Exhibit 10.1
SENIOR SECURED, SUPER PRIORITY, PRIMING DEBTOR-IN-POSSESSION
CREDIT AGREEMENT
dated as of
January 4, 2006
among
PLIANT CORPORATION,
as Parent Borrower,
The Domestic Subsidiary Borrowers Party Hereto,
The Lenders Party Hereto,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent, Collateral Agent and Lender,
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as Syndication Agent and a Lender
and
GE CAPITAL MARKETS, INC.,
as Lead Arranger and Book Runner
TABLE OF CONTENTS
Page
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ARTICLE I Definitions...................................................2
SECTION 1.01. Defined Terms...........................................2
SECTION 1.02. Classification of Loans and Borrowings.................40
SECTION 1.03. Terms Generally........................................40
SECTION 1.04. Accounting Terms; GAAP.................................41
ARTICLE II The Credits..................................................41
SECTION 2.01. Commitments; Loans Outstanding on Effective Date.......41
SECTION 2.02. Loans and Borrowings...................................41
SECTION 2.03. Requests for Borrowings................................42
SECTION 2.04. Swingline Loans........................................43
SECTION 2.05. Letters of Credit......................................44
SECTION 2.06. Funding of Borrowings..................................49
SECTION 2.07. Interest Elections.....................................49
SECTION 2.08. Termination and Reduction of Commitments...............51
SECTION 2.09. Repayment of Loans; Evidence of Debt...................51
SECTION 2.10. Prepayment of Loans....................................52
SECTION 2.11. Fees...................................................54
SECTION 2.12. Interest...............................................55
SECTION 2.13. Alternate Rate of Interest.............................56
SECTION 2.14. Increased Costs........................................57
SECTION 2.15. Break Funding Payments.................................58
SECTION 2.16. Taxes..................................................58
SECTION 2.17. Payments Generally; Pro Rata Treatment;
Sharing of Setoffs.....................................60
SECTION 2.18. Mitigation Obligations; Replacement of Lenders.........63
SECTION 2.19. Protective Advances....................................64
SECTION 2.20. Super Priority Nature of Obligations and
Lenders' Liens.........................................65
SECTION 2.21. Payment of Obligations.................................66
SECTION 2.22. No Discharge; Survival of Claims.......................66
SECTION 2.23. Release................................................66
SECTION 2.24. Waiver of any Priming Rights...........................67
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ARTICLE III Representations and Warranties...............................67
SECTION 3.01. Organization; Powers...................................67
SECTION 3.02. Authorization; Enforceability..........................67
SECTION 3.03. Governmental Approvals; No Conflicts...................68
SECTION 3.04. Financial Condition; No Material Adverse Change........68
SECTION 3.05. Properties.............................................69
SECTION 3.06. Litigation and Environmental Matters...................69
SECTION 3.07. Compliance with Laws and Agreements....................69
SECTION 3.08. Investment Company Status..............................70
SECTION 3.09. Taxes..................................................70
SECTION 3.10. ERISA..................................................70
SECTION 3.11. Disclosure.............................................70
SECTION 3.12. Subsidiaries...........................................71
SECTION 3.13. Insurance..............................................71
SECTION 3.14. Labor Matters..........................................71
SECTION 3.15. [Intentionally Omitted]................................71
SECTION 3.16. Security Documents.....................................71
SECTION 3.17. Federal Reserve Regulations............................72
SECTION 3.18. Reorganization Matters.................................73
SECTION 3.19. Related Names..........................................73
SECTION 3.20. Permanent Establishment in Canada......................73
ARTICLE IV Conditions...................................................74
SECTION 4.01. Effective Date.........................................74
SECTION 4.02. Subsequent to the Effective Date.......................77
SECTION 4.03. Each Credit Event......................................78
ARTICLE V Affirmative Covenants........................................79
SECTION 5.01. Financial Statements and Other Information.............79
SECTION 5.02. Notices of Material Events.............................82
SECTION 5.03. Information Regarding Collateral.......................83
SECTION 5.04. Existence; Conduct of Business.........................83
SECTION 5.05. Payment of Obligations; Compliance with Leases.........84
SECTION 5.06. Maintenance of Properties..............................84
SECTION 5.07. Insurance..............................................84
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SECTION 5.08. Casualty and Condemnation..............................85
SECTION 5.09. Books and Records; Inspection and Audit Rights.........85
SECTION 5.10. Compliance with Laws...................................86
SECTION 5.11. Use of Proceeds and Letters of Credit..................86
SECTION 5.12. Additional Subsidiaries................................87
SECTION 5.13. Further Assurances.....................................88
SECTION 5.14. Supplemental Disclosure................................88
SECTION 5.15. Intellectual Property..................................89
SECTION 5.16. Landlord Lien Waivers, Mortgagee Agreements and
Bailee Letters.........................................89
SECTION 5.17. Depository Banks.......................................89
SECTION 5.18. ERISA..................................................89
ARTICLE VI Negative Covenants...........................................89
SECTION 6.01. Indebtedness...........................................89
SECTION 6.02. Certain Equity Securities..............................91
SECTION 6.03. Liens..................................................91
SECTION 6.04. Fundamental Changes....................................93
SECTION 6.05. Investments, Loans, Advances, Guarantees and
Acquisitions...........................................93
SECTION 6.06. Asset Sales............................................95
SECTION 6.07. Sale and Lease-Back Transactions.......................96
SECTION 6.08. Swap Agreements........................................96
SECTION 6.09. Restricted Payments; Certain Payments of Indebtedness..97
SECTION 6.10. Transactions with Affiliates...........................97
SECTION 6.11. Restrictive Agreements.................................97
SECTION 6.12. Amendment of Material Documents........................98
SECTION 6.13. Repayment of Indebtedness..............................99
SECTION 6.14. Cash Held by Foreign Subsidiaries......................99
SECTION 6.15. ERISA..................................................99
SECTION 6.16. Cancellation of Indebtedness...........................99
SECTION 6.17. Change in Fiscal Year; Accounting Policies.............99
SECTION 6.18. Financial Covenants...................................100
SECTION 6.19. No Additional Deposit Accounts........................100
SECTION 6.20. Pliant Investment, Inc. and Alliant Company LLC.......100
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SECTION 6.21. Reclamation Claims....................................100
SECTION 6.22. Chapter 11 Claims.....................................101
ARTICLE VII Events of Default...........................................101
ARTICLE VIII The Agents..................................................105
ARTICLE IX [Intentionally Omitted].....................................108
ARTICLE X Miscellaneous...............................................108
SECTION 10.01. Notices...............................................108
SECTION 10.02. Waivers; Amendments...................................109
SECTION 10.03. Expenses; Indemnity; Damage Waiver; Joint and
Several Obligations...................................111
SECTION 10.04. Successors and Assigns................................112
SECTION 10.05. Survival..............................................116
SECTION 10.06. Counterparts; Integration; Effectiveness..............116
SECTION 10.07. Severability..........................................117
SECTION 10.08. Right of Setoff.......................................117
SECTION 10.09. Governing Law; Jurisdiction;
Consent to Service of Process.........................117
SECTION 10.10. WAIVER OF JURY TRIAL..................................118
SECTION 10.11. Headings..............................................118
SECTION 10.12. Confidentiality.......................................118
SECTION 10.13. Conversion of Currencies..............................119
SECTION 10.14. Interest Rate Limitation..............................119
SECTION 10.15. Conflict of Terms.....................................120
SECTION 10.16. Parties Including Trustees;
Bankruptcy Court Proceedings..........................120
SECTION 10.17. Pre-Petition Loan Agreement...........................120
SECTION 10.18. Agents as Party in Interest...........................120
ARTICLE XI Cross-Guaranty, Subrogation, Contribution and Subordination.120
SECTION 11.01. Cross-Guaranty........................................120
SECTION 11.02. Waivers by the Borrowers..............................121
SECTION 11.03. Benefit of Guaranty...................................121
SECTION 11.04. Waiver of Subrogation, Etc............................121
SECTION 11.05. Election of Remedies..................................122
SECTION 11.06. Limitation............................................122
SECTION 11.07. Contribution with Respect to Guaranty Obligations.....123
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SECTION 11.08. Liability Cumulative..................................123
SECTION 11.09. Subordination.........................................124
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SCHEDULES:
Schedule 1.01(a) Mortgaged Properties
Schedule 1.01(b) Existing Letters of Credit
Schedule 1.01(c) Domestic Subsidiary Borrowers
Schedule 1.01(d) Excluded Subsidiaries
Schedule 2.01(a) Domestic Commitments
Schedule 3.05 Owned or Leased Property
Schedule 3.12 Subsidiaries
Schedule 3.13 Insurance
Schedule 3.16(d) Mortgage Filing Offices
Schedule 4.01(y) First Day Orders
Schedule 5.07 Insurance Levels
Schedule 6.01 Existing Indebtedness
Schedule 6.03 Existing Liens
Schedule 6.05(b) Existing Investments
Schedule 6.06 Asset Sales
Schedule 6.10 Affiliate Transactions
Schedule 6.11 Existing Restrictions
Schedule 6.19 Deposit Accounts
EXHIBITS:
Exhibit A Form of Assignment and Assumption
Exhibit B Form of Guarantee Agreement
Exhibit C-1 Form of Domestic Pledge Agreement
Exhibit C-2 Form of Canadian Pledge Agreement
Exhibit D-1 Form of Domestic Security Agreement
Exhibit D-2 Form of Canadian Security Agreement
Exhibit E Form of Borrowing Base Certificate
Exhibit F Form of Interim Order
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SENIOR SECURED, SUPER PRIORITY, PRIMING DEBTOR-IN-POSSESSION
CREDIT AGREEMENT dated as of January 4, 2006, among PLIANT CORPORATION, a Utah
corporation, the Domestic Subsidiary Borrowers party hereto, the Lenders party
hereto, XXXXXX XXXXXXX SENIOR FUNDING, INC., as Syndication Agent, and GENERAL
ELECTRIC CAPITAL CORPORATION, as Administrative Agent and Collateral Agent.
RECITALS
WHEREAS, on January 3, 2006 (the "Petition Date"), the Borrowers
and the Guarantors (each, a "Filing Company") commenced Chapter 11 Case Nos.
06-10000 through 06-10010, jointly administered under Chapter 11 Case No.
06-10001 (each a "Chapter 11 Case" and collectively, the "Chapter 11 Cases")
by filing separate voluntary petitions for reorganization under Chapter 11 of
Title 11 of the United States Code, 11 U.S.C. 101 et seq. (the "Bankruptcy
Code"), with the United States Bankruptcy Court for the District of Delaware
(the "Bankruptcy Court"). Each Filing Company continues to operate their
businesses and manage their properties as debtors and debtors-in-possession
pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code.
WHEREAS, prior to the Petition Date, the Pre-Petition Lenders
provided financing to inter alia Borrowers pursuant to that certain Amended
and Restated Credit Agreement, dated as of November 21, 2005, among the Parent
Borrower, Uniplast Industries Co., and the Subsidiaries of Parent Borrower
party thereto as borrowers, as Borrowers, the Lenders party thereto, Xxxxxx
Xxxxxxx Senior Funding, Inc., as Domestic B Agent, and GE Capital, as Domestic
A Agent, Administrative Agent and Collateral Agent (the "Pre-Petition
Collateral Agent") (as amended, restated, supplemented or otherwise modified
from time to time, the "Pre-Petition Loan Agreement");
WHEREAS, the Borrowers have requested that Lenders provide a
senior secured, super-priority, priming revolving credit facility to Borrowers
of up to Two Hundred Million Dollars ($200,000,000) in the aggregate to fund
the working capital requirements of the Borrowers during the pendency of the
Chapter 11 Cases;
WHEREAS, the Lenders are willing to make certain loans and other
extensions of credit to the Borrowers of up to such amount upon the terms and
conditions set forth herein;
WHEREAS, the Borrowers have agreed to secure all of their
obligations under the Loan Documents by granting to the Collateral Agent, for
the benefit of the Agents and the Lenders, a first priority, priming security
interest in and lien (subject to certain limited exceptions as provided
herein) upon all of their existing and after-acquired personal and real
property;
WHEREAS, the Guarantors are willing to Guarantee all of the
obligations of the Borrowers to the Agents and the Lenders under the Loan
Documents and to grant to the Collateral Agent, for the benefit of the Agents
and the Lenders, a first priority, priming security interest (subject to
certain limited exceptions as provided herein) in all of their respective
assets to secure such Guarantee;
WHEREAS, the Borrowers' business is a mutual and collective
enterprise and the Borrowers believe that the consolidation of all loans and
other financial accommodations under this Agreement will enhance the aggregate
borrowing powers of the Borrowers and facilitate the administration of the
Chapter 11 Cases and their loan relationship with the Agents and the Lenders,
all to the mutual advantage of the Borrowers and their respective
subsidiaries;
WHEREAS, each Borrower acknowledges that it will receive
substantial direct and indirect benefits by reason of the making of loans and
other financial accommodations to the other Borrowers as provided in this
Agreement; and
WHEREAS, the Agents' and the Lenders' willingness to extend
financial accommodations to the Borrowers, and to administer each Borrower's
collateral security therefor, on a combined basis as more fully set forth in
this Agreement, is done solely as an accommodation to the Borrowers and at the
Borrowers' request and in furtherance of the Borrowers' mutual and collective
enterprise.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Account" shall have the meaning assigned to such term in the New
York Uniform Commercial Code and shall also include any right to payment for
goods sold or leased, or for services rendered, whether or not earned by
performance.
"Account Debtor" means any Person who is, or may be, obligated to
any Loan Party under, with respect to or on account of an Account.
"Accumulated Investment Balance" means, at any time, the aggregate
amount of investments, loans, advances and Indebtedness required to be added
to the "Accumulated Investment Balance" pursuant to Sections 6.05(c)(ii),
(d)(ii), (e)(iii) and (l)(ii) that remain outstanding at such time.
"Additional Eligible Accounts Receivable Amount" means an
incremental 10% of the Adjusted Eligible Accounts Receivable in excess of the
Adjusted Eligible Accounts Receivable included in the calculation of the
Borrowing Base pursuant to clause (a)(i)(A) of the
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definition thereof, in an aggregate amount not to exceed 95% of the Adjusted
Eligible Accounts Receivable.
"Additional Eligible Finished Goods Amount" means (a) if the
Borrowing Base is calculated pursuant to clause (a)(i)(B)(1) of the definition
thereof, then an incremental 20% of the Adjusted Eligible Finished Goods in
excess of the Adjusted Eligible Finished Goods included in the calculation of
the Borrowing Base pursuant to clause (a)(i)(B)(1) of the definition thereof,
in an aggregate amount not to exceed 85% of the Adjusted Eligible Finished
Goods and (b) if the Borrowing Base is calculated pursuant to clause
(a)(i)(B)(2) of the definition thereof, then, the product of (i) an
incremental 10% of the Adjusted Eligible Finished Goods in excess of the
Adjusted Eligible Finished Goods included in the calculation of the Borrowing
Base pursuant to clause (a)(i)(B)(2) of the definition thereof, in an
aggregate amount not to exceed 95% of the Adjusted Eligible Finished Goods
multiplied by (ii) the Recovery Rate with respect to Adjusted Eligible
Finished Goods.
"Additional Eligible Raw Materials Amount" means (a) if the
Borrowing Base is calculated pursuant to clause (a)(i)(C)(1) of the definition
thereof, then an incremental 20% of the Adjusted Eligible Raw Materials in
excess of the Adjusted Eligible Raw Materials included in the calculation of
the Borrowing Base pursuant to clause (a)(i)(C)(1) of the definition thereof,
in an aggregate amount not to exceed 55% of the Adjusted Eligible Raw
Materials and (b) if the Borrowing Base is calculated pursuant to clause
(a)(i)(C)(2) of the definition thereof, then, the product of (i) an
incremental 10% of the Adjusted Eligible Raw Materials in excess of the
Adjusted Eligible Raw Materials included in the calculation of the Borrowing
Base pursuant to clause (a)(i)(C)(2) of the definition thereof, in an
aggregate amount not to exceed 95% of the Adjusted Eligible Raw Materials
multiplied by (ii) the Recovery Rate with respect to Adjusted Eligible Raw
Materials.
"Adjusted Eligible Accounts Receivable" means, on any date, the
amount of Eligible Accounts Receivable on such date, minus the Dilution
Reserve on such date.
"Adjusted Eligible Finished Goods" means, on any date, the amount
of Eligible Finished Goods on such date, minus the Inventory Reserves with
respect to such Eligible Finished Goods on such date.
"Adjusted Eligible Raw Materials" means, on any date, the amount
of Eligible Raw Materials on such date, minus the Inventory Reserves with
respect to such Eligible Raw Materials on such date.
"Administrative Agent" means General Electric Capital Corporation,
in its capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
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"Agents" means, collectively, the Administrative Agent and the
Collateral Agent or, as the context may require, any such Agent.
"Allocable Amount" has the meaning assigned to such term in
Section 11.07(b).
"Alternate Base Rate" means, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of
such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Amended 2004 Notes" has the meaning assigned to such term in the
definition of "2004 Notes Restatement".
"Applicable Percentage" means, (a) with respect to any Domestic
Lender, the percentage of the total amount of the Domestic Commitments
represented by such Domestic Lender's Domestic Commitment. If the Commitments
of any Class have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments of such Class most recently in effect,
giving effect to any assignments.
"Approved Fund" has the meaning assigned to such term in Section
10.04.
"Arranger" means GE Capital Markets, Inc., as arranger and book
runner for the Loans.
"Assignment and Assumption" means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.
"Availability Amount" means, at any time, an amount equal to (a)
the lesser of (i) the total amount of the Commitments at such time and (ii)
the Borrowing Base in effect at such time minus (b) the total Revolving
Exposures at such time.
"Bailee Letter" means a written agreement reasonably acceptable to
the Collateral Agent, pursuant to which a bailee of Inventory or Equipment of
any Loan Party agrees to hold such Inventory or Equipment, as applicable, for
the benefit of the Collateral Agent, to waive or subordinate its rights and
claims as bailee in such Inventory or Equipment, as applicable, including
warehouseman's liens, processor's liens, rights of levy and distraint for
rent, grant access to the Collateral Agent for the repossession and sale of
such Inventory or Equipment, as applicable, and make other agreements relative
thereto.
"Bankruptcy Code" has the meaning assigned to such term in the
recitals to this Agreement.
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"Bankruptcy Court" shall have the meaning assigned to it in the
recitals to the Agreement.
"Bankruptcy Rules" shall mean the Federal Rules of Bankruptcy
Procedure, as the same may from time to time be in effect and applicable to
the Chapter 11 Cases.
"Banking Services" means overdrafts and related liabilities owed
to any of the Lenders (or any Affiliates thereof) arising from treasury,
depositary and cash management services or in connection with any automated
clearinghouse transfers of funds.
"Banking Services Obligations" of any Loan Party means all
monetary obligations of such Loan Party in respect of Banking Services.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrower" means the Parent Borrower or any Domestic Subsidiary
Borrower.
"Borrowing" means (a) Loans of the same Class and Type made,
converted or continued on the same date and, in the case of Eurodollar Loans,
as to which a single Interest Period is in effect, (b) a Swingline Loan and
(c) a Protective Advance.
"Borrowing Base" means, at any time of determination, an amount
equal to the sum, without duplication of:
(a) the lesser of (i)(A) 85% of each Loan Party's Adjusted
Eligible Accounts Receivable, plus (B) the lesser of (1) 65% of each Loan
Party's Adjusted Eligible Finished Goods and (2) the product of (x) 85% of
each Loan Party's Adjusted Eligible Finished Goods multiplied by (y) the
Recovery Rate with respect to Adjusted Eligible Finished Goods, plus (C) the
lesser of (1) 35% of each Loan Party's Adjusted Eligible Raw Materials and (2)
the product of (x) 85% of each Loan Party's Adjusted Eligible Raw Materials
multiplied by (y) the Recovery Rate with respect to Adjusted Eligible Raw
Materials and (ii) $123,735,000, plus
(b) the lesser of (i)(A) the Additional Eligible Accounts
Receivable Amount plus (B) the Additional Eligible Finished Goods Amount plus
(C) the Additional Eligible Raw Materials Amount and (ii) $20,000,000, minus
(c) an amount equal to $131,218,000 (equal to the Aggregate
Borrowing Bases under and as defined in the Pre-Petition Loan Agreement on the
Effective Date) plus any additional amounts owing from time to time by any
Loan Party under the Pre-Petition Loan Agreement or any of the loan documents
or instruments entered into in connection therewith, plus
(d) the lesser of (i)(A) 50% of each Loan Party's Eligible Real
Estate valued at market value plus (B) 70% of the Net Forced Liquidation Value
of each Loan Party's Eligible Machinery and Equipment and (ii) $100,000,000,
minus
(e) the Minimum Availability Reserve, minus
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(f) the Rent Reserve, minus
(g) the Priority Payables Reserve, minus
(h) the Secured Obligations Reserve, minus
(i) the Carve-Out Reserve, minus
(j) any Reserves.
The Borrowing Base at any time shall be determined by reference to the most
recent Borrowing Base Certificate delivered to the Agents pursuant to this
Agreement. Standards of eligibility and reserves and advance rates of the
Borrowing Base may be revised and adjusted from time to time solely at the
discretion of the Administrative Agent, with any changes in such standards to
be effective immediately after delivery of notice thereof to the Parent
Borrower. For purposes of calculating the Borrowing Base on any date, all
amounts reflected or outstanding in Canadian Dollars shall be translated into
dollars at the exchange rate in effect on such date, as determined in good
faith by the Parent Borrower.
"Borrowing Base Certificate" means a certificate substantially in
the form of Exhibit E (with such changes therein as may be required by either
Agent, to reflect the components of, and reserves against, the Borrowing Base
as provided for hereunder from time to time), executed and certified as
accurate and complete by a Financial Officer of the Parent Borrower, which
certificate shall include appropriate exhibits, schedules, supporting
documentation and reports as reasonably requested by either Agent.
"Borrowing Request" means a request by a Borrower for a Borrowing
in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to remain closed; provided that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks generally are not open for dealings in dollar deposits in the London
interbank market.
"Canadian Court" means the Ontario Superior Court of Justice
(Commercial List).
"Canadian Dollars" or "Cdn$" refers to lawful money of Canada.
"Canadian Final Order" means, collectively, the order of the
Canadian Court to be issued upon motion of each Canadian Guarantor, under
Section 18.6 of the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36
("CCAA"), together with all extensions, modifications and amendments thereto,
in each case in form and substance reasonably satisfactory to Agents, which,
among other matters but not by way of limitation, recognizes and declares the
Final Order enforceable in Canada.
"Canadian Guarantors" means Uniplast Holdings Co., a company
organized under the laws of Nova Scotia, Pliant Corporation of Canada Ltd., a
limited liability company
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organized under the laws of Ontario, and Pliant Packaging of Canada, LLC, a
Utah limited liability company.
"Canadian Interim Order" means, collectively, the order of the
Canadian Court to be issued upon motion of each Canadian Guarantor, under
Section 18.6 of the CCAA, together with all extensions, modifications and
amendments thereto, in each case in form and substance reasonably satisfactory
to Agents, which, among other matters but not by way of limitation, recognizes
and declares the Interim Order enforceable in Canada.
"Canadian Perfection Certificate" has the meaning assigned to the
term "Perfection Certificate" in the Canadian Security Agreement.
"Canadian Pledge Agreement" means the Canadian Pledge Agreement,
substantially in the form of Exhibit C-2, among the Canadian Guarantors (other
than Pliant Packaging of Canada, LLC) and the Collateral Agent.
"Canadian Security Agreement" means the Canadian Security
Agreement, substantially in the form of Exhibit D-2, among the Parent
Borrower, the Canadian Guarantors, Pliant Solutions Corporation and the
Collateral Agent.
"Canadian Stay Order" means, collectively, the order of the
Canadian Court to be issued on motion of each Canadian Guarantor, under
Section 18.6 of the CCAA, together with all extensions, modifications and
amendments thereto, in each case in form and substance reasonably satisfactory
to Agent, which, among other matters but not by way of limitation, recognizes
the Chapter 11 Cases and imposes a stay of proceedings against creditors and
others in Canada.
"Capital Expenditures" means, for any period, without duplication,
(a) the additions to property, plant and equipment and other capital
expenditures of the Parent Borrower and the Subsidiaries that are (or would
be) set forth in a consolidated statement of cash flows of the Parent Borrower
and the Subsidiaries for such period prepared in accordance with GAAP and (b)
Capital Lease Obligations incurred by the Parent Borrower and the Subsidiaries
during such period.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Carve-Out Amount" has the meaning assigned to such term in
Section 2.20(c).
"Carve-Out Event" means at any time an Event of Default has
occurred and is continuing.
"Carve-Out Expenses" has the meaning assigned to such term in
Section 2.20(c).
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"Carve-Out Reserve" means a reserve or reserves in the full amount
of the Carve-Out Amount as established by the Administrative Agent on the
Effective Date.
"Cash Interest Expense" means, for any period, Consolidated
Interest Expense for such period excluding any portion thereof in respect of
interest not required to be paid in cash during such period or within one year
thereafter.
"Cash Management Arrangement" means any arrangement pursuant to
which any financial institution provides any Loan Party with treasury,
depositary or cash management services or automated clearinghouse transfers of
funds.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. ss. 9601 et seq.
"Change in Control" means, at any time, (a) the failure by the
Control Group to own, directly or indirectly, beneficially and of record,
Equity Interests in the Parent Borrower representing 25% of the aggregate
voting power represented by the issued and outstanding Equity Interests in the
Parent Borrower; (b) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the SEC thereunder as in
effect on the Effective Date) other than the Control Group, of Equity
Interests in the Parent Borrower representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding Equity
Interests in the Parent Borrower; provided that the Control Group owns
beneficially and of record, in the aggregate, a lesser percentage of such
voting power; (c) the occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Parent Borrower by Persons who were
neither (i) nominated by members of the Control Group or the board of
directors of the Parent Borrower nor (ii) appointed by directors so nominated;
(d) the acquisition of ownership, directly or indirectly, beneficially or of
record, by any Person other than the Parent Borrower (or a Wholly Owned
Subsidiary of the Parent Borrower that is a Loan Party) of any Equity
Interests in any Domestic Subsidiary Borrower; or (e) the occurrence of a
"Change of Control" as defined under the Senior First Lien Note Documents, the
Senior Second Lien Note Documents, the Senior Subordinated Note Documents or
the terms of the Existing Preferred Stock. If, at any time, any of the members
of the board of directors of the Parent Borrower shall have more than one vote
per Person, then any determination of a majority of the board of directors
shall be based on a majority of the voting power of the members thereof rather
than a majority of the members or seats.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the Effective Date, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the Effective Date or (c) compliance by any Lender or the
Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the Effective Date.
"Chapter 11 Case" and Chapter 11 Cases" has the meaning assigned
to such terms in the recitals to this Agreement.
8
"Class", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are Domestic
Revolving Loans, Swingline Loans or Protective Advances. "Class", when used in
reference to any Lender, refers to whether such Lender has a Loan or
Commitment with respect to a particular Class.
"Class of Eligible Inventory" means each of Eligible Finished
Goods and Eligible Raw Materials.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Collateral Agent" means General Electric Capital Corporation, in
its capacity as Collateral Agent for the Secured Parties under the Security
Documents.
"Collateral Documentation Date" means the date which is ten (10)
days following entry of the Final Order by the Bankruptcy Court.
"Commitment" means a Domestic Commitment.
"Committees" shall mean collectively, the official committee of
unsecured creditors and any other committee formed, appointed, or approved in
the Chapter 11 Cases and each of such Committees shall be referred to herein
as a Committee.
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period, plus, without duplication and to the extent deducted
from revenues in determining Consolidated Net Income, the sum of (a) the
aggregate amount of Consolidated Interest Expense for such period, (b) the
aggregate amount of income tax expense for such period, (c) all amounts
attributable to depreciation, amortization and other non-cash charges or
losses for such period (but excluding any such charge that requires an accrual
of, or a cash reserve for, anticipated cash charges for any future period);
provided that any non-cash charges or losses that are added-back to
Consolidated Net Income pursuant to this clause (c) shall be treated as cash
charges or losses in any subsequent period during which cash disbursements
attributable thereto are made; (d) non-cash expenses resulting from the grant
of stock options or other equity-related incentives to any director, officer
or employee of the Parent Borrower or any Subsidiary pursuant to a written
plan or agreement, (e) all non-recurring transaction and financing expenses
resulting from the Transactions, (f) all non-recurring transaction and
financing expenses resulting from (i) modifications to the Senior Subordinated
Note Indenture entered into in connection with the Pre-Petition Loan Agreement
and (ii) ongoing discussions and negotiations with the holders of the Senior
Subordinated Notes regarding the possible restructuring of their claims with
respect thereto, (g) all losses during such period resulting from the sale or
other disposition of any asset of the Parent Borrower or any Subsidiary
outside the ordinary course of business and (h) any Excluded Charges during
such period, and minus, without duplication and to the extent added to
revenues in determining Consolidated Net Income for such period, (a) all
extraordinary gains during such period and (b) all gains during such period
resulting from the sale or other disposition of any asset of the Parent
Borrower or any Subsidiary outside the ordinary course of business, all as
determined on a consolidated basis with respect to the Parent Borrower and the
9
Subsidiaries in accordance with GAAP. If the Parent Borrower or any Subsidiary
has made any sale, transfer, lease or other disposition of assets outside of
the ordinary course of business permitted by Section 6.06 during the relevant
period for determining Consolidated EBITDA, Consolidated EBITDA for the
relevant period shall be calculated after giving pro forma effect thereto, as
if such sale, transfer, lease or other disposition of assets (and any related
incurrence, repayment or assumption of Indebtedness, with any new Indebtedness
being deemed to be amortized over the relevant period in accordance with its
terms, and assuming that any Loans borrowed in connection with such
acquisition are repaid with excess cash balances when available) had occurred
on the first day of the relevant period for determining Consolidated EBITDA.
"Consolidated Interest Expense" means, for any period, the
interest expense, both expensed and capitalized (including the interest
component in respect of Capital Lease Obligations), accrued by the Parent
Borrower and the Subsidiaries during such period (net of payments made or
received under interest rate protection agreements and net of interest
income), determined on a consolidated basis in accordance with GAAP; provided
that "Consolidated Interest Expense" shall not include non-cash interest
expense in respect of the Senior Subordinated Notes arising because (i) the
Senior Subordinated Notes and the Warrants were issued at a discount to their
face value or (ii) a portion of the issue price of the Senior Subordinated
Notes and the Warrants was allocated to the Warrants.
"Consolidated Net Income" means, for any period, net income or
loss of the Parent Borrower and the Subsidiaries for such period determined on
a consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income of any unconsolidated Subsidiary and any Person in
which any other Person (other than the Parent Borrower or any of the
Subsidiaries or any director holding qualifying shares in compliance with
applicable law or any other third party holding a de minimus number of shares
in order to comply with other similar requirements) has an Equity Interest,
except to the extent of the amount of dividends or other distributions
actually paid by such Subsidiary or other Person during such period to the
Parent Borrower or any other Subsidiary that is not subject to the
restrictions set forth in clause (a) or (b) hereof (provided that the Parent
Borrower's or any other Subsidiary's equity in the net loss of any such
Subsidiary or Person for such period shall be included in determining
Consolidated Net Income), (b) the income (but not the loss) of any Subsidiary
to the extent that such Subsidiary is contractually or legally prohibited from
paying dividends, except to the extent of the amount of dividends or other
distributions actually paid by such Subsidiary during such period to the
Parent Borrower or any other Subsidiary that is not subject to the
restrictions set forth in clause (a) or (b) hereof, (c) the income (or loss)
of any Person accrued prior to the date it becomes (or, for pro forma
purposes, is deemed to have become) a Subsidiary or is merged into or
consolidated with the Parent Borrower or any of the Subsidiaries or the date
that Person's assets are acquired by the Parent Borrower or any of the
Subsidiaries and (d) expenses and fees incurred by the Borrowers and allowed
by the Bankruptcy Court in the Chapter 11 Cases.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
10
"Control Group" means collectively the Sponsor and all Persons
Controlled by the Sponsor (other than any operating company Controlled by the
Sponsor).
