISA Affiliate has complied in
all material respects with the provisions of Sections
601-734 of ERISA and their Code counterparts. Neither
OSG, nor any of its Subsidiaries nor any ERISA
Affiliate is obligated to provide health care benefits
of any kind to retired employees pursuant to any
Employee Plan or any agreement or understanding. [The
Accumulated Post-Retirement Benefit Obligation (as
defined in Statement of Financial Accounting Standards
No. 106) as of [_____________] with respect to post-
retirement health and life benefits is estimated by
the independent actuary to be $___________, calculated
using the actuarial assumptions used for the last
available financial reporting period.]
(h) Schedule B, Part 6.16 lists all Employee Plans subject
to laws of a country or jurisdiction other than the
United States (the "Foreign Plans"). All
contributions required to be made to each Foreign Plan
for all prior plan years in order for each Foreign
Plans to comply with the minimum funding standards
imposed by applicable law have been made or properly
accrued and all employee contributions to the Foreign
Plans for all prior plan years have been properly
withheld any fully paid into the applicable funding
arrangements. There has been no withdrawal of assets
from the Foreign Plans and no application for approval
of a withdrawal of assets has been made to any
Governmental Authority. Each of the Foreign Plans is
registered or qualified within the meaning of
applicable law and nothing has occurred which would
result in the revocation of the registration or
qualification of such Plans. The representations and
warranties contained in this subsection (h) are in
addition to each of the other representations and
warranties contained in Section 6.16 that are
applicable to the Foreign Plans.
(i) Agent has received a copy of the three most recently
filed Internal Revenue Service Form 5500 series and
accountant's opinions, if applicable, for each
Employee Plan, all applicable Internal Revenue Service
determination letters, and all applicable foreign
registration documents.
(j) Neither OSG nor any ERISA Affiliate is required to
provide security to any Plan under Section 401(a)(2a)
of the Internal Revenue Code.
6.17 Compliance with Environmental Laws. Except as disclosed
on Schedule B, Part 6.17, (i) none of the Credit Parties is the subject of
a judicial or administrative proceeding or investigation relating to the
violation of any Environmental Law, or asserting potential liability
arising from the disposal by any Person of any Hazardous Material;
(ii) none of the Credit Parties has filed or received any notice under any
Requirement of Law of treatment, storage, disposal, spill or release or
threatened release, at any property owned or leased or formerly owned or
leased by any Credit Party or at any other location, of any Hazardous
Material generated, used, stored, treated, transported or released by or on
behalf of any Credit Party which, individually or in the aggregate, has had
or would reasonably be expected to have a Material Adverse Effect; and
(iii) none of the Credit Parties has knowledge of any contingent liability
for any release of any Hazardous Material which, individually or in the
aggregate, has had or would reasonably be expected to have a Material
Adverse Effect.
6.18 Intellectual Property. The Credit Parties possess such
assets, licenses, patents, patent applications, copyrights, service marks,
trademarks and trade names as are necessary or advisable to continue to
conduct their present and proposed business activities.
6.19 Licenses and Permits. Each of the Credit Parties has
obtained and holds in full force and effect, all franchises, licenses,
leases, permits, certificates, authorizations, qualifications, easements,
rights of way and other rights and approvals which are necessary or
advisable for the operation of its business as presently conducted and as
proposed to be conducted, except such permits, etc. for which transfer
approvals may, in accordance with Requirements of Law, and will be obtained
promptly after consummation of the Kolmar Acquisition or any Permitted
Acquisition.
6.20 Taxes and Tax Returns.
(a) Except as set forth on Schedule B, Part 6.20, the Credit
Parties have timely filed, without request for extension, all income tax
returns required to be filed. The information filed is complete and
accurate in all material respects. All deductions taken in such income tax
returns are appropriate and in accordance with applicable laws and
regulations, except deductions that may have been disallowed but are being
challenged in good faith and for which adequate reserves have been made in
accordance with GAAP.
(b) All taxes, assessments, fees and other governmental
charges for periods beginning prior to the date hereof, have been timely
paid and no Credit Party has any liability for taxes in excess of the
amounts so paid or reserves so established.
(c) Except as set forth in Schedule B, Part 6.20, no
deficiencies for taxes have been claimed, proposed or assessed by any
taxing or other Governmental Authority against any Credit Party and no tax
liens have been filed. Except as set forth in Schedule B, Part 6.20, there
are no pending or threatened audits, investigations or claims for or
relating to any liability for taxes and there are no matters under
discussion with any Governmental Authority which could reasonably be
expected to result in a material additional liability for taxes. Either
the federal income tax returns of the Credit Parties have been audited by
the Internal Revenue Service or other applicable Governmental Authority and
such audits have been closed, or the period during which any assessments
may be made by the Internal Revenue Service or other applicable
Governmental Authority has expired without waiver or extension for all
years up to and including the fiscal year of the Credit Parties ended as
set forth on Schedule B, Part 6.20. Except as set forth in Schedule B,
Part 6.20, no extension of a statute of limitations relating to taxes,
assessments, fees or other governmental charges is in effect with respect
to the Credit Parties.
(d) Except as set forth on Schedule B, Part 6.20, no Credit
Party has any obligation under any written tax sharing agreement or
agreement regarding payments in lieu of taxes.
6.21 Material Contracts. Schedule B, Part 6.21, contains a
true, correct and complete list of all the Material Contracts currently in
effect on the date hereof. Except as described on Schedule B, Part 6.21,
none of the Material Contracts contains any burdensome restrictions on the
Credit Parties or any of their respective properties, all of the Material
Contracts are in full force and effect, and no defaults currently exist
thereunder.
6.22 Accuracy and Completeness of Information. All factual
information furnished by or on behalf of the Credit Parties in writing to
the Agent, any Lender, or the Auditors for purposes of or in connection
with this Credit Agreement or any Credit Documents or the Transactions, or
any transaction contemplated hereby or thereby is or will be true and
accurate in all material respects on the date as of which such information
is dated or certified and not incomplete by omitting to state any material
fact necessary to make such information not misleading at such time.
6.23 No Change. Since December 31, 1996, there has been no
development or event nor any prospective development or event, which has
had or could reasonably be expected to have a Material Adverse Effect.
6.24 Representations in Acquisition Documents. Each of the
representations and warranties of the parties to any Acquisition Document
is true and correct in all material respects, and is incorporated herein by
reference.
ARTICLE 7.
AFFIRMATIVE COVENANTS.
Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder and under the other Credit
Documents:
7.1 Financial Reporting. OSG and the Borrowers shall timely
deliver to each Lender the following information:
(a) Annual Financial Statements. As soon as available, but not
later than 120 days after each Fiscal Year end: (i) the annual audited
Financial Statements of OSG and its Subsidiaries; (ii) a comparison in
reasonable detail to the prior year audited Financial Statements; (iii) the
Auditors' unqualified opinion, "Management Letter" and statement indicating
that the Auditors have not obtained knowledge of the existence of any
Default or Event of Default during their audit; (iv) a narrative discussion
of the consolidated financial condition and results of operations and the
consolidated liquidity and capital resources of OSG and its Subsidiaries
for such Fiscal Year, prepared by the chief financial officer of OSG; and
(v) a Compliance Certificate substantially in the form of Exhibit D with an
attached schedule of calculations demonstrating compliance with the Article
8 covenants.
(b) Projections. Not later than 45 days after each Fiscal
Year end, beginning with the Fiscal Year ended December 31, 1997,
projections of the financial condition and results of operations of OSG and
its Subsidiaries for the next three years, containing projected
consolidating balance sheets, statements of operations, statements of cash
flows and statements of changes in shareholders equity on a monthly basis
for the first of the three years and annually for the second and third.
(c) Quarterly Financial Statements. As soon as available, but
not later than 60 days after each end of each of the first three fiscal
quarters, and 120 days after end of the last fiscal quarter: (i) Financial
Statements of OSG and its Subsidiaries as of the fiscal quarter then ended,
and for the Fiscal Year to date; (ii) a comparison in reasonable detail to
the Financial Statements for the corresponding periods of the prior Fiscal
Year; (iii) the certification of the chief executive officer or chief
financial officer of OSG that such Financial Statements have been prepared
in accordance with GAAP (subject to year-end audit adjustments); (iv) a
narrative discussion of the consolidated financial condition and results of
operations and the consolidated liquidity and capital resources of OSG and
its Subsidiaries for such fiscal quarter and Fiscal Year to date, prepared
by the chief financial officer of OSG; and (v) a Compliance Certificate
substantially in the form of Exhibit D with an attached schedule of
calculations demonstrating compliance with the Article 8 covenants.
(d) Monthly Financial Statements. As soon as available, but
not later than 45 days after the end of each month: (i) a consolidated and
consolidating balance sheet for OSG and its Subsidiaries as at the end of
such month and for the Fiscal Year to date and consolidated and
consolidating statements of operations and cash flows for such month and
for the Fiscal Year to date; (ii) a comparison to the balance sheet,
statement of operations and statement of cash flows for the same year to
date period in the prior year; (iii) a certification by the chief financial
officer of OSG that such balance sheet, statement of operations and
statement of cash flows have been prepared in accordance with GAAP (subject
to year-end audit adjustments); and (iv) a Compliance Certificate
substantially in the form of Exhibit D with an attached schedule of
calculations demonstrating compliance the Article 8 covenants.
(e) Monthly Comparison to Prior Projections. As soon as
available, but not later than 45 days after the end of each month, a
comparison of actual results of operations for OSG and its Subsidiaries for
such month and for the period from the beginning of the current Fiscal Year
through the end of such month with amounts previously projected for those
periods (see Section 7.1(b)) and with actual results for corresponding
periods in the previous Fiscal Year.
(f) Purchase Price Adjustments. Promptly after receipt
thereof, all schedules, financial statements or documents evidencing the
calculation of any purchase price adjustment under any Acquisition
Documents.
7.2 Collateral Reporting. The Borrowers shall timely deliver
to the Agent the following certificates and reports:
(a) Monthly Borrowing Base Certificates. At the times and for
the periods set forth below, a borrowing base certificate (the "Borrowing
Base Certificate"), which shall be: (i) completed substantially in the form
of Exhibit E, detailing each Borrower Party's Eligible Accounts Receivable,
Eligible Inventory and Eligible Equipment as of the last day of the
applicable period (or as of such other date as the Agent may reasonably
request) and the Real Property Value; (ii) prepared by or under the
supervision of such Borrower's chief executive officer or chief financial
officer and certified by such officer subject only to adjustment upon
completion of the normal year-end audit; and (iii) attached to such
additional schedules and other information as the Agent may reasonably
request. The Borrowing Base Certificate shall be delivered monthly for
each month from the Closing Date until March 31, 1998, within thirty (30)
calendar days after the end of each month, calculating the Borrowing Base
as of the last day of each such month and thereafter, (A) for any month for
which the Excess Availability (determined as of the last day of such month)
is more than $10,000,000, within thirty (30) calendar days after the end of
such month, calculating the Borrowing Base as of the last day of each such
month; (B) for any month for which the Excess Availability (determined as
of the last day of such month) is in excess of $5,000,000 but less than or
equal to $10,000,000, within ten (10) Business Days after the end of such
month, calculating the Borrowing Base as of the last day of each such month
and (C) for any month for which the Excess Availability (determined as of
the end of each month for the month then ended) is $5,000,000 or less,
within five (5) Business Days after the end of each week, commencing with
the first week after the date of determination.