"Credit Exposure" means, as to any Lender at any time, the sum of
(a) such Lender's Revolving Exposure at such time, plus (b) an amount equal to
its Applicable Percentage, if any, of the aggregate principal amount of
Protective Advances outstanding at such time.
"Default" means any event or condition that constitutes an Event
of Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Depository Banks" has the meaning assigned to such term in
Section 4.01(s).
"Dilution Factors" means, without duplication, with respect to any
period, the aggregate amount of all deductions, credit memos, returns,
adjustments, allowances, bad debt write-offs and other non-cash credits that
are recorded to reduce accounts receivable of the Loan Parties in a manner
consistent with current and historical accounting practices of the Loan
Parties.
"Dilution Ratio" means, at any date, (a) the amount (expressed as
a percentage) equal to (i) the aggregate amount of the applicable Dilution
Factors for the 12 most recently ended fiscal months of the Parent Borrower
divided by (ii) total gross sales of the Loan Parties for the 12 most recently
ended fiscal months of the Parent Borrower, minus (b) 5%; provided that the
Dilution Ratio shall not be less than zero.
"Dilution Reserve" means, at any date, the Dilution Ratio on such
date multiplied by the amount of Eligible Accounts Receivable on such date.
"dollars" or "$" refers to lawful money of the United States of
America.
"Domestic Commitment" means, with respect to each Domestic Lender,
the commitment of such Domestic Lender to make Domestic Revolving Loans and to
acquire participations in Letters of Credit and Swingline Loans hereunder,
expressed as an amount representing the maximum aggregate amount of such
Domestic Lender's Domestic Revolving Exposure hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced
or increased from time to time pursuant to assignments by or to such Domestic
Lender pursuant to Section 10.04, together with the commitment of such Lender
to acquire participations in Protective Advances hereunder. The initial amount
of each Domestic Lender's Domestic Commitment is set forth on Schedule
2.01(a), or in the Assignment and Assumption pursuant to which such Domestic
Lender shall have assumed its Domestic Commitment, as applicable. The initial
aggregate amount of the Domestic Lenders' Domestic Commitments is
$200,000,000.
"Domestic Lender" means the Persons listed on Schedule 2.01(a) and
any other Person that shall have become a party hereto as a Domestic Lender
pursuant to an Assignment and Assumption, other than any such Person that
ceases to be a party hereto pursuant to an
11
Assignment and Assumption. Unless the context otherwise requires, the term
"Domestic Lenders" includes the Swingline Lender.
"Domestic Perfection Certificate" has the meaning assigned to the
term "Perfection Certificate" in the Domestic Security Agreement.
"Domestic Pledge Agreement" means the Domestic Pledge Agreement,
substantially in the form of Exhibit C-1, among each Loan Party (other than
the Canadian Guarantors (but including Pliant Packaging of Canada, LLC) and
any other Loan Party that is a Foreign Subsidiary) and the Collateral Agent.
"Domestic Revolving Exposure" means, with respect to any Domestic
Lender at any time, the sum of the outstanding principal amount of such
Domestic Lender's Domestic Revolving Loans and its LC Exposure and Swingline
Exposure at such time.
"Domestic Revolving Loan" means a Loan made by a Domestic Lender
pursuant to Section 2.01(a). Each Domestic Revolving Loan shall be a
Eurodollar Loan or an ABR Loan.
"Domestic Security Agreement" means the Domestic Security
Agreement, substantially in the form of Exhibit D-1, among each Loan Party
(other than the Canadian Guarantors (but including Pliant Packaging of Canada,
LLC) and any other Loan Party that is a Foreign Subsidiary) and the Collateral
Agent.
"Domestic Subsidiary Borrower" means each Subsidiary of the Parent
Borrower listed on Schedule 1.01(c).
"Effective Date" means the date on which the conditions specified
in Section 4.01 are satisfied (or waived in accordance with Section 10.02).
"Eligible Accounts Receivable" means, at any time of
determination, the aggregate of the amounts (determined as provided in the
second succeeding sentence) for each Account of the Loan Parties that
satisfies the following criteria at the time of creation and continues to meet
the same at such time of determination: such Account (i) has been invoiced to,
and represents the bona fide amounts due to any Loan Party from, the purchaser
of goods or services, in each case originated in the ordinary course of
business of such Loan Party, and (ii) is not ineligible for inclusion in the
calculation of the Borrowing Base pursuant to any of clauses (a) through (t)
below or otherwise deemed, solely at the discretion of the Administrative
Agent to be ineligible for inclusion in the calculation of the Borrowing Base.
Without limiting the foregoing, to qualify as Eligible Accounts Receivable, an
Account shall indicate no Person other than a Loan Party as payee or
remittance party. The amount to be so included in Eligible Accounts Receivable
at any time with respect to Accounts shall be the face amount of Accounts,
reduced by, without duplication and to the extent not reflected in such face
amount, (i) the amount of all accrued and actual discounts, claims, credits or
credits pending, debit memos, promotional program allowances, price
adjustments, finance charges or other allowances (including any amount that
the applicable Loan Party may be obligated to rebate to a customer pursuant to
the terms of any agreement or understanding (written or oral)), (ii) the
aggregate amount of all limits and deductions provided for in this definition
and elsewhere in this Agreement, (iii) the aggregate amount of all cash
received in respect of such Account but not yet
12
applied by the applicable Loan Party to reduce the amount of such Account and
(iv) with respect to an Account of the Canadian Guarantors or any Subsidiary
of the Canadian Guarantors that is a Loan Party, the amount of all goods and
services taxes, harmonized taxes and sales taxes payable in respect of such
Account. Standards of eligibility may be fixed from time to time solely at the
discretion of the Administrative Agent, with any changes in such standards to
be effective immediately after delivery of notice thereof to the Parent
Borrower. Unless otherwise approved from time to time in writing by the
Administrative Agent, no Account shall be an Eligible Account Receivable if:
(a) the applicable Loan Party does not have sole lawful and absolute
title to such Account; or
(b) such Account (i) is unpaid more than 90 days from the original
date of invoice or 60 days from the original due date or (ii) has been
written off the books of the applicable Loan Party or has been otherwise
designated on such books as uncollectible; or
(c) more than 50% in face amount of all Accounts of the Account
Debtor with respect to such Account are ineligible pursuant to clause (b)
above; or
(d) the Account Debtor with respect to such Account is insolvent or
the subject of any bankruptcy case or insolvency proceeding of any kind;
or
(e) such Account is not payable in dollars or the applicable Account
Debtor is either not organized under the laws of the United States of
America or any State thereof or the District of Columbia or is located or
has its principal place of business or substantially all its assets
outside the United States; provided that, with respect to an Account of
the Canadian Guarantors or any Subsidiary of the Canadian Guarantors that
is a Loan Party, such Account may be payable in Canadian Dollars and the
applicable Account Debtor may be organized under the laws of Canada or
any province thereof and be located or have its principal place of
business or substantially all its assets in Canada; or
(f) the applicable Account Debtor is the United States of America or
Canada or any department, agency or instrumentality thereof, unless the
relevant Loan Party duly assigns its rights to payment of such Account to
the Administrative Agent pursuant to the Assignment of Claims Act of
1940, as amended, or the Financial Administration Act (Canada), as
amended, as applicable, which assignment and related documents and
filings shall be in form and substance satisfactory to the Collateral
Agent; or
(g) such Account is subject to any adverse security deposit,
progress payment, retainage or other similar advance made by or for the
benefit of the applicable Account Debtor, in each case to the extent
thereof; or
(h) such Account is not subject to a valid and perfected
first-priority Lien in favor of the Collateral Agent for the benefit of
the Secured Parties to secure the Obligations, subject to no other Liens,
other than Liens described under clauses (a) and (e) of the definition of
"Permitted Encumbrances"; or
13
(i) (A) such Account was invoiced (1) in advance of goods or
services provided or (2) twice or more or (B) income associated with such
Account has not been earned; or
(j) such Account is a non-trade Account, or relates to payments for
interest; or
(k) the sale to the applicable Account Debtor in respect of such
Account is on a xxxx-and-hold, guarantee sale, sale-and-return,
ship-and-return, sale on approval, extended terms or consignment or other
similar basis or made pursuant to any other agreement providing for
repurchase or return of any merchandise that has been claimed to be
defective or otherwise unsatisfactory; or
(l) the goods giving rise to such Account have not been shipped or
title has not been transferred to the applicable Account Debtor, or such
Account represents a progress-billing or otherwise does not represent a
complete sale; provided that, for purposes hereof, "progress-billing"
means any invoice for goods sold or leased or services rendered under a
contract or agreement pursuant to which such Account Debtor's obligation
to pay such invoice is conditioned upon the applicable Loan Party's
completion of any further performance under the contract or agreement; or
(m) such Account arises out of a sale made by the applicable Loan
Party to an employee, officer, agent, director, stockholder, subsidiary
or Affiliate of any Loan Party; or
(n) such Account was created as a new receivable for the unpaid
portion of an outstanding Account (including chargebacks, debit memos or
other adjustments for unauthorized deductions); or
(o) the applicable Account Debtor (i) is a creditor of any Loan
Party, (ii) has, or has asserted, a right of set-off against any Loan
Party (unless such Account Debtor has entered into a written agreement
reasonably acceptable to the Collateral Agent to waive such set-off
rights) or (iii) has disputed its liability (whether by chargeback or
otherwise) or made any asserted or unasserted claim with respect to such
Account or any other Account of any Loan Party that has not been
resolved, in each case, without duplication, to the extent of (A) the
amount owed by such Loan Party to such Account Debtor, (B) the amount of
such actual or asserted right of set-off or (C) the amount of such
dispute or claim, as the case may be; or
(p) such Account does not comply in all material respects with the
requirements of all applicable laws and regulations, whether Federal,
state, local or foreign, including the Federal Consumer Credit Protection
Act, the Federal Truth in Lending Act and Regulation Z of the Board; or
(q) as to all or any part of such Account, a check, promissory note,
draft, trade acceptance or other Instrument for the payment of money has
been received, presented for payment and returned uncollected for any
reason; or
(r) such Account is for goods that have been sold under a purchase
order or pursuant to the terms of a contract or other agreement or
understanding (written or oral)
14
that indicates that any Person other than the applicable Loan Party has
or has had or has purported to have or have had an ownership interest in
such goods; or
(s) such Account is an extended terms account that is due and
payable more than 60 days from the original date of invoice; or
(t) such Account is created on cash in advance terms.
Notwithstanding the forgoing, all Accounts of any single Account
Debtor and its Affiliates that, in the aggregate, exceed (i) 20% in respect of
an Account Debtor whose securities are rated Investment Grade or (ii) 10% in
respect of all other Account Debtors, in either case of the total amount of
all Accounts of the Loan Parties at any time of determination, shall be deemed
not to be Eligible Accounts Receivable to the extent of such excess.
"Eligible Finished Goods" means, on any date, the amount of
Eligible Inventory defined as Finished Goods by each Loan Party on such date
as shown on its perpetual inventory records in accordance with its current and
historical accounting practices.
"Eligible Inventory" means, at any time of determination, without
duplication, the Inventory Value of the Inventory of the Loan Parties at such
time that is not ineligible for inclusion in the calculation of the Borrowing
Base pursuant to any of clauses (a) through (o) below or otherwise deemed, at
the sole discretion of the Administrative Agent, to be ineligible for
inclusion in the calculation of the Borrowing Base. Without limiting the
foregoing, to qualify as "Eligible Inventory", no Person other than a Loan
Party shall have any direct or indirect ownership, interest or title to such
Inventory and no Person other than a Loan Party shall be indicated on any
purchase order or invoice with respect to such Inventory as having or
purporting to have an interest therein. Standards of eligibility may be fixed
from time to time solely at the discretion of the Administrative Agent, with
any changes in such standards to be effective immediately after delivery of
notice thereof to the Parent Borrower. Unless otherwise approved from time to
time in writing by the Administrative Agent, no Inventory shall be deemed
Eligible Inventory if:
(a) such Inventory is not owned solely by a Loan Party or a Loan
Party does not have sole and good, valid and unencumbered title thereto;
or
(b) such Inventory is not located in the United States or Canada; or
(c) such Inventory is not either (i) located in a third party
warehouse or in another location not owned by a Loan Party and either (A)
covered by a Landlord Lien Waiver or Bailee Letter, as applicable, in
each case in form and substance acceptable to the Collateral Agent, or
(B) a Rent Reserve has been taken with respect to such Inventory or (ii)
located on property owned by a Loan Party; or
(d) such Inventory constitutes goods returned or rejected due to
quality issues by a customer of the applicable Loan Party, or constitutes
goods in transit to third parties; or
15
(e) such Inventory constitutes operating supplies, packaging or
shipping materials, cartons, repair parts, labels or miscellaneous spare
parts or other such materials not considered for sale in the ordinary
course of business; or
(f) such Inventory is not subject to a valid and perfected
first-priority Lien in favor of the Collateral Agent, subject to no other
Liens, other than Liens described under clauses (a), (b) and (e) of the
definition of "Permitted Encumbrances"; or
(g) such Inventory is consigned or at a customer location but still
accounted for in the perpetual inventory balance of the Parent Borrower
or the Canadian Guarantors, as applicable; or
(h) such Inventory is being processed offsite at a third party
location or outside processor, or is in transit to or from the such third
party location or outside processor, or is located at a closed facility;
or
(i) such Inventory is seconds or thirds or stale or is scrap,
obsolete or slow moving or unmerchantable or is identified as overstock
or excess by the Parent Borrower or the Canadian Guarantors, as
applicable; or
(j) such Inventory is used as a sample or prototype, displays or
display items, not first-quality or non-saleable in the ordinary course
of business or has been returned by a customer; or
(k) such Inventory is a discontinued product or component thereof;
or
(l) any portion of the Inventory Value of such Inventory is
attributable to intercompany profit between any Loan Party and any of its
Affiliates; or
(m) such Inventory is damaged, returned or marked for return to
vendor; or
(n) such Inventory is not in good condition, does not meet all
material standards imposed by any Governmental Authority having
regulatory authority over it, is repair or replacement parts for
machinery and equipment, is rejected, defective or undergoing quality
review.
"Eligible Machinery and Equipment" means, on any date, the amount
of Equipment of each Loan Party, other than any Equipment which is ineligible
for inclusion in the calculation of the Borrowing Base pursuant to any of
clauses (a) through (d) below or otherwise deemed, solely at the discretion of
the Administrative Agent to be ineligible for inclusion in the calculation of
the Borrowing Base. Standards of eligibility may be fixed from time to time
solely at the discretion of the Administrative Agent, with any changes in such
standards to be effective immediately after delivery of notice thereof to the
Parent Borrower. Without limiting the Administrative Agent's discretion
provided herein, no Equipment shall be Eligible Machinery and Equipment if:
16
(a) such Equipment is not subject to a valid and perfected first
priority Lien in favor of Agent, subject to no other Liens, other than Liens
described under clauses (a), (b) and (e) of the definition of "Permitted
Encumbrances";
(b) such Equipment is not owned solely by a Loan Party or a Loan
Party does not have sole and good, valid and unencumbered title thereto;
(c) such Equipment is not located at Real Estate (i) owned by a
Loan Party, which Real Estate is subject to a first priority perfected Lien in
favor of the Collateral Agent or (ii) leased by a Loan Party where (x) the
lessor has delivered to the Collateral Agent a Landlord Lien Waiver or Bailee
Letter, as applicable or (y) a Rent Reserve has been taken with respect to
such Equipment; or
(d) such Equipment was not included in the most recent appraisal
conducted pursuant to Section 5.09(b), which appraisal shall be based upon the
Net Forced Liquidation Value of such Equipment, shall be in form and substance
and from an independent third party appraiser, in each case satisfactory to
the Agents.
"Eligible Raw Materials" means, on any date, the amount of
Eligible Inventory defined as Raw Materials by each Loan Party on such date as
shown on its perpetual inventory records in accordance with its current and
historical accounting practices.
"Eligible Real Estate" means, on any date, the amount of Real
Estate of each Loan Party, other than any Real Estate which is ineligible for
inclusion in the calculation of the Borrowing Base pursuant to any of clauses
(a) through (c) below or otherwise deemed, solely at the discretion of the
Administrative Agent to be ineligible for inclusion in the calculation of the
Borrowing Base. Standards of eligibility may be fixed from time to time solely
at the discretion of the Administrative Agent, with any changes in such
standards to be effective immediately after delivery of notice thereof to the
Parent Borrower. Without limiting the Administrative Agent's discretion
provided herein, no Real Estate shall be Eligible Real Estate if:
(a) such Real Estate is not subject to a valid and perfected first
priority Lien in favor of the Collateral Agent, subject to no other Liens,
other than Liens described under clauses (a), (b) and (e) of the definition of
"Permitted Encumbrances";
(b) such Real Estate is not owned solely by a Loan Party; or
(c) such Real Estate was not included in the most recent appraisal
conducted pursuant to Section 5.09(b), which appraisal shall be based upon the
market value of such Real Estate, shall be in form and substance and from an
independent third party appraiser, in each case satisfactory to the Agents.
"Environmental Laws" means all laws (including common law), rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions,
notices or binding agreements issued, promulgated or entered into by or with
any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, handling, treatment,
storage, disposal, Release or threatened Release of any Hazardous Material or
to health and safety matters.
17
"Environmental Liability" means any liability, obligation, claim,
action, suit, judgment or order, contingent or otherwise (including, but not
limited to, any liability for damages, natural resource damage, costs of
environmental remediation, administrative oversight costs, fines, penalties or
indemnities), of the Parent Borrower or any Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of
any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment
or (e) any contract, agreement or other consensual arrangement pursuant to
which liability is assumed or imposed with respect to any of the foregoing.
"Equipment" has the meaning assigned to such term in Article 9 of
the New York Uniform Commercial Code and, in any event, including all of each
Loan Party's machinery and equipment, including processing equipment,
conveyors, machine tools, data processing and computer equipment, including
embedded software and peripheral equipment and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and
other equipment of every kind and nature, trade fixtures and fixtures not
forming a part of real property, together with all additions and accessions
thereto, replacements therefor, all parts therefor, all substitutes for any of
the foregoing, fuel therefor, and all manuals, drawings, instructions,
warranties and rights with respect thereto, and all products and proceeds
thereof and condemnation awards and insurance proceeds with respect thereto.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Parent Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or
not waived; (c) the filing pursuant to Section 412(d) of the Code or Section
303(d) of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (d) the incurrence by the Parent Borrower or any of
its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Parent Borrower or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating
to an intention to terminate any Plan or Plans or to appoint a trustee to
administer
18
any Plan; (f) the incurrence by the Parent Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the
Parent Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Parent Borrower or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excluded Charges" means non-recurring charges incurred in respect
of restructurings, plant closings, headcount reductions or other similar
actions, including severance charges in respect of employee terminations;
provided that the aggregate amount of Excluded Charges shall not exceed (a)
$15,000,000 during the term of this Agreement and (b) $7,500,000 during any
one fiscal year.
"Excluded Subsidiaries" means the Subsidiaries of Uniplast
Industries Co. set forth on Schedule 1.01(d); provided, however, that any
Subsidiary shall cease to be a Excluded Subsidiary at such time as such
Subsidiary (a) engages in any business or business activity, other than
activities incidental to the liquidation or dissolution of such Subsidiary in
accordance with applicable law or (b) has total assets with an aggregate book
value or fair market value in excess of $100,000.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made
by or on account of any obligation of any Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United
States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar
tax imposed by any other jurisdiction described in clause (a) above and (c) in
the case of a Foreign Lender with respect to any Borrower (other than an
assignee pursuant to a request by the Parent Borrower under Section 2.18(b)),
any withholding tax that is imposed on amounts payable by such Borrower to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.16(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time
of designation of a new lending office (or assignment), to receive additional
amounts from such Borrower with respect to such withholding tax pursuant to
Section 2.16(a).
"Existing Credit Agreement" means that certain credit dated as of
February 17, 2004 (as amended) among the Parent Borrower, the Uniplast
Industries Co., and certain other subsidiaries of the Parent Borrower party
thereto as borrowers, as Borrowers, the lenders party thereto, Credit Suisse
First Boston, acting through its Cayman Islands Branch, as Administrative
Agent and Documentation Agent, Deutsche Bank Trust Company Americas, as
Collateral Agent,
19
General Electric Capital Corporation, as Co-Collateral Agent, and JPMorgan
Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Syndication Agent
"Existing Letters of Credit" means the letters of credit issued by
LaSalle under the Existing Credit Agreement and outstanding as of the
Effective Date, which are listed on Schedule 1.01(b).
"Existing Preferred Stock" means the Series A Cumulative
Exchangeable Redeemable Preferred Stock of the Parent Borrower having the
terms specified in the form of the Parent Borrower's Fourth Amended and
Restated Articles of Incorporation attached as Exhibit A to the Amendment and
Waiver dated as of August 13, 2004, among the Parent Borrower and the Lenders
party thereto, as such terms may be amended or modified from time to time
pursuant to Section 6.12(a).
"Extraordinary Receipts" means any cash received by any Loan Party
not in the ordinary course of business (and not consisting of proceeds from
the issuance of Stock, debt or disposition of Collateral), including, without
limitation, (i) foreign, United States, state or local tax refunds paid in
connection with or as the result of any settlement, audit, or amendment to any
tax return, (ii) pension plan reversions, (iii) judgments, proceeds of
settlements or other consideration of any kind in connection with any cause of
action, and (iv) indemnity payments (but excluding therefrom working capital
adjustments).
"Federal Funds Effective Rate" means, for any day, a floating
rate equal to the weighted average of the rates on overnight Federal funds
transactions among members of the Federal Reserve System, as determined by the
Administrative Agent in its sole discretion, which determination shall be
final, binding and conclusive (absent manifest error).
"Fee Letter" means that certain Fee Letter dated November 29, 2005
between the Parent Borrower and the Administrative Agent, in form and
substance satisfactory to the Agents.
"Filing Company" has the meaning assigned to such term in the
recitals to this Agreement.
"Final Order" means, collectively, the order of the Bankruptcy
Court entered in the Chapter 11 Cases after a final hearing under Bankruptcy
Rule 4001(c)(2) or such other procedures as approved by the Bankruptcy Court
which order shall be satisfactory in form and substance to the Agents and the
Lenders, and from which no appeal or motion to reconsider has been timely
filed, or if timely filed, such appeal or motion to reconsider has been
dismissed or denied (unless the Agents and the Lenders waive such
requirement), together with all extensions, modifications and amendments
thereto, which, among other matters but not by way of limitation, authorizes
the Borrowers to obtain credit, incur (or guaranty) Indebtedness, and grant
Liens under this Agreement and the other Loan Documents, as the case may be,
provides for the super priority of the Agents' and the Lenders' claims.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer, assistant treasurer or controller of the Parent
Borrower.
20
"Finished Goods" means completed goods that require no additional
processing or manufacturing to be sold to customers (other than customers that
are Affiliates of any Loan Party) by a Loan Party in the ordinary course of
business.
"Fixed Charge Coverage Ratio" means, as of the end of any period
of twelve consecutive fiscal months of the Parent Borrower, the ratio of (a)
Consolidated EBITDA for such period to (b) the sum of (i) the aggregate amount
of scheduled principal or similar payments made during such period in respect
of Long-Term Indebtedness of the Parent Borrower and the Subsidiaries (other
than (A) payments made by the Parent Borrower or any Subsidiary to the Parent
Borrower or a Subsidiary, (B) payments made by the Parent Borrower or a
Subsidiary in respect of loans under the Existing Credit Agreement and (C)
payments made by the Parent Borrower or a Subsidiary in respect of any of the
Loans) plus (ii) the aggregate amount of payments made during such period in
respect of Long-Term Indebtedness of the Parent Borrower and the Subsidiaries,
to the extent that such payments reduced any scheduled principal or similar
payments referred to in clause (i) above that would have become due within one
year after the date of the applicable payment, plus (iii) Cash Interest
Expense during such period plus (iv) cash dividends or other distributions
paid by the Parent Borrower in respect of its Equity Interests during such
period, plus (v) the aggregate amount of Taxes paid in cash during such
period, plus (vi) Capital Expenditures made during such period (excluding
Capital Expenditures funded with the Net Proceeds from any sale, transfer or
disposition of assets pursuant to Section 6.06(a), (d), (e), (f) or (g) (other
than a sale, transfer or disposition of inventory pursuant to Section
6.06(a)), all as determined on a consolidated basis with respect to the Parent
Borrower and the Subsidiaries in accordance with GAAP.
"Foreign Assets" means the assets of or shares or other ownership
interests in the Foreign Subsidiaries (other than any Foreign Subsidiary that
is a Loan Party).
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than the United States of America, any State thereof
or the District of Columbia.
"Foreign Subsidiary" means any Subsidiary that is organized under
the laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia.
"GAAP" means, subject to Section 1.04, generally accepted
accounting principles in the United States of America.
"Governmental Authority" means the government of the United States
of America or Canada, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation of
any other Person (the "primary obligor") in
21
any manner, whether directly or indirectly, and including any obligation of
the guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account party in respect of
any letter of credit or letter of guaranty issued to support such Indebtedness
or obligation; provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Agreement" means the Guarantee Agreement, substantially
in the form of Exhibit B, among each Loan Party (other than a Foreign
Subsidiary that is not organized under the laws of Canada or any province
thereof) and the Collateral Agent.
"Guarantor Payment" has the meaning assigned to such term in
Section 11.07(a).
"Hazardous Materials" means all explosive, radioactive, hazardous
or toxic substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes, and all
other substances or wastes of any nature regulated pursuant to any
Environmental Law, including any material listed as a hazardous substance
under Section 101(14) of CERCLA.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations
of such Person in respect of the deferred purchase price of property or
services (excluding accounts payable incurred in the ordinary course of
business that are not overdue by more than 90 days, unless the payment thereof
is being contested in good faith) (it being understood that "deferred purchase
price" in connection with any purchase of property or assets shall include
only that portion of the purchase price that shall be deferred beyond the date
on which the purchase is actually consummated), (e) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned
or acquired by such Person, whether or not the Indebtedness secured thereby
has been assumed, (f) all Guarantees by such Person of Indebtedness of others,
(g) all Capital Lease Obligations of such Person, (h) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty and (i) all obligations, contingent
or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Notwithstanding the foregoing, "Indebtedness" shall not include (i) deferred
taxes or (ii) unsecured indebtedness of the Parent Borrower or any Subsidiary
to finance insurance premiums in a principal amount not in excess of the
casualty and
22
other insurance premiums to be paid by the Parent Borrower or any Subsidiary
for a three-year period beginning on the date of any incurrence of such
indebtedness.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Insolvency Law" shall mean any of the Bankruptcy and Insolvency
Act (Canada), the CCAA and titles 7 and 11 of the United States Code entitled
"Bankruptcy," each as now and hereafter in effect, any successors to such
statutes and any other applicable insolvency or other similar law of any
jurisdiction.
"Instrument" has the meaning assigned to such term in the New York
Uniform Commercial Code.
"Intercompany Obligations" has the meaning assigned to such term
in Section 11.09(a).
"Intercreditor Agreement" means that certain Amended and Restated
Intercreditor Agreement dated as of February 17, 2004 among the Parent
Borrower, the Pre-Petition Collateral Agent (as successor to Deutsche Bank
Trust Company Americas), the Senior First Lien Note Trustee and the Senior
Second Lien Note Trustee (or any other trustee or agent to which Liens are
granted under the Senior First Lien Security Documents or the Senior Second
Lien Security Documents).
"Interest Election Request" means a request by a Borrower to
convert or continue a Revolving Loan in accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan
(including any Swingline Loan), the first Business Day of each month and (b)
with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Loan with an Interest Period of more than one month's duration,
each day prior to the last day of such Interest Period that occurs at
intervals of one month's duration after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is, (a) on or before
January 31, 2006, seven days thereafter or (b) at any time thereafter, one,
two or three months thereafter, as the applicable Borrower may elect;
provided, that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall
be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such
Borrowing.
23
"Interim Order" means, collectively, the order of the Bankruptcy
Court entered in the Chapter 11 Cases after an interim hearing (assuming
satisfaction of the standards prescribed in Section 364 of the Bankruptcy Code
and Bankruptcy Rule 4001 and other applicable law), together with all
extensions, modifications, and amendments thereto, in form and substance
satisfactory to Agent, which, among other matters but not by way of
limitation, authorizes, on an interim basis, the Borrowers to execute and
perform under the terms of this Agreement and the other Loan Documents,
substantially in the form of Exhibit F.
"Inventory" has the meaning assigned to such term in Article 9 of
the New York Uniform Commercial Code.
"Inventory Reserves" means reserves against Inventory equal to the
sum of the following (with each reserve (other than the reserve described in
clause (h) below) determined by the Parent Borrower but subject to adjustment
solely at the discretion of the Administrative Agent:
(a) a reserve for shrink that arises from discrepancies between
the perpetual accounting system of the Parent Borrower or the Canadian
Guarantors, as applicable, and physical counts of the Inventory pertaining to
inventory quantities on hand; and
(b) a reserve for royalties; and
(c) a reserve for Inventory that is designated to be returned to
vendors or that is recognized as damaged, off-quality or not to customer
specifications by the applicable Loan Party; and
(d) to the extent not included in the calculation of Inventory
Value, a revaluation reserve whereby capitalized favorable variances shall be
deducted from Eligible Inventory and unfavorable variances shall not be added
to Eligible Inventory; and
(e) a lower of the cost or market reserve for any differences
between the applicable Loan Party's actual cost to produce versus its selling
price to third parties determined on a product line basis; and
(f) a reserve for prepaid freight; and
(g) a reserve for vendor rebates; and
(h) any other reserve as deemed appropriate from time to time.
"Inventory Value" means, with respect to any Inventory of any Loan
Party at any time of determination, the lesser of (a) the standard cost of
such Inventory as shown on the perpetual inventory records of each Loan Party
stated on a basis consistent with its current and historical accounting
practices, in dollars, determined in accordance with the standard cost method
of accounting, less (i) any markup on such Inventory from an Affiliate and
(ii) in the event variances under the standard cost method (A) are
capitalized, favorable variances shall be deducted from Eligible Inventory,
and unfavorable variances shall not be added to Eligible Inventory, and (B)
are expensed, a reserve shall be established by the Parent Borrower (but shall
24
be subject to adjustment at the sole discretion of the Administrative Agent as
appropriate in order to adjust the standard cost of Eligible Inventory to
approximate actual cost and (b) the market value of such Inventory.
"Investment Grade" means, in the case of S&P, a rating of BBB- or
better and, in the case of Xxxxx'x, a rating of Baa3 or better.
"Issuing Bank" means General Electric Capital Corporation, in its
capacity as the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section 2.05(i) and such other financial
institutions as may become Issuing Banks as provided in Section 2.05(i). The
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of the Issuing Bank or a bank or other legally
authorized Person selected by or acceptable to the Administrative Agent in its
sole discretion, in each case subject to the consent of the Parent Borrower
which shall not be unreasonably withheld or delayed, in which case the term
"Issuing Bank" shall include any such Affiliate or bank or Person with respect
to Letters of Credit issued by such Affiliate or bank or Person. In the event
that there is more than one Issuing Bank at any time, references herein and in
the other Loan Documents to the Issuing Bank shall be deemed to refer to the
Issuing Bank in respect of the applicable Letter of Credit or to all Issuing
Banks, as the context requires.