(b) Inventory Report. A report of Inventory of each Borrower
Party, based upon a physical count, which shall describe the Borrower
Party's Inventory by category and by item (in reasonable detail) and report
of the value (at lower of cost or market) of such Inventory; provided that
so long as no Event of Default has occurred and is continuing, such report
shall be required no more than once a year.
(c) Appraisals.
(i) At least once during each Fiscal Year, an appraisal
of the orderly liquidation value of all Equipment of the Borrower Parties,
prepared by an appraisal firm satisfactory to the Agent and in scope and
substance satisfactory to the Agent; provided that so long as no Event of
Default has occurred and is continuing, such appraisal shall be required no
more than once a year.
(ii) When required under applicable Requirements of Law,
an appraisal of any Mortgaged Property, meeting the requirements of such
Requirements of Law.
(d) Further Assurances. When reasonably requested by the
Agent or any Lender, any further information regarding the Collateral,
business affairs and financial condition of OSG or any of its Subsidiaries.
7.3 Notification Requirements. The Borrowers shall timely
give the Agent and each of the Lenders the following notices:
(a) Notice of Defaults. Promptly, and in any event within two
(2) Business Days after becoming aware of the occurrence of a Default or
Event of Default, a certificate of the chief executive officer or chief
financial officer of OSG or a Borrower specifying the nature thereof and
the Borrowers' proposed response thereto, each in reasonable detail.
(b) Proceedings or Adverse Changes. Promptly, and in any
event within five (5) Business Days after OSG or any Borrower becomes aware
of (i) any proceeding being instituted by or against any Credit Party in
any federal, state, local or foreign court or before any commission or
other regulatory body (federal, state, local or foreign) seeking an
injunction or any such proceeding being instituted or threatened which, if
adversely determined, could have a Material Adverse Effect, (ii) any order,
judgment or decree in excess of $750,000 being entered against any Credit
Party or any of their respective properties or assets or (iii) any actual
or prospective change, development or event which has had or could
reasonably be expected to have a Material Adverse Effect, a written
statement describing such proceeding, order, judgment, decree, change,
development or event and any action being taken with respect thereto by any
Credit Party.
(c) ERISA Notices. (i) Promptly, and in any event within ten
(10) Business Days after OSG, any of its Subsidiaries or any ERISA
Affiliate knows or has reason to know that a Termination Event has
occurred, a written statement of the chief financial officer of OSG
describing such Termination Event and any action that is being taking with
respect thereto by OSG, any such Subsidiary or ERISA Affiliate, and any
action taken or threatened by the Internal Revenue Service, Department of
Labor or Pension Benefit Guaranty Corporation. OSG, such Subsidiary and
the ERISA Affiliate shall be deemed to know all facts known by the
administrator of any Benefit Plan of which it is the plan sponsor; (ii)
promptly, and in any event within three (3) Business Days after the filing
thereof with the Internal Revenue Service, a copy of each funding waiver
request filed with respect to any Benefit Plan and all communications
received by OSG, any of its Subsidiaries or any ERISA Affiliate with
respect to such request; and (iii) promptly, and in any event within three
(3) Business Days after receipt by OSG, any of its Subsidiaries or any
ERISA Affiliate, of the PBGC's intention to terminate a Benefit Plan or to
have a trustee appointed to administer a Benefit Plan, copies of each such
notice.
(d) Environmental and Health and Safety Notices. Promptly,
and in any event within ten (10) Business Days after receipt by any Credit
Party of any notice, complaint or order alleging actual or prospective
violation in any material respect of any environmental, health or safety
Requirement of Law or alleging responsibility for costs of a cleanup,
together with a copy of such notice, complaint, or order and a written
statement describing any action being taken with respect thereto by any
Credit Party.
(e) Material Contracts. Promptly, and in any event within ten
(10) Business Days after any Material Contract or the Management Agreement
is terminated or amended or any new Material Contract is entered into, a
written statement describing such event, with copies of amendments or new
contracts, and an explanation of any actions being taken with respect
thereto.
(f) Collateral Matters. At least thirty (30) Business Days
prior written notice to the Agent of any change in the name, identity or
corporate structure of any Credit Party, the location of any Collateral
(other than with respect to the Collateral located in the ordinary course
of business on property owned or leased by an outside processor) or in the
location of the chief executive office or place of business of any Credit
Party from the locations specified in Schedule B, Part 6.10. At least
twenty (20) Business Days prior to any such change, the Borrowers shall
cause to be executed and delivered to the Agent any financing statements,
Collateral Access Agreements or other documents required by the Agent, all
in form and substance reasonably satisfactory to the Agent.
7.4 Corporate Existence. OSG shall, and shall cause each of
its Subsidiaries to, (a) maintain its corporate existence (except that any
Borrower's Subsidiaries may merge with each other and with such Borrower
(provided that the Borrower shall be the surviving corporation), provided
the Agent receives five (5) Business Days prior written notice thereof),
(b) maintain in full force and effect all licenses, bonds, franchises,
leases, trademarks and qualifications to do business, and all patents,
contracts and other rights necessary or advisable to the profitable conduct
of their businesses except where failure to do so could not reasonably be
expected to have a Material Adverse Effect, and (c) continue in, and limit
their operations to, the same general lines of business as presently
conducted by them (after giving effect to the Kolmar Acquisition) and those
reasonably related thereto.
7.5 Books and Records; Inspections. OSG agrees to maintain,
and to cause each of its Subsidiaries to maintain, books and records
pertaining to the Collateral in such detail, form and scope as is
consistent with good business practice. OSG and the Borrowers agree that
the Agent or its agents may enter upon the premises of OSG or any of its
Subsidiaries at any time and from time to time, during normal business
hours and upon reasonable notice under the circumstances, and at any time
at all on and after the occurrence of a Default which continues beyond the
expiration of any grace or cure period applicable thereto, and which has
not otherwise been waived by the Agent, for the purposes of (a) inspecting
and verifying the Collateral, (b) inspecting and/or copying (at the
Borrowers' expense) any and all records pertaining thereto, and
(c) discussing the affairs, finances and business of the Credit Parties
with any officers, employees and directors of any Credit Party or with the
Auditors.
7.6 Insurance. OSG agrees to maintain, and to cause each of
its Subsidiaries to maintain, public liability insurance, third party
property damage insurance, business interruption insurance and replacement
value insurance on the Collateral under such policies of insurance, with
such insurance companies, in such amounts and covering such risks as are at
all times satisfactory to the Agent in its commercially reasonable
judgment. All policies covering the Collateral are to name the Agent as an
additional insured and the loss payee in case of loss, and are to contain
such other provisions as the Agent may reasonably require to fully protect
the Agent's interest in the Collateral and to any payments to be made under
such policies. All policies shall also contain an agreement of the issuer
requiring that the coverages evidenced thereby may not be cancelled,
terminated or modified without endeavoring to give at least thirty (30)
days prior written notice to the Agent. Borrowers shall deliver all
original policies, including additional and renewal policies, to the Agent
and, in the case of insurance about to expire, shall deliver renewal
policies not less than ten (10) days prior to their respective dates of
expiration. In case of loss or damage by fire or other casualty, the Agent
is authorized: (a) to settle and adjust any claim under insurance policies
that insure against such risks; or (b) to allow the applicable Credit Party
to agree with the insurance company or companies on the amount to be paid
in regard to such loss. In either case, the Agent is authorized to collect
and receive any insurance proceeds payable with respect to any property of
any Credit Party, which shall be applied to the Revolving Loans in
accordance with Section 4.7(a). If the Agent makes such proceeds available
to reimburse any Credit Party or any lessee for the cost of repair,
rebuilding or restoration any Collateral, such proceeds shall be made
available in the manner and under the conditions that the Agent may
reasonably require.
7.7 Taxes. OSG agrees to pay when due, and to cause each of
its Subsidiaries to pay when due, all taxes lawfully levied or assessed
against OSG, any of its Subsidiaries or any of the Collateral before any
penalty or interest accrues thereon; provided, however, that, unless such
taxes have become a federal tax or ERISA Lien on any of the assets of the
Credit Parties, no such tax need be paid if the same is being contested, in
good faith, by appropriate proceedings promptly instituted and diligently
conducted and if an adequate reserve or other appropriate provision shall
have been made therefor as required in order to be in conformity with GAAP.
7.8 Compliance With Laws. OSG agrees to comply, and to cause
each of its Subsidiaries to comply in all material respects, with all
Requirements of Law applicable to the Collateral or any part thereof, or to
the operation of its business or its assets generally, unless the
applicable Credit Party contests any such Requirements of Law in a
reasonable manner and in good faith.
7.9 Use of Proceeds. The initial Revolving Loans made to the
Borrowers hereunder shall be used by the Borrowers to pay the costs and
expenses of the Transactions contemplated by this Credit Agreement which
are due and payable on the Closing Date, including without limitation the
Fees and Expenses due on the Closing Date pursuant to Article 4 hereof, and
to repay Indebtedness; and the proceeds of any subsequent Revolving Loans
made hereunder shall be used by the Borrowers solely for ongoing working
capital requirements, other corporate purposes permitted hereunder and for
Permitted Acquisitions. The Borrowers shall not use any portion of the
proceeds of any such Revolving Loans for the purpose of purchasing or
carrying any "margin stock" (as defined in Regulation G of the Board of
Governors of the Federal Reserve System) in any manner which violates the
provisions of Regulation G or X of said Board of Governors or for any other
purpose in violation of any applicable statute or regulation, or of the
terms and conditions of this Credit Agreement.
7.10 Fiscal Year. OSG agrees to maintain its Fiscal Year and
that of its Subsidiaries as a year ending December 31.
7.11 Maintenance of Property. OSG agrees to keep, and to
cause each of its Subsidiaries to keep, all property useful and necessary
to their respective businesses in good working order and condition
(ordinary wear and tear excepted) in accordance with their past operating
practices and not to commit or suffer any waste with respect to any of
their properties.
7.12 ERISA Documents. The Borrowers will cause to be
delivered to the Agent, upon the Agent's request, each of the following:
(a) a copy of each Plan (or, where any such plan is not in writing,
complete description thereof) (and if applicable, related trust agreements
or other funding instruments) and all amendments thereto, all written
interpretations thereof and written descriptions thereof that have been
distributed to employees or former employees of the OSG or its
Subsidiaries; (b) the most recent determination letter issued by the
Internal Revenue Service with respect to each Benefit Plan; (c) for the
three most recent plan years, Annual Reports on Form 5500 Series required
to be filed with any governmental agency for each Benefit Plan; (d) all
actuarial reports prepared for the last three plan years for each Benefit
Plan; (e) a listing of all Multiemployer Plans, with the aggregate amount
of the most recent annual contributions required to be made by OSG or any
ERISA Affiliate to each such plan and copies of the collective bargaining
agreements requiring such contributions; (f) any information that has been
provided to OSG or any ERISA Affiliate regarding withdrawal liability under
any Multiemployer Plan; and (g) the aggregate amount of the most recent
annual payments made to former employees of OSG or any ERISA Affiliate
under any Retiree Health Plan.
7.13 Further Assurances. OSG shall take, and shall cause each
of its Subsidiaries to take, all such further actions and execute all such
further documents and instruments as the Agent or the Majority Lenders may
at any time reasonably determine in its or their sole discretion to be
necessary or desirable to further carry out and consummate the transactions
contemplated by the Credit Documents, to cause the execution, delivery and
performance of the Credit Documents to be duly authorized and to perfect or
protect the Liens (and the priority status thereof) of the Agent on the
Collateral.
7.14 Environmental and Other Matters. The Credit Parties will
conduct their businesses so as to comply in all material respects with all
applicable Environmental Laws, in all jurisdictions in which any of them is
doing business, including, without limitation, compliance in all material
respects with the terms and conditions of all permits and governmental
authorizations, except to the extent that the Credit Parties are
contesting, in good faith by appropriate legal proceedings, any such
Environmental Law or interpretation thereof or application thereof;
provided, that the Credit Parties shall comply in all material respects
with the applicable order of any court or other governmental agency
relating to such Environmental Laws unless the Credit Parties shall
currently be prosecuting an appeal or proceedings for review and shall have
secured a stay of enforcement or execution or other arrangement postponing
enforcement or execution pending such appeal or proceedings for review. If
any Credit Party shall (a) receive written notice that any material
violation of any Environmental Law may have been committed or is about to
be committed by any Credit Party, (b) receive written notice that any
administrative or judicial complaint or order has been filed or is about to
be filed against any Credit Party alleging material violations of any
Environmental Law, or requiring any Credit Party to take any action in
connection with the release or threatened release of Hazardous Materials or
(c) receive any written notice from a Governmental Authority or any other
Person alleging that any Credit Party may be liable or responsible for
material costs associated with a response to or cleanup of a release of
Hazardous Materials or any damages caused thereby, the Borrowers shall
provide the Agent and the Lenders with a copy of such notice within ten
(10) days after the receipt thereof. Within ten (10) days after a Borrower
learns of the enactment or promulgation of any federal, state, local or
foreign Environmental Law which reasonably could be expected to have a
Material Adverse Effect, the Borrower shall provide the Agent and the
Lenders with notice thereof. The Borrowers shall promptly take all
reasonable action necessary to prevent the imposition of any Liens on any
of properties of any Credit Party arising out of or related to any
environmental matters. At the written request of the Agent (which request
will not be made unless (i) the Agent received a notice under Section
7.3(d), (ii) the Agent receives notice from a Credit Party pursuant to this
Section 7.14, (iii) the Agent otherwise reasonably believes a Credit Party
may be in violation of an Environmental Law or (iv) an Event of Default has
occurred and is continuing), at the sole cost and expense of the Borrowers,
the Borrowers shall retain an environmental consulting firm, satisfactory
to the Agent, to conduct an environmental review, audit or investigation of
the specific items as requested by the Agent relating to the properties of
the Credit Parties and provide to the Agent and each Lender a copy of any
reports delivered in connection therewith. At the request of the Agent,
the Borrowers shall provide the Agent with any additional information
relating to environmental matters and any potential related liability
resulting therefrom as the Agent may reasonably request. It is
contemplated that such review, audit, investigation or information shall be
provided on a confidential and privileged basis in connection with the
common interests of the Agent, Lenders and Credit Parties, subject to the
provisions of Section 11.9.
7.15 Kolmar. Immediately following consummation of the Kolmar
Acquisition, OSG shall cause Kolmar to become a Borrower under this Credit
Agreement and a party to the other Credit Documents to which Borrowers are
a party, by executing and delivering a Joinder Agreement and the other
documents and instruments set forth on the Closing Document List, shall
cause Kolmar Canada to execute and deliver a Joinder Agreement and the
other documents and instruments set forth on the Closing Document List and,
in each case, OSG shall cause Kolmar and Kolmar Canada to execute and
deliver such other documents and instruments as are otherwise necessary (or
advisable in the Agent's judgment) in order to grant the Agent a perfected
first priority security interest and Lien (subject only to Permitted
Encumbrances) in the assets of Kolmar and Kolmar Canada.
7.16 Enforcement of Purchase Agreement. The Credit Parties
will enforce their rights or claims under the Purchase Agreement against
Sellers and Sellers' obligations thereunder diligently and in good faith in
accordance with reasonable business practices; provided however that
following the occurrence and during the continuance of a Default or an
Event of Default, the Credit Parties will enforce such rights, claims and
obligations as directed by the Agent in its sole discretion. The Credit
Parties will keep the Agent informed of any such claims against Sellers or
any of them, and the enforcement thereof, and will not waive any material
right or remedy under the Purchase Agreement or modify any provisions of
the Purchase Agreement relating thereto without the prior written consent
of Majority Lenders. Following the occurrence and during the continuance
of a Default or Event of Default, all enforcement actions shall be
reasonably satisfactory to the Majority Lenders.
ARTICLE 8.
NEGATIVE COVENANTS.
Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder and under the other Credit
Documents, OSG and the Borrowers shall comply with, and, where required,
shall cause each of their Subsidiaries to comply with, the following
covenants:
8.1 Minimum EBITDA. OSG and its Subsidiaries shall maintain
as of the end of each Test Period ending on the last day of each fiscal
quarter set forth below consolidated EBITDA of not less than the amount set
forth below:
AMOUNT
QUARTER (expressed in thousands)
------- ------------------------
March 31, 1998 $ 3,250
June 30, 1998 8,800
September 30, 1998 15,000
December 31, 1998 19,200
March 31, 1999 20,700
June 30, 1999 20,300
September 30, 1999 20,200
December 31, 1999 21,800
March 31, 2000 22,300
June 30, 2000 22,700
September 30, 2000 23,200
December 31, 2000 23,600
March 31, 2001 22,500
June 30, 2001 22,900
September 30, 2001 23,300
December 31, 2001 23,700
March 31, 2002 24,000
June 30, 2002 24,300
September 30, 2002 24,500
December 31, 2002 24,800
8.2 Fixed Charge Coverage. OSG and its Subsidiaries shall
maintain a ratio of consolidated EBITDA to consolidated Fixed Charges for
each Test Period ending on the last day of any fiscal quarter set forth
below of not less than the ratio set forth below:
QUARTER RATIO
------- -----
March 31, 1998 0.90:1.00
June 30, 1998 1.00:1.00
September 30, 1998 1.00:1.00
December 31, 1998 1.10:1.00
March 31, 1999 1.10:1.00
June 30, 1999 1.10:1.00
September 30, 1999 1.10:1.00
December 31, 1999 1.10:1.00
March 31, 2000 1.10:1.00
June 30, 2000 1.10:1.00
September 30, 2000 1.10:1.00
December 31, 2000 1.20:1.00
and thereafter
8.3 Funded Debt Coverage. OSG and its Subsidiaries shall
maintain a Funded Debt Ratio for any Test Period ending on the last day of
any fiscal quarter set forth below of not greater than the ratio set forth
below:
QUARTER RATIO
------- -----
March 31, 1998 8.0:1.00
June 30, 1998 6.0:1.00
September 30, 1998 5.6:1.00
December 31, 1998 5.5:1.00
March 31, 1999 5.3:1.00
June 30, 1999 5.20:1.00
September 30, 1999 5.10:1.00
December 31, 1999 4.80:1.00
March 31, 2000 4.70:1.00
June 30, 2000 4.60:1.00
September 30, 2000 4.50:1.00
December 31, 2000 4.40:1.00
March 31, 2001 4.40:1.00
June 30, 2001 4.30:1.00
September 30, 2001 4.20:1.00
December 31, 2001 4.10:1.00
March 31, 2002 4.10:1.00
June 30, 2002 4.00:1.00
and thereafter
8.4 [Intentionally omitted]
8.5 [Intentionally omitted]
8.6 Capital Expenditures. The Borrowers and their
Subsidiaries shall not make payments for Capital Expenditures in excess of
$4,500,000 in Fiscal Year 1998, $5,000,000 in Fiscal Year 1999, and
$5,500,000 in any Fiscal Year thereafter, except for acquisitions of assets
in a Permitted Acquisition; provided that the maximum amount for each
Fiscal Year shall be increased by an amount equal to fifty percent (50%) of
the amount by which the actual Capital Expenditures in the immediately
preceding Fiscal Year are less than the maximum permitted amount for such
Fiscal Year, without giving effect to any amounts carried forward to that
Fiscal Year. The Borrowers shall not make any Capital Expenditures that
are not directly related to the business conducted on the Closing Date by
the Borrowers and their Subsidiaries (after giving effect to the Kolmar
Acquisition) or lines of business reasonably related thereto.
8.7 Additional Indebtedness. Neither OSG nor any of its
Subsidiaries shall directly or indirectly incur, create, assume or suffer
to exist any Indebtedness other than:
(a) Indebtedness under the Credit Documents;
(b) Indebtedness under Interest Rate Agreements in the
ordinary course of business;
(c) Indebtedness described on Schedule B, Part 8.7, and any
refinancing of such Indebtedness (excluding any Indebtedness of Foreign
Subsidiaries), so long as the aggregate principal amount of the
Indebtedness so refinanced shall not be increased and the refinancing shall
be on terms and conditions no more restrictive than the terms and
conditions of the Indebtedness to be refinanced;
(d) Indebtedness under Capital Leases or secured by purchase
money liens on Equipment acquired after the date of this Credit Agreement
not to exceed $2,000,000 in the aggregate outstanding at any one time
(collectively, "Purchase Money Liens") so long as such Indebtedness shall
be from parties and on terms and conditions satisfactory to the Agent, each
Purchase Money Lien shall attach only to the property to be acquired and
proceeds thereof, a description shall have been furnished to the Agent for
any item of Equipment for which the purchase price is greater than
$500,000, and the Indebtedness incurred shall not exceed one hundred
percent (100%) of the purchase price of the item or items of Equipment
purchased.
(e) Subordinated Debt of OSG, which may be guaranteed by the
Borrowers and any Subsidiaries which are Guarantors hereunder, provided all
such guaranties shall be on a subordinated basis on the terms approved by
the Agent and the Majority Lenders;
(f) Indebtedness representing deferred payments of insurance
premiums;
(g) Indebtedness of (i) a Borrower Party to another Borrower
Party or a Domestic Subsidiary or (ii) a Domestic Subsidiary to a Borrower
or another Domestic Subsidiary in each case evidenced by an Intercompany
Note pledged to the Agent; provided that Indebtedness of a Borrower to any
Domestic Subsidiary of a Borrower not a Borrower Party shall not exceed
$1,000,000 in the aggregate at any time outstanding;
(h) Indebtedness of a Foreign Subsidiary other than a Borrower
Party to a Borrower Party in an outstanding amount not to exceed $4,000,000
at any time after the Closing Date for all Foreign Subsidiaries or
$2,000,000 at any time after the Closing Date for any Foreign Subsidiary,
provided that such Indebtedness is evidenced by an Intercompany Note
pledged to the Agent; and
(i) Contingent Obligations permitted under Section 8.9.