"Landlord Lien Waiver" means a written agreement reasonably
acceptable to the Collateral Agent, pursuant to which a Person shall waive or
subordinate its rights and claims as landlord in any Inventory or Equipment of
the applicable Loan Party for unpaid rents, grant access to the Collateral
Agent for the repossession and sale of such Inventory or Equipment, as
applicable, and make other agreements relative thereto.
"LC Availability Period" means the period from and including the
Effective Date to but excluding the earlier of (a) the date that is five
Business Days prior to the Maturity Date and (b) the date of termination of
the Domestic Commitments.
"LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by
or on behalf of the Parent Borrower at such time. The LC Exposure of any
Domestic Lender at any time shall be its Applicable Percentage of the total LC
Exposure at such time.
"Lenders" means the Domestic Lenders.
"Letter of Credit" means any letter of credit issued pursuant to
this Agreement.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, the rate per annum determined by the Administrative Agent
equal to:
25
(a) the offered rate for deposits in dollars for the applicable
Interest Period that appears on Telerate Page 3750 as of 11:00 a.m. (London
time), on the second full Business Day next preceding the first day of such
Interest Period; divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is 2 Business Days prior to the
beginning of such Interest Period (including basic, supplemental, marginal and
emergency reserves under any regulations of the Federal Reserve Board or other
Governmental Authority having jurisdiction with respect thereto, as now and
from time to time in effect) for Eurodollar funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board that
are required to be maintained by a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Telerate
News Service (or its successor satisfactory to the Administrative Agent), the
LIBO Rate shall be determined from such financial reporting service or other
information as shall be mutually acceptable to the Administrative Agent and
the Parent Borrower.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the Fee Letter, the
Guarantee Agreement, the Security Documents, the Interim Order, the Canadian
Interim Order, the Final Order and the Canadian Final Order.
"Loan Parties" means the Parent Borrower, the Domestic Subsidiary
Borrowers, and the other Subsidiary Loan Parties.
"Loans" means the loans made by the Lenders to the Borrowers
pursuant to this Agreement, including Swingline Loans and Protective Advances.
"Long-Term Indebtedness" means any Indebtedness that, in
accordance with GAAP, constitutes (or, when incurred, constituted) a long-term
liability; provided, however, that all Obligations hereunder shall be for
purposes of this Agreement at all times constitute Long-Term Indebtedness.
"Margin Stock" has the meaning assigned to such term in Regulation
U.
"Xxxx-to-Market Value" has the meaning assigned to such term in
the Intercreditor Agreement.
"Material Adverse Effect" means a material adverse effect on (a)
the business, operations, properties, assets, prospects or condition
(financial or otherwise) or contingent or other liabilities of the Parent
Borrower and the Subsidiaries, taken as a whole, (b) the ability of
26
the Loan Parties to perform any material obligations under any Loan Document
or (c) the rights of or benefits available to the Lenders under any Loan
Document.
"Material Indebtedness" means Indebtedness (other than the Loans
and Letters of Credit), or obligations in respect of one or more Swap
Agreements, of any one or more of the Parent Borrower and the Subsidiaries in
an aggregate principal or similar amount exceeding $10,000,000. For purposes
of determining Material Indebtedness, the "principal amount" of the
obligations of the Parent Borrower or any Subsidiary in respect of any Swap
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Parent Borrower or such Subsidiary would be
required to pay if such Swap Agreement were terminated at such time.
"Maturity Date" means the earliest of (a) January 4, 2008, (b) the
date of termination of the Lenders' obligations to make Loans and to incur LC
Exposure or permit existing Loans to remain outstanding pursuant to Article
VII, (c) the date of indefeasible prepayment in full by the Borrowers of the
Loans and the cancellation and return (or stand-by guarantee) of all Letters
of Credit or the cash collateralization of all LC Exposure pursuant to Section
2.17(b), and the permanent reduction of all Commitments to zero dollars ($0),
(d)(i) five (5) days following the Petition Date if the Interim Order has not
been entered by the Bankruptcy Court by such date or (ii) ten (10) days
following the Petition Date if the Canadian Interim Order has not been issued
by the Canadian Court by such date, (e)(i) forty-five (45) days following the
Petition Date if the Final Order has not been entered by the Bankruptcy Court
by such date or (ii) fifty-five (55) days following the Petition Date if the
Canadian Final Order has not been issued by the Canadian Court by such date,
(f) the date upon which the Interim Order expires or the Canadian Interim
Order expires, unless the Final Order or the Canadian Final Order, as
applicable, shall have been entered and become effective by such date, (g) the
close of business on the first Business Day after the entry of the Final Order
and the Canadian Final Order, if by that time Borrowers have not paid the
Administrative Agent the fees required under the Fee Letter to be paid on or
before such date, unless the Agents and the Lenders agree otherwise, (h) the
date a plan of reorganization confirmed in the Chapter 11 Cases becomes
effective that does not provide for the payment in full of all amounts owed to
the Agents and the Lenders under this Agreement and the other Loan Documents
on such effective date and (i) the date of the closing of a sale of all or
substantially all of any Borrower's assets pursuant to Section 363 of the
Bankruptcy Code, a confirmed plan of reorganization or a liquidation pursuant
to Chapter 7 of the Bankruptcy Code.
"Minimum Availability Reserve" means at all times $10,000,000.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases
and rents, leasehold mortgage or other security document, including any
amendment thereto, granting a Lien on any Mortgaged Property to secure the
Obligations.
"Mortgaged Property" means, initially, each parcel of real
property and the improvements thereto owned by a Loan Party and identified on
Schedule 1.01(a), and includes
27
each other parcel of real property and improvements thereto with respect to
which a Mortgage is granted pursuant to Section 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash
proceeds received by the Parent Borrower and the Subsidiaries in respect of
such event including (i) any cash received in respect of any non-cash proceeds
(excluding interest payments), but only as and when received, (ii) in the case
of a casualty, insurance proceeds, and (iii) in the case of a condemnation or
similar event, condemnation awards and similar payments, net of (b) the sum of
(i) all reasonable fees and out-of-pocket expenses paid by the Parent Borrower
and the Subsidiaries to third parties (other than to the Parent Borrower or a
Subsidiary) in connection with such event, (ii) in the case of a sale,
transfer or other disposition of an asset (including pursuant to a sale and
leaseback transaction or a casualty or other insured damage or condemnation or
similar proceeding), the amount of all payments required to be made by the
Parent Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event (including in order to obtain
any consent required therefor) and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by the Parent Borrower and the
Subsidiaries, and the amount of any reserves established by the Parent
Borrower and the Subsidiaries to fund contingent liabilities reasonably
estimated to be payable, and that are directly attributable to such event (as
determined reasonably and in good faith by the chief financial officer of the
Parent Borrower). In the case of Net Proceeds denominated in a currency other
than dollars, the amount of such Net Proceeds shall be the dollar equivalent
thereof based upon the exchange rates prevailing at the time of the
transaction giving rise to such Net Proceeds.
"Non-Consenting Lender" has the meaning assigned to such term in
Section 10.02(c).
"Obligations" means (a) all principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for
prepayment, or otherwise, (b) each payment required to be made by the
Borrowers under this Agreement in respect of any Letter of Credit, when and as
due, including payments in respect of reimbursement of disbursements, interest
thereon and obligations to provide cash collateral and (c) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding (including the Chapter 11 Cases)), of each Loan
Party to the Secured Parties under this Agreement and the other Loan
Documents, (d) all covenants, agreements, obligations and liabilities of each
Loan Party under or pursuant to this Agreement and the other Loan Documents,
(e) all Swap Obligations and (f) the due and punctual payment and performance
of all Banking Services Obligations.
28
"Other Taxes" means any and all current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"Parent Borrower" means Pliant Corporation, a Utah corporation.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means the Domestic Perfection Certificate
or the Canadian Perfection Certificate.
"Permitted Encumbrances" means:
(a) Liens imposed by law for Taxes that (i) are not yet due or to
the extent that nonpayment thereof is permitted under the Bankruptcy Code
or (ii) are being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
processors', landlords', repairmen's and other like Liens imposed by law,
arising in the ordinary course of business and securing obligations that
are not overdue by more than 60 days or are being contested in compliance
with Section 5.05;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) (i) Liens incurred on assets of any Foreign Subsidiary that is
not a Loan Party to secure the obligations of the Parent Borrower or any
of its Subsidiaries under trade contracts in the ordinary course of
business; provided that the aggregate amount of such obligations (other
than obligations constituting Indebtedness incurred pursuant to clauses
(v) or (ix) of Section 6.01) that may be secured pursuant to this
subclause (i) and outstanding at any time shall not exceed $15,000,000
minus the aggregate amount of Indebtedness that has been incurred
pursuant to clauses (v) and (ix) of Section 6.01 and that is outstanding
at such time, or (ii) deposits made to secure the performance of bids,
trade contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in
the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;
(f) Liens of a collection bank arising in the ordinary course of
business under ss. 4-208 of the Uniform Commercial Code in effect in the
relevant jurisdiction;
(g) Liens (i) disclosed on title policies delivered to GE Capital
prior to the Effective Date in respect of any Mortgaged Property and (ii)
easements, zoning restrictions, rights-of-way and similar restrictions
and encumbrances (including minor
29
title and survey defects) on real property imposed by law or arising in
the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected
property or interfere with the ordinary conduct of business of the Parent
Borrower or any Subsidiary;
(h) Liens in respect of real property that become Mortgaged Property
after the Effective Date pursuant to Section 5.13 to the extent such Lien
is permitted by the applicable Mortgage and reasonably acceptable to the
Collateral Agent; and
(i) Canadian statutory deemed trusts for employee source deductions
and goods and services tax under the Excise Tax Act (Canada);
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means: (i) a marketable obligation,
maturing within two years after issuance thereof, issued or guaranteed by the
United States of America or an instrumentality or agency thereof, (ii) a
certificate of deposit or banker's acceptance, maturing within one year after
issuance thereof, issued by any Lender, or a national or state bank or trust
company or a European, Canadian or Japanese bank in each case having capital,
surplus and undivided profits of at least $100,000,000 and whose long-term
unsecured debt has a rating of "A" or better by S&P or A2 or better by Moody's
or the equivalent rating by any other nationally recognized rating agency
(provided that the aggregate face amount of all investments in certificates of
deposit or banker's acceptances issued by the principal offices of or branches
of such European or Japanese banks located outside the United States shall not
at any time exceed 33-1/3% of all investments described in this definition),
(iii) open market commercial paper, maturing within 270 days after issuance
thereof, which has a rating of A1 or better by S&P or P1 or better by Moody's,
or the equivalent rating by any other nationally recognized rating agency,
(iv) repurchase agreements and reverse repurchase agreements with a term not
in excess of one year with any financial institution that has been elected a
primary government securities dealer by the Federal Reserve Board or whose
securities are rated AA-or better by S&P or Aa3 or better by Moody's or the
equivalent rating by any other nationally recognized rating agency relating to
marketable direct obligations issued or unconditionally guaranteed by the
United States of America or any agency or instrumentality thereof and backed
by the full faith and credit of the United States of America, (v) "money
market" preferred stock maturing within six months after issuance thereof or
municipal bonds issued by a corporation organized under the laws of any state
of the United States, which has a rating of "A" or better by S&P or Moody's or
the equivalent rating by any other nationally recognized rating agency, (vi)
tax exempt floating rate option tender bonds backed by letters of credit
issued by a national or state bank whose long-term unsecured debt has a rating
of AA or better by S&P or Aa2 or better by Moody's or the equivalent rating by
any other nationally recognized rating agency, (vii) "money market" funds that
invest in the investments specified in clauses (i) through (vi) above and
(viii) demand deposit accounts with commercial banks.
"Permitted Notes Refinancing Indebtedness" means the 2004 Notes
(after giving effect to the 2004 Notes Restatement) and any Indebtedness of
the Parent Borrower issued to refinance, redeem, repurchase or otherwise
replace (collectively with the amendment and
30
restatement expressly contemplated by the 2004 Notes Restatement, "refinance")
all or any portion of any of the Senior First Lien Notes, Senior Second Lien
Notes or Senior Subordinated Notes (or previous refinancings, redemptions,
repurchases or replacements thereof constituting Permitted Notes Refinancing
Indebtedness); provided that (a) except as otherwise expressly contemplated by
the 2004 Notes Restatement, the aggregate principal amount at maturity of such
Permitted Notes Refinancing Indebtedness does not exceed the aggregate
principal amount at maturity of the Indebtedness being refinanced (plus unpaid
accrued interest and premium thereon), (b) if the aggregate principal amount
at maturity of the Indebtedness being refinanced exceeds the accreted value of
such Indebtedness, the accreted value of such Permitted Notes Refinancing
Indebtedness does not exceed the accreted value of the Indebtedness being
refinanced (plus unpaid accrued interest (not included in the accreted value)
and premium thereon), (c) such Permitted Notes Refinancing Indebtedness has a
rate of interest at a market rate determined at the time of pricing, but in
any event, except as otherwise expressly contemplated by the 2004 Notes
Restatement, at no time greater than the rate of interest of any of the
Indebtedness being refinanced, (d) except as otherwise expressly contemplated
by the 2004 Notes Restatement, the stated maturity of such Permitted Notes
Refinancing Indebtedness is no earlier than the later of (i) 180 days after
the Maturity Date and (ii) the date on which the Indebtedness being refinanced
would otherwise come due in accordance with its terms, (e) except as otherwise
expressly contemplated by the 2004 Notes Restatement, such Permitted Notes
Refinancing Indebtedness does not require any scheduled amortization,
principal or sinking fund payments earlier than the later of (i) 180 days
after the Maturity Date and (ii) the date on which the Indebtedness being
refinanced would otherwise come due in accordance with its terms, (i) with
respect to any refinancing of the Senior Subordinated Notes, such Permitted
Notes Refinancing Indebtedness is unsecured and subordinated in right of
payment to the Obligations on terms no less favorable to the Lenders than
those contained in the Senior Subordinated Note Documents, (g) such Permitted
Notes Refinancing Indebtedness does not have different obligors or guarantors
than those with respect to the Senior First Lien Notes, Senior Second Lien
Notes or Senior Subordinated Notes, as applicable, being refinanced and (h)
all other terms and conditions (including, as applicable, any collateral and
intercreditor provisions) of such Permitted Notes Refinancing Indebtedness are
not less favorable to the Lenders or the Parent Borrower and its subsidiaries
in any material respect than those contained in (i) except in the case of
Permitted Notes Refinancing Indebtedness referred to in clause (ii) below, the
Senior First Lien Notes, Senior Second Lien Notes or Senior Subordinated
Notes, as applicable, being refinanced or (ii) if such Permitted Notes
Refinancing Indebtedness is refinancing any 2004 Notes (other than the Amended
2004 Notes), the 2004 Notes outstanding immediately prior to the 2004 Notes
Restatement Date.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA, Section
412 of the Code or Section 302 of ERISA, and in respect of which the Parent
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
31
"Pledge Agreements" means the Domestic Pledge Agreement and the
Canadian Pledge Agreement.
"Postpetition" means the time period beginning immediately after
the filing of the Chapter 11 Cases.
"Prepetition" means the time period ending immediately prior to
the filing of the Chapter 11 Cases.
"Prepetition Indebtedness" means all Indebtedness of any Loan
Party outstanding on the Petition Date immediately prior to the filing of the
Chapter 11 Cases other than Indebtedness under the Pre-Petition Loan
Agreement.
"Pre-Petition Agents" means the "Agents" under and as defined in
the Pre-Petition Loan Agreement.
"Pre-Petition Collateral Agent" has the meaning assigned to such
term in the recitals to this Agreement.
"Pre-Petition Lenders" means the lenders under the Pre-Petition
Loan Agreement.
"Pre-Petition Loan Agreement" has the meaning assigned to such
term in the recitals to this Agreement.
"Prepayment Fee" means a fee payable to the Administrative Agent,
for the benefit of the Lenders, in connection with reduction in all or a
portion of the Commitment or termination of all or a portion of the Commitment
in an amount equal to the Commitment so reduced or terminated so prepaid
multiplied by 1.00%.
"Prime Rate" means the rate publicly quoted from time to time by
The Wall Street Journal as the "prime rate" (or, if The Wall Street Journal
ceases quoting a prime rate, the highest per annum rate of interest published
by the Federal Reserve Board in Federal Reserve statistical release H.15 (519)
entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent); each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"Priority Payables Reserve" means, with respect to any Person at
any time, any amount payable by such Person that is secured by a Lien in favor
of a Governmental Authority that ranks or is capable of ranking prior to or
pari passu with the Liens created by the Security Documents in respect of any
Eligible Accounts Receivable, Eligible Inventory, Eligible Real Estate or
Eligible Machinery and Equipment, including, if applicable, amounts owing for
wages, vacation pay, severance pay, employee deductions, sales tax, excise
tax, Taxes payable pursuant to Part IX of the Excise Tax Act (Canada) (net of
GST input credits), income tax, workers compensation, government royalties,
pension fund obligations, overdue rents or Taxes, and other statutory or other
claims.
"Pro Forma Opening Borrowing Base" means the Borrowing Base,
calculated as of December 26, 2005.
32
"Projections" has the meaning assigned to such term in Section
4.01(j).
"Protective Advances" has the meaning assigned to such term in
Section 2.19(a).
"Qualified Preferred Stock" means, with respect to any Person, any
preferred Equity Interest that by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable or exercisable)
or upon the happening of any event does not (a) (i) mature or becomes
mandatorily redeemable pursuant to a sinking fund obligation or otherwise;
(ii) become convertible or exchangeable at the option of the holder thereof
for Indebtedness or preferred stock that is not Qualified Preferred Stock; or
(iii) become redeemable at the option of the holder thereof (other than as a
result of a change of control event), in whole or in part, in each case on or
prior to the first anniversary of the Maturity Date and (b) provide holders
thereunder with rights upon the occurrence of a "change of control" event or
have other terms relating to "change of control" events that are less
favorable to the Lenders than the applicable terms set forth in the Existing
Preferred Stock. Notwithstanding anything to the contrary, the Existing
Preferred Stock shall be deemed to be Qualified Preferred Stock.
"Qualifying Foreign Subsidiary" means any Foreign Subsidiary other
than (a) a Foreign Subsidiary that is treated as a corporation for U.S.
federal income tax purposes or (b) any direct or indirect subsidiary of a
Foreign Subsidiary described in clause (a). Each Canadian Guarantor (other
than Pliant Packaging of Canada, LLC) is a Qualifying Foreign Subsidiary.
"Raw Materials" means items or materials used or consumed in the
manufacturing of goods to be sold by the applicable Loan Party in the ordinary
course of business.
"Real Estate" has the meaning assigned to such term in Section
3.05.
"Recovery Rate" means, with respect to any Class of Eligible
Inventory, (a) the estimated net recovery of all Eligible Inventory of the
Borrowers of such Class of Eligible Inventory stated in dollars as determined
on a net orderly liquidation basis by the most recent analysis conducted by
outside inventory consultants/appraisers retained or approved by the Agents
and disclosed to the Parent Borrower divided by (b) the Inventory Value of all
Eligible Inventory of the Loan Parties of such Class of Eligible Inventory, as
of the date of such most recent analysis.
"Register" has the meaning assigned to such term in Section 10.04.
"Regulation U" means Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" means Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation Z" means Regulation Z of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
33
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Release" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into or through the environment.
"Rent Reserve" means, with respect to any location that is not
owned by a Loan Party where any Inventory or Equipment (to the extent subject
to Liens arising by operation of law or otherwise to secure rent, warehousing
fees or similar payment obligations payable by any Loan Party in respect of
such location) is located and with respect to which no Landlord Lien Waiver or
Bailee Letter, as applicable, or entry of the Final Order or Interim Order
providing for collateral access, in each case is in effect, a reserve equal to
three months' rent, warehousing fees or similar payment obligations at such
location.
"Required Domestic Lenders" means, at any time, Domestic Lenders
having Domestic Revolving Exposures and unused Domestic Commitments
representing more than 50% of the sum of the total Domestic Revolving
Exposures and unused Domestic Commitments at such time.
"Required Lenders" means, at any time, Lenders having Credit
Exposure and unused Commitments representing more than 50% of the sum of the
total Credit Exposure and unused Commitments at such time.
"Reserves" means any reserves against Eligible Accounts
Receivable, Eligible Finished Goods, Eligible Raw Materials, Eligible Real
Estate or Eligible Machinery and Equipment of any Borrower or the Availability
Amount that the Administrative Agent may, in its reasonable credit judgment,
establish from time to time. Without limiting the generality of the foregoing,
Reserves established to ensure the payment of accrued Consolidated Interest
Expenses or Indebtedness shall be deemed to be a reasonable exercise of the
applicable Agent's credit judgment.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Parent Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interests in the Parent
Borrower or any Subsidiary or any option, warrant or other right to acquire
any such Equity Interests in the Parent Borrower or any Subsidiary. For the
avoidance of doubt, the receipt by the Parent Borrower of its Equity Interests
in settlement of any claim made by the Parent Borrower pursuant to the
Uniplast Purchase Agreement as in effect on June 15, 2001, shall not be a
Restricted Payment.
"Revolving Availability Period" means the period from and
including the Effective Date to but excluding the earlier of the Maturity Date
and the date of termination of the Commitments.
34
"Revolving Exposure" means, with respect to any Lender at any
time, the sum of the Domestic Revolving Exposure of such Lender.
"Revolving Loan" means a Domestic Revolving Loan.
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc.
"SEC" means the Securities and Exchange Commission.
"Secured Obligations Reserve" means, at any time, the sum of (a)
the Xxxx-to-Market Value of the Swap Obligations of the Loan Parties at such
time, (b) if, at such time, any Cash Management Arrangement is in effect that
could give rise to Banking Services Obligations, the actual amount of Banking
Services Obligations at such time and (c) any amount payable by a Loan Party
that ranks pari passu with or senior to the Obligations.
"Secured Parties" means the "Secured Parties" as defined in the
Domestic Security Agreement.
"Security Agreements" means the Domestic Security Agreement and
the Canadian Security Agreement.
"Security Documents" means the Security Agreements, the Pledge
Agreements, the Mortgages and each other security agreement or other
instrument or document executed and delivered pursuant to Section 5.12 or 5.13
to secure any of the Obligations.
"Senior Claims" means (a) Liens existing on the Closing Date and
listed on Schedule 6.03 (other than Liens securing the Obligations under and
as defined in the Pre-Petition Loan Agreement and Liens permitted by Sections
6.03(i) and (k) (which Liens are specifically "primed" by the Liens created
under the Loan Documents), (b) Liens described in clauses (c), (d)(ii),
(g)(ii) and (i) of the definition of "Permitted Encumbrances" (c) Liens
permitted by Section 6.03(e) and (d) to the extent such Liens are entitled to
priority under applicable law, Liens described in clauses (a) and (b) of the
definition of "Permitted Encumbrances".
"Senior First Lien Note Documents" means the Senior First Lien
Notes, the Senior First Lien Note Indenture, the Senior First Lien Security
Documents, the Intercreditor Agreement and all other instruments, agreements
and documents evidencing, guaranteeing or otherwise governing the terms of the
Senior First Lien Notes.
"Senior First Lien Note Indenture" means the indenture dated as of
February 17, 2004, or any other indenture or similar agreement or instrument,
in each case pursuant to which any Senior First Lien Notes are issued.
"Senior First Lien Notes" means the $306,000,000 principal amount
at maturity of 11-1/8% senior secured discount notes due 2009 of the Parent
Borrower issued in exchange for the substantially identical notes of like
tenor privately issued on the Effective Date and any Permitted Notes
Refinancing Indebtedness in respect thereof.
35
"Senior First Lien Note Trustee" means the trustee under the
Senior First Lien Note Indenture, or any successor thereto.
"Senior First Lien Security Documents" means any and all security
agreements, pledge agreements, mortgages and other agreements and documents
pursuant to which any Liens are granted to secure any Indebtedness or other
obligations in respect of the Senior First Lien Notes.
"Senior Second Lien Note Documents" means the Senior Second Lien
Notes, the Senior Second Lien Note Indenture, the Senior Second Lien Security
Documents, the Intercreditor Agreement and all other instruments, agreements
and documents evidencing, guaranteeing or otherwise governing the terms of the
Senior Second Lien Notes.
"Senior Second Lien Note Indenture" means the indenture dated as
of May 30, 2003, between the Parent Borrower and Wilmington Trust Company, as
trustee, or any other indenture or similar agreement or instrument, in each
case pursuant to which any Senior Second Lien Notes are issued.
"Senior Second Lien Notes" means the $250,000,000 aggregate
principal amount of 11-1/8% senior secured notes due 2009 of the Parent
Borrower outstanding on the Effective Date and any Permitted Notes Refinancing
Indebtedness in respect thereof.
"Senior Second Lien Note Trustee" means the trustee under the
Senior Second Lien Note Indenture, or any successor thereto.
"Senior Second Lien Security Documents" means any and all security
agreements, pledge agreements, mortgages and other agreements and documents
pursuant to which any Liens are granted to secure any Indebtedness or other
obligations in respect of the Senior Second Lien Notes.
"Senior Subordinated Note Documents" means the Senior Subordinated
Notes, the Senior Subordinated Note Indenture and all other instruments,
agreements and documents evidencing, guaranteeing or otherwise governing the
terms of the Senior Subordinated Notes.
"Senior Subordinated Note Indenture" means collectively, (a) the
indenture dated as of May 31, 2000, between the Parent Borrower and The Bank
of New York, as trustee, (b) the indenture dated as of April 10, 2002, between
the Parent Borrower and The Bank of New York, as trustee, and (c) any other
indenture or similar agreement or instrument, in each case pursuant to which
any Senior Subordinated Notes are issued.
"Senior Subordinated Notes" means the $320,000,000 aggregate
principal amount of 13% senior subordinated notes due 2010 of the Parent
Borrower outstanding on the Effective Date and any Permitted Notes Refinancing
Indebtedness in respect thereof.
"Series B Preferred Stock" means the Series B Redeemable Preferred
Stock of the Parent Borrower having the terms specified in the form of the
Parent Borrower's Fourth Amended and Restated Articles of Incorporation
attached as Exhibit A to the Amendment and
36
Waiver dated as of August 13, 2004, among the Parent Borrower and the Lenders
party thereto, as such terms may be amended or modified from time to time
pursuant to Section 6.12(a).
"Sponsor" means X.X. Xxxxxx Partners, LLC.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative
Agent is subject with respect to the LIBO Rate, for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Stockholders Agreement" means the Stockholders Agreement dated as
of May 31, 2000, among Huntsman Packaging Corporation, a Utah corporation, and
the stockholders party thereto.
"subsidiary" means, with respect to any Person (the "parent") at
any date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as
any other corporation, limited liability company, partnership, association or
other entity of which securities or other ownership interests representing
more than 50% of the equity or more than 50% of the ordinary voting power or,
in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held.
"Subsidiary" means any subsidiary of the Parent Borrower.
"Subsidiary Loan Party" means any Subsidiary of the Parent
Borrower; provided that a Foreign Subsidiary shall not be a Subsidiary Loan
Party unless such Foreign Subsidiary is a Qualifying Foreign Subsidiary.
"Swap Agreement" means any agreement with respect to any swap,
spot, forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial
or pricing indices or measures of economic, financial or pricing risk or value
or any similar transaction or any combination of these transactions; provided
that no phantom stock or similar plan providing for payments only on account
of services provided by current or former directors, officers, employees or
consultants of the Parent Borrower or the Subsidiaries shall be a Swap
Agreement.
"Swap Obligations" of each Loan Party means all obligations,
monetary or otherwise, under each Swap Agreement that (i) is effective on the
Effective Date with a
37
counterparty that is a Lender (or an Affiliate of a Lender) as of the
Effective Date or (ii) is entered into after the Effective Date with any
counterparty that is a Lender (or an Affiliate thereof) at the time such Swap
Agreement is entered into.
"Swingline Exposure" means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
"Swingline Lender" means General Electric Capital Corporation, in
its capacity as lender of Swingline Loans hereunder.
"Swingline Loan" has the meaning assigned to such term in Section
2.04.
"Syndication Agent" means Xxxxxx Xxxxxxx Senior Funding, Inc., in
its capacity as syndication agent for the Lenders hereunder.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"Transactions" means (a) the execution, delivery and performance
by each Loan Party of the Loan Documents to which it is to be a party, the
borrowing of Loans, the use of the proceeds thereof and the issuance of
Letters of Credit hereunder and (b) the payment of the Transaction Costs.
"Transaction Costs" means the fees and expenses incurred by, or
required to be reimbursed or paid by, the Parent Borrower and the Subsidiaries
in connection with the Transactions.
"2004 Notes" has the meaning assigned to such term in the
definition of "2004 Notes Restatement"
"2004 Notes Refinancing Percentage" means the amount (expressed as
a percentage) equal to (a) the aggregate accreted value of the Amended 2004
Notes divided by (b) the aggregate accreted value of the 2004 Notes, in each
case on the 2004 Notes Restatement Date.
"2004 Notes Restatement" means (a) the amendment and restatement
on or before May 15, 2005, of the Senior First Lien Note Indenture by the
Parent Borrower and the Senior First Lien Note Trustee to (i) amend and
restate the terms of the Senior First Lien Notes that (A) are outstanding on
the effective date (the "2004 Notes Restatement Date") of such amendment and
restatement (the "2004 Notes") and (B) were, on the record date established by
the Parent Borrower for the purpose of consenting to such amendment and
restatement (the "Record Date"), held of record by holders (the "Consenting
Holders") that delivered to the Senior First Lien Note Trustee an effective
consent (which has not been validly withdrawn) to such amendment and
restatement (the Senior First Lien Notes that satisfy the requirements of this
clause (B) and clause (A) above, together with any identical notes issued in
payment of interest thereon or on any such additional notes in accordance with
their terms, the "Amended 2004 Notes"); provided that (1) the 2004 Notes
Refinancing Percentage is not less than 51%,
38
(2) the terms of the Amended 2004 Notes as of the 2004 Notes Restatement Date
(other than the interest rate, the pay-in-kind interest requirements, the cash
interest requirements, the voluntary redemption premiums (which shall be
market premiums on the 2004 Notes Restatement Date) and the principal amount
at maturity in respect thereof) shall be substantially identical to the terms
of the 2004 Notes immediately prior to the 2004 Notes Restatement Date, (3)
the Amended 2004 Notes shall not require the payment of any interest (other
than through the issuance of additional Amended 2004 Notes and, to the extent
permitted by clause (B) of the proviso to Section 6.09(b), in cash in
accordance with the terms thereof), (4) the rate of interest on the Amended
2004 Notes shall be a fixed rate that is a market rate on the 2004 Notes
Restatement Date (which may be greater than the rate of interest on the 2004
Notes immediately prior to the 2004 Notes Restatement Date) and in any event
shall not exceed the per annum rate separately agreed upon by the Parent
Borrower and the Administrative Agent, (5) the maturity date of the Amended
2004 Notes shall be June 15, 2009, and (6) such amendment and restatement
shall otherwise be effected on terms reasonably acceptable to the
Administrative Agent, and (ii) amend and restate the terms of the 2004 Notes
(other than the Amended 2004 Notes) to eliminate the material restrictive
covenants with respect thereto that can be eliminated by majority consent
under the terms thereof, (b) in connection with the amendment and restatement
described above in clause (a) of this definition and as soon as practicable
after the 2004 Notes Restatement Date, the payment by the Parent Borrower to
each Consenting Holder that consents to such amendment and restatement no
later than the deadline established by the Parent Borrower for such purpose of
a consent fee (which shall be a market amount) in cash in respect of each
$1,000 in principal amount at maturity of Amended 2004 Notes held by such
Consenting Holder on the Record Date; provided that the aggregate amount of
such consent fees shall not exceed the aggregate amount separately agreed upon
by the Parent Borrower and the Administrative Agent, and (c) the execution and
delivery by the Parent Borrower, the Collateral Agent, the Senior First Lien
Note Trustee and the Senior Second Lien Note Trustee of any amendment,
amendment and restatement or reaffirmation of the Intercreditor Agreement in
effect immediately prior to the 2004 Notes Restatement Date that the
Administrative Agent and the Collateral Agent determine is reasonably
necessary or desirable to effect the treatment under the Intercreditor
Agreement of the 2004 Amended Notes in a manner substantially identical to the
manner in which the 2004 Notes are treated under the Intercreditor Agreement
as in effect at such time; provided, however, that the transactions described
above in clauses (a), (b) and (c) of this definition will not satisfy the
requirements for the 2004 Notes Restatement unless, no later than the 2004
Notes Restatement Date, the Parent Borrower shall have delivered to the
Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent, one or more opinions of counsel to the Parent Borrower
as are reasonably requested by the Administrative Agent with respect to the
Parent Borrower and the authorization and consummation of the transactions
described above in clauses (a), (b) and (c).