8.8 Liens. Neither OSG nor any of its Subsidiaries shall
directly or indirectly create, incur, assume, or suffer to exist any Lien
on any of its property now owned or hereafter acquired except:
(a) Liens granted to the Lenders under the Credit Documents;
(b) Liens listed on Schedule B, Part 8.8;
(c) Purchase Money Liens;
(d) Liens of warehousemen, mechanics, materialmen, workers,
repairmen, common carriers, or landlords, liens for taxes, assessments or
other governmental charges, and other similar Liens arising by operation of
law for amounts that are not more than 30 days delinquent or which are
being diligently contested in good faith by the applicable Credit Party, so
long as the Agent has been notified thereof and adequate reserves are
maintained by the applicable Credit Party for their payment;
(e) Attachment or judgment Liens which do not constitute an
Event of Default;
(f) Deposits or pledges to secure obligations under worker's
compensation, social security or similar laws, or under unemployment
insurance, not to exceed an aggregate of $2,000,000;
(g) Deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory
obligations, and other obligations of like nature arising in the ordinary
course of business not to exceed an aggregate of $1,000,000;
(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 materially
detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of any Credit Party;
(i) Deposits in an aggregate amount not to exceed $1,000,000
made in the ordinary course of business to secure liability to insurance
carriers;
(j) Any interest or title of a lessor or sublessor under any
Operating Lease permitted under Section 8.22 and any "encumbrance" created
by arrangements providing for customers to use or sublease a portion of a
Credit Party's leased warehouses to store Inventory belonging to such
customers;
(k) Liens for taxes, assessments or other governmental charges
not yet due and payable or which are being diligently contested in good
faith by the applicable Credit Party by appropriate proceedings, provided
that in such case an adequate reserve is being maintained by the Credit
Party for the payment of same;
(l) Deposits or pledges to secure surety and appeal bonds; and
(m) Extensions and renewals of any of the foregoing so long as
the aggregate amount of extended or renewed Liens are not increased and are
on terms and conditions no more restrictive than the terms and conditions
of the Liens extended or renewed.
8.9 Contingent Obligations. Neither OSG nor any of its
Subsidiaries shall directly or indirectly incur, assume, or suffer to exist
any Contingent Obligation, excluding (i) customary indemnities given in
connection with the sale of Inventory or other asset dispositions or
Permitted Acquisitions; (ii) Contingent Obligations of OSG or any Borrower
under guaranties of Indebtedness of any Borrower Party or any Domestic
Subsidiary permitted to be incurred under Section 8.7; (iii) Contingent
Obligations of OSG or any Borrower under guaranties of Indebtedness of any
of its Foreign Subsidiaries not to exceed $4,000,000 in the aggregate
outstanding at any time and (iv) Contingent Obligations of OSG and its
Subsidiaries in an aggregate amount outstanding not to exceed $2,500,000
with respect to loans to employees of OSG or any of its Subsidiaries to
purchase OSG capital stock.
8.10 Sale of Assets. OSG shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, sell, lease, assign,
transfer or otherwise dispose of any assets other than (i) Inventory in the
ordinary course of business, (ii) individual items of Collateral with a
book value of less than $1,000,000 in the aggregate during any Fiscal Year,
(iii) obsolete or worn out property disposed of in the ordinary course of
business and (iv) other dispositions of assets, provided that with respect
to this clause (iv) (a) such dispositions are for fair value, (b) the
aggregate consideration is either paid in full in cash at the time of
disposition and is either reinvested in the business of the Borrowers or
their Subsidiaries (subject to the limitations of Sections 8.6, 8.12 and
8.20) or used to repay the Revolving Loans and (c) the aggregate amount of
all such dispositions does not exceed $2,500,000 in the aggregate for any
Fiscal Year. None of the Credit Parties shall, directly or indirectly,
become or remain liable as lessee or as guarantor or other surety with
respect to any lease of any property, whether real or personal or mixed, or
whether now owned or hereafter acquired, which any Credit Party has sold or
transferred or intends to sell or transfer to any other Person if the
aggregate amount for which the Credit Parties are liable, contingently or
otherwise, exceeds $2,000,000 in any Fiscal Year.
8.11 Restricted Payments. OSG shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly,
(a) declare or pay any dividend (other than dividends payable
solely in common stock of OSG or any of its Subsidiaries) on, or make any
payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of capital stock of OSG or any of
its Subsidiaries or any warrants, options or rights to purchase any such
capital stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in
cash or property or in obligations of OSG or any of its Subsidiaries except
that:
(i) any Subsidiary may declare and pay dividends to a
Borrower Party or any other Subsidiary of the Borrower which is
its direct parent;
(ii) (A) if after giving effect to the following, no Default
or Event of Default would exist, Borrowers may make payments and
distributions to OSG to permit OSG to pay federal, state and
provincial income taxes then due and owing, capital and franchise
taxes and other similar licensing expenses incurred in the
ordinary course of business; provided that the Borrowers' and
their Subsidiaries' aggregate contribution to federal, state and
provincial income taxes as a result of the filing of a
consolidated return by OSG shall not be greater, nor shall the
aggregate receipt of tax benefits be less, than they would have
been had the Borrowers and their Subsidiaries not filed a
consolidated return with OSG; and (B) Borrowers may make payments
and distributions to OSG to permit OSG to pay executive salaries,
lease payments and other expenses incurred in the ordinary course
of business (but excluding any Indebtedness);
(iii) Borrowers may make dividend payments to OSG with
respect to Borrower common stock from time to time in amounts
sufficient to permit OSG to make payments with respect to the
Subordinated Debt, but only to the extent permitted by the
subordination provisions contained in the indenture or other
agreement pursuant to which such Subordinated Debt was issued or
otherwise as approved in writing by Majority Lenders and OSG may
make such payments; provided that nothing in this clause (iii)
shall be deemed to permit any voluntary prepayment with respect
to, or redemption or defeasance of, any such Subordinated Debt;
(iv) so long as no Default or Event of Default has occurred
and is continuing or would arise as a result of such payments,
Borrowers may make dividend payments to OSG with respect to any
Borrower's common stock from time to time in amounts sufficient to
permit OSG to purchase OSG stock from its employees or managers
pursuant to the terms of the Stockholder Agreement and OSG may
make payments to purchase such stock; provided that the aggregate
amount of such payments shall not exceed during the term of this
Credit Agreement the sum of (a) $1,000,000 plus (b) the net cash
proceeds of any OSG capital stock sold to management investors
after the Closing Date which net cash proceeds have been
contributed to a Borrower;
(v) so long as no Default or Event of Default has occurred
and is continuing or would arise as a result of such payments,
Borrowers may make dividend payments to OSG with respect to any
Borrower's common stock from time to time in an amount sufficient
to permit OSG to make scheduled quarterly cash dividend payments
on the Series A Preferred Stock in accordance with the terms
thereof as in effect on the Closing Date and OSG may make such
payments; provided that the aggregate sum of such payments shall
not exceed $60,000 during any Fiscal Year; and
(vi) so long as no Default or Event of Default has occurred
and is continuing or would arise as a result of such payments,
Borrowers may make dividend payments to OSG with respect to any
Borrower's common stock from time to time in amounts sufficient to
permit OSG to make additional scheduled quarterly cash dividend
payments on the Series A Preferred Stock or Series B Preferred
Stock in accordance with the terms thereof as in effect on the
Closing Date and OSG may make such payments; provided that (A) the
aggregate sum of such payments shall not exceed $300,000 during
any Fiscal Year, and (B) after giving effect to the payment, the
ratio of the consolidated EBITDA to consolidated Fixed Charges is
greater than 1.6 to 1 and Borrowers have Excess Availability of at
least $25,000,000; or
(b) make any optional payment or prepayment on or redemption
(including, without limitation, by making payments to a sinking or
analogous fund) or repurchase of any Indebtedness (other than Indebtedness
pursuant to this Credit Agreement) or of any Mandatory Redeemable
Obligation or any payments in violation of the subordination provisions of
any Subordinated Debt; provided that any Subsidiary may make payments on
account of Indebtedness owing to a Borrower Party and any Borrower Party
may make payments under any Intercompany Note in accordance with its terms;
and OSG may refinance the Bridge Loan with Subordinated Debt permitted
hereunder; or
(c) change or amend the terms of any Subordinated Debt (or any
indenture or agreement in connection therewith) if the effect of such
amendment is to: (a) increase the interest rate on such Subordinated Debt;
(b) change the dates upon which payments of principal or interest are due
on such Subordinated Debt other than to extend such dates; (c) change any
default or event of default other than to delete or make less restrictive
any default provision therein, or add any covenant with respect to such
Subordinated Debt; (d) change the redemption or prepayment provision of
such Subordinated Debt other than to extend the dates therefor or to reduce
the premiums payable in connection therewith; (e) grant any security or
collateral to secure payment of such Subordinated Debt; (f) add any
guarantor thereof which is not a Guarantor or a Borrower hereunder, or (g)
change or amend any other term if such change or amendment would materially
increase the obligations of any obligor or confer additional material
rights on the holder of any Subordinated Debt in a manner adverse to any
Credit Party, the Agent, any Lender or the Issuing Bank.
8.12 Investments. OSG shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, make any Investment in any
Person, whether in cash, securities, or other property of any kind
including, without limitation, any Subsidiary or Affiliate of the
Borrowers, other than:
(a) Advances or loans by Borrowers or their Subsidiaries to
subcontractors or suppliers made in the ordinary course of business not to
exceed $300,000 outstanding at any one time to any one Person and $750,000
in the aggregate outstanding at any one time; and progress payments to
purchase Equipment in the ordinary course of business;
(b) loans, Investments and advances between the Borrowers and
their Subsidiaries permitted under Section 8.7 including, without
limitation, under Section 8.7(h);
(c) Cash Equivalents;
(d) Deposits with financial institutions, disclosed in
Schedule B, Part 8.14 or notified to the Agent under Section 8.14, and
which are insured by the Federal Deposit Insurance Corporation ("FDIC") or
a similar federal insurance program; provided, however, that a Borrower
may, in the ordinary course of its business, maintain in its Disbursement
Accounts from time to time amounts in excess of then applicable FDIC or
other program insurance limits; and Foreign Subsidiaries which are not
Borrower Parties may maintain other deposit accounts;
(e) Loans and advances by Borrowers and their Subsidiaries to
employees of OSG and its Subsidiaries for moving, travel or entertainment
and similar expenses in the ordinary course of business and relocation
loans to employees in an aggregate amount not to exceed $500,000 at any
time outstanding;
(f) Investments received in connection with Insolvency
Proceedings;
(g) the Kolmar Acquisition and Permitted Acquisitions;
(h) advances or loans to employees of OSG and its
Subsidiaries to the extent permitted under clause (iv) of Section 8.9;
(i) Investments in joint ventures in an aggregate amount not
to exceed $5,000,000 during the term of this Credit Agreement; provided
that no Credit Party shall have or assume any liability as a general
partner in connection therewith; and
(j) Such other Investments as the Agent may approve in writing
in its sole discretion.
8.13 Affiliate Transactions. OSG shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, enter into any
transaction, including, without limitation, the purchase, sale or exchange
of property or the rendering of any service to, with any Subsidiary or
Affiliate of OSG, except (i) in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's or such Subsidiary's or
Affiliate's business, as the case may be, and upon fair and reasonable
terms no less favorable to such Borrower or such Subsidiary or such
Affiliate than could be obtained in a comparable arm's-length transaction
with an unaffiliated Person and (ii) as permitted under Section 8.19.
8.14 Additional Bank Accounts. OSG shall not, and shall not
permit any of its Domestic Subsidiaries or any Foreign Subsidiary which is
a Borrower Party to, directly or indirectly, open, maintain or otherwise
have any checking, savings or other accounts at any bank or other financial
institution, or any other account where money is or may be deposited or
maintained with any Person, other than the Disbursement Accounts and the
accounts set forth on Schedule B, Part 8.14, without at least 5 days prior
written notice to the Agent, and delivery of such executed Lock Box
Agreements or Blocked Account Agreements as the Agent requests with respect
to any account other than a checking account.
8.15 Excess Cash. OSG shall not, and shall not permit its
Domestic Subsidiaries or any Foreign Subsidiary which is a Borrower Party
to, directly or indirectly, maintain in the aggregate in all deposit
accounts of OSG and such Subsidiaries (other than the Disbursement Accounts
and payroll accounts), total cash balances and Investments permitted by
Section 8.12(c), (d) and (f), in excess of $2,000,000 at any time during
which any Revolving Loans bearing interest at the Prime Rate are
outstanding hereunder or on any date when any Interest Period applicable to
Revolving Loans that are Eurodollar Loans ends.
8.16 Additional Negative Pledges. OSG shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective, or permit any of
its Subsidiaries to create or otherwise cause or suffer to exist or become
effective, directly or indirectly, (i) any prohibition or restriction
(including any agreement to provide equal and ratable security to any other
Person in the event a Lien is granted to or for the benefit of the Agent
and the Lenders) on the creation or existence of any Lien upon the assets
of the Borrowers or its Subsidiaries or (ii) any Contractual Obligation
which may restrict or inhibit the Agent's rights or ability to sell or
otherwise dispose of the Collateral or any part thereof after the
occurrence of an Event of Default.
8.17 Additional Subsidiaries. OSG shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, form or acquire
any new Subsidiaries, except in connection with the Kolmar Acquisition and
Permitted Acquisitions in compliance with Section 8.20 hereof, or unless
such Subsidiary is a Wholly-owned Subsidiary and becomes a Borrower
hereunder.
8.18 No Restrictions on Subsidiary Distributions to Borrowers.
Except as provided herein, OSG will not and will not permit any of its
Subsidiaries directly or indirectly to create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any such Subsidiary to: (1) pay dividends or
make any other distribution on any of such Subsidiary's capital stock owed
by any Borrower or any Subsidiary of any Borrower; (2) subject to
subordination provisions for the benefit of Agent and Lenders, pay any
Indebtedness owned to any Borrower or any other Subsidiary; (3) make loans
or advances to any Borrower or any other Subsidiary; or (4) transfer any of
its property or assets to any Borrower or any other Subsidiary.
8.19 Management Fees and Compensation. OSG will not and will
not permit any of its Subsidiaries directly or indirectly to pay any
management, consulting or similar fees to any Affiliate or to any director,
officer or employee of any Credit Party, except that Credit Parties may (i)
pay management fees quarterly in arrears in an aggregate amount not in
excess of $350,000 annually to G+M under the Management Agreement; (ii) pay
fees to G+M in connection with Permitted Acquisitions in amounts not to
exceed $800,000 for the Kolmar Acquisition, and 1% of the total
consideration for other Permitted Acquisitions; and (iii) pay financial
advisory fees to HVP in an aggregate amount not to exceed $115,000
annually, of which up to $50,000 annually may be paid to HVP and the
remainder of which shall accrue but shall not be paid until the later of
(i) repayment in full of the Obligations and (ii) termination of the
Commitments; and Credit Parties may pay the reasonable expenses of G+M
incurred under the Management Agreement and of directors incurred in the
ordinary course of business. Further, OSG and Borrowers may pay director
fees in an aggregate amount not to exceed $35,000 annually to outside
directors not employed by G+M or HVP.
8.20 Permitted Acquisitions. No Credit Party shall make an
Acquisition other than the Kolmar Acquisition unless each of the following
conditions is satisfied:
(a) such acquisition is made by OSG (but only if an acquisition
of a new Wholly-owned Subsidiary) or a Borrower;
(b) such Acquisition shall be consensual and shall have been
approved by the board of directors of the Person to be acquired;
(c) both before and after giving effect to such Acquisition, all
representations and warranties of the Credit Parties contained in any
Credit Document are true and correct in all material respects and no
Default or Event of Default shall have occurred and be continuing, and the
Agent shall receive a certificate of OSG and the Borrowers to such effect
on the date on which such Acquisition is consummated;
(d) both before and after giving effect to such Acquisition and
the incurrence of Indebtedness in connection therewith, all Credit Parties
(including any Subsidiary acquired in such Acquisition) shall be solvent
(as represented in Section 6.7) and the Credit Parties shall be in
compliance with all financial covenants in Sections 8.2 through 8.6 hereof
inclusive on a pro forma basis, and the Agent shall receive a certificate
of OSG and the Borrowers to such effect on the date on which such
Acquisition is consummated;
(e) the purchase price for any single Acquisition or series of
related Acquisitions in any Fiscal Year shall not exceed $10,000,000, nor
shall the purchase price for all Acquisitions exceed $50,000,000 in the
aggregate without the prior written consent of the Agent and the Majority
Lenders. For purposes hereof, any Indebtedness assumed in connection with
an Acquisition shall be included in the calculation of the purchase price;
(f) the Credit Parties shall have delivered written notice of the
pending Acquisition to the Agent and Lenders at least 30 days prior to its
consummation including a detailed description of such pending Acquisition,
which notice shall be accompanied by the following historical financial
statements for the Person or business to be acquired and pro forma
financial statements giving effect to the Acquisition, analyses of sources
and uses of funds, pro forma calculations of compliance with the financial
covenants in Section 8.2 thorough 8.6 hereof and, prior to consummation of
the Acquisition, such other due diligence information as may have been
reasonably requested by the Agent or any Lender;
(g) if a Revolving Loan is to be made for such Acquisition, the
Agent shall have received a Notice of Borrowing and a Borrowing Base
Certificate for the applicable Borrower, which calculation of the Borrowing
Base may include the assets to be acquired directly by such Borrower in the
Acquisition;
(h) the Agent shall have received such financing statements,
filings and other Collateral Documents as required (or advisable in the
Agent's judgment) to perfect Liens on any assets to be acquired, including
assets of any new Domestic Subsidiary or Borrower Party, together with
evidence satisfactory to the Agent that such Liens are first and prior
Liens subject only to Permitted Encumbrances;
(i) all new Subsidiaries formed or acquired in such Permitted
Acquisition shall be Wholly-owned;
(j) the business and assets to be acquired in such Acquisition
shall be acquired free and clear of all Liens (other than Permitted
Encumbrances);
(k) any new Domestic Subsidiary shall either (i) be designated a
"Borrower" hereunder, and shall execute and deliver to the Agent a Joinder
Agreement and such other Credit Documents as are executed by a Borrower (as
described therein) and such other documents as are required under the
requirements of Requirements of Law in the United States in order to grant
the Agent a perfected first priority security interest and Lien in the
assets of such Borrower (subject only to Permitted Encumbrances) or (ii) be
designated a "Subsidiary Guarantor," and shall execute and deliver to the
Agent a Joinder Agreement and such other Collateral Documents as are to be
executed by Subsidiary Guarantors (as designated therein) and such other
documents as are necessary (or advisable in the Agent's judgment) under the
requirements of Requirements of Law in the United States in order to grant
the Agent a perfected first priority security interest and Lien in the
assets of such Subsidiary Guarantor (subject only to Permitted
Encumbrances); and OSG or the applicable Borrower or Subsidiary Guarantor
shall execute and deliver a Pledge Amendment together with stock
certificates and promissory notes and other instruments endorsed in blank
in accordance with the Pledge Agreement;
(l) prior to inclusion of any assets in the Borrowing Base, the
Agent shall have received appraisals, meeting the standards described in
Section 5.2(l) or Section 7.2(c) hereof, of all Equipment and real estate
of any Borrower Party to be included in the Borrowing Base and shall have
completed such review of Accounts and Inventory as it deems necessary or
desirable for inclusion in the Borrowing Base;
(m) the Person or business to be acquired is engaged in the
business of contract packaging or similar activities related or incidental
thereto; and
(n) on or prior to the date of such Acquisition, the Agent shall
have received, in form and substance satisfactory to Agent, all acquisition
documents related thereto and legal opinions, evidence of solvency,
certificates, lien search results and other documents and instruments
reasonably requested by the Agent, which collectively shall confirm to the
Agent's satisfaction that the conditions set forth herein have been
satisfied.
8.21 Changes to Certain Agreements. OSG shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, without the
prior written consent of the Agent and the Majority Lenders, amend, modify,
cancel or terminate or permit the amendment, modification, cancellation or
termination (other than at its stated maturity) of (a) any of the Material
Contracts if the effect thereof would or reasonably could be expected to
have a Material Adverse Effect, (b) the Management Agreement or the HVP
Agreement if the effect thereof will increase any amounts payable
thereunder or change the time at which such amounts are to be paid; or (c)
any Mandatory Redeemable Obligation if the effect thereof is to accelerate
any required or permitted redemption or repurchase or to add any additional
events requiring such redemption or repurchase.
ARTICLE 9.
EVENTS OF DEFAULT AND REMEDIES.
9.1 Events of Default. The occurrence of any of the following
events shall constitute an Event of Default hereunder:
(a) Failure to Pay. Any Borrower shall fail to pay any
principal Obligation when due, whether at stated maturity, mandatory
prepayment or otherwise, or any Credit Party shall fail to pay any other
Obligation within three (3) Business Days of the date due;
(b) Breach of Certain Covenants. Any Credit Party shall fail
to comply with any covenant contained in Sections 7.2, 7.3, 7.4, 7.6, 7.9
or 7.15 or Article 8 hereof.
(c) Breach of Representation or Warranty. Any representation
or warranty made or deemed to be made by any Credit Party in this Credit
Agreement or in any other Credit Document (and in any statement or
certificate given under this Credit Agreement or any other Credit
Document), shall be false or misleading in any material respect when made
or deemed to be made.