"2004 Notes Remaining Amount" means (a) $306,000,000 minus (b) an
amount equal to (i) the 2004 Notes Refinancing Percentage multiplied by (ii)
$306,000,000.
"2004 Notes Restatement Date" has the meaning assigned to such
term in the definition of "2004 Notes Restatement".
39
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the LIBO Rate or the Alternate Base
Rate.
"USA Patriot Act" means the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
Patriot Act) Act of 2001.
"U.S. Trustee" means the United States Trustee appointed to the
Chapter 11 Cases.
"Warrants" means the warrants of the Parent Borrower to acquire
common stock of the Parent Borrower issued as units with the Senior
Subordinated Notes.
"Wholly Owned Subsidiary" means a Subsidiary of which securities
(except for directors' qualifying shares or other de minimus shares) or other
ownership interests representing 100% of the equity are at the time owned,
directly or indirectly, by the Parent Borrower.
"Withdrawal Liability" means liability of the Parent Borrower or
any ERISA Affiliate to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan, as such terms are defined in
Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Loan") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Loan").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights. To the extent that any of the Loan Documents executed in
connection with the closing of the Existing Credit Agreement have not been
amended or amended and restated in connection with the transactions
contemplated by this
40
Agreement, the parties hereby acknowledge that all references contained
therein to (a) the "Credit Agreement" shall be references to this Agreement,
(b) the "Administrative Agent" shall be references to the Administrative Agent
as defined herein, (c) the "Collateral Agent" shall be referenced to the
Collateral Agent as defined herein and (d) the "Loan Parties" shall be deemed
to include all of the Loan Parties.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature
shall be construed in accordance with GAAP, as in effect from time to time;
provided that, if the Parent Borrower notifies the Administrative Agent that
the Parent Borrower requests an amendment to any provision hereof to eliminate
the effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the
Administrative Agent notifies the Parent Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision
amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments; Loans Outstanding on Effective Date.
(a) Subject to the terms and conditions set forth herein, each
Domestic Lender agrees to make loans in dollars to the Parent Borrower and the
Domestic Subsidiary Borrowers from time to time during the Revolving
Availability Period in an aggregate principal amount that will not result in
(i) such Lender's Domestic Revolving Exposure exceeding such Lender's Domestic
Commitment (after giving effect to the application of any proceeds being
applied contemporaneously with the advance of such Domestic Revolving Loans)
or (ii) the total Revolving Exposures exceeding the lesser of (A) the total
amount of the Commitments and (B) the Borrowing Base then in effect, subject
to the Administrative Agent's authority, in its sole discretion, to make
Protective Advances pursuant to the terms of Section 2.19.
(b) [Intentionally Omitted].
(c) [Intentionally Omitted].
(d) Within the foregoing limits and subject to the terms and
conditions set forth herein, the Parent Borrower and the Domestic Subsidiary
Borrowers may borrow, prepay and reborrow Domestic Revolving Loans during the
Revolving Availability Period.
SECTION 2.02. Loans and Borrowings. (a) Each Domestic Revolving
Loan (other than a Swingline Loan) shall be made as part of a Borrowing
consisting of Domestic Revolving Loans of the same Type made by the Domestic
Lenders (or their Affiliates as provided in paragraph (b) below) ratably in
accordance with their respective Domestic Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the Commitments of the
41
Lenders are several and no Lender shall be responsible for any other Lender's
failure to make Loans as required. Any Protective Advance and any Swingline
Loan shall be made in accordance with the procedures set forth in Sections
2.19 and 2.04.
(b) Subject to Section 2.13, each Revolving Loan shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Parent Borrower may
request in accordance herewith; provided that all Borrowings made on the
Effective Date must be made as ABR Loans but may be converted into Eurodollar
Loans after January 16, 2006 in accordance with Section 2.07. Each Swingline
Loan shall be an ABR Loan.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Loan, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time that
each ABR Revolving Loan is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $1,000,000;
provided that an ABR Revolving Loan of any Class may be in an aggregate amount
that is equal to the entire unused balance of the total amount of the
Commitments of such Class or that is equal to the amount required to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.05(e).
Each Swingline Loan shall be in an amount that is an integral multiple of
$100,000 and not less than $500,000. Borrowings of more than one Type and
Class may be outstanding at the same time; provided that there shall not at
any time be more than a total of eight Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, no
Borrower shall be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Revolving
Loan, the Parent Borrower shall notify the Administrative Agent (on behalf of
itself or another Borrower) of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 12:00 noon, New York City time, three
Business Days before the date of the proposed Borrowing or (b) in the case of
an ABR Borrowing, not later than 1:00 p.m., New York City time, one Business
Day before the date of the proposed Borrowing; provided that any such notice
of an ABR Revolving Loan to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.05(e) may be given not later than 10:00 a.m., New
York City time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing
Request in a form approved by the Administrative Agent and signed by the
Parent Borrower (on behalf of itself or another Borrower). Each such
telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:
(i) whether the Parent Borrower is requesting such Borrowing on
behalf of itself or for another Borrower (and, if on behalf of another
Borrower, the identity of such Borrower);
(ii) [Intentionally Omitted];
(iii) the aggregate amount of such Borrowing;
42
(iv) the date of such Borrowing, which shall be a Business Day;
(v) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(vi) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of "Interest Period"; and
(vii) the location and number of the relevant Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Loan, then the Parent Borrower
shall be deemed to have selected (on behalf of itself or the applicable
Borrower) an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request with respect to a Borrowing of any Class in
accordance with this Section, the Administrative Agent shall advise each
Lender with respect to such Class of the details thereof and of the amount of
such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make loans
("Swingline Loans") to the Parent Borrower from time to time during the
Revolving Availability Period, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate principal amount of
outstanding Swingline Loans exceeding $10,000,000 and (ii) the total Revolving
Exposures exceeding the lesser of (A) the total amount of the Commitments and
(B) the Borrowing Base then in effect; provided that the Swingline Lender
shall not be required to make a Swingline Loan to refinance an outstanding
Swingline Loan. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Parent Borrower may borrow, prepay and
reborrow Swingline Loans.
(b) To request a Swingline Loan, the Parent Borrower shall notify
the Administrative Agent of such request by telephone (confirmed by telecopy),
not later than 12:00 noon, New York City time, on the day of a proposed
Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day), the amount of the requested
Swingline Loan and the wire transfer instructions for the account of the
Parent Borrower to which the proceeds of such Swingline Loan should be
transferred. The Administrative Agent will promptly advise the Swingline
Lender of any such notice received from the Parent Borrower. The Swingline
Lender shall make each Swingline Loan available to the Parent Borrower by wire
transfer to the account specified by the Parent Borrower in the request for
such Swingline Loan (or, in the case of a Swingline Loan made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e), by
remittance to the Issuing Bank) by 2:00 p.m., New York City time, on the
requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Domestic
43
Lenders to acquire participations on such Business Day in all or a portion of
the Swingline Loans outstanding. Such notice shall specify the aggregate
amount of Swingline Loans in which Domestic Lenders will participate. Promptly
upon receipt of such notice, the Administrative Agent will give notice thereof
to each Domestic Lender, specifying in such notice such Domestic Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Domestic Lender
hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of the
Swingline Lender, such Domestic Lender's Applicable Percentage of such
Swingline Loan or Loans. Each Domestic Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or reduction or termination of the Domestic Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Domestic Lender shall comply with its obligation under this
paragraph by making a wire transfer to the Administrative Agent for the
benefit of the Swingline Lender of immediately available funds, in the same
manner as provided in Section 2.06 with respect to Domestic Revolving Loans
made by such Domestic Lender (and Section 2.06 shall apply, mutatis mutandis,
to the payment obligations of the Domestic Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by it
from the Lenders. The Administrative Agent shall notify the Parent Borrower of
any participations in any Swingline Loan acquired pursuant to this paragraph,
and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from the Parent Borrower (or other party on behalf of the
Parent Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Domestic Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph
shall not relieve the Parent Borrower of any default in the payment thereof.
SECTION 2.05. Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, the Parent Borrower may request the issuance
of Letters of Credit for its own account or the account of any other Loan
Party (provided that the Parent Borrower shall be a co-applicant with respect
to each Letter of Credit issued for the account of or in favor of such other
Loan Party, and the issuance of any such Letter of Credit shall constitute a
Guarantee by the Parent Borrower of Indebtedness of such Loan Party pursuant
to Section 6.05(e)), in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time during the LC
Availability Period. All Letters of Credit shall be denominated in U.S.
dollars. In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Parent Borrower to, or entered
into by the Parent Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Parent Borrower
shall hand deliver or telecopy (or transmit by
44
electronic communication, if arrangements for doing so have been approved by
the Issuing Bank) to the Issuing Bank and the Administrative Agent (reasonably
in advance of the requested date of issuance, amendment, renewal or extension)
a notice requesting the issuance of a Letter of Credit, or identifying the
Letter of Credit to be amended, renewed or extended, and specifying the date
of issuance, amendment, renewal or extension (which shall be a Business Day),
the date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by the Issuing Bank, the Parent Borrower also shall submit a letter
of credit application on the Issuing Bank's standard form in connection with
any request for a Letter of Credit. Subject to the requirements of the next
sentence, upon such request, the Administrative Agent shall cause the Issuing
Bank to issue the Letter of Credit, which Letter of Credit, if the Issuing
Bank thereof is not a Lender, shall be guaranteed by the Administrative Agent.
A Letter of Credit shall be issued, amended, renewed or extended only if (and
upon issuance, amendment, renewal or extension of each Letter of Credit the
Parent Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) the LC Exposure
shall not exceed $25,000,000 and (ii) the total Revolving Exposures shall not
exceed the lesser of (A) the total amount of the Commitments and (B) the
Borrowing Base then in effect.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after
the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension) and
(ii) the date that is five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, (i) if the
Issuing Bank is a Lender, hereby grants to each Domestic Lender, and each
Domestic Lender hereby acquires from the Issuing Bank, a participation in such
Letter of Credit equal to such Domestic Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit or (ii) if
the Issuing Bank is not a Lender, the Administrative Agent hereby grants to
each Domestic Lender, and each Domestic Lender hereby acquires from the
Administrative Agent, a participation in the guarantee of such Letter of
Credit equal to such Domestic Lender's Applicable Percentage of the aggregate
amount available to be drawn under such Letter of Credit. In consideration and
in furtherance of the foregoing, each Domestic Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Bank, such Domestic Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Parent
Borrower on the date due as provided in paragraph (e) of this Section, or of
any reimbursement payment required to be refunded to the Parent Borrower for
any reason. Each Domestic Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.
45
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Parent Borrower shall
reimburse such LC Disbursement by paying to the Administrative Agent an amount
equal to such LC Disbursement not later than 12:00 noon, New York City time,
on the date that such LC Disbursement is made, if the Parent Borrower shall
have received notice of such LC Disbursement prior to 10:00 a.m., New York
City time, on such date, or, if such notice has not been received by the
Parent Borrower prior to such time on such date, then not later than 12:00
noon, New York City time, on (i) the Business Day that the Parent Borrower
receives such notice, if such notice is received prior to 10:00 a.m., New York
City time, on the day of receipt, or (ii) the Business Day immediately
following the day that the Parent Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided
that, if the Parent Borrower does not otherwise elect by notice to the
Administrative Agent to make such payment, the Parent Borrower shall be deemed
to have requested in accordance with Section 2.03 (but without regard to the
minimum borrowing amounts specified in Section 2.02) that such LC Disbursement
be financed with an ABR Domestic Revolving Loan in an amount equal to such LC
Disbursement, the Administrative Agent shall notify the Domestic Lenders
thereof, the Domestic Lenders shall (subject to the conditions to borrowing
herein) advance their respective ABR Domestic Revolving Loans (which shall be
applied to reimburse such LC Disbursement) and, to the extent such ABR
Domestic Revolving Loans are so advanced and applied, the Parent Borrower's
obligation to make such payment shall be deemed discharged as of the date due
and replaced by the resulting ABR Domestic Revolving Loans. If and to the
extent that the Parent Borrower's obligation to make such payment is not fully
discharged and replaced by ABR Domestic Revolving Loans as aforesaid (whether
as a result of the failure to satisfy any condition to borrowing or otherwise)
and if the Parent Borrower otherwise fails to make such payment when due, the
Administrative Agent shall notify each Domestic Lender of the applicable LC
Disbursement, the payment then due from the Parent Borrower in respect thereof
and such Domestic Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Domestic Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Parent
Borrower, in the same manner as provided in Section 2.06 with respect to
Domestic Revolving Loans made by such Domestic Lender (and Section 2.06 shall
apply, mutatis mutandis, to the payment obligations of the Domestic Lenders),
and the Administrative Agent shall promptly pay to the Issuing Bank the
amounts so received by it from the Domestic Lenders. Promptly following
receipt by the Administrative Agent of any payment from the Parent Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Domestic Lenders have made
payments pursuant to this paragraph to reimburse the Issuing Bank, then to
such Domestic Lenders and the Issuing Bank as their interests may appear. Any
payment made by a Domestic Lender pursuant to this paragraph to reimburse the
Issuing Bank for any LC Disbursement (other than the funding of ABR Domestic
Revolving Loans as contemplated above) shall not constitute a Loan and shall
not relieve the Parent Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations Absolute. The Parent Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of
any Letter of Credit or this Agreement, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or
46
invalid in any respect or any statement therein being untrue or inaccurate in
any respect, (iii) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document that does not comply with
the terms of such Letter of Credit or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but
for the provisions of this Section, constitute a legal or equitable discharge
of, or provide a right of setoff against, the Parent Borrower's obligations
hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility
by reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irrespective
of any of the circumstances referred to in the preceding sentence), or any
error, omission, interruption, loss or delay in transmission or delivery of
any draft, notice or other communication under or relating to any Letter of
Credit (including any document required to make a drawing thereunder), any
error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided that nothing in this
Section 2.05 shall be construed to excuse the Issuing Bank from liability to
the Parent Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Parent Borrower to the extent permitted by applicable law) suffered by the
Parent Borrower that are caused by the Issuing Bank's failure to exercise care
when determining whether drafts and other documents presented under a Letter
of Credit comply with the terms thereof. The parties hereto expressly agree
that, in the absence of gross negligence or willful misconduct on the part of
the Issuing Bank, the Issuing Bank shall be deemed to have exercised care in
each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the
contrary, or refuse to accept and make payment upon such documents if such
documents are not in strict compliance with the terms of such Letter of
Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Parent Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether the Issuing
Bank has made or will make an LC Disbursement thereunder; provided that any
failure to give or delay in giving such notice shall not relieve the Parent
Borrower of its obligation to reimburse the Issuing Bank and the Domestic
Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Parent Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Parent
Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Domestic Revolving Loans; provided that, if the Parent
Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.12(d) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing
Bank, except that interest accrued on and after the date of payment by any
Domestic Lender pursuant to
47
paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank; Additional Issuing Banks. The
Issuing Bank may be replaced at any time by written agreement among the Parent
Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. The Administrative Agent shall notify the Domestic
Lenders of any such replacement of the Issuing Bank or any such additional
Issuing Bank. At the time any such replacement shall become effective, the
Parent Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank pursuant to Section 2.11(b). From and after the
effective date of any such replacement or addition, as applicable, (i) the
successor or additional Issuing Bank shall have all the rights and obligations
of the Issuing Bank under this Agreement with respect to Letters of Credit to
be issued thereafter and (ii) references herein to the term "Issuing Bank"
shall be deemed to refer to such successor or such addition or to any previous
Issuing Bank, or to such successor or such addition and all previous Issuing
Banks, as the context shall require. After the replacement of an Issuing Bank
hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.
If at any time there is more than one Issuing Bank hereunder, the Parent
Borrower may, in its discretion, select which Issuing Bank is to issue any
particular Letter of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
and be continuing, on the Business Day that the Parent Borrower receives
notice from the Administrative Agent or the Required Lenders (or, if the
maturity of the Loans has been accelerated, Domestic Lenders with LC Exposure
representing greater than 50% of the total LC Exposure) demanding the deposit
of cash collateral pursuant to this paragraph, the Parent Borrower shall
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Domestic Lenders, an amount in
cash equal to 105% of the LC Exposure as of such date plus any accrued and
unpaid interest thereon. The Parent Borrower also shall deposit cash
collateral pursuant to this paragraph as and to the extent required by Section
2.10(b), and any such cash collateral so deposited and held by the
Administrative Agent hereunder shall constitute part of the Borrowing Base for
purposes of determining compliance with Section 2.10(b). Each such deposit
shall be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the Parent Borrower under this Agreement.
The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. Other than any interest
earned on the investment of such deposits, which investments shall be made at
the option and sole discretion of the Administrative Agent and at the Parent
Borrower's risk and expense, such deposits shall not bear interest. Interest
or profits, if any, on such investments shall accumulate in such account.
Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Parent Borrower for the
LC Exposure at such time or, if the maturity of the Loans has been accelerated
(but subject to the consent of Domestic Lenders with LC Exposure representing
greater than 50% of the total LC Exposure), be applied to satisfy other
obligations of the Parent Borrower under this Agreement. If the Parent
Borrower is required to provide an amount of cash collateral hereunder
48
as a result of the occurrence of an Event of Default, such amount (to the
extent not applied as aforesaid) shall be returned to the Parent Borrower
within three Business Days after all Events of Default have been cured or
waived. If the Parent Borrower is required to provide an amount of cash
collateral hereunder pursuant to Section 2.10(b), such amount (to the extent
not applied as aforesaid) shall be returned to the Parent Borrower as and to
the extent that, after giving effect to such return, the Parent Borrower would
remain in compliance with Section 2.10(b) and no Default shall have occurred
and be continuing.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make
each Loan of any Class to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds by 12:00 noon, New York City
time, to the account of the Administrative Agent most recently designated by
it for such purpose for such Class by notice to the Lenders; provided that
Swingline Loans shall be made as provided in Section 2.04. The Administrative
Agent will make such Loans available to the applicable Borrower by promptly
transferring the amounts so received, in like funds, to the account of such
Borrower designated by the Parent Borrower in the applicable Borrowing
Request; provided that ABR Domestic Revolving Loans made to finance the
reimbursement of (i) an LC Disbursement as provided in Section 2.05(e) shall
be remitted by the Administrative Agent to the Issuing Bank and (ii) a
Protective Advance shall be made by the Administrative Agent.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender
will not make available to the Administrative Agent such Lender's share of
such Borrowing, the Administrative Agent may, in its sole discretion, assume
that such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the applicable Borrower a corresponding amount. In such event, if
a Lender has not in fact made its share of the applicable Borrowing available
to the Administrative Agent, then the applicable Lender and the applicable
Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to such Borrower to but
excluding the date of payment to the Administrative Agent, at (i) in the case
of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation or (ii) in the case of any Borrower, the
interest rate applicable to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the Parent Borrower
may elect (on behalf of itself or another Borrower) to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Parent Borrower (on behalf of itself or another Borrower)
may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among
the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section
49
shall not apply to Swingline Loans or Protective Advances, which may not be
converted or continued.
(b) To make an election pursuant to this Section, the Parent
Borrower shall notify the Administrative Agent of such election by telephone
by the time that a Borrowing Request would be required under Section 2.03 if
the Parent Borrower were requesting a Revolving Borrowing of the Class and
Type resulting from such election to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by the Parent Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing (including the identity of the applicable
Borrower) to which such Interest Election Request applies and, if
different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
"Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Parent Borrower (on behalf of itself
or the applicable Borrower) shall be deemed to have selected an Interest
Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and
of such Lender's portion of each resulting Borrowing.
(e) If the Parent Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of
the Interest Period applicable thereto, then, unless such Borrowing is repaid
as provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof,
if an Event of Default has occurred and is continuing and the Administrative
Agent, at the request of the Required Lenders, so notifies the Parent
Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto.
50
SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date.
(b) The Parent Borrower may at any time terminate, or from time to
time reduce, the Commitments of any Class; provided that (i) each reduction of
the Commitments of any Class shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000 and (ii) the Parent
Borrower shall not terminate or reduce the Commitments of any Class if (A) the
total Revolving Exposures would exceed the total amount of the Commitments or
(B) after giving pro forma effect to such reduction, the Availability Amount
would be less than $10,000,000. In connection with such termination or
reduction, the Borrowers shall pay the applicable Prepayment Fee (if any). No
Prepayment Fee shall be payable on the Commitments in the event this Agreement
is terminated in connection with a refinancing of the Obligations in a
transaction in which General Electric Capital Corporation (or its Affiliates),
together with certain co-lenders selected by General Electric Capital
Corporation, (i) provides for the Borrowers, as debtors-in-possession, a
senior secured, superpriority, priming debtor-in-possession credit facility
pursuant to Section 364(d)(1) of the Bankruptcy Code; provided that the order
approving such facility provides, pursuant to Section 364(d)(1) of the
Bankruptcy Code, that the liens and security interests securing such facility
are superior in priority to the liens and security interests granted (x) to
secure the obligations evidenced by the Pre-Petition Loan Agreement, (y) to
secure the obligations evidenced by the Senior First Lien Notes, and (z) to
secure the obligations evidenced by the Senior Second Lien Notes or (ii)
provides for the Borrowers a credit facility in connection with a plan of
reorganization confirmed in the Chapter 11 Cases.
(c) The Parent Borrower shall notify the Administrative Agent of
any election to terminate or reduce the Commitments of any Class under
paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders with respect to such Class of
Commitments of the contents thereof. Each notice delivered by the Parent
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Commitments of any Class delivered by the Parent
Borrower under paragraph (b) of this Section may state that such notice is
conditioned upon the effectiveness of other borrowings or the completion of
the sale or issuance of stock of the Parent Borrower or the sale of assets of
the Parent Borrower, in which case such notice may be revoked by the Parent
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination or
reduction of the Commitments of any Class shall be permanent. Each reduction
of the Commitments of any Class shall be made ratably among the Lenders in
accordance with their respective Commitments of such Class.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) Each
Borrower, jointly and severally, hereby unconditionally promises to pay (i) to
the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Revolving Loan of such Lender on the Maturity Date,
(ii) to the Administrative Agent the then unpaid amount of each Protective
Advance on the earlier of the Maturity Date and demand by the Administrative
Agent and (ii) to the Swingline Lender the then unpaid principal amount of
each Swingline Loan on the Maturity Date.
51
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each Borrower
to such Lender resulting from each Loan made by such Lender, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be conclusive evidence (absent
manifest error) of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Administrative Agent
to maintain such accounts or any error therein shall not in any manner affect
the obligation of any Borrower to repay the Loans in accordance with the terms
of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the applicable Borrower shall prepare, execute
and deliver to such Lender a promissory note payable to the order of such
Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a customary form approved by the Administrative Agent and the
Parent Borrower. Thereafter, the Loans evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 10.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note
is a registered note, to such payee and its registered assigns).
SECTION 2.10. Prepayment of Loans. (a) The Borrowers shall have
the right at any time and from time to time to prepay any Borrowing in whole
or in part, subject to the requirements of this Section.
(b) (i) If at any time the total Revolving Exposures exceed the
lesser of (A) the total amount of the Commitments at such time and (B) the
Borrowing Base then in effect, then in any such case the Borrowers shall
immediately prepay first, Protective Advances, second, Swingline Loans and
third, Domestic Revolving Loans, without demand or notice of any kind, to the
extent necessary to eliminate such excess. If any such excess remains after
all Domestic Revolving Loans, Protective Advances and Swingline Loans are
prepaid, the Borrowers shall deposit cash collateral pursuant to Section
2.05(j) in an amount equal to such remaining excess.
(ii) [Intentionally Omitted].
(c) So long as no Event of Default shall have occurred and be
continuing, on each Business Day, at or before 12:00 p.m., New York City time,
the Administrative Agent will apply cash deposited in the Collateral Proceeds
Account on such Business Day to prepay, first, Protective Advances, second,
Swingline Loans and third, Domestic Revolving Loans. Unless otherwise directed
by the Parent Borrower, the Administrative Agent will apply any prepayment
52
of Revolving Borrowings made pursuant to this clause (c) to each Class of
Revolving Borrowings on a pro rata basis, with each prepayment of Revolving
Borrowings within any Class applied to prepay ABR Borrowings before any other
Borrowings, with any excess prepayment amount applied to prepay Eurodollar
Borrowings in order of expiration of their respective Interest Periods (and
applied on a pro rata basis in respect of Eurodollar Borrowings with Interest
Periods expiring on the same date).
(d) (i) Immediately upon receipt by any Loan Party of cash
proceeds of any asset disposition, Borrowers shall prepay the Loans in an
amount equal to all such proceeds, net of (A) commissions and other reasonable
and customary transaction costs, fees and expenses properly attributable to
such transaction and payable by Borrowers in connection therewith (in each
case, paid to non-Affiliates), (B) transfer taxes, (C) amounts payable to
holders of senior Liens on such asset (to the extent such Liens constitute
Permitted Encumbrances hereunder), if any, and (D) an appropriate reserve for
income taxes in accordance with GAAP in connection therewith. Any such
prepayment shall be applied in accordance with Section 2.17. The Commitments
shall be permanently reduced by the amount of any such prepayments resulting
from the sales of Eligible Real Estate and Eligible Machinery and Equipment.
(ii) If any Loan Party issues any Equity Interests or any debt
securities (other than in connection with a plan of reorganization of the
Loan Parties whereby debt of such Loan Party is exchanged for equity in
such Loan Party), no later than the Business Day following the date of
receipt of the proceeds thereof, all Borrowers (in the case of an
issuance by a Guarantor) or the issuing Borrower shall prepay the Loans
(and cash collateralize Letter of Credit Obligations) in an amount equal
to all such proceeds, net of underwriting discounts and commissions and
other reasonable costs paid to non-Affiliates in connection therewith.
Any such prepayment shall be applied in accordance with Section 2.17.
(iii) If at any time any Loan Party receives any Extraordinary
Receipts, the Borrowers shall prepay the Loans in an amount equal to all
such Extraordinary Receipts no later than the Business Day following the
date of receipt thereof. Any such prepayment shall be applied in
accordance with Section 2.17.
(e) Prior to any optional or mandatory prepayment of Borrowings
hereunder (other than a mandatory prepayment made pursuant to clause (c)
above), the Parent Borrower shall, subject to the requirements of clause (b)
above, select the Borrowing or Borrowings to be prepaid and shall specify such
selection in the notice of such prepayment pursuant to paragraph (e) of this
Section; provided that (i) the Parent Borrower may elect not to provide
notice, or select the Borrowing or Borrowings to be prepaid, in connection
with a mandatory prepayment pursuant to clause (b) above and, in such an
event, (A), such prepayment shall be applied to outstanding Borrowings in such
manner as the Administrative Agent deems appropriate to comply with the terms
of clause (b) above and (B) to the extent that the terms of clause (b) above
and subclause (A) of this clause (i) do not require any prepayment to be
allocated to any specific Class of Borrowings, the Administrative Agent shall
apply such prepayment to each Class of Revolving Borrowings on a pro rata
basis, and (ii) each prepayment of Revolving Borrowings within any Class shall
be applied to prepay ABR Borrowings before any other Borrowings, with any
excess prepayment amount applied to prepay Eurodollar Borrowings in order of
expiration
53
of their respective Interest Periods (and applied on a pro rata basis in
respect of Eurodollar Borrowings with Interest Periods expiring on the same
date).
(f) The Parent Borrower shall notify the Administrative Agent
(and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of prepayment, (ii) in the case
of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment; provided that (A) no
notice shall be required in respect of any mandatory prepayment made pursuant
to clause (c) above, (B) in the event the Parent Borrower elects to provide
notice of a mandatory prepayment pursuant to clause (b) above to identify the
Borrowings to be prepaid in connection therewith, such notice shall be given
to the Administrative Agent on the same day that the applicable prepayment is
required to be made pursuant to such clause, it being understood that any
failure or delay on the part of the Parent Borrower in providing such notice
to the Administrative Agent shall not affect the obligations of the Parent
Borrower to make such prepayment, and (C) if a notice of optional prepayment
is given in connection with a conditional notice of termination of the
Commitments of any Class as contemplated by Section 2.08, then such notice of
prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.08. Promptly following receipt of any such notice
(other than a notice relating solely to Swingline Loans), the Administrative
Agent shall advise the Lenders of the contents thereof. Each partial
prepayment of any Borrowing shall be in an amount such that the remaining
amount of such Borrowing not so prepaid would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02, except as
necessary to apply fully the required amount of a mandatory prepayment. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in
the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to
the extent required by Section 2.12.
SECTION 2.11. Fees. (a) (i) The Parent Borrower agrees to pay to
the Administrative Agent for the account of the office (or Affiliate) of each
Domestic Lender from which such Domestic Lender would make Domestic Revolving
Loans of any Class to the Borrowers hereunder (which office or Affiliate shall
be specified by each Domestic Lender for each Class of such Domestic Lender's
Domestic Commitments in a notice to the Administrative Agent prior to the
initial payment to such Domestic Lender under this paragraph) a commitment
fee, which shall accrue at a per annum rate of 0.50% on the average daily
unused amount of the Domestic Commitment of such Domestic Lender during the
period from and including the Effective Date to but excluding the date on
which such Domestic Commitment terminates. Accrued commitment fees with
respect to each Domestic Commitment shall be payable in arrears on the first
Business Day of each month and on the date on which such Domestic Commitment
terminates, commencing on the first such date to occur after the date hereof.
All commitment fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). For purposes of determining the unused amount
of the Domestic Commitment of any Class of each
54
Domestic Lender for purposes of computing commitment fees with respect to
Domestic Commitments, a Domestic Commitment of a Domestic Lender shall be
deemed to be used to the extent of (i) the outstanding Domestic Revolving
Loans and LC Exposure of such Domestic Lender (and the Swingline Exposure of
such Domestic Lender shall be disregarded for such purpose) and (ii) the
outstanding Loans and the LC Exposure under and as defined in the Pre-Petition
Loan Agreement.
(ii) [Intentionally Omitted].