(d) Other Defaults. Any Credit Party shall fail to comply
with (i) Sections 7.1 or 7.5 and such failure shall continue for five (5)
days or (ii) any provisions contained in this Credit Agreement or any other
Credit Document, other than as set forth in clause (i) or in
Sections 9.1(a), (b) and 9.1(c), and such failure shall continue for
thirty (30) days after the earlier of (x) any Credit Party's knowledge of
its occurrence or (y) notice to such Credit Party from the Agent, any
Lender or the Issuing Bank of such failure.
(e) Dissolution. Any Credit Party shall dissolve, wind up or
otherwise cease it business.
(f) Insolvency Event. Any Credit Party shall become the
subject of an Insolvency Event that is not resolved or dismissed within
forty-five (45) days.
(g) Change of Control. A Change of Control shall occur.
(h) Cross Default. Any Credit Party or any of their
respective Subsidiaries shall fail to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise)
with respect to any Indebtedness (other than an Obligation) of any Credit
Party or any of their respective Subsidiaries aggregating $2,000,000 or
more; or any breach, default or event of default shall occur, or any other
condition shall exist under any Contractual Obligation pertaining to any
such Indebtedness, if the effect thereof is to cause an acceleration,
mandatory redemption or other required repurchase of such Indebtedness, or
permit the holder(s) of such Indebtedness to accelerate the maturity of any
such Indebtedness or require a redemption or other repurchase of such
Indebtedness; or any such Indebtedness shall be otherwise declared to be
due and payable (by acceleration or otherwise) or required to be prepaid,
redeemed or otherwise repurchased by any Credit Party or any of their
respective Subsidiaries (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof; or the holder of any Lien
(other than Liens upon property leased of any Credit Party or any of their
respective Subsidiaries which were created by the lessor prior to the
commencement of the lease), in any amount, shall commence foreclosure of
such Lien upon property of any Credit Party or any of their respective
Subsidiaries having an aggregate value in excess of $2,000,000 and such
foreclosure shall continue against such property to a date less than thirty
(30) days prior to the date of the proposed foreclosure sale.
(i) Failure of Enforceability of Credit Documents; Security.
Any covenant, agreement or obligation of any Credit Party contained in or
evidenced by any of the Credit Documents shall cease to be enforceable, or
shall be determined to be unenforceable, in accordance with its terms; any
Credit Party shall deny or disaffirm its obligations under any of the
Credit Documents or any Liens granted in connection therewith (provided
that a good faith dispute as to erroneous charges shall not constitute a
Default); or any Liens granted in any of the Collateral shall be determined
to be void, voidable, invalid or unperfected, are subordinated or not given
the priority contemplated by this Credit Agreement or the applicable Credit
Document.
(j) Judgments. One or more judgments or decrees shall be
entered against any Credit Party involving in the aggregate a liability
(not paid or fully covered by insurance satisfactory to the Agent) of
$250,000 or more and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within forty-five (45)
days from the entry thereof.
9.2 Acceleration and Cash Collateralization. Upon the
occurrence and during the continuance of an Event of Default, the Agent may
take any or all of the following actions, in addition to all other rights
and remedies in the Credit Documents or under applicable law, without
prejudice to the rights of the Agent or any Lender to enforce its claims
against the Credit Parties:
(a) Acceleration. Upon the written request of the Majority
Lenders, and by delivery of written notice to the Borrowers from the Agent,
all Obligations shall be declared to be immediately due and payable (except
with respect to any Event of Default set forth in Section 9.1(f) hereof, in
which case all Obligations shall automatically become immediately due and
payable without the necessity of any request of the Majority Lenders or
notice or other demand to the Borrowers) without presentment, demand,
protest or any other action or obligation of the Agent or any Lender.
(b) Termination of Commitments. Upon the written request of
the Majority Lenders, and by delivery of written notice to the Borrowers
from the Agent, the Commitments shall be immediately terminated and, at all
times thereafter, all Revolving Loans made by any Lender pursuant to this
Credit Agreement shall be at such Lender's sole discretion, unless such
Event of Default is waived in accordance with Section 11.11.
(c) Cash Collateralization. On demand of the Agent or the
Majority Lenders the Borrowers shall immediately deposit with the Agent for
each Letter of Credit then outstanding, cash or Cash Equivalents in an
amount equal to 110% of the greatest amount drawable thereunder.
9.3 Rescission of Acceleration. After acceleration of the
maturity of the Revolving Loans, if the Borrowers pay all accrued interest
and all principal due (other than by reason of the acceleration) and all
Defaults and Events of Default are otherwise remedied or waived in
accordance with Section 11.11, the Majority Lenders may elect in their sole
discretion to rescind the acceleration and return any cash collateral.
(This Section is intended only to bind all of the Lenders to a decision of
the Majority Lenders and not to confer any right on the Borrowers, even if
the described conditions for the Majority Lenders' election may be met.)
9.4 Remedies. Upon the occurrence and during the continuance
of an Event of Default, the Agent may do any or all of the following:
(a) copy all documents, instruments, files and records
(including the copying of any computer records) relating to the
Accounts or use (at the expense of the Borrowers) such supplies or
space of any Credit Party at its place of business necessary to
properly administer and collect the Accounts thereon;
(b) accelerate or extend the time of payment, compromise, issue
credits, or bring suit on the Accounts (in the name of a Credit
Party or the Lenders) and otherwise administer and collect the
Accounts;
(c) sell, assign and deliver the Accounts and any returned,
reclaimed or repossessed merchandise, with or without
advertisement, at public or private sale, for cash, on credit or
otherwise; and
(d) foreclose the security interests created pursuant to the
Credit Documents by any available procedure, or take possession of
any or all of the Collateral without judicial process and enter
any premises where any Collateral may be located for the purpose
of taking possession of or removing the same.
Any Lender may bid or become a purchaser at any sale, free from any right
of redemption, which right is expressly waived by the Borrowers. If notice
of intended disposition of any Collateral is required by law, it is agreed
that ten (10) Business Days notice shall constitute reasonable
notification. The Borrowers will, and will cause each other Credit Party
to, assemble the Collateral and make it available to the Agent at such
locations as the Agent may specify, whether at the premises of a Credit
Party or elsewhere, and will make available to the Agent the premises and
facilities of the Credit Parties for the purpose of the Agent's taking
possession of, removing or putting the Collateral in saleable form.
9.5 Right of Setoff. In addition to and not in limitation of
all rights of offset that any Lender or the Issuing Bank may have under
applicable law, upon the occurrence of any Event of Default, and whether or
not any Lender or the Issuing Bank has made any demand or the Obligations
of any Credit Party have matured, each Lender and the Issuing Bank shall
have the right to appropriate and apply to the payment of the Obligations
of such Credit Party all deposits and other obligations then or thereafter
owing by such Lender or the Issuing Bank to such Credit Party. Each Lender
or the Issuing Bank exercising such rights shall notify the Agent thereof
and any amount received as a result of the exercise of such rights shall be
shared in accordance with Section 2.7.
9.6 License for Use of Software and Other Intellectual
Property. Unless expressly prohibited by the licensor thereof, if any,
the Agent is hereby granted a license to use all computer software programs
(including the relevant source codes), data bases, processes and materials
used by any Credit Party in connection with its businesses or in connection
with the Collateral. The Agent agrees not to use any such license prior to
the occurrence of an Event of Default without the Borrowers' prior consent.
9.7 No Marshalling; Deficiencies; Remedies Cumulative. The
net cash proceeds resulting from the Agent's exercise of any of the
foregoing rights to liquidate all or substantially all of the Collateral
(after deducting all of the Agent's Expenses related thereto) shall be
applied by the Agent to the payment of the Obligations to the Agent and the
Lenders, whether due or to become due, in such order as the Agent may
elect. The Borrowers and each other Credit Party shall remain liable to
the Agent and the Lenders for any deficiencies, and the Agent and the
Lenders in turn agree to remit to the Borrowers or successors or assigns or
any other Person lawfully entitled thereto, any surplus resulting
therefrom. The foregoing remedies are not intended to be exhaustive and
the full or partial exercise of any of them shall not preclude the full or
partial exercise of any other available remedy under the Credit Agreement,
under any other Credit Document, at equity or at law.
ARTICLE 10.
THE AGENT
10.1 Appointment of Agent.
(a) Each Lender hereby designates BT Commercial Corporation as
its Agent and irrevocably authorizes the Agent to take action on its behalf
under the Credit Documents, to exercise the powers and perform the duties
described therein, and to exercise such other powers reasonably incidental
thereto. The Agent may perform any of its duties through its agents or
employees.
(b) Other than the Borrowers' rights under Section 10.8, this
Article 10 is for the benefit of the Agent and the Lenders only. The Agent
shall act only for the Lenders and assumes no obligation to or agency or
trust relationship with any Credit Party.
10.2 Nature of Duties of Agent. The Agent has no duties or
responsibilities except those expressly set forth in the Credit Documents.
Neither the Agent nor any of its officers, directors, employees or agents
shall be liable for any action taken or omitted hereunder or in connection
herewith. The duties of the Agent shall be mechanical and administrative
in nature. The Agent shall have no fiduciary relationship to any Lender or
any participant of any Lender.
10.3 Lack of Reliance on Agent. Independently and without
reliance upon the Agent, each Lender has made and shall continue to make
its own independent investigation and analysis of the content and validity
of the Credit Documents and of the performance and creditworthiness of the
Credit Parties thereunder. The Agent does not assume any responsibility or
undertake any obligation to make inquiry with respect to such matters,
unless specifically requested to do so in writing by a Lender.
10.4 Certain Rights of the Agent. The Agent may request
instructions from the Majority Lenders at any time. If the Agent requests
instructions from the Majority Lenders with respect to any action or
inaction, the Agent shall be entitled to await instructions from the
Majority Lenders before such action or inaction. No Lender shall have any
right of action based upon the Agent's action or inaction in response to
instructions from the Majority Lenders.
10.5 Reliance by Agent. The Agent may rely upon written or
telephonic communication it believes to be genuine and to have been signed,
sent or made by the proper person. The Agent may obtain the advice of
legal counsel (including, for matters concerning the Credit Parties,
counsel for the Borrowers), independent public accountants and other
experts selected by it and shall have no liability for action or inaction
in good faith based upon such advice.
10.6 Indemnification of Agent. To the extent the Agent is not
reimbursed and indemnified by the Borrowers, each Lender will reimburse and
indemnify the Agent, to the extent of its Proportionate Share, for any and
all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever (including
all Expenses) which may be imposed on, incurred by or asserted against the
Agent in performing its duties hereunder or otherwise relating to the
Credit Documents, unless resulting from the Agent's gross negligence or
willful misconduct.
10.7 The Agent in its Individual Capacity. In its individual
capacity, the Agent shall have the same rights and powers hereunder as any
other Lender and may exercise them as though it was not performing the
duties specified herein. The terms "Lenders," "Majority Lenders," or any
similar terms shall, unless the context clearly otherwise indicates,
include the Agent in its individual capacity. The Agent and each of its
Affiliates may accept deposits from, lend money to, acquire equity
interests in, and generally engage in any kind of banking, trust, financial
advisory or other business with the Borrowers or any Affiliate of the
Borrowers as if it were not performing the duties specified herein, and the
Agent may accept fees and other consideration from the Credit Parties for
services in connection with this Credit Agreement and otherwise without
having to account for the same to the Lenders.