(b) The Parent Borrower agrees to pay (i) to the Administrative
Agent for the account of each Domestic Lender a participation fee with respect
to its participations in Letters of Credit, which shall accrue at 2.75% per
annum on the average daily amount of such Domestic Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date on which such Domestic Lender's Domestic Commitment
terminates and the date on which such Domestic Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at
the rate or rates per annum separately agreed upon between the Parent Borrower
and the Issuing Bank on the average daily amount of the LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the later of the
date of termination of the Domestic Commitments and the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank's standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. Participation fees and fronting
fees accrued through and including the first Business Day of each month of
each year shall be payable on such first Business Day, commencing on the first
such date to occur after the Effective Date; provided that all such fees shall
be payable on the date on which the Domestic Commitments terminate and any
such fees accruing after the date on which the Domestic Commitments terminate
shall be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) The Parent Borrower agrees to pay to each of the
Administrative Agent and the Collateral Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon between the
Parent Borrower and the Administrative Agent or the Collateral Agent, as
applicable.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank or the Collateral Agent, as applicable, in the case of fees payable to
it) for distribution, in the case of commitment fees and participation fees,
to the Lenders entitled thereto. Fees paid shall not be refundable under any
circumstances.
SECTION 2.12. Interest. (a) The Loans made by the Domestic Lenders
comprising each ABR Borrowing (including each Swingline Loan) shall bear
interest at the Alternate Base Rate plus 1.50% per annum.
55
(b) The Loans comprising each Eurodollar Borrowing made by the
Domestic Lenders shall bear interest at the LIBO Rate for the Interest Period
in effect for such Borrowing plus 2.75% per annum.
(c) Each Protective Advance shall bear interest at the Alternate
Base Rate plus 1.50% per annum plus 2%.
(d) Notwithstanding the foregoing, so long as any Event of Default
has occurred and is continuing under Article VII (a) or (b) or so long as any
other Event of Default has occurred and is continuing and at the election of
the Administrative Agent (or upon the written request of the Required Lenders)
confirmed by written notice to the Parent Borrower, the interest rates
applicable to Loans and any fee or other amount payable by any Borrower
hereunder shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Revolving Loans as provided in paragraph (a) of this
Section.
(e) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and, in the case of Domestic
Revolving Loans, upon termination of the Domestic Commitments; provided that
(A) interest accrued pursuant to paragraph (c) of this Section shall be
payable on demand, (B) in the event of any repayment or prepayment of any Loan
(other than a prepayment of an ABR Revolving Loan prior to the end of the
Revolving Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (C) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall
be payable on the effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or LIBO Rate shall be determined by the Administrative Agent, and
such determination shall be conclusive absent manifest error. Solely for
purposes of the Interest Act (Canada), (i) whenever interest is to be computed
or expressed at any rate (the "Specified Rate"), the annual rate of interest
to which each such Specified Rate is equal is such Specified Rate multiplied
by a fraction, the numerator of which is the actual number of days in the
relevant year and the denominator of which is 360; (ii) the principle of
deemed reinvestment of interest shall not apply to any interest calculation
hereunder; and (iii) the rates of interest stipulated herein are intended to
be nominal rates and not effective rates or yields.
SECTION 2.13. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the LIBO Rate for such Interest Period; or
56
(b) the Administrative Agent is advised by the Required Domestic
Lenders that the LIBO Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Parent Borrower
and the Domestic Lenders, by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies the Parent Borrower
and such Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any
Domestic Revolving Borrowing to, or continuation of any such Borrowing as, a
Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
with respect to any Domestic Revolving Borrowing requests a Eurodollar
Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.14. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or
the Issuing Bank of participating in, issuing or maintaining any Letter of
Credit or to reduce the amount of any sum received or receivable by such
Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Borrowers will pay to such Lender or the Issuing Bank, as
the case may be, such additional amount or amounts as will compensate (on an
after-tax basis) such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing Bank or
such Lender's or the Issuing Bank's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's or the Issuing
Bank's policies and the policies of such Lender's or the Issuing Bank's
holding company with respect to capital adequacy), then from time to time the
Borrowers will pay to such Lender or the Issuing Bank, as the case may be,
following receipt by the Parent Borrower of the certificate referred to in
clause (c) below, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company for any such reduction suffered.
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(c) A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank
or its holding company, as the case may be, as specified in paragraph (a) or
(b) of this Section (and setting forth the underlying calculations) shall be
delivered to the Parent Borrower and shall be conclusive absent manifest
error. The Borrowers shall pay such Lender or the Issuing Bank, as the case
may be, the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank
to demand compensation pursuant to this Section shall not constitute a waiver
of such Lender's or the Issuing Bank's right to demand such compensation;
provided that the Borrowers shall not be required to compensate a Lender or
the Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or
the Issuing Bank, as the case may be, notifies the Parent Borrower of the
Change in Law giving rise to such increased costs or reductions and of such
Lender's or the Issuing Bank's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.
SECTION 2.15. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of
an Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.10(f) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Parent Borrower
pursuant to Section 2.18, then, in any such event, the Borrowers shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount reasonably determined by such
Lender to be the excess, if any, of (i) the amount of interest that would have
accrued on the principal amount of such Loan had such event not occurred, at
the LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert or continue,
for the period that would have been the Interest Period for such Loan), over
(ii) the amount of interest that would accrue on such principal amount for
such period at the interest rate that such Lender would bid were it to bid, at
the commencement of such period, for dollar deposits of a comparable amount
and period from other banks in the eurodollar market. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section (and setting forth the underlying
calculations) shall be delivered to the Parent Borrower and shall be
conclusive absent manifest error. The Borrowers shall pay such Lender the
amount shown as due on any such certificate within 10 days after receipt
thereof.
SECTION 2.16. Taxes. (a) Any and all payments by or on account of
any obligation of the Borrowers hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; provided that if any Borrower shall be required to
deduct any Indemnified Taxes or Other Taxes from such
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payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender
or Issuing Bank (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Borrower shall
make such deductions and (iii) such Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent, each
Lender and the Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrowers hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified
Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such
payment or liability (and setting forth the underlying calculations) delivered
to the Parent Borrower by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by a Borrower to a Governmental Authority, such Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding Tax under the laws of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement made by such Borrower, shall deliver
to the Parent Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Parent Borrower as will permit such payments to be made without withholding or
at a reduced rate. Notwithstanding any other provision of this Section 2.16,
no such Foreign Lender shall be required to deliver any form pursuant to this
Section 2.16(e) that such Foreign Lender is not legally able to deliver.
(f) If the Administrative Agent or a Lender (or transferee)
determines, in its reasonable discretion, that it has received a refund of any
Taxes or Other Taxes as to which it has been indemnified by a Borrower or with
respect to which a Borrower has paid additional amounts pursuant to this
Section 2.16, it shall pay over such refund to such Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by such
Borrower under this Section 2.16 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender (or transferee) and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such
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refund); provided, however, that the Borrowers, upon the request of the
Administrative Agent or such Lender (or transferee), agree to repay the amount
paid over to such Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority), to the Administrative Agent
or such Lender (or transferee) in the event the Administrative Agent or such
Lender (or transferee) is required to repay such refund to such Governmental
Authority. Nothing contained in this Section 2.16(f) shall require the
Administrative Agent or any Lender to make available its Tax returns (or any
other information relating to its Taxes which it deems confidential) to any
Borrower or any other Person.
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of
Setoffs. (a) The Parent Borrower and each Domestic Subsidiary Borrower shall
make each payment required to be made by it hereunder or under any other Loan
Document (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.14, 2.15 or 2.16, or
otherwise) prior to 2:00 p.m., New York City time, on the date when due, in
immediately available funds, without setoff or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 000 Xxxxxxx 0,
Xxxxxxx, Xxxxxxxxxxx, except payments to be made directly to the Issuing Bank,
Swingline Lender or Collateral Agent as expressly provided herein and except
that payments pursuant to Sections 2.14, 2.15, 2.16 and 10.03 shall be made
directly to the Persons entitled thereto and payments pursuant to other Loan
Documents shall be made to the Persons specified therein. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof.
If any payment under any Loan Document shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments under
each Loan Document shall be made in dollars.
(b) Any proceeds of Collateral received by the Administrative
Agent (i) not constituting either (A) a specific payment of principal,
interest, fees or other sum payable under the Loan Documents (which shall be
applied as specified by the Borrowers), (B) a mandatory prepayment pursuant to
Section 2.10(b) or (c) (which shall be applied in accordance with Section
2.10) or (C) amounts to be applied from the Collateral Proceeds Account (which
shall be applied in accordance with Section 2.10(c)) or (ii) after an Event of
Default has occurred and is continuing and the Administrative Agent so elects
or the Required Lenders so direct, such funds shall be applied ratably as
follows:
first, to pay any fees, indemnities, or expense reimbursements
including amounts then due to the Agents and the Issuing Bank from the
Borrowers (other than in connection with Banking Services or Swap
Obligations);
second, to pay any fees or expense reimbursements then due to the
Lenders from the Borrowers (other than in connection with Banking Services or
Swap Obligations);
third, to pay interest due in respect of the Protective Advances
and any amounts owing with respect to Banking Services;
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fourth, to pay the principal of the Protective Advances;
fifth, to pay interest then due and payable on the Swingline
Loans;
sixth, to pay the principal of the Swingline Loans (and if such
payment is a result of a prepayment pursuant to Section 2.10(d)(i) from the
sale of Eligible Real Estate or Eligible Machinery and Equipment, with a
corresponding reduction the Domestic Commitments in the amount of any such
prepayment);
seventh, to pay interest on the Domestic Revolving Loans;
eighth, to pay the principal of the Domestic Revolving Loans and
unreimbursed LC Disbursements (and if such payment is a result of a prepayment
pursuant to Section 2.10(d)(i) from the sale of Eligible Real Estate or
Eligible Machinery and Equipment, with a corresponding reduction the Domestic
Commitments in the amount of any such prepayment);
ninth, to pay an amount to the Administrative Agent equal to 105%
of the aggregate undrawn face amount of all outstanding Letters of Credit and
the aggregate amount of any unpaid LC Disbursements, to be held as cash
collateral for such Obligations;
tenth, to pay any amounts owing with respect to Swap Obligations;
eleventh, to the payment of any other Obligation due to the Agents
or any Lender by the Borrowers; and
twelfth, if all of the Obligations (other than contingent
obligations for which no claim has been made) have been indefeasibly paid and
performed in full (or with respect to any outstanding Letters of Credit, a
cash deposit has been delivered to the Administrative Agent as required by
this Agreement) and the Commitments have been terminated, to the Loan Parties
to be paid pursuant to the Pre-Petition Loan Agreement, the Senior First Lien
Note Indenture or the Senior Second Lien Note Indenture pursuant to the terms
of such documents.
The Administrative Agent shall retain the right after an Event of Default has
occurred and is continuing, in the event that there is a liquidation of, or
foreclosure on, any interest of any Loan Party in the Collateral, to first
apply the proceeds received with respect to Real Estate and Equipment to the
Obligations pursuant to the waterfall in the immediately preceding sentence
and after such application, to the extent any Obligations remain, to apply the
proceeds received with respect to Inventory and Accounts to such remaining
Obligations. Notwithstanding anything to the contrary contained in this
Agreement, unless so directed by the Borrowers, or unless a Default is in
existence, neither the Administrative Agent nor any Lender shall apply any
payment which it receives to any Eurodollar Loan of a Class, except (a) on the
expiration date of the Interest Period applicable to any such Eurodollar Loan
or (b) in the event, and only to the extent, that there are no outstanding ABR
Loans of the same Class and, in any event, the Borrowers shall pay the break
funding payment required in accordance with Section 2.15. The Administrative
Agent and the Lenders shall have the continuing and exclusive right to apply
and reverse and reapply any and all such proceeds and payments to any portion
of the Obligations in accordance with the payment priorities established
hereby.
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(c) At the election of the Administrative Agent, all payments of
principal, interest, LC Disbursements, fees, premiums, reimbursable expenses
(including, without limitation, all reimbursement for fees and expenses
pursuant to Section 10.03), and other sums payable under the Loan Documents,
may be paid from the proceeds of Borrowings made hereunder whether made
following a request by the Borrower pursuant to Section 2.03 or a deemed
request as provided in this Section or may be deducted from any deposit
account of the Borrower maintained with the Administrative Agent. The Borrower
hereby irrevocably authorizes (i) the Administrative Agent to make a Borrowing
for the purpose of paying each payment of principal, interest and fees as it
becomes due hereunder or any other amount due under the Loan Documents and
agrees that all such amounts charged shall constitute Loans (including
Swingline Loans, but such a Borrowing may only constitute a Protective Advance
if it is to reimburse costs, fees and expenses as described in Section 10.03)
and that all such Borrowings shall be deemed to have been requested pursuant
to Section 2.03, 2.04 or 2.19, as applicable and (ii) the Administrative Agent
to charge any deposit account of the Borrower maintained with the
Administrative Agent for each payment of principal, interest and fees as it
becomes due hereunder or any other amount due under the Loan Documents. If at
any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment
of principal and unreimbursed LC Disbursements then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal
and unreimbursed LC Disbursements then due to such parties.
(d) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Domestic Revolving Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Domestic Revolving Loans
and participations in LC Disbursements and Swingline Loans and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Domestic Revolving Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest
on their respective Domestic Revolving Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment
made by any Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Domestic Revolving
Loans or participations in LC Disbursements to any assignee or participant,
other than to a Borrower or any Subsidiary or Affiliate thereof (as to which
the provisions of this paragraph shall apply). Each Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against any Borrower rights of setoff and
counterclaim
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with respect to such participation as fully as if such Lender were a direct
creditor of such Borrower in the amount of such participation.
(e) Unless the Administrative Agent shall have received notice
from the Parent Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the applicable Borrower will not make such payment, the
Administrative Agent may assume, in its sole discretion, that such Borrower
has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders or the Issuing Bank, as the
case may be, the amount due. In such event, if no Borrower has in fact made
such payment, then each of the Lenders or the Issuing Bank, as the case may
be, severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed
to it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(f) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.04(c), 2.05(d), 2.05(e), 2.06(b), 2.17(e) or
10.03(c), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.18. Mitigation Obligations; Replacement of Lenders. (a)
If any Lender requests compensation under Section 2.14, or if any Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, then such
Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates
(provided that, if such compensation or additional amounts relate to a
particular Class of Loans, such designation or assignment may relate only to
such Class of Loans), if, in the reasonable judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.14 or 2.16, as the case may be, in the future and (ii)
would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. Each Borrower hereby agrees
to pay all reasonable costs and expenses incurred by any Lender in connection
with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or if
any Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Parent Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 10.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (i) the Parent Borrower shall have received the prior written consent of
the
63
Administrative Agent, the Issuing Bank and Swingline Lender, which consent
shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts), (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.14 or payments required to be made pursuant to Section 2.16, such assignment
will result in a reduction in such compensation or payments and (iv) with
respect to compensation or additional amounts (but not defaults) in respect of
a particular Class of Loans, such assignment may be limited to such Class of
Loans. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Parent Borrower to require such
assignment and delegation cease to apply.
SECTION 2.19. Protective Advances. (a) Subject to the limitations
set forth below, the Administrative Agent is authorized by the Borrowers and
the Lenders, from time to time in the Administrative Agent's sole discretion
(but shall have absolutely no obligation to), to make Loans to the Borrowers,
on behalf of all Lenders, which the Administrative Agent, in its reasonable
discretion, deems necessary or desirable (i) to preserve or protect the
Collateral, or any portion thereof, (ii) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or (iii)
to pay any other amount chargeable to or required to be paid by the Borrowers
pursuant to the terms of this Agreement, including payments of reimbursable
expenses (including costs, fees, and expenses as described in Section 10.03)
and other sums payable under the Loan Documents (any of such Loans are herein
referred to as "Protective Advances"); provided that, the aggregate amount of
Protective Advances outstanding at any time shall not at any time exceed
$10,000,000; and provided further that, the aggregate amount of outstanding
Protective Advances plus the aggregate Revolving Exposure shall not exceed the
aggregate unused Commitments. Protective Advances may be made even if the
conditions precedent set forth in Section 4.03 have not been satisfied. The
Protective Advances shall be secured by the Liens in favor of the Collateral
Agent in and to the Collateral and shall constitute Obligations hereunder. All
Protective Advances shall be ABR Borrowings. The Administrative Agent's
authorization to make Protective Advances may be revoked at any time by the
Required Lenders. Any such revocation must be in writing and shall become
effective prospectively upon the Administrative Agent's receipt thereof. At
any time that the Availability Amount is greater than $0 and the conditions
precedent set forth in Section 4.03 have been satisfied, the Administrative
Agent may request the Domestic Revolving Lenders to make a Domestic Revolving
Loan to repay a Protective Advance. At any other time the Administrative Agent
may require the Lenders to fund their risk participations described in Section
2.19(b).
(b) Upon the making of a Protective Advance by the Administrative
Agent (whether before or after the occurrence of a Default), each Domestic
Lender shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the Administrative Agent
without recourse or warranty, an undivided interest and participation in such
Protective Advance in proportion to its Applicable Percentage. From and after
the date, if any, on which any Domestic Lender is required to fund its
participation in any Protective Advance purchased hereunder, the
Administrative Agent shall promptly distribute to such Lender, such Lender's
Applicable Percentage of all payments of principal and interest and
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all proceeds of Collateral received by the Administrative Agent in respect of
such Protective Advance.
SECTION 2.20. Super Priority Nature of Obligations and Lenders'
Liens.
(a) The priority of the Collateral Agent's Liens on the Collateral
shall be set forth in the Interim Order, the Canadian Interim Order, the Final
Order and the Canadian Final Order.
(b) All Obligations shall constitute administrative expenses of
the Borrowers in the Chapter 11 Cases, with administrative priority and senior
secured status under Sections 364(c) and 364(d) of the Bankruptcy Code.
Subject to the Carve-Out Amount and any other amounts expressly provided for
in the Interim Order, the Canadian Interim Order, the Final Order and the
Canadian Final Order, such administrative claim shall have priority over all
other costs and expenses of the kinds specified in, or ordered pursuant to,
Sections 105, 326, 330, 331, 503(b), 506(c), 507(a), 507(b), 726 or any other
provision of the Bankruptcy Code and shall at all times be senior to the
rights of the Borrowers, the Borrowers' estates, and any successor trustee or
estate representative in the Chapter 11 Cases or any subsequent proceeding or
case under the Bankruptcy Code or any Insolvency Law other than rights in and
claims to Avoidance Actions. The Liens granted to the Lenders on the
Collateral owned by the Borrowers and the Guarantors, and the priorities
accorded to the Obligations shall have the priority and senior secured status
afforded by Sections 364(c) and 364(d)(1) of the Bankruptcy Code (all as more
fully set forth in the Interim Order, the Canadian Interim Order, the Final
Order and the Canadian Final Order) and by the Intercreditor Agreement senior
to all claims and interests other than (i) the Carve-Out Expenses limited to
the Carve-Out Amount and (ii) claims to Avoidance Actions.
(c) The Collateral Agent's Liens on the Collateral owned by the
Borrowers or the other Loan Parties which have filed a Chapter 11 Case and the
Lenders' administrative claim under Sections 364(c)(1) and 364(d) of the
Bankruptcy Code afforded the Obligations shall also have priority over any
claims arising under Section 506(c) of the Bankruptcy Code subject and
subordinate only to the Senior Claims and the following (hereafter referred to
as the "Carve-Out Expenses"): (a) after the Petition Date any unpaid fees and
disbursements that were accrued or incurred prior to the Carve-Out Event by
the professionals retained by the Borrowers and professionals retained by any
Committees and subsequently allowed by order of the Bankruptcy Court, plus (b)
those fees and disbursements incurred by professionals of the Borrowers and
professionals for any Committee after the Carve-Out Event and subsequently
allowed by order of the Bankruptcy Court; up to a maximum aggregate amount for
clause (a) and (b) not to exceed $5,000,000 plus any fees mandated by 28
U.S.C. ss. 1930 and the clerk of the Bankruptcy Court and any statutory or
other fees mandated by the Canadian Court; such dollar amount being referred
to herein as the "Carve-Out Amount") (determined without regard to any
pre-petition retainer paid to any Borrower's or Committee's counsel in
connection with the Chapter 11 Cases); provided, that the Carve-Out Expenses
shall not include any other claims that are or may be senior to or pari passu
with any of the Carve-Out Expenses or any professional fees and expenses of a
Chapter 7 trustee; and provided, further, that Carve-Out Expenses shall not
include any fees or disbursements related to the preparation for, or
commencement or prosecution of, any claims or proceedings against (i) the
Agents or the Lenders or their claims or security interests in or Liens on,
the Collateral whether under this Agreement or any other Loan Document and
65
(ii) any agent or Pre-Petition Lender under the Pre-Petition Loan Agreement or
their claims or security interests in connection with the Pre-Petition Loan
Agreement or any of the loan documents or instruments entered into in
connection therewith. So long as no Carve-Out Event shall have occurred and be
continuing, (i) the Borrowers shall be permitted to pay administrative
expenses allowed and payable under Sections 330 and 331 of the Bankruptcy
Code, as the same may become due and payable, and (ii) such payments shall not
be applied to reduce the Carve-Out Amount. Except as set forth herein or in
the Final Order and except for the Senior Claims, no other claim having a
priority superior or pari passu to that granted to the Lenders by the Final
Order or the Canadian Final Order shall be granted or approved while any
Obligations under this Agreement remain outstanding.
SECTION 2.21. Payment of Obligations. Upon the maturity (whether
by acceleration or otherwise) of any of the Obligations under this Agreement
or any of the other Loan Documents, the Lenders shall be entitled to immediate
payment of such Obligations without further application to or order of the
Bankruptcy Court or the Canadian Court.
SECTION 2.22. No Discharge; Survival of Claims. The Borrowers
agree that (a) the Obligations hereunder shall not be discharged by the entry
of an order confirming a plan of reorganization in any Chapter 11 Case (and
the Borrowers pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby
waive any such discharge) and (ii) the superpriority administrative claim
granted to the Agents and the Lenders pursuant to the Interim Order and Final
Order and described in Section 2.20 and the Liens granted to the Collateral
Agent pursuant to the Interim Order and the Final Order and described in
Section 2.20 and the priority and the Liens set forth in the Canadian Interim
Order and the Canadian Final Order shall not be affected in any manner by the
entry of an order confirming a plan of reorganization in any Chapter 11 Case.
SECTION 2.23. Release. Each Borrower hereby acknowledges effective
upon entry of the Final Order, that no Loan Party shall have any defense,
counterclaim, offset, recoupment, cross-complaint, claim or demand of any kind
or nature whatsoever that can be asserted to reduce or eliminate all or any
part of the Loan Parties' liability to repay any Agent or any Lender as
provided in this Agreement or to seek affirmative relief or damages of any
kind or nature from any Agent or any Lender. The Borrowers, each in their own
right and on behalf of their bankruptcy estates, and on behalf of all their
successors, assigns, subsidiaries and any Affiliates and any Person acting for
and on behalf of, or claiming through them, (collectively, the "Releasing
Parties"), hereby fully, finally and forever release and discharge the Agents
and the Lenders and all of the Agents' and the Lenders' past and present
officers, directors, servants, agents, attorneys, assigns, heirs, parents,
subsidiaries, and each Person acting for or on behalf of any of them
(collectively, the "Released Parties") of and from any and all past, present
and future actions, causes of action, demands, suits, claims, liabilities,
Liens, lawsuits, adverse consequences, amounts paid in settlement, costs,
damages, debts, deficiencies, diminution in value, disbursements, expenses,
losses and other obligations of any kind or nature whatsoever, whether in law,
equity or otherwise (including, without limitation, those arising under
Sections 541 through 550 of the Bankruptcy Code and interest or other carrying
costs, penalties, legal, accounting and other professional fees and expenses,
and incidental, consequential and punitive damages payable to third parties),
whether known or unknown, fixed or contingent, direct, indirect, or
derivative, asserted or unasserted, foreseen or unforeseen, suspected or
unsuspected, now existing, heretofore existing or which may heretofore accrue
against any of the Released
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Parties, whether held in a personal or representative capacity, and which are
based on any act, fact, event or omission or other matter, cause or thing
occurring at or from any time prior to and including the date hereof in any
way, directly or indirectly arising out of, connected with or relating to this
Agreement, the Interim Order, the Final Order and the transactions
contemplated hereby, and all other agreements, certificates, instruments and
other documents and statements (whether written or oral) related to any of the
foregoing.
SECTION 2.24. Waiver of any Priming Rights. Upon the Effective
Date, and on behalf of themselves and their estates, and for so long as any
Obligation shall be outstanding, the Borrowers hereby irrevocably waive any
right, pursuant to Sections 364(c) or 364(d) of the Bankruptcy Code or
otherwise, to grant any Lien of equal or greater priority than the Lien
securing the Obligations, or to approve a claim of equal or greater priority
than the Obligations except as provided in Section 2.20 and except for the
Senior Claims.
ARTICLE III
Representations and Warranties
The Parent Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Parent Borrower
and the Subsidiaries is duly organized, validly existing and, where
applicable, in good standing under the laws of the jurisdiction of its
organization, subject to the entry of (and except as otherwise provided in)
the Interim Order and the Canadian Interim Order (or the Final Order and the
Canadian Final Order, when applicable) by the Bankruptcy Court and the
Canadian Court, respectively, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect or the failure to do so is permitted by the
Bankruptcy Code, or the Bankruptcy Court or (in the case of the Canadian
Guarantors) the Canadian Court after appropriate notice and hearing, is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required.
SECTION 3.02. Authorization; Enforceability. Upon the entry by the
Bankruptcy Court and the Canadian Court of the Interim Order and the Canadian
Interim Order (or the Final Order and the Canadian Final Order, when
applicable) respectively, the Transactions entered into and to be entered into
by each Loan Party are within such Loan Party's corporate powers and have been
duly authorized by all necessary corporate and, if required, stockholder
action. Upon the entry by the Bankruptcy Court and the Canadian Court of the
Interim Order and the Canadian Interim Order (or the Final Order and the
Canadian Final Order, when applicable) respectively, this Agreement has been
duly executed and delivered by each Borrower and constitutes, and each other
Loan Document to which any Loan Party is to be a party, when executed and
delivered by such Loan Party, and subject to the entry of the Interim Order,
the Canadian Interim Order, the Final Order and the Canadian Final Order, will
constitute, a legal, valid and binding obligation of such Borrower or such
Loan Party (as the case may be), enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in
equity or at law.
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SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority or any other
Person, except for the Bankruptcy Court and the Canadian Court or such as have
been obtained or made and are in full force and effect or, if not obtained or
made, would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect and except filings necessary to perfect Liens
created under the Loan Documents, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of the
Parent Borrower or any of the Subsidiaries or any order of any Governmental
Authority, except, with respect to any violation of applicable law or
regulation or any order of any Governmental Authority, to the extent any such
violation would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect, (c) will not violate or result in a default
under any material indenture, agreement or other instrument binding upon the
Parent Borrower or any of the Subsidiaries or its assets, except to the extent
any such violation, default or right would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect or is
permitted by the Bankruptcy Code, or the Bankruptcy Court or (in the case of
the Canadian Guarantors) the Canadian Court after appropriate notice and
hearing, or give rise to a right thereunder to require any payment to be made
by the Parent Borrower or any of the Subsidiaries, and (d) will not result in
the creation or imposition of any Lien on any asset of the Parent Borrower or
any of the Subsidiaries, except Liens created under the Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
The Parent Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders' equity and cash flows
(i) as of and for the fiscal year ended December 31, 2004, reported on by
Ernst & Young LLP, independent public accountants and (ii) as of and for the
fiscal quarter ended September 30, 2005, certified by its chief financial
officer. Such financial statements present fairly, in all material respects,
the financial position and results of operations and cash flows of the Parent
Borrower and its consolidated Subsidiaries, as of such dates and for such
periods in accordance with GAAP and in the case of clause (ii) above, subject
to normal year-end audit adjustments and the absence of footnotes.
(b) The Parent Borrower has heretofore made available to the
Lenders its pro forma consolidated balance sheet as of September 30, 2005,
prepared giving effect to the Transactions as if the Transactions had occurred
on such date. Such pro forma consolidated balance sheet (i) has been prepared
in good faith based on the same assumptions used to prepare the applicable pro
forma financial statements, which were simultaneously made available to the
Lenders (which assumptions are believed by the Parent Borrower to be
reasonable), (ii) is based on the best information available to the Parent
Borrower after due inquiry, (iii) accurately reflects all material adjustments
necessary to give effect to the Transactions and (iv) presents fairly, in all
material respects, the pro forma financial position of the Parent Borrower and
its consolidated Subsidiaries as of September 30, 2005, as if the Transactions
had occurred on such date.
(c) Except as disclosed in the financial statements referred to
above or the notes thereto, after giving effect to the Transactions, none of
the Parent Borrower or any of the Subsidiaries has, as of the Effective Date,
any material contingent liabilities, unusual long-term commitments or
unrealized losses.
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(d) Since September 30, 2005 or as otherwise disclosed to the
Agents on or before the Effective Date and other than the Chapter 11 Cases,
there has been no material adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or contingent or other
liabilities of the Parent Borrower and the Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Parent Borrower and the
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes and other Permitted Encumbrances.
(b) Each of the Parent Borrower and the Subsidiaries owns, or is
licensed or otherwise permitted to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to the business
of the Parent Borrower and the Subsidiaries, taken as a whole, and the use
thereof by the Parent Borrower and the Subsidiaries does not infringe upon the
rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.
(c) Schedule 3.05 sets forth the address of each parcel of real
property that is owned or leased (the "Real Estate") by the Parent Borrower or
any of the Subsidiaries as of the Effective Date.
(d) As of the Effective Date, neither the Parent Borrower nor any
of the Subsidiaries has received notice of, or has knowledge of, any pending
or contemplated condemnation proceeding affecting any Mortgaged Property or
any sale or disposition thereof in lieu of condemnation. Neither any Mortgaged
Property nor any interest therein is subject to any right of first refusal,
option or other contractual right to purchase such Mortgaged Property or
interest therein held by any Person, other than the Parent Borrower or any
Subsidiary Loan Party.
SECTION 3.06. Litigation and Environmental Matters. (a) There are
no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Parent Borrower,
threatened against or affecting the Parent Borrower or any of the Subsidiaries
(i) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Effect or (ii) that
involve any of the Loan Documents or the Transactions.
(b) Except with respect to any matters that, individually or in
the aggregate, would not be reasonably likely to result in a Material Adverse
Effect, neither the Parent Borrower nor any of the Subsidiaries (i) has failed
to comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii)
has become subject to any Environmental Liability, (iii) has received notice
of any claim with respect to any Environmental Liability or (iv) knows of any
basis for any Environmental Liability.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Parent Borrower and the Subsidiaries is in compliance with all laws,
regulations and orders of any
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Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except (a)
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, (b) as
otherwise provided by the Interim Order, the Canadian Interim Order, the Final
Order or the Canadian Final Order or (c) is permitted by the Bankruptcy Code,
or the Bankruptcy Court or (in the case of the Canadian Guarantors) the
Canadian Court after appropriate notice and hearing. No Default has occurred
and is continuing.
SECTION 3.08. Investment Company Status. Neither the Parent
Borrower nor any of the Subsidiaries is an "investment company" as defined in,
or subject to regulation under, the Investment Company Act of 1940.