10.8 Successor Agent.
(a) The Agent may, upon five Business Days' notice to the
Lenders and the Borrowers, resign by giving written notice thereof to the
Lenders and the Borrowers. The Agent's resignation shall be effective upon
the appointment of a successor Agent.
(b) Upon receipt of the Agent's resignation, the Majority
Lenders may appoint a successor Agent. Unless an Event of Default shall
have occurred and be continuing at the time of such appointment, the
successor Agent shall be subject to approval by the Borrowers, which
approval shall not to be unreasonably withheld, conditioned or delayed and
shall be delivered to the Majority Lenders within five Business Days after
the Borrowers' receipt of notice of a proposed successor Agent. If a
successor Agent has not accepted its appointment within fifteen Business
Days, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent.
(c) Upon its acceptance of the agency hereunder, a successor
Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall
be discharged from its duties and obligations under this Credit Agreement.
The retiring Agent shall continue to have the benefit of this Article 10
for any action or inaction while it was Agent.
10.9 Collateral Matters.
(a) Each Lender authorizes and directs the Agent to enter into
the Collateral Documents for the benefit of the Lenders. Except as
otherwise set forth herein, any action or exercise of powers by the
Majority Lenders under the Credit Documents, together with such other
powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders. Prior to an Event of Default, without
notice to or consent from any Lender, the Agent may take any action
necessary or advisable to perfect and maintain the perfection of the Liens
upon the Collateral.
(b) The Agent is authorized to release or subordinate any Lien
granted to or held by the Agent upon any Collateral (i) upon termination of
the Commitments and payment and satisfaction of all of the Obligations,
(ii) upon receipt of the proceeds of sales of the Collateral permitted
hereunder, (iii) if required by the holder of any Purchase Money Lien, or
(iv) if the release can be and is approved by the Majority Lenders. The
Agent is further authorized to approve easements and similar agreements
with respect to Mortgaged Properties and to execute and deliver such
releases or subordinations of Liens as are required in connection
therewith. The Agent may request and the Lenders will provide confirmation
of the Agent's authority to release particular types or items of
Collateral.
(c) The Agent shall have no obligation to assure that the
Collateral exists or is owned by any Credit Party, that such Collateral is
cared for, protected or insured, or that the Liens in the Collateral have
been created, perfected, or have any particular priority. With respect to
the Collateral, the Agent may act in any manner it may deem appropriate, in
its sole discretion, given the Agent's own interest in the Collateral as
one of the Lenders, and it shall have no duty or liability whatsoever to
the Lenders, except for its gross negligence or willful misconduct.
10.10 Actions with Respect to Defaults. In addition to the
Agent's right to take actions on its own accord as permitted under this
Credit Agreement, the Agent shall take such action with respect to a
Default or Event of Default as shall be directed by the Majority Lenders.
Until the Agent shall have received such directions, the Agent may act (or
not act) as it deems advisable and in the best interests of the Lenders.
ARTICLE 11.
MISCELLANEOUS
11.1 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND ANY
DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS CREDIT AGREEMENT OR ANY
OF THE CREDIT DOCUMENTS, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR
OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAWS PROVISIONS OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW) AND DECISIONS OF THE STATE OF NEW YORK.
11.2 SUBMISSION TO JURISDICTION. ALL DISPUTES AMONG ANY
CREDIT PARTY AND THE LENDERS (OR THE AGENT ACTING ON THEIR BEHALF), WHETHER
SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY
STATE AND FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN, CITY OF NEW
YORK, AND THE COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN; PROVIDED,
HOWEVER, THAT THE AGENT, ON BEHALF OF THE LENDERS, SHALL HAVE THE RIGHT, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST ANY CREDIT PARTY
OR ITS PROPERTY IN ANY LOCATION REASONABLY SELECTED BY THE AGENT IN GOOD
FAITH TO ENABLE THE AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT. OSG AND THE BORROWERS
AGREE THAT THEY WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS, SETOFFS OR
CROSS-CLAIMS IN ANY PROCEEDING BROUGHT BY THE AGENT. OSG AND THE BORROWERS
WAIVE ANY OBJECTION THAT ANY OF THEM MAY HAVE TO THE LOCATION OF THE COURT
IN WHICH THE AGENT HAS COMMENCED A PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON FORUM NON
CONVENIENS.
11.3 SERVICE OF PROCESS. OSG AND THE BORROWERS HEREBY
IRREVOCABLY DESIGNATE NATIONAL REGISTERED AGENTS, INC. AS THEIR DESIGNEE,
APPOINTEE AND AGENT TO RECEIVE, FOR AND ON THEIR BEHALF OF SERVICE OF
PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT. IT IS
UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT AT ITS ADDRESS
WILL BE PROMPTLY FORWARDED BY MAIL TO OSG AND THE BORROWERS, BUT FAILURE OF
OSG OR ANY BORROWER TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE
SERVICE OF SUCH PROCESS.
11.4 JURY TRIAL. OSG, THE BORROWERS, THE AGENT AND THE
LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY. INSTEAD, ANY
DISPUTES WILL BE RESOLVED IN A BENCH TRIAL.
11.5 LIMITATION OF LIABILITY. NEITHER THE AGENT NOR ANY
LENDER SHALL HAVE ANY LIABILITY TO ANY CREDIT PARTY (WHETHER SOUNDING IN
TORT, CONTRACT, OR OTHERWISE) FOR LOSSES SUFFERED BY ANY CREDIT PARTY IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS
OR RELATIONSHIPS CONTEMPLATED BY THIS CREDIT AGREEMENT, OR ANY ACT,
OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS
DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OR COURT ORDER BINDING ON
THE AGENT OR ANY SUCH LENDER, THAT THE LOSSES WERE THE RESULT OF ACTS OR
OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
11.6 Delays. No delay or omission of the Agent or the Lenders
to exercise any right or remedy hereunder shall impair any such right or
operate as a waiver thereof.
11.7 Notices. Except as otherwise provided herein or therein,
all notices and correspondences hereunder or under the other Credit
Documents shall be in writing and sent by certified or registered mail,
return receipt requested, or by overnight delivery service, with all
charges prepaid, if to the Agent or any of the Lenders, then to BT
Commercial Corporation, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx,, Xxxxxxxxxx
00000 Attention: Xxxxxxx Lies and if to OSG or the Credit Parties then c/o
Aerosol Services Company, Inc., 000 Xxxxx Xxxxx Xxxxxx, Xxxx xx Xxxxxxxx,
Xxxxxxxxxx 00000-0000 Attention: Chief Financial Officer with a copy to
The Xxxxxx + Xxxxxx Group, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxx: or by facsimile
transmission, promptly confirmed in writing sent by first class mail, if to
the Agent, or any of the Lenders, at 000-000-0000, and if to the Borrowers
at 000-000-0000 or to G+M at 000-000-0000. All such notices and
correspondence shall be deemed given (i) if sent by certified or registered
mail, three Business Days after being postmarked, (ii) if sent by overnight
delivery service, when received at the above stated addresses or when
delivery is refused and (iii) if sent by telex or facsimile transmission,
when receipt of such transmission is acknowledged. Any party may change
its notice address by delivering written notice to the other parties in
accordance with this Section.
11.8 Assignments and Participations.
(a) Borrowers Assignment. The Borrowers shall not assign this
Credit Agreement, or any rights or obligations hereunder, without the prior
written consent of the Agent and the Lenders. Any purported assignment in
violation of the terms of this Section 11.8 shall be void an of no force
and effect.
(b) Lender Assignments. Each Lender may assign to one or more
banks or other financial institutions all or a portion of its rights and
obligations under this Credit Agreement, the Revolving Notes and the other
Credit Documents, with the consent of the Agent and, so long as no Default
or Event of Default has occurred and is continuing, the consent of the
Borrowers (which shall not be unreasonably withheld, conditioned or
delayed), and upon execution and delivery to the Agent, for its acceptance
and recording in the Register (as defined below), of an agreement in
substantially the form of Exhibit G (an "Assignment and Assumption
Agreement"), together with surrender of any Revolving Note or Revolving
Notes subject to such assignment and a processing and recordation fee of
$2,500. No such assignment shall be for less than $5,000,000 of the
Commitments unless it is to another Lender. (This Section does not apply
to branches and Affiliates of a Lender, it being understood that a Lender
may make, carry or transfer Revolving Loans at or for the account of any of
its branch offices or Affiliates without consent of the Borrowers, the
Agent or any other Lender.)
(c) Agent's Register. The Agent shall maintain a register of
the names and addresses of the Lenders, their Commitments, and the
principal amount of their Revolving Loans (the "Register"). The Agent
shall also maintain a copy of each Assignment and Assumption Agreement
delivered to and accepted by it and modify the Register to give effect to
each Assignment and Assumption Agreement. Upon its receipt of each
Assignment and Assumption Agreement and surrender of the affected Revolving
Note or Revolving Notes, the Agent will give prompt notice thereof to the
Borrowers and deliver to the Borrowers a copy of the Assignment and
Assumption Agreement and the surrendered Revolving Note or Revolving Notes.
Within five Business Days after its receipt of such notice, the Borrowers
shall execute and deliver to the Agent a new Revolving Note or Revolving
Notes to the order of the assignee in the amount of the Commitment or
Commitments assumed by it and to the assignor in the amount of the
Commitment or Commitments retained by it, if any. Such new Revolving Note
or Revolving Notes shall re-evidence the Indebtedness outstanding under the
surrendered Revolving Note or Revolving Notes and shall be dated as of the
Closing Date. The Agent shall be entitled to rely upon the Register
exclusively for purposes of identifying the Lenders hereunder.
(d) Lender Participations. Each Lender may sell
participations (without the consent of the Agent, the Borrowers or any
other Lender) to one or more parties in or to all or a portion of its
rights and obligations under this Credit Agreement, the Revolving Notes and
the other Credit Documents. Notwithstanding a Lender's sale of a
participation interest, its obligations hereunder shall remain unchanged.
The Borrowers, the Agent, and the other Lenders shall continue to deal
solely and directly with such Lender. No participant shall have rights to
approve any amendment or waiver of this Credit Agreement except to the
extent such amendment or waiver would (i) increase the Commitment of the
Lender from whom the participant purchased its participation interest; (ii)
reduce the principal of, or rate or amount of interest on the Revolving
Loans subject to such participation, (iii) postpone any date fixed for any
payment of principal of, or interest on, the Revolving Loans subject to the
participation interest, or (iv) release any guarantor of the Obligations or
all or a substantial portion of the Collateral, other than when otherwise
permitted hereunder.