SECTION 3.09. Taxes. Each of the Parent Borrower and the
Subsidiaries has timely filed or caused to be filed all Tax returns and
reports required to have been filed and has paid or caused to be paid all
Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Parent
Borrower or such Subsidiary, as applicable, has set aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan individually (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent audited financial
statements reflecting such amounts, exceed by more than $25,000,000 the fair
market value of the assets of such Plan individually, and the present value of
all accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent audited financial
statements reflecting such amounts, exceed by more than $28,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Parent Borrower has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to
which the Parent Borrower or any of the Subsidiaries is subject, and all other
matters known to any of them, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. The reports,
financial statements, certificates and other written information furnished by
or on behalf of any Loan Party to any Agent, the Arranger or any Lender in
connection with the negotiation of this Agreement or any other Loan Document
or delivered hereunder or thereunder (as modified or supplemented by other
information so furnished), when made or delivered, did not contain any
material misstatement of fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that, with respect to projected
financial information, the Parent Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
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SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name of,
the jurisdiction of organization of, and the direct or indirect ownership
interest of the Parent Borrower in, each Subsidiary of the Parent Borrower and
identifies each Subsidiary that is a Loan Party, in each case as of the
Effective Date.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a description of
all insurance maintained by or on behalf of the Parent Borrower and the
Subsidiaries as of the Effective Date. As of the Effective Date, all premiums
that are due and payable in respect of such insurance have been paid. The
Parent Borrower believes that the insurance maintained by or on behalf of the
Parent Borrower and the Subsidiaries is adequate.
SECTION 3.14. Labor Matters. As of the Effective Date, there are
no strikes, lockouts or slowdowns against the Parent Borrower or any
Subsidiary pending or, to the knowledge of the Parent Borrower, threatened
that could reasonably be expected to result in a Material Adverse Effect. All
material payments due from the Parent Borrower or any Subsidiary, or for which
any claim may be made against the Parent Borrower or any Subsidiary, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of the Parent Borrower
or such Subsidiary. The consummation of the Transactions will not give rise to
any right of termination or right of renegotiation on the part of any union
under any collective bargaining agreement to which the Parent Borrower or any
Subsidiary is bound.
SECTION 3.15. [Intentionally Omitted].
SECTION 3.16. Security Documents. (a) The Pledge Agreements and
the Interim Order, the Canadian Interim Order, the Final Order and the
Canadian Final Order are effective to create in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral described therein (and the proceeds
thereof) and, when such Collateral is delivered to the Collateral Agent, the
Collateral Agent shall have a fully perfected first-priority Lien on, and
security interest in, all right, title and interest of the Loan Parties in
such Collateral and the proceeds thereof as security for the Obligations, as
applicable, in each case prior and superior in right to any other Person,
subject only to (i) the Senior Claims and (ii) the Carve-Out Expenses limited
to the Carve-Out Amount.
(b) The Security Agreements and the Interim Order, the Canadian
Interim Order, the Final Order and the Canadian Final Order are effective to
create in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
Collateral described therein (and the proceeds thereof) and, when financing
statements (and/or other filings, notices and registrations, in the case of
Collateral under the Canadian Security Agreement) in appropriate form are
filed with the appropriate offices in each relevant jurisdiction (including
those specified on Schedule 6 to the Domestic Perfection Certificate and those
specified on Schedule 6 to the Canadian Perfection Certificate), the
Collateral Agent shall have a fully perfected Lien on, and security interest
in, all right, title and interest of the Loan Parties in such Collateral
(other than the Intellectual Property (as defined in the Domestic Security
Agreement) and, subject to Section 9-315 of the New York Uniform Commercial
Code (and the equivalent legislation in other jurisdictions), the proceeds
thereof, as security for the Obligations, in each case prior and superior in
right to any other Person, other
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than with respect to Liens expressly permitted by Section 6.03 and subject
only to (i) the Senior Claims and (ii) the Carve-Out Expenses limited to the
Carve-Out Amount.
(c) When the Domestic Security Agreement (or a summary thereof) is
filed in the United States Patent and Trademark Office and the United States
Copyright Office or either of the Interim Order or the Final Order has been
entered by the Bankruptcy Court, the Collateral Agent shall have a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in the Intellectual Property (as defined in the Domestic
Security Agreement) in which a security interest may be perfected by filing,
recording or registering a security agreement, financing statement or
analogous document in the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, in each case prior and superior
in right to any other Person (it being understood that subsequent recordings
in the United States Patent and Trademark Office and the United States
Copyright Office may be necessary to perfect a lien on registered trademarks,
trademark applications and copyrights acquired by the Loan Parties after the
Effective Date), other than with respect to Liens permitted by Section 6.03
and subject only to (i) the Senior Claims and (ii) the Carve-Out Expenses
limited to the Carve-Out Amount.
(d) The Mortgages and the Interim Order, the Canadian Interim
Order, the Final Order and the Canadian Final Order are effective to create,
subject to the exceptions listed in each title insurance policy covering such
Mortgage, in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable Lien on all of the Loan
Parties' right, title and interest in and to the Mortgaged Properties
thereunder and the proceeds thereof, and when the Mortgages are filed in the
offices specified on Schedule 3.16(d), the Collateral Agent shall have a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Mortgaged Properties and, to the extent applicable,
subject to Section 9-315 of the New York Uniform Commercial Code (and the
equivalent legislation in other jurisdictions), the proceeds thereof, in each
case prior and superior in right to any other Person, other than with respect
to the rights of Persons pursuant to Liens expressly permitted by Section 6.03
and subject only to (i) the Senior Claims and (ii) the Carve-Out Expenses
limited to the Carve-Out Amount.
SECTION 3.17. Federal Reserve Regulations. (a) Neither the Parent
Borrower nor any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (i) to purchase or carry Margin Stock or any
security convertible into or exchangeable for Margin Stock, or extend credit
to others for the purpose of purchasing or carrying Margin Stock or any
security convertible into or exchangeable for Margin Stock, or to refund
Indebtedness originally incurred for such purpose, or (ii) for any purpose
that entails a violation of the provisions of the Regulations of the Board,
including Regulation U or Regulation X.
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SECTION 3.18. Reorganization Matters.
(a) The Chapter 11 Cases were commenced on the Petition Date in
accordance with applicable law and proper notice thereof and the proper notice
for the hearing for the approval of the Interim Order and the Canadian Interim
Order has been given and proper notice for the hearing for the approval of the
Final Order and the Canadian Final Order will be given.
(b) After the entry of the Interim Order, and pursuant to and to
the extent permitted in the Interim Order and the Final Order, the Obligations
will constitute allowed administrative expense claims in the Chapter 11 Cases
having priority over all administrative expense claims and unsecured claims
against Borrowers now existing or hereafter arising, of any kind whatsoever
(other than claims to Avoidance Actions), including, without limitation, all
administrative expense claims of the kind specified in Sections 105, 326, 330,
331, 503(b), 506(c), 507(a), 507(b), 546(c), 726, 1114 or any other provision
of the Bankruptcy Code, as provided under Section 364(c)(1) of the Bankruptcy
Code, subject, as to priority, only to the Carve-Out Expenses.
(c) After the entry of the Interim Order and the Canadian Interim
Order and pursuant to and to the extent provided in the Interim Order, the
Canadian Interim Order, the Final Order and the Canadian Final Order, the
Obligations will be secured by a valid and perfected first priority Lien on
all of the Collateral, subject only to the Senior Claims and the Carve-Out
Expenses.
(d) The Interim Order and the Canadian Interim Order (with respect
to the period prior to entry of the Final Order) or the Final Order and the
Canadian Final Order (with respect to the period on and after entry of the
Final Order), as the case may be, are in full force and effect and have not
been reversed, stayed, modified or amended.
(e) Notwithstanding the provisions of Section 362 of the
Bankruptcy Code, and subject to the applicable provisions of the Interim
Order, the Canadian Interim Order, the Final Order and the Canadian Final
Order, as the case may be, upon the maturity (whether by acceleration or
otherwise) of any of the Obligations, the Agents and the Lenders shall be
entitled to immediate payment of such Obligations and to enforce the remedies
provided for hereunder, without further application to or order by the
Bankruptcy Court.
SECTION 3.19. Related Names. None of Huntsman Corporation Canada
Inc., Huntsman Chemical Company of Canada Inc., Tioxide Canada Inc., Huntsman
ICI (Canada) Corp., La Corporation Huntsman Canada Inc., Huntsman Corporation
Canada Inc./La Corporation Huntsman Canada Inc., La Corporation Huntsman
Canada Inc./Huntsman Corporation Canada Inc. or Huntsman - Tioxide Canada Inc.
are subsidiaries of any Loan Party.
SECTION 3.20. Permanent Establishment in Canada. Neither the
Parent Borrower nor Pliant Solutions Corporation (a) maintains any location in
Canada, (b) has any income attributable to a permanent establishment in Canada
or (c) is required to pay any income taxes in Canada.
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ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders to
make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall
not become effective until the date on which each of the following conditions
is satisfied (or waived in accordance with Section 10.02):
(a) The Agents (or their respective counsel) shall have received
from the Parent Borrower, the Domestic Subsidiary Borrowers and each
Lender, a counterpart of this Agreement signed on behalf of such party.
(b) [Intentionally Omitted].
(c) The Agents shall have received such documents and certificates
as the Agents or their respective counsel may reasonably request relating
to the organization, existence and good standing of each Loan Party, the
authorization of the Transactions and any other legal matters relating to
the Loan Parties, the Loan Documents or the Transactions, all in form and
substance satisfactory to the Agents and their respective counsel.
(d) [Intentionally Omitted].
(e) The Agents shall have received all fees and other amounts due
and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by any Loan Party hereunder or under any other
Loan Document.
(f) The Agents shall have received counterparts of the Domestic
Pledge Agreement signed on behalf of each Loan Party (other than the
Canadian Guarantors (but including Pliant Packaging of Canada, LLC)) and
the Canadian Pledge Agreement signed on behalf of the Canadian Guarantors
(other than Pliant Packaging of Canada, LLC), together with certificates
(if any) representing all the outstanding Equity Interests of each
Subsidiary owned by or on behalf of any Loan Party as of the Effective
Date after giving effect to the Transactions (except that such delivery
of certificates representing Equity Interests of a Foreign Subsidiary
that is not a Loan Party may be limited to 65% of the outstanding voting
Equity Interests of a first-tier Foreign Subsidiary), promissory notes
evidencing all intercompany Indebtedness owed to any Loan Party by the
Parent Borrower or any Subsidiary as of the Effective Date after giving
effect to the Transactions and stock powers and instruments of transfer,
endorsed in blank, with respect to such certificates and promissory
notes.
(g) The Agents shall have received counterparts of the Domestic
Security Agreement signed on behalf of each Loan Party (other than the
Canadian Guarantors (but including Pliant Packaging of Canada, LLC)) and
the Canadian Security Agreement signed on behalf of the Canadian
Guarantors, the Parent Borrower and Pliant Solutions Corporation,
together with the following:
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(i) all documents and instruments, including Uniform Commercial
Code (or equivalent) financing statements, required by the Security
Agreements or by law or reasonably requested by the Agents to be
filed, registered or recorded to create or perfect the Liens
intended to be created under the Security Agreements, in proper form
for filing, registration or recordation;
(ii) completed Perfection Certificates dated the Effective Date
and signed by an executive officer or Financial Officer of the
Parent Borrower or the Canadian Guarantors, as applicable, together
with all attachments contemplated thereby, including the results of
a search of the Uniform Commercial Code (or equivalent) filings made
with respect to the Loan Parties in the jurisdictions contemplated
by the Perfection Certificates and copies of the financing
statements (or similar documents) disclosed by such search and
evidence reasonably satisfactory to the Agents that the Liens
indicated by such financing statements (or similar documents) are
permitted by Section 6.03 or have been released;
(iii) counterparts of a Mortgage with respect to each Mortgaged
Property signed on behalf of the record owner of such Mortgaged
Property; and
(iv) a UCC fixture financing statement for each Mortgaged
Property to be filed upon the Collateral Agent's request in the
appropriate jurisdiction as necessary, in the Collateral Agent's
sole discretion, to perfect the Collateral Agent's Lien on such
Mortgaged Property.
(h) The Agents shall have received a counterpart of the Guarantee
Agreement signed on behalf of each Loan Party which is not a Borrower.
(i) [Intentionally Omitted].
(j) The Lenders shall have received projections of the Parent
Borrower and the Subsidiaries through the fiscal year ending December 31,
2006, presented on a monthly basis through December 31, 2006 and rolling
cash flow financial projections through February 28, 2006 (the
"Projections"), which Projections shall not be materially inconsistent
with the projections previously provided to the Agents and the Arranger.
(k) The Agents shall have received evidence satisfactory to them
that the insurance required by Section 5.07 is in effect.
(l) The Agents shall have received copies of the Senior First Lien
Note Documents, Senior Second Lien Note Documents and the Senior
Subordinated Note Documents, each certified by a Financial Officer as
complete and correct. The Agents and the Arranger shall be satisfied with
the terms of the Senior First Lien Note Documents, the Senior Second Lien
Note Documents, the Senior Subordinated Note Documents and the
Intercreditor Agreement.
(m) [Intentionally Omitted].
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(n) After giving effect to the Transactions, the Parent Borrower and
the Subsidiaries shall not have any outstanding Indebtedness or preferred
stock other than (i) Indebtedness incurred under the Loan Documents, (ii)
the Senior First Lien Notes, (iii) the Senior Second Lien Notes, (iv) the
Senior Subordinated Notes, (v) the Existing Preferred Stock, (vi) the
Obligations under and as defined in the Pre-Petition Loan Agreement and
(vii) the Indebtedness permitted pursuant to Section 6.01(ii).
(o) The Agents shall be reasonably satisfied as to the amount and
nature of any contingent liabilities relating to environmental and
employee health and safety exposures to which the Parent Borrower and the
Subsidiaries may be subject, and with the plans of the Parent Borrower
and the Subsidiaries with respect thereto.
(p) Each Agent shall have received all documentation and other
information requested by it to satisfy the requirements of bank
regulatory authorities under applicable "know your customer" and
anti-money laundering rules and regulations, including the USA Patriot
Act.
(q) The Agents shall have received a completed Borrowing Base
Certificate that sets forth the Pro Forma Opening Borrowing Base.
(r) The Agents shall have (i) received the results of a field
examination with respect to the Accounts, Inventory, Real Estate and
Equipment of the Parent Borrower and the Subsidiaries and an Inventory,
Real Estate and Equipment appraisal with respect to the Inventory, Real
Estate and Equipment of the Parent Borrower and the Subsidiaries, in each
case in form and substance reasonably satisfactory to the Agents and (ii)
otherwise have completed its business and legal due diligence, with
results satisfactory to the Agents.
(s) The Agents shall be satisfied with the cash management system of
the Loan Parties in effect on the Effective Date.
(t) After giving effect to all Borrowings to be made on the
Effective Date and the issuance of any Letters of Credit on the Effective
Date and payment of all fees and expenses due hereunder, and with all of
the Loan Parties' indebtedness, liabilities, and obligations current, the
Availability Amount shall not be less than $45,000,000.
(u) The corporate capital, ownership structure, debt instruments,
material contracts, and governing documents of each Loan Party, and the
tax effects resulting from the commencement of the Chapter 11 Cases and
this Agreement and the terms and conditions of all Indebtedness of each
Loan Party shall be acceptable to the Agents in their sole discretion.
(v) The automatic stay shall have been modified to permit the
creation and perfection of the Collateral Agent's Liens and security
interests and shall have been automatically vacated to permit enforcement
of the Lenders' rights and remedies under this Agreement, including,
without limitation, the enforcement, upon three (3) Business Days prior
written notice, of such remedies against the Collateral, requiring the
Borrowers' best efforts to sell the Collateral if so requested by any
Agent and directing
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that Agent and its representatives be granted access to all locations
during the continuance of an Event of Default in support of the
enforcement and exercise of such remedies.
(w) Entry by the Bankruptcy Court of the Interim Order and the
issuance by the Canadian Court of the Canadian Interim Order, and all
motions relating thereto, by no later than five (5) days and ten (10)
days, respectively, after the Petition Date in form and substance
satisfactory to the Lenders, (i) approving the transactions contemplated
hereby, (ii) granting a first priority perfected security interest in the
Collateral subject only to the Senior Claims and the Carve-Out Expenses
up to the Carve-Out Amount, (iii) prohibiting the incurrence of debt with
priority equal to or greater than the Agents' and the Lenders', (iv)
prohibiting any granting or imposition of liens other than the Permitted
Encumbrances and (v) authorizing and approving this Agreement and the
transactions contemplated thereby.
(x) [Intentionally Omitted].
(y) The "first day" orders on the first day motions described on
Schedule 4.01(y) in form and substance satisfactory to the Agents shall
have been entered in the Chapter 11 Cases.
(z) The Administrative Agent shall have received such other
documents as any Agent, the Issuing Bank, any Lender or their respective
counsel may have reasonably requested.
The obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 10.02) at or
prior to 5:00 p.m., New York City time, on January 4, 2006. The Administrative
Agent shall notify the Parent Borrower and the Lenders of the Effective Date,
and such notice shall be conclusive and binding.
SECTION 4.02. Subsequent to the Effective Date. The obligation of
the Lenders to continue to make or maintain Loans (or otherwise extend credit
hereunder) and of the Issuing Bank to continue to issue Letters of Credit is
subject to the fulfillment, on or before the date applicable thereto, if any,
of each of the conditions subsequent set forth below (unless waived in
accordance with Section 10.02):
(a) On or before the Collateral Documentation Date, the Agents shall
have received a favorable written opinion (addressed to the Agents, the
Issuing Bank and the Lenders and dated the Collateral Documentation Date)
of each of (i) Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel for the Parent
Borrower, the Domestic Subsidiary Borrowers and the Guarantors, in form
and substance satisfactory to the Agents, (ii) General Counsel of the
Parent Borrower, the Domestic Subsidiary Borrowers and the Guarantors, in
form and substance satisfactory to the Agents, (iii) Van Cott, Xxxxxx,
Cornwall & XxXxxxxx, P.C., Utah counsel for the Parent Borrower, the
Guarantors and certain Domestic Subsidiary Borrowers, in form and
substance satisfactory to the Agents, (iv) Canadian counsel for the
Canadian Guarantors acceptable to the Agents, in form and
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substance satisfactory to the Agents, and (v) Nova Scotia counsel for
Uniplast Industries Co. acceptable to the Agents, in form and substance
satisfactory to the Agents, and, in the case of each such opinion
required by this paragraph, covering such other matters relating to the
Loan Parties, the Loan Documents or the Transactions as the Agents shall
reasonably request. Each Borrower hereby requests such counsel to deliver
such opinions.
(b) On or before the Collateral Documentation Date, the
Administrative Agent shall have received such other certificates,
documents and agreements respecting any Loan Party as the Agents may
reasonably request.
(c) Within forty-five (45) days and fifty-five (55) days,
respectively, after the Petition Date, the Bankruptcy Court shall have
entered the Final Order and the Canadian Court shall have issued the
Canadian Final Order, and all motions relating thereto, in form and
substance satisfactory to the Lenders, (i) approving the transactions
contemplated hereby, (ii) granting a first priority perfected security
interest in the Collateral subject only to the Senior Claims and the
Carve-Out Expenses up to the Carve-Out Amount, (iii) prohibiting the
incurrence of debt with priority equal to or greater than the Agents' and
the Lenders', (iv) prohibiting any granting or imposition of liens other
than the Permitted Encumbrances and (v) authorizing and approving this
Agreement and the transactions contemplated thereby.
SECTION 4.03. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing, and of the Issuing Bank to
issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) The representations and warranties of each Loan Party set forth
in the Loan Documents qualified as to materiality shall be true and
correct and those not so qualified shall be true and correct in all
material respects on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, except to the extent such representations and warranties
expressly relate to an earlier date in which case such representations
and warranties shall be true and correct as of such earlier date.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be
continuing.
(c) At the time of, and after giving effect to, such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit,
the total Revolving Exposures shall not exceed the lesser of (i) the
total amount of the Commitments and (ii) the Borrowing Base then in
effect.
(d) The Borrowing requested would not cause the aggregate
outstanding amount of the Loans and/or LC Exposure to exceed the amount
then authorized by the Interim Order, the Canadian Interim Order, the
Final Order or the Canadian Final Order, as the
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case may be, and any order modifying or vacating such order shall not have
been entered, or any appeal of such order shall not have been timely
filed.
(e) (i) The Bankruptcy Court shall have entered the Final Order and
the Canadian Court shall have entered the Canadian Final Order on or
before the date that is 45 days and fifty-five (55) days, respectively,
after the Petition Date, (ii) the Bankruptcy Court shall have entered the
Final Order following the expiration of the Interim Order and the
Canadian Court shall have entered the Canadian Final Order following the
expiration of the Canadian Interim Order, (iii) the Interim Order, the
Canadian Interim Order, the Final Order or the Canadian Final Order, as
the case may be, shall not have been vacated, reversed, modified or
amended without the Lenders' consent, (iv) a motion for reconsideration
of any such order shall not have been timely filed and (v) an appeal of
any such order shall not have been timely filed and if such order is the
subject of a pending appeal in any respect, either the making of any
Loans, the granting of superpriority claim status with respect to the
Obligations, the granting of the Liens described herein, or the
performance by any Borrower of any of its obligations under this
Agreement or any other Loan Document or under any other instrument or
agreement referred to in this Agreement shall be the subject of a
presently effective stay pending appeal.
The making of any Loan on the occasion of each Borrowing and each issuance,
amendment, renewal or extension of a Letter of Credit shall be deemed to
constitute a representation and warranty by the Parent Borrower on the date
thereof as to the matters specified in this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall
have been paid in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, each Borrower
covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
Parent Borrower will furnish to the Administrative Agent, which will deliver
to each other Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the Parent
Borrower, its audited consolidated balance sheet and related statements
of operations, stockholders' equity and cash flows as of the end of and
for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by Ernst & Young LLP or
other independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and without
any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial
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condition and results of operations of the Parent Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Parent Borrower, its consolidated
balance sheet and related statements of operations, stockholders' equity
and cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of
(or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting
fairly in all material respects the financial condition and results of
operations of the Parent Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments and the absence of footnotes;
(c) within 30 days after the end of each fiscal month of each fiscal
year (or within 45 days after the end of each final fiscal month of each
fiscal quarter) of the Parent Borrower, (i) its consolidated balance
sheet and related statements of operations as of the end of and for such
fiscal month and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end
of) (A) the previous fiscal year and (B) the Projections, all certified
by one of its Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of the Parent
Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes and (ii) information to
support the calculation of the Fixed Charge Coverage Ratio as of the end
of and for such fiscal month, certified by one of its Financial Officers;
(d) concurrently with any delivery of financial statements under
clause (a), (b) or (c) above, a certificate of a Financial Officer of the
Parent Borrower (i) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations with respect to compliance with Section
6.09, (iii) setting forth reasonably detailed calculations of the Fixed
Charge Coverage Ratio as of the last day of the last fiscal period
covered by such financial statements and (iv) stating whether any change
in GAAP or in the application thereof has occurred since the date of the
Parent Borrower's audited financial statements referred to in Section
3.04 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any
Default (which certificate may be limited to the extent required by
accounting rules or guidelines);
(f) no later than 12:00 noon, New York City time, on Wednesday of
each week, and at any time an Event of Default has occurred and is
continuing, at such other times as
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may be requested by any Agent, (i) a completed Borrowing Base Certificate
calculating and certifying the Borrowing Base as of the last day of the
prior week and accompanied by such supporting detail and documentation as
shall be reasonably requested by any Agent; provided, however, that (A)
the unit cost for Eligible Raw Materials may be calculated as of the last
day of the immediately preceding calendar month and (B) the cost for
polyvinyl chloride (PVC) resin, polyethylene (PE) resin and polypropylene
(PP) resin may be calculated on a weekly average basis and (ii) rolling
cash flow financial projections covering the next 13 weeks;
(g) to the extent requested by any Agent at any time when it
reasonably believes that the then-existing Borrowing Base Certificate is
materially inaccurate or that the Borrowing Base at such time would, if
calculated at such time, be materially different than such Borrowing Base
reflected in such then-existing Borrowing Base Certificate, within 10
Business Days of such request, a completed Borrowing Base Certificate
that satisfies the requirements of Section 5.01(f) showing such Borrowing
Base as of the date so requested, accompanied by the reports and
supporting information contemplated thereby or otherwise requested by any
Agent;
(h) within two Business Days of any request therefor, such other
information concerning the amount, composition and manner of computation
of the Borrowing Base as any Agent may reasonably request (in such detail
as may reasonably be requested by any Agent);
(i) not later than 45 days following the commencement of each fiscal
year of the Parent Borrower, a detailed consolidated budget for such
fiscal year (including a projected consolidated balance sheet and related
statements of projected operations and cash flow as of the end of and for
such fiscal year), presented on a monthly basis, and, promptly when
available, any significant revisions of such budget;
(j) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Parent Borrower or any Subsidiary with the SEC, or any Governmental
Authority succeeding to any or all of the functions of the SEC, or with
any national securities exchange, as the case may be;
(k) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Parent Borrower or any Subsidiary, or compliance with the terms of any
Loan Document, as the Administrative Agent, the Collateral Agent or any
Lender may reasonably request;
(l) as soon as available but in any event within five Business Days
of after the end of each calendar month, and at such other times as may
be requested by any Agent, as of the period then ended:
(i) with respect to each Borrower, a summary of Inventory by
location and type and, if requested by any Agent, a supporting
perpetual Inventory report, in each case accompanied by such
supporting detail and documentation as may be reasonably requested
by any Agent;
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(ii) with respect to each Borrower, a monthly trial balance
showing Accounts outstanding aged from invoice date as follows: 1 to
30 days, 31 to 60 days, 61 to 90 days and 91 days or more,
accompanied by such supporting detail and documentation as may be
reasonably requested by any Agent;
(iii) with respect to each Borrower, a schedule and aging of
such Borrower's accounts payable; and
(iv) with respect to each Borrower, a report from the resin
integration purchase system (RIPS) listing all resin payments due as
of the date of delivery of such report;
(m) as soon as available but in any event within five Business Days
of after the end of each calendar month, and at such other times as may
be requested by any Agent, a report setting forth additions and
reductions (cash and non-cash) with respect to Accounts of each Borrower,
as of the period then ended; and
(n) at the time any report (including, without limitation, monthly
reports), projection, prospectus or other similar document is filed with
the Bankruptcy Court or provided to the U.S. Trustee, as applicable, the
Parent Borrower shall deliver to each Agent copies of any such report,
projection, prospectus or other similar document. The Parent Borrower
shall also promptly provide each Agent with copies of all
non-confidential financial reports or analyses provided by or on behalf
of any Loan Party to the Committee with respect to the Chapter 11 Cases.
SECTION 5.02. Notices of Material Events. The Parent Borrower will
furnish to each Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or, to the
knowledge of an executive officer or a Financial Officer of the Parent
Borrower, affecting the Parent Borrower or any Affiliate thereof that
would reasonably be expected to result in a Material Adverse Effect;
(c) any downgrade of the ratings of the Parent Borrower's senior
secured indebtedness for borrowed money by S&P, Xxxxx'x or any other
rating agency;
(d) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, would reasonably be expected
to result in liability of the Parent Borrower and the Subsidiaries in an
aggregate amount exceeding $5,000,000; and
(e) any other development that results in, or would reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement
of a Financial Officer or other executive officer of the Parent Borrower
setting forth the details of the event or
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development requiring such notice and any action taken or proposed to be taken
with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) The Parent
Borrower will furnish to the Agents 10 day's prior written notice of any
change (i) in any Loan Party's corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive office,
its principal place of business, any office in which it maintains books or
records relating to Collateral owned by it or any office or facility at which
Collateral owned by it having an aggregate fair value in excess of $100,000 is
located (including the establishment of any such new office or facility),
(iii) in any Loan Party's identity or corporate structure, (iv) in any Loan
Party's Federal Taxpayer Identification Number or other organizational
identification number (or, with respect to each Foreign Subsidiary, any
comparable identification numbers issued by any Governmental Authority) or (v)
in any Loan Party's jurisdiction of incorporation or organization. The Parent
Borrower agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform
Commercial Code (or the equivalent legislation of other jurisdictions) or
otherwise that are required in order for the Collateral Agent to continue at
all times following such change to have a valid, legal and perfected security
interest in all the Collateral; provided that the Collateral Agent shall take
any action reasonably requested by the Parent Borrower to maintain a valid,
legal and perfected security interest in all the Collateral.
(b) Each quarter, at the time of delivery of annual or quarterly
financial statements with respect to the preceding fiscal year or fiscal
quarter pursuant to clause (a) or clause (b) of Section 5.01, the Parent
Borrower shall deliver to the Administrative Agent a certificate of a
Financial Officer and the chief legal officer of the Parent Borrower or the
Canadian Guarantors, as applicable, (i) setting forth the information required
pursuant to Section 2 of the Domestic Perfection Certificate and Section 2 of
the Canadian Perfection Certificate or confirming that there has been no
change in such information since the date of the applicable Perfection
Certificate delivered on the Effective Date or the date of the most recent
certificate delivered pursuant to this Section and (ii) certifying that all
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations,
including all refilings, rerecordings and reregistrations, containing a
description of the Collateral have been filed of record in each governmental,
municipal or other appropriate office in each jurisdiction identified pursuant
to clause (i) above to the extent necessary to protect and perfect the
security interests under the Security Agreements for a period of not less than
18 months after the date of such certificate (except as noted therein with
respect to any continuation statements to be filed within such period).
SECTION 5.04. Existence; Conduct of Business. Except as occasioned
by the Chapter 11 Cases, the Parent Borrower will, and will cause each of the
Subsidiaries to, do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges, franchises, patents, copyrights, trademarks and
trade names material to the conduct of the business of the Parent Borrower and
the Subsidiaries, taken as a whole; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.04.
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SECTION 5.05. Payment of Obligations; Compliance with Leases. (a)
The Parent Borrower will, and will cause each of the Subsidiaries to, pay (i)
all material Taxes and other charges of any Governmental Authority imposed on
it or any of its properties or assets or in respect of any of its franchises,
business, income or property before any material penalty or interest accrues
thereon and (ii) all claims (including claims for labor, services, materials
and supplies) for sums that have become due and payable and that by law have
or may become a Lien (other than a Lien permitted under Section 6.03) upon any
of the property or assets of the Parent Borrower or any of the Subsidiaries,
prior to the time when any penalty or fine shall be incurred with respect
thereto, except where (1) (A) the validity or amount thereof is being
contested in good faith by appropriate procedures or proceedings, (B) the
Parent Borrower or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, (C) such contest
effectively suspends collection of the contested obligation and the
enforcement of any Lien securing such obligation and (D) the failure to make
payment pending such contest would not reasonably be expected to result in a
Material Adverse Effect or (2) the nonpayment of which is permitted by the
Bankruptcy Code or the Bankruptcy Court or, with respect to the Canadian
Guarantors, the Canadian Court.
(b) The Parent Borrower will, and will cause each of the
Subsidiaries to, comply with all material terms of each lease under which the
Parent Borrower or any Subsidiary leases any property, as lessee, and at which
Accounts or Inventory that is included in the calculation of the Borrowing
Base is located.
SECTION 5.06. Maintenance of Properties. The Parent Borrower will,
and will cause each of the Subsidiaries to, keep and maintain all property
material to the conduct of the business of the Parent Borrower and the
Subsidiaries taken as a whole in good working order and condition, ordinary
wear and tear excepted.