11.9 Confidentiality. Each Lender agrees that it will not
disclose without the prior consent of the Borrowers any information with
respect to OSG or any of its Subsidiaries which is furnished pursuant to
this Credit Agreement and which is designated by the Borrowers to the
Lenders in writing as confidential; provided, that any Lender may disclose
any such information (a) to its employees, auditors, or counsel, or to
another Lender if the disclosing Lender or such disclosing Lender's holding
or parent company in its sole discretion determines that any such party
should have access to such information, (b) as has become generally
available to the public, (c) as may be required or appropriate in any
report, statement or testimony submitted to any Governmental Authority
having or claiming to have jurisdiction over such Lender, (d) as may be
required or appropriate in response to any summons or subpoena or in
connection with any litigation, (e) in order to comply with any Requirement
of Law, and (f) to any prospective or actual transferee or participant in
connection with any contemplated transfer or participation of any of the
Revolving Notes or Commitments or any interest therein by such Lender.
11.10 Indemnification; Reimbursement of Expenses of
Collection. The Borrowers hereby jointly and severally indemnify and agree
to defend and hold harmless the Agent, the Issuing Bank and each of the
Lenders and their respective directors, officers, agents, employees and
counsel from and against any and all losses, claims, damages, liabilities,
deficiencies, judgments or expenses incurred by any of them (except to the
extent that it is finally judicially determined to have resulted from their
own gross negligence or willful misconduct) arising out of or by reason of
(a) any litigations, investigations, claims or proceedings which arise out
of or are in any way related to (i) this Credit Agreement, the other Credit
Documents or any Transaction Document or Acquisition Document or the
transactions contemplated thereby, including the Kolmar Acquisition or any
Permitted Acquisition, (ii) the issuance of the Letters of Credit,
(iii) the failure of the Issuing Bank to honor a drawing under any Letter
of Credit, as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority, (iv) any actual or proposed use by the Borrowers of
the proceeds of the Revolving Loans or (v) the Agent's or the Lenders'
entering into this Credit Agreement, the other Credit Documents or any
Transaction Document or any other agreements and documents relating hereto,
including, without limitation, amounts paid in settlement, court costs and
the fees and disbursements of counsel incurred in connection with any such
litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing and (b) any remedial or other action
taken by any Credit Party or the Lenders in connection with compliance by
any Credit Party, or any of their respective properties, with any federal,
state, local or foreign environmental laws, acts, rules, regulations,
orders, directions, ordinances, criteria or guidelines. In addition, the
Borrowers shall, upon demand, pay to the Agent and any Lender all costs and
expenses (including the reasonable fees and disbursements of counsel and
other professionals) paid or incurred by the Agent or such Lender in
(i) enforcing or defending its rights under or in respect of this Credit
Agreement, the other Credit Documents or any other document or instrument
now or hereafter executed and delivered in connection herewith, (ii) in
collecting the Revolving Loans, (iii) in foreclosing or otherwise
collecting upon the Collateral or any part thereof and (iv) obtaining any
legal, accounting or other advice in connection with any of the foregoing.
11.11 Amendments and Waivers. No amendment or waiver of any
provision of this Credit Agreement, any part of Schedule B, or any other
Credit Document shall be effective unless in writing and signed by the
Majority Lenders (or by the Agent on their behalf), and then only in the
specific instance and for the specific purpose for which given, except
that:
(a) the consent of all the Lenders is required to (i) increase
the Commitments, (ii) reduce the principal of, or interest on, the
Revolving Notes, any Letter of Credit reimbursement obligations or
any Fees hereunder (other than Fees that are exclusively for the
account of the Agent or the Issuing Bank), (iii) postpone any date
fixed for any payment in respect of principal of, or interest on,
the Revolving Notes, any Letter of Credit reimbursement
obligations or any Fees hereunder, (iv) change the percentage of
the Commitments, or any minimum requirement necessary for the
Lenders or the Majority Lenders to take any action hereunder,
(v) amend or waive this Section 11.11(a), or change the definition
of Majority Lenders, (vi) except as otherwise expressly provided
in this Credit Agreement, and other than in connection with the
financing, refinancing, sale or other disposition of any asset of
a Credit Party permitted under this Credit Agreement, release any
Liens in favor of the Lenders on any of the Collateral, or (vii)
increase advance rates under the Borrowing Base to any level above
the advance rates in effect as of the date hereof; and
(b) the consent of the Agent or the Issuing Bank, as the case
may be, shall be required for any amendment, waiver or consent
affecting the rights or duties of the Agent or the Issuing Bank
under any Credit Document, in addition to the consent of the
Lenders otherwise required by this section.
The consent of the Credit Parties shall not be required for any amendment,
modification or waiver of the provisions of Article 10 (other than
Section 10.8). OSG and the Borrowers and the Lenders hereby authorize the
Agent to modify this Credit Agreement by unilaterally amending or
supplementing Annex I to reflect assignments of the Commitments.
Notwithstanding the foregoing, the Borrowers may amend Schedule B, Parts
6.1, 6.10, 6.14 and 8.14, without the consent of the Majority Lenders.
11.12 Counterparts and Effectiveness. This Credit Agreement
and any waiver of amendment hereto may be executed in any number of
counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. This
Credit Agreement shall become effective on the date on which all of the
parties hereto shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Agent pursuant
to Section 11.7 or, in the case of the Lenders, shall have given to the
Agent written, telecopied or telex notice (actually received) at such
office that the same has been signed and mailed to it.
11.13 Severability. In case any provision in or obligation
under this Credit Agreement or the Revolving Notes or the other Credit
Documents shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations shall not in any way be affected or impaired thereby.
11.14 Maximum Rate. Notwithstanding anything to the contrary
contained elsewhere in this Credit Agreement or in any other Credit
Document, OSG, the Borrowers, the Agent and the Lenders hereby agree that
all agreements among them under this Credit Agreement and the other Credit
Documents, whether now existing or hereafter arising and whether written or
oral, are expressly limited so that in no contingency or event whatsoever
shall the amount paid, or agreed to be paid, to the Agent or any Lender for
the use, forbearance, or detention of the money loaned to the Borrowers and
evidenced hereby or thereby or for the performance or payment of any
covenant or obligation contained herein or therein, exceed the Highest
Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents at
the time performance of such provision shall be due shall exceed the
Highest Lawful Rate, then, automatically, the obligation to be fulfilled
shall be modified or reduced to the extent necessary to limit such interest
to the Highest Lawful Rate, and if from any such circumstance any Lender
should ever receive anything of value deemed interest by applicable law
which would exceed the Highest Lawful Rate, such excessive interest shall
be applied to the reduction of the principal amount then outstanding
hereunder or on account of any other then outstanding Obligations and not
to the payment of interest, or if such excessive interest exceeds the
principal unpaid balance then outstanding hereunder and such other then
outstanding Obligations, such excess shall be refunded to the Borrowers.
All sums paid or agreed to be paid to the Agent or any Lender for the use,
forbearance, or detention of the Obligations and other Indebtedness of the
Borrowers to the Agent or any Lender, to the extent permitted by applicable
law, shall be amortized, prorated, allocated and spread throughout the full
term of such Indebtedness, until payment in full thereof, so that the
actual rate of interest on account of all such Indebtedness does not exceed
the Highest Lawful Rate throughout the entire term of such Indebtedness.
The terms and provisions of this Section shall control every other
provision of this Credit Agreement, the other Credit Documents and all
agreements among OSG, the Borrowers, the Agent and the Lenders.
11.15 Entire Agreement; Successors and Assigns. This Credit
Agreement and the other Credit Documents constitute the entire agreement
among OSG, the Borrowers, the Agent, and the Lenders, supersede any prior
agreements among them, and shall bind and benefit OSG, the Borrowers, and
the Lenders and their respective successors and permitted assigns.
11.16 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted
by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default or Event of Default if
such action is taken or condition exists.
11.17 Survival. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Credit
Agreement, the Notes and the other Credit Documents, the making of the
Revolving Loans and issuance of Letters of Credit hereunder.
Notwithstanding anything in this Credit Agreement, any other Credit
Document or implied by law to the contrary, all indemnities set forth
herein, including, without limitation, in Section 3.10, 4.14, 4.15, 4.16,
10.6 and 11.10, shall survive the payment of the Obligations and the
termination of this Credit Agreement.
11.18 Judgment Currency.
(a) If, for the purpose of obtaining judgment in any
court, it is necessary to convert a sum due hereunder in any currency (the
"Original Currency") into another currency (the "Other Currency") the
parties hereto agree, to the fullest extent permitted by any Requirements
of Law, that the rate of exchange used shall be that at which in accordance
with normal banking procedures the Agent could purchase the Original
Currency with the Other Currency on the Business Day immediately preceding
the day on which any such judgment, or any relevant part thereof, is paid
or otherwise satisfied.
(b) The obligations of each Credit Party in respect of
any sum due from it to the Agent, the Lenders or the Issuing Bank hereunder
and under the other Credit Documents shall, notwithstanding any judgment in
such Other Currency, be discharged only to the extent that on the Business
Day following receipt by the Agent of any sum adjudged to be so due in the
Other Currency the Agent may in accordance with normal banking procedures
purchase the Original Currency with the Other Currency; if the Original
Currency so purchased is less than the sum originally due to the Agent, the
Lenders or the Issuing Bank in the Original Currency, OSG and each Borrower
agrees, as a separate obligation and notwithstanding any such judgment, to
severally indemnify the Agent, the Lenders and Issuing Bank against such
loss, and if the amount of the Original Currency so purchased exceeds the
sum originally due to the Agent, the Lenders or the Issuing Bank in the
Original Currency, the Agent, the Lenders or the Issuing Bank, as
applicable, shall remit such excess to the applicable Credit Party.
11.19 Currency of Payments. Notwithstanding any provision to
the contrary herein or in any Credit Document, all payments made under or
in connection with this Credit Agreement and the other Credit Documents
shall be in lawful currency of the United States.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to
be executed and delivered by their proper and duly authorized officers as
of the date set forth above.
GUARANTOR: OUTSOURCING SERVICES GROUP, INC.
a Delaware corporation
By: /s/ Xxx Xxxxxxx
----------------------------
Name: Xxx Xxxxxxx
Title: Chief Financial Officer
BORROWERS: AEROSOL SERVICES COMPANY, INC.
a California corporation
PIEDMONT LABORATORIES, INC.
a Georgia corporation
By: /s/ Xxx Xxxxxxx
----------------------------
Name: Xxx Xxxxxxx
Title: Chief Financial Officer
AGENT: BT COMMERCIAL CORPORATION,
as Agent
By: /s/ Xxxx X. Xxxx
----------------------------
Name: Xxxx X. Xxxx
Title: Vice President
LENDERS: BT COMMERCIAL CORPORATION
By: /s/ Xxxx X. Xxxx
----------------------------
Name: Xxxx X. Xxxx
Title: Vice President
XXXXXX FINANCIAL, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
NATIONAL BANK OF CANADA
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxx
Title: Assistant Vice President
SUMITOMO BANK OF CALIFORNIA
By: /s/ Xxx X. Xxxxxxx
----------------------------
Name: Xxx X. Xxxxxxx
Title: Vice President
FLEET CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