SECTION 5.07. Insurance. The Parent Borrower will, and will cause
each of the Subsidiaries to, maintain insurance with respect to its material
properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar
circumstances by such other Persons. Such insurance shall be maintained with
financially sound and reputable insurers, except that a portion of such
insurance program (not to exceed that which is customary in the case of
companies engaged in the same or similar business or having similar properties
similarly situated) may be effected through self-insurance, provided adequate
reserves therefor, in accordance with GAAP, are maintained. All insurance
policies or certificates (or certified copies thereof) with respect to such
insurance (A) shall be endorsed to the Collateral Agent's reasonable
satisfaction for the benefit of the Lenders (including by naming the
Collateral Agent as loss payee or additional insured, as appropriate); and (B)
shall state that such insurance policy shall not be canceled without 30 days'
prior written notice thereof (or, in connection with any cancellation
resulting from the non-payment of premiums, 10 days' prior written notice
thereof). The Parent Borrower shall promptly notify the Administrative Agent
of any material change or revision, or notice of expiration or non-renewal,
with respect to any such insurance policy. The Parent Borrower shall furnish
to the Administrative Agent, on the Effective Date and on the date of delivery
of each annual financial statement, full information as to the insurance
carried. At any time that insurance at levels described in Schedule 5.07 is
not being maintained by or on behalf of the Parent Borrower or any of the
Subsidiaries, the Parent
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Borrower will notify the Lenders in writing within two Business Days thereof
and, if thereafter notified by the Administrative Agent or the Required
Lenders to do so, the Parent Borrower or any such Subsidiary, as the case may
be, shall obtain insurance at such levels at least equal to those set forth on
Schedule 5.07; provided that such insurance can be obtained at commercially
reasonable rates.
SECTION 5.08. Casualty and Condemnation. (a) The Parent Borrower
will furnish to each Agent and the Lenders prompt written notice of any
casualty or other insured damage to any portion of any Collateral or the
commencement of any action or proceeding for the taking of any Collateral or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding, where the fair market value of the
Collateral so affected in connection with any such casualty event or
condemnation is at least $1,000,000.
(b) If any event described in paragraph (a) of this Section
results in Net Proceeds (whether in the form of insurance proceeds,
condemnation award or otherwise), the Collateral Agent is authorized to
collect such Net Proceeds and, if received by the Parent Borrower or any
Subsidiary, such Net Proceeds shall be paid over to the Collateral Agent;
provided that (i) if the aggregate Net Proceeds in respect of such event
(other than proceeds of business interruption insurance) are less than
$1,000,000, such Net Proceeds shall be paid over to the Parent Borrower unless
a Default has occurred and is continuing and (ii) all proceeds of business
interruption insurance shall be paid over to the Parent Borrower unless a
Default has occurred and is continuing. All such Net Proceeds retained by or
paid over to the Collateral Agent shall be held by the Collateral Agent and
released from time to time to pay the costs of repairing, restoring or
replacing the affected property or funding expenditures for assets in any
business permitted under Section 6.04(b), in each case in accordance with the
terms of the applicable Security Document, subject to the provisions of the
applicable Security Document regarding application of such Net Proceeds during
a Default.
SECTION 5.09. Books and Records; Inspection and Audit Rights. (a)
The Parent Borrower will, and will cause each of the Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made in all material respects of all dealings and transactions in relation to
its business and activities. The Parent Borrower will, and will cause each of
the Subsidiaries to, permit any representatives designated by any Agent or any
Lender, upon reasonable prior notice, to visit and inspect its properties, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants
(and the Parent Borrower shall be provided the opportunity to participate in
any such discussions with such independent accountants), all at such
reasonable times and as often as reasonably requested. The Parent Borrower
shall pay the reasonable fees and expenses of any representatives retained by
the Administrative Agent to conduct any such inspection; provided, however
that so long as no Event of Default shall have occurred and be continuing, the
Parent Borrower shall only be required to pay for one such inspection per
fiscal quarter of the Parent Borrower.
(b) The Parent Borrower will, and will cause each of the
Subsidiaries to, permit any representatives designated by any Agent (including
any consultants, accountants, lawyers and appraisers retained by such Agent)
to conduct evaluations and appraisals of the Parent Borrower's computation of
the Borrowing Base and the assets included in the Borrowing Base,
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all at such reasonable times and as often as reasonably requested. The Parent
Borrower shall pay the reasonable fees and expenses of any representatives
retained by the Administrative Agent to conduct any such evaluation or
appraisal; provided, however that so long as no Event of Default shall have
occurred and be continuing, the Parent Borrower shall only be required to pay
for one such evaluation or appraisal for each of the Inventory, Equipment and
Real Estate included in the Borrowing Base per calendar year. The Parent
Borrower also agrees to modify or adjust the computation of the Borrowing Base
(which may include maintaining additional reserves or modifying the
eligibility criteria for the components of the Borrowing Base) to the extent
required by any Agent or the Required Lenders as a result of any such
evaluation or appraisal or otherwise.
(c) In the event that historical accounting practices, systems or
reserves relating to the components of the Borrowing Base are modified in a
manner that is adverse to the Domestic Lenders in any material respect, the
Parent Borrower will agree to maintain such additional reserves (for purposes
of computing the Borrowing Base) in respect of the components of the Borrowing
Base and make such other adjustments to its parameters for including the
components of the Borrowing Base as the Administrative Agent or the Required
Lenders in their discretion shall require based upon such modifications.
(d) [Intentionally Omitted].
SECTION 5.10. Compliance with Laws. The Parent Borrower will, and
will cause each of the Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property, including Environmental Laws except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect or the failure to do so is permitted by the
Bankruptcy Code, or the Bankruptcy Court or (in the case of the Canadian
Guarantors) the Canadian Court after appropriate notice and hearing.
SECTION 5.11. Use of Proceeds and Letters of Credit. The proceeds
of the Loans will be used solely for ordinary working capital and general
corporate purposes of the applicable Borrower including certain fees and
expenses of professionals retained by the Borrowers, subject to the Carve-Out
Amount and for certain other pre-petition expenses that are approved by the
Bankruptcy Court and consented to by the Agents, but excluding in any event
the making of any Restricted Payment not specifically permitted by Section
6.09. No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to
purchase or carry Margin Stock or any security convertible into or
exchangeable for Margin Stock, or extend credit to others for the purpose of
purchasing or carrying Margin Stock or any security convertible into or
exchangeable for Margin Stock, or to refund Indebtedness originally incurred
for such purpose, (ii) for any purpose that entails a violation of any of the
Regulations of the Board, including Regulation U and Regulation X, (iii) for
the payment of interest and principal with respect to the Senior First Lien
Notes (other than in the form of adequate protection payments approved by the
Interim Order, the Canadian Interim Order, the Final Order and the Canadian
Final Order), the Senior Second Lien Notes or the Senior Subordinated Notes,
(iv) to finance in any way any action, suit, arbitration, proceeding,
application, motion or other litigation of any type adverse to the interests
of the Agents and the Lenders or their rights and remedies under this
Agreement, the other Loan
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Documents, the Pre-Petition Loan Agreement or any of the loan documents or
instruments entered into in connection therewith, the Interim Order or the
Final Order, (v) to make any distribution under a plan of reorganization in
any Chapter 11 Case or (vi) to make any payment in settlement of any claim,
action or proceeding, before any court, arbitrator or other governmental body
without the prior written consent of the Agents. Letters of Credit will be
issued only for general corporate purposes.
SECTION 5.12. Additional Subsidiaries. If (a) any additional
Subsidiary is formed or acquired after the Effective Date (or if any
Subsidiary ceases to be an Excluded Subsidiary after the Effective Date), the
Parent Borrower will notify the Agents and the Lenders thereof and (i) if (x)
such Subsidiary is a Loan Party (other than a Loan Party organized under the
laws of Canada or any province thereof), the Parent Borrower will cause such
Subsidiary to become a party to (1) this Agreement, as a Borrower, or the
Guarantee Agreement, as a Guarantor (2) the Domestic Security Agreement, the
Domestic Pledge Agreement and each other applicable Security Document in the
manner provided therein (or, if such Loan Party is a Foreign Subsidiary not
organized under the laws of Canada or any province thereof, such mortgages and
security, pledge, guarantee and subordination agreements as reasonably
requested by the Administrative Agent or the Collateral Agent to guarantee and
secure the Obligations) and (y) if such Subsidiary is a Loan Party organized
under the laws of Canada or any province thereof, the Parent Borrower will
cause such Subsidiary to become a party to the Guarantee Agreement, the
Canadian Security Agreement, the Canadian Pledge Agreement and each other
applicable Security Document in the manner provided therein, in each case
within three Business Days after such Subsidiary is formed or acquired and
promptly take such actions to create and perfect Liens on such Subsidiary's
assets to secure the Obligations as the Administrative Agent or the Collateral
Agent or the Required Lenders shall reasonably request and (ii) if any Equity
Interests or Indebtedness of such Subsidiary are owned by or on behalf of any
Loan Party, the Parent Borrower will cause certificates and promissory notes
evidencing such Equity Interests and Indebtedness to be pledged to secure the
Obligations within three Business Days after such Subsidiary is formed or
acquired (except that, if such Subsidiary is a Foreign Subsidiary and is not a
Loan Party, Equity Interests of such Subsidiary that are owned by or on behalf
of the Parent Borrower or a Subsidiary Loan Party and that are to be pledged
to secure the Obligations may be limited to 65% of the outstanding voting
Equity Interests of such Subsidiary) and (b) any Subsidiary which is not a
Loan Party commences a Chapter 11 case which is administratively consolidated
with the Chapter 11 Cases, the Parent Borrower will notify the Agents and the
Lenders thereof and if (i) such Subsidiary is not organized under the laws of
Canada or any province thereof, the Parent Borrower will cause such Subsidiary
to become a party to (x) this Agreement, as a Borrower, or the Guarantee
Agreement, as a Guarantor (y) the Domestic Security Agreement, the Domestic
Pledge Agreement and each other applicable Security Document in the manner
provided therein or (ii) if such Subsidiary is organized under the laws of
Canada or any province thereof, the Parent Borrower will cause such Subsidiary
to become a party to the Guarantee Agreement, the Canadian Security Agreement,
the Canadian Pledge Agreement and each other applicable Security Document in
the manner provided therein, in each case within three Business Days after
such Subsidiary's Chapter 11 case is administratively consolidated with the
Chapter 11 Cases and promptly take such actions to create and perfect Liens on
such Subsidiary's assets to secure the Obligations as the Administrative Agent
or the Collateral Agent or the Required Lenders shall reasonably request.
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SECTION 5.13. Further Assurances. (a) The Parent Borrower will,
and will cause each other Loan Party to, execute any and all further
documents, financing statements, agreements and instruments, and take all such
further actions (including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents), that may be
required under any applicable law, or which any Agent or the Required Lenders
may reasonably request, to effectuate the transactions contemplated by the
Loan Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority
of any such Lien, all at the expense of the Loan Parties. The Parent Borrower
also agrees to provide to the Agents, from time to time upon request, evidence
reasonably satisfactory to the Agents as to the perfection and priority of the
Liens created or intended to be created by the Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Parent
Borrower or any other Loan Party after the Effective Date (other than assets
constituting Collateral that become subject to the Lien of the appropriate
Security Agreements upon acquisition thereof), the Parent Borrower will notify
the Agents and the Lenders thereof, and, if requested by any Agent or the
Required Lenders, the Parent Borrower will cause such assets to be subjected
to a Lien securing the Obligations and will take, and cause the other Loan
Parties to take, such actions as shall be necessary or reasonably requested by
any Agent to grant and perfect such Liens, including actions described in
paragraph (a) of this Section, all at the expense of the Loan Parties;
provided that the following property shall not be covered by this Section
5.13(b): (i) intellectual property a security interest in which would require
filings or recordations under laws other than the laws of the United States,
Canada (in the case of intellectual property of the Canadian Guarantors (other
than Pliant Packaging of Canada, LLC) or another Loan Party organized under
the laws of Canada or any province thereof) or any jurisdiction thereof, (ii)
owned real estate or leasehold interests with an aggregate fair market value
of less than $5,000,000, (iii) any other items of tangible personal property
with, in each case, a fair market value of less than $500,000 and (iv) items
explicitly excluded by exceptions in any Security Agreement, Pledge Agreement
or other Security Document.
SECTION 5.14. Supplemental Disclosure. From time to time as may be
reasonably requested by the Administrative Agent (which request will not be
made more frequently than once each year absent the occurrence and continuance
of an Event of Default) or at the Loan Parties' election, the Parent Borrower
shall supplement each Schedule, or any representation herein or in any other
Loan Document, with respect to any matter hereafter arising that, if existing
or occurring at the date of this Agreement, would have been required to be set
forth or described in such Schedule or as an exception to such representation
or that is necessary to correct any information in such Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Schedule, such Schedule shall be appropriately marked
to show the changes made therein); provided that (a) no such supplement to any
such Schedule or representation shall amend, supplement or otherwise modify
any Schedule or representation, or be or be deemed a waiver of any Default or
Event of Default resulting from the matters disclosed therein, except as
consented to by Agent and Requisite Lenders in writing, and (b) no supplement
shall be required or permitted as to representations and warranties that
relate solely to the Closing Date.
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SECTION 5.15. Intellectual Property. The Parent Borrower will, and
will cause each of the Subsidiaries to, conduct its business and affairs
without infringement of or interference with any Intellectual Property (as
defined in the Domestic Security Agreement) of any other Person in any
material respect and shall comply in all material respects with the terms of
its Licenses (as defined in the Domestic Security Agreement).
SECTION 5.16. Landlord Lien Waivers, Mortgagee Agreements and
Bailee Letters. As reasonably requested by the Collateral Agent and to the
extent not otherwise addressed to each Agent's reasonable satisfaction in the
Interim Order and the Final Order, the Parent Borrower will, and will cause
each of the Subsidiaries to, use commercially reasonable efforts to obtain a
Landlord Lien Waiver, mortgagee agreement or Bailee Letter, as applicable,
from the lessor of each leased property, mortgagee of owned property or bailee
with respect to any warehouse, processor or converter facility or other
location where Collateral is stored or located, which agreement or letter
shall contain a waiver or subordination of all Liens or claims that the
landlord, mortgagee or bailee may assert against the Collateral at that
location, and shall otherwise be reasonably satisfactory in form and substance
to the Collateral Agent. Each Loan Party shall timely and fully pay and
perform its obligations under all leases and other agreements with respect to
each leased location or public warehouse where any Collateral is or may be
located.
SECTION 5.17. Depository Banks. The Parent Borrower will, and will
cause each of the Subsidiaries to, maintain a bank reasonably acceptable to
the Administrative Agent as its principal depository bank, including for the
maintenance of operating, administrative, cash management, collection
activity, and other deposit accounts for the conduct of its business.
SECTION 5.18. ERISA. The Parent Borrower will, and will cause each
of the Subsidiaries to, establish, maintain and operate all Plans to comply in
all material respects with the provisions of ERISA, the Code, and all other
applicable laws, and the regulations and interpretations thereunder other than
to the extent that the Loan Parties are in good faith contesting by
appropriate proceedings the validity or implication of any such provision,
law, rule, regulation or interpretation.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Parent Borrower covenants and
agrees with the Lenders that:
SECTION 6.01. Indebtedness. The Parent Borrower will not, and will
not permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
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(ii) Indebtedness existing on the Effective Date and set forth in
Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof;
(iii) Indebtedness of the Parent Borrower to any Subsidiary and of
any Subsidiary to the Parent Borrower or any other Subsidiary; provided
that Indebtedness of any Subsidiary that is not a Loan Party to any Loan
Party shall be subject to Section 6.05;
(iv) Guarantees by the Parent Borrower of Indebtedness of any
Subsidiary and by any Subsidiary of Indebtedness of the Parent Borrower,
any other Subsidiary; provided that (i) Guarantees by any Loan Party of
Indebtedness of any Subsidiary that is not a Loan Party shall be subject
to Section 6.05, (ii) any Guarantee after the Effective Date of the
Senior Subordinated Notes by a Subsidiary shall not be permitted (A)
unless each Agent consents or (B) as otherwise provided by the Bankruptcy
Court after appropriate notice and hearing;
(v) Indebtedness of the Parent Borrower or any Subsidiary incurred
to finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such assets or secured
by a Lien on any such assets prior to the acquisition thereof, including
Capital Lease Obligations incurred pursuant to transactions permitted by
Section 6.07, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof; provided that (A) such Indebtedness is incurred prior to or
within 20 days after such acquisition or the completion of such
construction or improvement and (B) the aggregate principal amount of
Indebtedness permitted by this clause (v) shall not exceed $10,000,000 at
any time outstanding;
(vi) the Senior First Lien Notes in an aggregate principal amount at
maturity not exceeding an amount equal to the sum of (A) the aggregate
accreted value of the Amended 2004 Notes on the 2004 Notes Restatement
Date plus the aggregate principal amount of additional Senior First Lien
Notes issued in payment of interest thereon plus the amount of additional
Permitted Notes Refinancing Indebtedness in respect thereof incurred in
respect of unpaid accrued interest and premium thereon and (B) the 2004
Notes Remaining Amount plus the amount of additional Permitted Notes
Refinancing Indebtedness in respect thereof incurred in respect of unpaid
accrued interest (not included in the accreted value) and premium
thereon;
(vii) Indebtedness with respect to surety, appeal and performance
bonds obtained by the Parent Borrower or any of the Subsidiaries in the
ordinary course of business;
(viii) [Intentionally Omitted];
(ix) other Indebtedness of any Subsidiary that is not a Loan Party;
provided that the aggregate amount of Indebtedness that may be incurred
pursuant to this clause (ix) and outstanding at any time shall not exceed
$15,000,000, minus (A) the aggregate amount of Indebtedness that has been
incurred pursuant to clauses (v) and (viii) above
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and that is outstanding at such time and (B) the aggregate amount of
other obligations that have been secured pursuant to subclause (i) of
clause (d) of the definition of "Permitted Encumbrances" and that are
outstanding at such time;
(x) the Senior Second Lien Notes in an aggregate principal amount
not exceeding $250,000,000 plus the amount of additional Permitted Notes
Refinancing Indebtedness in respect thereof incurred in respect of unpaid
accrued interest and premium thereon;
(xi) the Senior Subordinated Notes in an aggregate principal amount
not exceeding $320,000,000 plus the amount of additional Permitted Notes
Refinancing Indebtedness in respect thereof incurred in respect of unpaid
accrued interest and premium thereon;
(xii) the Existing Preferred Stock and all additional shares of such
Preferred Stock permitted to be issued under Section 6.09(a)(ii), in each
case to the extent that such Preferred Stock is or may subsequently
become characterized as Indebtedness in the consolidated financial
statements of the Parent Borrower in accordance with GAAP and other
applicable financial accounting standards;
(xiii) Indebtedness arising under or in connection with the
Pre-Petition Loan Agreement;
(xiv) the Existing Letters of Credit; and
(xv) the Series B Preferred Stock permitted to be issued under this
Agreement, to the extent that such Series B Preferred Stock is or may
subsequently become characterized as Indebtedness in the consolidated
financial statements of the Parent Borrower in accordance with GAAP and
other applicable accounting standards.
SECTION 6.02. Certain Equity Securities. The Parent Borrower will
not, nor will it permit any Subsidiary to, issue any preferred stock (other
than Qualified Preferred Stock of the Parent Borrower) or be or become liable
in respect of any obligation (contingent or otherwise) to purchase, redeem,
retire, acquire or make any other payment in respect of any Equity Interests
of the Parent Borrower or any Subsidiary.
SECTION 6.03. Liens. The Parent Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Parent Borrower or any
Subsidiary existing on the Effective Date and set forth in Schedule 6.03;
provided that (i) such Lien shall not apply to any other property or
asset of the Parent Borrower or any Subsidiary
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and (ii) such Lien shall secure only those obligations that it secures on
the Effective Date and extensions, renewals and replacements thereof that
do not increase the outstanding principal amount thereof;
(d) any Lien existing on any property or asset prior to the
acquisition thereof by the Parent Borrower or any Subsidiary or existing
on any property or asset of any Person that becomes a Subsidiary after
the Effective Date prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary, as
the case may be, (ii) such Lien shall not apply to any other property or
assets of the Parent Borrower or any Subsidiary and (iii) such Lien shall
secure only those obligations that it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may
be and extensions, renewals and replacements thereof that do not increase
the outstanding principal amount thereof;
(e) Liens on fixed or capital assets acquired, constructed or
improved by the Parent Borrower or any Subsidiary; provided that (i) such
Liens secure Indebtedness permitted by clause (v) of Section 6.01, (ii)
such Liens and the Indebtedness secured thereby are incurred prior to or
within 120 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does
not exceed 100% of the cost of acquiring, constructing or improving such
fixed or capital assets and (iv) such security interests shall not apply
to any other property or assets of the Parent Borrower or any Subsidiary
other than property directly related to such fixed or capital assets and
of a type customarily covered by such Liens, except that such security
interests may not apply to any accounts receivable or inventory;
(f) Liens securing Indebtedness incurred pursuant to Section
6.01(ix); provided that such Liens shall apply only to properties and
assets of Foreign Subsidiaries that are not Loan Parties;
(g) leases and subleases of real property and tangible personal
property and licenses and sublicenses of intellectual property rights, in
each case granted in the ordinary course of business and not interfering
individually or in the aggregate (with all such licenses and subleases
being taken as a whole) in any material respect with the conduct of the
business of the Parent Borrower and the Subsidiaries;
(h) Liens to secure compensation and indemnity obligations to the
trustee under the indenture for the Senior Subordinated Notes and the
warrant agent under the warrant agreement for the Warrants;
(i) Liens granted under the Senior First Lien Security Documents or
the Senior Second Lien Security Documents; provided that (i) such Liens
secure only obligations under the Senior First Lien Note Documents and
the Senior Second Lien Note Documents, respectively, except that such
obligations shall not include obligations under any Indebtedness (or
obligations under any Swap Agreements) except to the extent incurred
pursuant to Section 6.01(x), with respect to the Senior Second Lien
Notes, or Section 6.01(vi), with respect to the Senior First Lien Notes,
(ii) such Liens do not apply
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to any asset other than Collateral that is subject to a Lien granted
under a Security Document to secure the Obligations, (iii) any Liens on
any Collateral that secure obligations in respect of the Senior First
Lien Notes or Senior Second Lien Notes are subordinated to the Liens on
such Collateral that secure the Obligations and (iv) all such Liens
granted under the Senior First Lien Security Documents and Senior Second
Lien Security Documents shall be subject to the terms of the
Intercreditor Agreement;
(j) Liens on cash deposited with the issuing bank for any Existing
Letter of Credit to cash collateralize such Existing Letter of Credit
(including with respect to interest, fees and expenses associated
therewith); provided that (i) the amount of such cash subject to such
Lien at any time shall not exceed 105% of the face amount of such
Existing Letter of Credit and (ii) upon the termination or expiration of
such Existing Letter of Credit, to the extent there has been no drawing
under such Existing Letter of Credit that has not been reimbursed at such
time, an amount of cash equal to 105% of the face amount of such Existing
Letter of Credit (less any amounts retained to pay interest, fees and
expenses associated therewith) shall be promptly released from such Lien;
and
(k) Liens arising under or in connection with the Pre-Petition Loan
Agreement.
SECTION 6.04. Fundamental Changes. (a) The Parent Borrower will
not and will not permit any Subsidiary to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Default shall have occurred and be continuing
(i) any Subsidiary may merge into the Parent Borrower in a transaction in
which the Parent Borrower is the surviving corporation, (ii) any Subsidiary
may merge into any Subsidiary that is a Loan Party; provided that if any
Subsidiary that is party to such transaction is (A) a Loan Party, the
surviving entity must be a Loan Party or (B) a Domestic Subsidiary Borrower,
the surviving entity must be a Domestic Subsidiary Borrower, (iii) any
Subsidiary that is not a Loan Party may merge into any Subsidiary that is not
a Loan Party, (iv) any Subsidiary (other than any Domestic Subsidiary
Borrower) may liquidate or dissolve if the Parent Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Parent Borrower and is not materially disadvantageous to the Lenders; provided
that any such merger involving a Person that is not a Wholly Owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted
by Section 6.05 and (v) the Parent Borrower may merge with an Affiliate
incorporated under the laws of the State of Delaware solely for the purpose of
incorporating or organizing the Parent Borrower under the laws of the State of
Delaware; provided that such merger does not adversely affect the Lenders in
any material respect.
(b) The Parent Borrower will not, and will not permit any of the
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Parent Borrower and the Subsidiaries
on the Effective Date and businesses reasonably related, ancillary or
complementary thereto.
SECTION 6.05. Investments, Loans, Advances, Guarantees and
Acquisitions. The Parent Borrower will not, and will not permit any of the
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a Wholly Owned Subsidiary prior to such merger)
any Equity Interests, evidences of indebtedness or other
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securities (including any option, warrant or other right to acquire any of the
forgoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or
a series of transactions) any assets of any other Person constituting a
business unit, except:
(a) Permitted Investments;
(b) investments existing on the date hereof and set forth on
Schedule 6.05(b), to the extent such investments would not be permitted
under any other clause of this Section 6.05;
(c) investments by the Parent Borrower and the Subsidiaries in the
Equity Interests of their respective Subsidiaries (that are Subsidiaries
prior to such Investment); provided that (i) any such Equity Interests
owned by a Loan Party shall be pledged to secure the Obligations and
(ii)(A) the amount of any such investment by a Loan Party in a Subsidiary
that is not a Loan Party shall be automatically added to the Accumulated
Investment Balance and (B) the Accumulated Investment Balance shall not
exceed $7,000,000 during any fiscal year of the Parent Borrower;
(d) loans or advances made by the Parent Borrower to any Subsidiary
and made by any Subsidiary to the Parent Borrower or any other
Subsidiary; provided that (i) other than loans or advances made to Pliant
Film Products GmbH, any such loans and advances made by a Loan Party
shall be evidenced by a promissory note pledged to secure the Obligations
and (ii)(A) the amount of any such loan or advance by a Loan Party to a
Subsidiary that is not a Loan Party shall be automatically added to the
Accumulated Investment Balance and (B) the Accumulated Investment Balance
shall not exceed $7,000,000 during any fiscal year of the Parent
Borrower;
(e) Guarantees by the Parent Borrower of Indebtedness and other
obligations of any Subsidiary and Guarantees by any Subsidiary of
Indebtedness or other obligations of the Parent Borrower or any
Subsidiary; provided that (i) after the Effective Date, no Subsidiary
shall Guarantee the Senior First Lien Notes, Senior Second Lien Notes or
Senior Subordinated Notes unless (A) such Subsidiary also has Guaranteed
the Obligations, (B) with respect to any Guarantee of the Senior
Subordinated Notes, such Guarantee is subordinated to such Guarantee of
the Obligations on terms no less favorable to the Lenders than the
subordination provisions of the Senior Subordinated Notes and (C)(1) each
Agent consents or (2) as otherwise provided by the Bankruptcy Court after
appropriate notice and hearing, (ii) any such Guarantee constituting
Indebtedness is permitted by Section 6.01 and (iii) in the event of any
Guarantee by a Loan Party of Indebtedness of a Person that is not a Loan
Party, (A) the aggregate principal amount of such Indebtedness shall be
automatically added to the Accumulated Investment Balance and (B) the
Accumulated Investment Balance shall not exceed $7,000,000 during any
fiscal year of the Parent Borrower;
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(f) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(g) [Intentionally Omitted];
(h) [Intentionally Omitted];
(i) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course
of business;
(j) investments of any Person existing at the time such Person
becomes a Subsidiary or at the time such Person merges or consolidates
with the Parent Borrower or any of the Subsidiaries, in either case in
compliance with the terms of this Agreement; provided that such
investments were not made by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary or
such merger or consolidation;
(k) Swap Agreements entered into in compliance with Section 6.08;
(l) other loans, advances and investments; provided that (i) the
amount of any such loan, advance or investment made pursuant to this
clause (l) shall be automatically added to the Accumulated Investment
Balance and (ii) the Accumulated Investment Balance shall not exceed
$7,000,000 during any fiscal year of the Parent Borrower; and
(m) notes or other evidences of Indebtedness acquired as
consideration in connection with a sale, transfer, lease or other
disposition of any asset by the Parent Borrower or any of the
Subsidiaries.
SECTION 6.06. Asset Sales. The Parent Borrower will not, and will
not permit any of the Subsidiaries to, sell, transfer, lease or otherwise
dispose of any asset, including any Equity Interest owned by it (other than
any such sale, transfer, lease or other disposition resulting from any
casualty or condemnation of any assets of the Parent Borrower or any of the
Subsidiaries), nor will the Parent Borrower permit any of the Subsidiaries to
issue any additional Equity Interest in such Subsidiary, except:
(a) sales of inventory, used or surplus tangible property and
Permitted Investments in the ordinary course of business;
(b) sales, transfers, issuances and dispositions to the Parent
Borrower or a Subsidiary; provided that any such sales, transfers or
dispositions involving a Subsidiary that is not a Loan Party shall be
made in compliance with Section 6.10;
(c) leases and licenses entered into in the ordinary course of
business;
(d) sales in connection with sale-leasebacks permitted under Section
6.07;
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(e) sales of investments referred to in clauses (b), (f), (l) and
(m) of Section 6.05;
(f) sales, transfers and dispositions of assets (other than Equity
Interests of a Subsidiary) that are not permitted by any other clause of
this Section; provided that the aggregate fair market value of all assets
sold, transferred or otherwise disposed of in reliance upon this clause
(f) shall not, in the aggregate, exceed $1,000,000 during the term of
this Agreement;
(g) sales, transfers and dispositions of Foreign Assets;
(h) transfers and dispositions constituting investments permitted
under Section 6.05; and
(i) sales, transfers and dispositions of the assets set forth in
Schedule 6.06; provided that the Parent Borrower provides the
Administrative Agent, the Collateral Agent with written notice of any
such sale, transfer or disposition not less than five Business Days prior
to the consummation thereof;
provided that all sales, transfers, leases and other dispositions permitted
hereby shall be made for an amount not less than fair value (as determined in
good faith by the Board of Directors of the Parent Borrower), or, in the case
of clause (d) above, for an amount, if less, equal to the aggregate cost
expended for the property that is the subject of such sale-leaseback (except
that those permitted by clause (a) above shall be made on terms that are
customary in the ordinary course) and for consideration in cash. For purposes
of this Section 6.06, the following shall be deemed to be cash: (a) the
assumption of any liabilities of the Parent Borrower or any Subsidiary with
respect to, and the release of the Parent Borrower or such Subsidiary from all
liability in respect of, any Indebtedness of the Parent Borrower or the
Subsidiaries permitted hereunder (in the amount of such Indebtedness) in
connection with a sale, transfer, lease or other disposition of Collateral
permitted under Section 6.06 and (b) securities received by the Parent
Borrower or any Subsidiary from the transferee that are immediately
convertible into cash without breach of their terms or the agreement pursuant
to which they were purchased and that are promptly converted by the Parent
Borrower or such Subsidiary into cash.
SECTION 6.07. Sale and Lease-Back Transactions. The Parent
Borrower will not, and will not permit any Subsidiary to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property being sold or transferred, except for any
such sale of fixed or capital assets that is consummated within 120 days after
the date the Parent Borrower or such Subsidiary acquires or finishes
construction of such fixed or capital asset.
SECTION 6.08. Swap Agreements. The Parent Borrower will not, and
will not permit any of the Subsidiaries to, enter into any Swap Agreement,
except (a) Swap Agreements entered into to hedge or mitigate risks to which
the Parent Borrower or any Subsidiary has actual exposure (other than those in
respect of Equity Interests of the Parent Borrower or any of the Subsidiaries)
and (b) Swap Agreements entered into in order to effectively cap, collar or
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exchange interest rates (from fixed to floating rates, from one floating rate
to another floating rate, to a fixed rate or otherwise) with respect to any
interest-bearing liability or investment of the Parent Borrower or any
Subsidiary.
SECTION 6.09. Restricted Payments; Certain Payments of
Indebtedness. (a) The Parent Borrower will not, and will not permit any
Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except (i) Wholly Owned Subsidiaries may declare and pay
dividends with respect to their Equity Interests and Subsidiaries that are not
Wholly Owned Subsidiaries may declare and pay dividends ratably with respect
to their Equity Interests, (ii) the Parent Borrower may, subject to Section
6.02, make dividends with respect to its Equity Interests consisting solely of
additional Equity Interests permitted hereunder and (iii)(A) as otherwise
consented to by each Agent or (B) as otherwise provided by the Bankruptcy
Court after appropriate notice and hearing; provided that in each case, no
Default has occurred and is continuing or would result therefrom.
(b) The Parent Borrower will not, and will not permit any
Subsidiary to, make or agree to pay or make, directly or indirectly, any
payment or other distribution (whether in cash, securities or other property)
of or in respect of principal of or interest on any Senior First Lien Note,
Senior Second Lien Note or Senior Subordinated Note, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Senior First Lien
Note, Senior Second Lien Note or Senior Subordinated Note (i) unless each
Agent consents or (ii) as otherwise provided by the Bankruptcy Court after
appropriate notice and hearing.
SECTION 6.10. Transactions with Affiliates. The Parent Borrower
will not, and will not permit any Subsidiary to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire
any property or assets from, or otherwise engage in any other transactions
with, any of its Affiliates (including any Subsidiary), except (a)
transactions in the ordinary course of business that are at prices and on
terms and conditions not less favorable to the Parent Borrower or such
Subsidiary than could be obtained on an arm's-length basis from unrelated
third parties (as determined in good faith by members of the board of
directors of the Parent Borrower having a majority of the voting power held by
all disinterested members of the board of directors of the Parent Borrower),
(b) transactions between or among the Loan Parties and not involving any other
Affiliate (except to the extent the involvement with the other Affiliate
otherwise complies with this Section 6.10), (c) any Restricted Payment
permitted by Section 6.09, (d) transactions expressly contemplated by Schedule
6.10 and (e) the issuance of shares of the Series B Preferred Stock to
"Eligible Persons" pursuant to the terms of the 2004 Restricted Stock
Incentive Plan of the Parent Borrower, to the extent such issuance has been
approved in good faith by members of the board of directors of the Parent
Borrower having a majority of the voting power held by all disinterested
members of the board of directors of the Parent Borrower.
SECTION 6.11. Restrictive Agreements. The Parent Borrower will not
and will not permit any Subsidiary to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (a) the
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ability of the Parent Borrower or any Subsidiary to create, incur or permit to
exist any Lien upon any of its property or assets or (b) the ability of any
Subsidiary to pay dividends or other distributions with respect to any of its
Equity Interests (it being understood that the priority of any preferred stock
in receiving dividends or liquidating distributions prior to dividends or
liquidating distributions being paid on common stock shall not be deemed a
restriction on the ability to make distributions on capital stock) or to make
or repay loans or advances to the Parent Borrower or any other Subsidiary (it
being understood that the subordination of loans or advances made to the
Parent Borrower or any Subsidiary to other Indebtedness incurred by the Parent
Borrower or such Subsidiary shall not be deemed a restriction on the ability
to make loans or advances) or to Guarantee Indebtedness of the Parent Borrower
or any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document, (ii) the
foregoing shall not apply to restrictions and conditions existing on the
Effective Date identified on Schedule 6.11, (iii) the foregoing shall not
apply to any restriction or condition with respect to a Subsidiary pursuant to
an agreement relating to any Equity Interests or Indebtedness of such
Subsidiary, in each case incurred by such Subsidiary prior to the date on
which such Subsidiary was acquired by the Parent Borrower (other than Equity
Interests or Indebtedness incurred as consideration in, in contemplation of,
or to provide all or any portion of the funds or credit support utilized to
consummate the transaction or series of related transactions pursuant to which
such Subsidiary became a Subsidiary or was otherwise acquired by the Parent
Borrower) and outstanding on such date; (iv) the foregoing shall not apply to
any restriction or condition pursuant to an agreement refinancing an agreement
referred to in clause (i), (ii) or (iii) or this clause (iv) or contained in
any amendment to an agreement referred to in clause (i), (ii) or (iii) or this
clause (iv); provided, however, that the conditions and restrictions contained
in any such refinancing agreement or amendment are no more restrictive, taken
as a whole, than the encumbrances and restrictions contained in the applicable
predecessor agreement; (v) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary or assets pending such sale; provided such restrictions and
conditions apply only to the Subsidiary or assets that are to be sold and such
sale is permitted hereunder, (vi) clause (a) of the foregoing shall not apply
to restrictions or conditions imposed by any agreement relating to secured
Indebtedness or other secured obligations permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness or other obligations, (vii) clause (a) of the foregoing shall not
apply to customary provisions in contracts restricting the assignment thereof,
or the subletting, assignment or transfer of any property or asset that is
subject to a lease, license or similar contract; (viii) the foregoing shall
not apply to restrictions imposed by any agreement relating to Indebtedness of
a Foreign Subsidiary (other than a Foreign Subsidiary that is a Loan Party)
that applies only to such Foreign Subsidiary and its assets (including its
subsidiaries); (ix) the foregoing shall not apply to net worth provisions in
lease and other agreements entered into by the Parent Borrower or any
Subsidiary in the ordinary course of business; and (x) the foregoing shall not
apply to restrictions imposed by the Senior First Lien Note Documents, the
Senior Second Lien Note Documents and the Senior Subordinated Note Documents.
SECTION 6.12. Amendment of Material Documents. The Parent Borrower
will not, and will not permit any Subsidiary to, amend, modify or waive any of
its rights under (a) its certificate of incorporation, by-laws or other
organizational documents, including the terms related to the Existing
Preferred Stock (other than amendments and modifications that are not adverse
to the interests of the Lenders and do not impair the exercise of remedies
under any
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Security Document) or (b) the Senior First Lien Note Documents, the Senior
Second Lien Note Documents or the Senior Subordinated Note Documents (other
than amendments to the Senior First Lien Security Documents or the Senior
Second Lien Security Documents that are not adverse to the interests of the
Lenders and do not impair the exercise of remedies under any Security
Document).
SECTION 6.13. Repayment of Indebtedness. Except pursuant to a
confirmed plan of reorganization in the Chapter 11 Cases and except as
specifically permitted hereunder, no Borrower shall, without the express prior
written consent of the Administrative Agent or pursuant to an order of the
Bankruptcy Court after notice and hearing, make any payment or transfer with
respect to any Lien or Indebtedness incurred or arising prior to the filing of
the Chapter 11 Cases that is subject to the automatic stay provisions of the
Bankruptcy Code whether by way of "adequate protection" under the Bankruptcy
Code or otherwise.
SECTION 6.14. Cash Held by Foreign Subsidiaries. The Parent
Borrower will not permit at any time on any day (a) the aggregate amount of
"cash and cash equivalents" and "marketable securities" of the Foreign
Subsidiaries (other than Foreign Subsidiaries that are Loan Parties), in each
case that would be required to be reflected on a consolidated balance sheet of
the Parent Borrower and the Subsidiaries prepared as of such time in
accordance with GAAP, minus (b) the aggregate amount of payments in such cash
and cash equivalents that the Parent Borrower reasonably and in good faith
determines will be made by the Foreign Subsidiaries that are not Loan Parties
(and will reduce such cash and cash equivalents) on such day to exceed
$10,000,000.
SECTION 6.15. ERISA. The Parent Borrower will not, and will not
permit any Subsidiary to, cause or permit any ERISA Affiliate to, cause or
permit to occur (i) an event that could result in the imposition of a Lien
under Section 412 of the Code or Section 302 or 4068 of ERISA or (ii) an ERISA
Event to the extent such ERISA Event would reasonably be expected to result in
taxes, penalties and other liabilities in an aggregate amount in excess of
$250,000 in the aggregate.
SECTION 6.16. Cancellation of Indebtedness. The Parent Borrower
will not, and will not permit any Subsidiary to, cancel any claim or debt
owing to it, except for reasonable consideration negotiated on an arm's length
basis and in the ordinary course of its business consistent with past
practices.
SECTION 6.17. Change in Fiscal Year; Accounting Policies. The
Parent Borrower will not, and will not permit any Subsidiary to, change its
fiscal year from a year ending December 31 unless required by law, in which
case such Loan Party will give the Administrative Agent at least thirty (30)
days prior written notice thereof. Subject to Section 1.04, the Parent
Borrower will not, and will not permit any Subsidiary to, change its
accounting policies from those used to prepare the financial statements
delivered pursuant to Section 4.01(i) without the prior written consent of the
Administrative Agent
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SECTION 6.18. Financial Covenants. The Parent Borrower shall have
at the end of each fiscal month set forth below, a Fixed Charge Coverage Ratio
for the 12-month period then ended of not less than:
Fiscal Month Ending Minimum Fixed Charge Coverage Ratio
------------------- -----------------------------------
January 31, 2006 0.77:1.00
February 28, 2006 0.77:1.00
March 31, 2006 0.88:1.00
April 30, 2006 0.88:1.00
May 31, 2006 0.90:1.00
June 30, 2006 1.09:1.00
July 31, 2006 1.10:1.00
August 31, 2006 1.10:1.00
each fiscal month thereafter 1.20:1.00
SECTION 6.19. No Additional Deposit Accounts. No Loan Party shall
open, maintain or otherwise have any deposit 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 (a) the accounts set forth on
Schedule 6.19, each of which shall (i) with respect to the Loan Parties (other
than the Canadian Guarantors) on the Effective Date, be subject to a deposit
account control agreement in form and substance reasonably satisfactory to the
Collateral Agent or (ii) with respect to the Canadian Guarantors, be subject
to the cash sweep as provided in the Interim Order, the Canadian Interim
Order, the Final Order and the Canadian Final Order, (b) deposit accounts
established after the Effective Date that are subject to a deposit account
control agreement, in form and substance reasonably satisfactory to the
Collateral Agent, (c) other deposit accounts established solely as payroll and
other zero balance accounts.
SECTION 6.20. Pliant Investment, Inc. and Alliant Company LLC. (a)
Pliant Investment, Inc. shall not hold any assets other than the membership
interest of Alliant Company LLC and may not have any liabilities other than
(i) the liabilities under the Loan Documents and (ii) tax and routine
administrative liabilities in the ordinary course of business and (b) Alliant
Company LLC shall not hold any assets and may not have any liabilities other
than (i) the liabilities under the Loan Documents, (ii) tax and routine
administrative liabilities in the ordinary course of business and (iii) assets
and liabilities related to the indemnity escrow established in connection with
the sale of its assets.
SECTION 6.21. Reclamation Claims. No Loan Party shall enter into
any agreement to return any of its Inventory to any of its creditors for
application against any Prepetition Indebtedness, Prepetition trade payables
or other Prepetition claims under Section 546(h) of the Bankruptcy Code or
allow any creditor to take any setoff or recoupment against any of its
Prepetition Indebtedness, Prepetition trade payables or other Prepetition
claims based upon any such return pursuant to Section 553(b)(1) of the
Bankruptcy Code or otherwise if, after giving effect to any such agreement,
setoff or recoupment, the aggregate amount of Prepetition Indebtedness,
Prepetition trade payables and other Prepetition claims subject to all such
agreements, setoffs and recoupments since the Petition Date would exceed
$500,000.
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SECTION 6.22. Chapter 11 Claims. No Loan Party shall incur,
create, assume, suffer to exist or permit any other superpriority
administrative claim which is pari passu with or senior to the claims of the
Agents and the Lenders against the Borrowers, except as set forth in Section
2.20(b).
ARTICLE VII
Events of Default
Notwithstanding the provisions of Section 362 of the Bankruptcy
Code and without application or motion to the Bankruptcy Court or any notice
to any Loan Party, if any one or more of the following events ("Events of
Default") shall occur:
(a) any Borrower shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) any Borrower shall fail to (i) pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or any other Loan Document, when
and as the same shall become due and payable, or (ii) fail to deliver any
Borrowing Base Certificate required to be delivered pursuant to the terms of
this Agreement, and, in the case of clause (ii), such failure shall continue
unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of the Parent Borrower or any Subsidiary in or in connection with any
Loan Document or any amendment or modification thereof or waiver thereunder,
or in any report, certificate, financial statement or other document furnished
pursuant to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, shall have been incorrect in any
material respect when made or deemed made;
(d) any Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 2.20, 2.23, 2.24, 4.02, 5.02, 5.04
(with respect to the existence of such Borrower) 5.11 or 5.19 or in Article
VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and if such failure is
capable of being cured, such failure shall continue unremedied for a period of
30 days after notice thereof from the Administrative Agent to the Parent
Borrower (which notice will be given at the request of any Lender);
(f) the Parent Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness entered into either (x) Prepetition and which is
affirmed after the Petition Date or (y) Postpetiton, when and as the same
shall become due and payable, including any applicable grace period;
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(g) except for defaults occasioned by the filing of the Chapter 11
Cases and defaults resulting from obligations with respect to which the
Bankruptcy Code prohibits any Loan Party from complying or permits any Loan
Party not to comply, any event or condition occurs that results in any
Material Indebtedness entered into either (x) Prepetition and which is
affirmed after the Petition Date or (y) Postpetiton, becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of
notice) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (g) shall not apply
to secured Indebtedness that becomes due as a result of the voluntary sale,
transfer or other disposition (including as a result of a casualty or
condemnation event) of the property or assets securing such Indebtedness in a
manner not prohibited by this Agreement;
(h) [Intentionally Omitted];
(i) [Intentionally Omitted];
(j) [Intentionally Omitted];
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 (net of amounts covered by insurance as to
which the insurer has not denied liability) shall be rendered against the
Parent Borrower, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Parent Borrower or
any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the reasonable
opinion of the Required Lenders, when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Parent Borrower and the Subsidiaries in an aggregate amount exceeding
(i) $7,000,000 in any year or (ii) $10,000,000 for all periods;
(m) (i) any Loan Document shall for any reason be asserted by the
Parent Borrower or any of the Subsidiaries not to be a legal, valid and
binding obligation of any party thereto, (ii) any Lien purported to be created
under any Security Document shall cease to be, or shall be asserted by any
Loan Party not to be, a valid and perfected Lien on any Collateral, with the
priority required by the Loan Documents, except (A) as a result of the sale or
other disposition of the applicable Collateral in a transaction permitted
under the Loan Documents, (B) as a result of (1) the Collateral Agent's
failure to take any action reasonably requested by the Parent Borrower in
order to maintain a valid and perfected Lien on any Collateral or (2) any
action taken by the Collateral Agent to release any Lien on any Collateral or
(C) Liens on any item of Collateral with a fair market value not exceeding
$500,000, (iii) the Guarantees pursuant to the Guarantee Agreements by the
Loan Parties of any of the Obligations shall cease to be in full force and
effect (other than in accordance with the terms thereof), or shall be asserted
by any Loan Party not to be in effect or not to be legal, valid and binding
obligations, or (iv) the Obligations of any Borrower or the Guarantees thereof
by the Loan Parties pursuant to the
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Security Documents shall be invalidated or otherwise cease, or shall be
asserted by any Loan Party to be invalid or to cease, to be legal, valid and
binding obligations of the parties thereto;
(n) a Change in Control shall occur;
(o) any information contained in any Borrowing Base Certificate is
untrue or incorrect in any respect (other than (i) inadvertent, immaterial
errors not exceeding $250,000 in the aggregate in any Borrowing Base
Certificate) and (ii) errors understating the Borrowing Base); or
(p) the occurrence of any of the following in the Chapter 11
Cases:
(i) the bringing of a motion, taking of any action or the filing of
any plan of reorganization or disclosure statement attendant thereto by a
Loan Party in any Chapter 11 Case: (w) to obtain additional financing
under Section 364(c) or (d) of the Bankruptcy Code not otherwise
permitted pursuant to this Agreement; (x) to grant any Lien other than
Permitted Encumbrances upon or affecting any Collateral; (y) except as
provided in the Interim or Final Order, as the case may be, to use cash
collateral of the Agents under Section 363(c) of the Bankruptcy Code
without the prior written consent of Agent and Lenders; or (z) any other
action or actions materially adverse to the Agents and the Lenders or
their rights and remedies hereunder or their interest in the Collateral;
(ii) the confirmation of any plan of reorganization or disclosure
statement attendant thereto with respect to a Loan Party to which (x) the
Lenders do not consent or otherwise agree to the treatment of their
claims under this Agreement or (y) (1) the Pre-Petition Agents do not
consent or otherwise agree to the treatment of their claims under the
Pre-Petition Loan Agreement or (2) such plan of reorganization does not
contain a provision for termination of the Commitments under and as
defined in the Pre-Petition Loan Agreement and repayment in full in cash
of all of the Obligations under and as defined in the Pre-Petition Loan
Agreement;
(iii) the entry of an order in any of the Chapter 11 Cases
confirming a plan or plans of reorganization that does not contain a
provision for termination of the Commitments and repayment in full in
cash of all of the Obligations under this Agreement on or before the
effective date of such plan or plans;
(iv) the entry of an order amending, supplementing, staying,
vacating or otherwise modifying the Loan Documents or the Interim Order,
the Canadian Interim Order, the Final Order or the Canadian Final Order
without the written consent of all of the Lenders or the filing by any
Loan Party of a motion for reconsideration with respect to the Interim
Order, the Canadian Interim Order, the Final Order or the Canadian Final
Order;
(v) the Final Order is not entered immediately following the
expiration of the Interim Order;
103
(vi) the payment of, or application for authority to pay, any
pre-petition claim without the Lenders' prior written consent or pursuant
to an order of the Bankruptcy Court after notice and hearing unless
otherwise permitted under this Agreement;
(vii) the allowance of any claim or claims under Section 506(c) of
the Bankruptcy Code against or with respect to any of the Collateral;
(viii) the appointment of an interim or permanent trustee in the
Chapter 11 Cases or the appointment of a receiver or an examiner in the
Chapter 11 Cases with expanded powers to operate or manage the financial
affairs, the business, or reorganization of such Borrower; or the sale
without the Agents' and the Lenders' consent, of all or substantially all
of such Borrower's assets either through a sale under Section 363 of the
Bankruptcy Code, through a confirmed plan of reorganization in the
Chapter 11 Cases, or otherwise that does not provide for payment in full
of the Obligations and termination of the Lenders' commitment to make
Loans;
(ix) the dismissal of the Chapter 11 Cases, or the conversion of the
Chapter 11 Cases from one under Chapter 11 to one under Chapter 7 of the
Bankruptcy Code or any Loan Party shall file a motion or other pleading
seeking the dismissal of the Chapter 11 Cases under Section 1112 of the
Bankruptcy Code or otherwise;
(x) the entry of an order by the Bankruptcy Court granting relief
from or modifying the automatic stay of Section 362 of the Bankruptcy
Code or the Canadian Stay Order (x) to allow any creditor to execute upon
or enforce a Lien on any Collateral, or (y) with respect to any Lien of
or the granting of any Lien on any Collateral to any state or local
environmental or regulatory agency or authority, which in either case
would have a Material Adverse Effect;
(xi) the commencement of a suit or action against any Agent or any
Lender and, as to any suit or action brought by any Person other than a
Loan Party or a subsidiary, officer or employee of a Loan Party, the
continuation thereof without dismissal for thirty (30) days after service
thereof on such Agent or such Lender, that asserts by or on behalf of a
Borrower, the Environmental Protection Agency, any state environmental
protection or health and safety agency, or any official committee in the
Chapter 11 Cases, any claim or legal or equitable remedy which seeks
subordination of the claim or Lien of the Collateral Agent or the
Lenders;
(xii) the entry of an order in the Chapter 11 Cases avoiding or
requiring repayment of any portion of the payments made on account of the
Obligations owing under this Agreement;
(xiii) the failure of any Loan Party to perform any of its
obligations under the Interim Order, the Canadian Interim Order, the
Final Order or the Canadian Final Order; or
(xiv) the entry of an order in any of the Chapter 11 Cases or by the
Canadian Court granting any other super priority administrative claim or
Lien equal or superior to
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that granted to the Collateral Agent, on behalf of itself and the
Lenders, except for the Carve-Out Amount and the Senior Claims;
then, and in every such event, and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders (or such other Lenders as and when provided in the
Security Documents) shall, notwithstanding the provisions of Section 362 of
the Bankruptcy Code, without any application, motion or notice to, or order
from, the Bankruptcy Court, except as expressly provided herein, take either
or both of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate
immediately, (ii) declare the Loans then outstanding to be due and payable in
whole (or in part, in which case any principal not so declared to be due and
payable (the "remaining Loans") may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations (other than any remaining Loans) of each Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Borrower and (iii) exercise any rights and remedies provided to any Agent
under the Loan Documents or at law or equity, including all remedies provided
under the Code; and pursuant to the Interim Order and the Final Order, the
automatic stay of Section 362 of the Bankruptcy Code or the Canadian Stay
Order shall be modified and vacated to permit the Lenders to exercise their
remedies under this Agreement and the Loan Documents, without further
application or motion to, or order from, the Bankruptcy Court or the Canadian
Court; provided, however, that notwithstanding anything to the contrary
contained herein, the Collateral Agent shall be permitted to exercise any
remedy in the nature of a liquidation of, or foreclosure on, any interest of
any Loan Party in the Collateral only upon three (3) Business Days' prior
written notice to such Borrower, the Borrowers' bankruptcy counsel, counsel
approved by the Bankruptcy Court for the Committee and the U.S. Trustee. If
any Event of Default has occurred and is continuing under clause (a) or (b) of
this Article then the Administrative Agent shall, or if any other Event of
Default has occurred and is continuing, the Administrative Agent may (and at
the written request of the Required Lenders shall), notwithstanding the
provisions of Section 362 of the Bankruptcy Code, without any application,
motion or notice to, or order from, the Bankruptcy Court, increase the rate of
interest applicable to the Loans and any fee or other amount payable by any
Borrower hereunder to the rate set forth in Section 2.12(d). Upon the
occurrence of an Event of Default and the exercise by Lenders of their rights
and remedies under this Agreement and the other Loan Documents, the Loan
Parties shall assist the Lenders in effecting a sale or other disposition of
the Collateral upon such terms as are designed to maximize the proceeds
obtainable from such sale or other disposition.
ARTICLE VIII
The Agents
Each of the Lenders and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. Without limiting the generality of the foregoing, each Lender hereby
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authorizes GE Capital to consent, on behalf of each Lender, to an Interim
Order substantially in the form attached as Exhibit F, to the Canadian Interim
Order, to the Final Order and the Canadian Final Order to be negotiated
between the Borrowers, the Agents and the Committee.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Parent Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any
duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated by the Loan
Documents that the Administrative Agent is required to exercise in writing by
the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 10.02), and
(c) except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Parent Borrower or any of
the Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by
it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.02) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall not be deemed
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Parent Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv)
the validity, enforceability, effectiveness or genuineness of any Loan
Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for any of the Borrowers), independent
accountants and other experts selected by it, and
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shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor to the
Administrative Agent as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the other Agents, the Lenders, the Issuing
Bank and the Parent Borrower. Upon any such resignation, the Required Lenders
shall have the right, with the consent of the Parent Borrower (such consent
not to be unreasonably withheld), to appoint a successor. If no successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Administrative
Agent that shall be a bank with an office in New York, New York, or an
Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Parent Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Parent Borrower
and such successor. After the Administrative Agent's resignation hereunder,
the provisions of this Article and Section 10.03 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or related agreement or any document
furnished hereunder or thereunder.
The provisions of this Article shall apply to the Collateral Agent
as though named herein as the Administrative Agent. Notwithstanding any other
provision contained herein, neither the Arranger nor the Syndication Agent
shall, in their capacity as such, have any responsibilities under this
Agreement or the other Loan Documents.
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ARTICLE IX
[Intentionally Omitted]
ARTICLE X
Miscellaneous
SECTION 10.01. Notices. (a) Except in the case of notices and
other communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(i) if to any Borrower, to the Parent Borrower at 0000 Xxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Chief Financial
Officer (Telecopy No. (000) 000-0000), with a copy to Sidley Xxxxxx Xxxxx
& Wood LLP, Xxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxxx X. Gold, (Telecopy No. (000) 000-0000);
(ii) if to the Administrative Agent, the Collateral Agent or the
Swingline Lender, to General Electric Capital Corporation, 000 Xxxx
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Account Manager -
Pliant Corporation (Telecopy No. (000) 000-0000), with copies to General
Electric Capital Corporation, 000 Xxxxxxx 0, Xxxxxxx, Xxxxxxxxxxx 00000,
Attention: Corporate Counsel - Commercial Finance (Telecopy No. (203)
956-4001) and Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 000 Xxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxx X. Xxxxxx,
III (Telecopy No. (000) 000-0000); (iii) if to the Issuing Bank, c/o
General Electric Capital Corporation, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attention: Account Manager - Pliant Corporation (Telecopy
No. (000) 000-0000), with a copy to General Electric Capital Corporation,
000 Xxxxxxx 0, Xxxxxxx, Xxxxxxxxxxx 00000, Attention: Corporate Counsel -
Commercial Finance (Telecopy No. (000) 000-0000);
(iv) [Intentionally Omitted]; and
(v) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may
be delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender or Issuing Bank. The
Administrative Agent or the Parent Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval
of such procedures may be limited to particular notices or communications.
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(c) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 10.02. Waivers; Amendments. (a) No failure or delay by any
Agent, the Issuing Bank or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of Agents, the Issuing Bank and the
Lenders hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan
or issuance or a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether any Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Parent Borrower and the Required Lenders or, in the case
of any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent or Collateral Agent, as applicable,
and the Loan Party or Loan Parties that are parties thereto, in each case with
the consent of the Required Lenders; provided that no such agreement shall
have the effect of:
(i) increasing the Commitment of any Lender without the consent of
each Lender (provided that the Administrative Agent may make Protective
Advances as set forth in Section 2.15);
(ii) reducing the principal amount of any Loan or LC Disbursement or
reducing the rate of interest thereon, or reducing any fees payable
hereunder, without the written consent of each Lender affected thereby
and the Agents;
(iii) postponing the maturity of any Loan, or any scheduled date of
payment of the principal amount of any Loan, or the required date of
reimbursement of any LC Disbursement, or any date for the payment of any
interest thereon, or any fees payable hereunder, or reducing the amount
of, waiving or excusing any such payment, or postponing the scheduled
date of expiration of any Commitment, without the written consent of each
Lender affected thereby and the Agents;
(iv) changing Section 2.17(b), (c) or (d) in a manner that would
alter the way that payments are shared, without the written consent of
each Lender;
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(v) changing any of the provisions of this Section or the definition
of "Required Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders (or Lenders of any Class,
including as contemplated by the term "Required Domestic Lenders")
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written
consent of each Lender (or each Lender of such Class, as the case may
be);
(vi) releasing any Loan Party from its Guarantee under any Guarantee
Agreement (except with respect to the dissolution, consolidation or
merger of such Guarantor in accordance with the terms of Section 6.04 or
as expressly provided in the applicable Guarantee Agreement), or limiting
its liability in respect of such Guarantee, without the written consent
of each Lender; provided, however, that if the Required Lenders have
approved the sale of the Equity Interests of such Loan Party, the consent
of the Required Lenders (and not each Lender) shall be required for such
release;
(vii) releasing all or substantially all the Collateral from the
Liens of the Security Documents (except as expressly provided therein),
without the written consent of each Lender;
(viii) changing any provision of any Loan Document to permit the
Parent Borrower or any of the Subsidiaries to enter into any accounts
receivable or inventory securitization transaction or other similar
financing arrangement, including any sale of, or any grant of a security
interest in, accounts receivable or inventory in connection with any
asset securitization or other similar financing arrangement, without the
written consent of Lenders having Commitments representing in the
aggregate more than 66-(2)/3% of the total amount of the Commitments at
such time; or
(ix) changing any provision of any Loan Document in a manner that by
its terms adversely affects the rights in respect of payments due to
Lenders holding Loans of any Class differently than those holding Loans
of any other Class without the written consent of Lenders holding a
majority in interest of the outstanding Loans and unused Commitments of
each affected Class; and
provided further that no such agreement shall amend, modify or otherwise
affect the rights or duties of any Agent, the Issuing Bank or the
Swingline Lender without the prior written consent of such Agent, the
Issuing Bank or the Swingline Lender, as the case may be.
(c) If, in connection with any proposed amendment, waiver or
consent requiring the consent of "each Lender" or "each Lender affected
thereby," the consent of the Required Lenders is obtained, but the consent of
other necessary Lenders is not obtained (any such Lender whose consent is
necessary but not obtained being referred to herein as a "Non-Consenting
Lender"), then so long as no Agent is a Non-Consenting Lender, the
Administrative Agent may elect to replace a Non-Consenting Lender as a Lender
party to this Agreement, provided that, concurrently with such replacement,
(i) another bank or other entity which is reasonably satisfactory to the
Parent Borrower and the Administrative Agent shall agree, as of such date, to
purchase for cash the Loans and other Obligations due to the Non-Consenting
Lender pursuant to
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an Assignment and Assumption and to become a Lender for all purposes under
this Agreement and to assume all obligations of the Non-Consenting Lender to
be terminated as of such date and to comply with the requirements of clause
(b) of Section 10.04, and (ii) the Borrowers shall pay to such Non-Consenting
Lender in same day funds on the day of such replacement (1) all interest, fees
and other amounts then accrued but unpaid to such Non-Consenting Lender by the
Borrower hereunder to and including the date of termination, including without
limitation payments due to such Non-Consenting Lender under Sections 2.14 and
2.16, and (2) an amount, if any, equal to the payment which would have been
due to such Lender on the day of such replacement under Section 2.15 had the
Loans of such Non-Consenting Lender been prepaid on such date rather than sold
to the replacement Lender.
SECTION 10.03. Expenses; Indemnity; Damage Waiver; Joint and
Several Obligations. (a) The Borrowers shall pay (i) all reasonable
out-of-pocket expenses incurred by the Agents, the Arranger and their
respective Affiliates (other than the Sponsor or any Person Controlled by the
Sponsor), including the reasonable fees, charges and disbursements of counsel
for the Agents and the Arranger, in connection with the syndication of the
credit facilities provided for herein, the preparation and administration of
the Loan Documents or any amendments, modifications or waivers of the
provisions thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the Agents, the
Issuing Bank, the Arranger or any Lender, including the fees, charges and
disbursements of any counsel for the Agents, the Issuing Bank, the Arranger or
any Lender, in connection with the enforcement or protection of its rights in
connection with the Loan Documents, including its rights under this Section,
or in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) The Borrowers shall indemnify each Agent, the Issuing Bank,
the Arranger and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Loan Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by the Issuing Bank to honor
a demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or Release of
Hazardous Materials on or from any Mortgaged Property or any other property
currently or formerly owned or operated by the Parent Borrower or any of the
Subsidiaries, or any Environmental Liability related in any way to the Parent
Borrower or any of the Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not,
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as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or any
Affiliate of such Indemnitee (or of any officer, director, employee, advisor
or agent of such Indemnitee or any such Indemnitee's Affiliates) or to the
extent such damages constitute special, indirect or consequential damages (as
opposed to direct or actual damages).
(c) To the extent that the Borrowers fail to pay any amount
required to be paid by it to any Agent, the Issuing Bank, the Arranger or the
Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to such Agent, the Issuing Bank, such Arranger or the
Swingline Lender, as the case may be, such Lender's pro rata share (determined
as of the time that the applicable unreimbursed expense or indemnity payment
is sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against such Agent, the Issuing Bank or the
Swingline Lender in its capacity as such. For purposes hereof, a Lender's "pro
rata share" shall be determined based upon its share of the sum of the total
Revolving Exposures and unused Commitments at the time.
(d) To the extent permitted by applicable law, the Borrowers shall
not assert, and each of them hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.
(e) Each Borrower agrees, jointly and severally, to pay on demand
all fees, costs and expenses (including reasonable fees and expenses of all of
its counsel, advisors, consultants and auditors) incurred in connection with
(i) the obtaining of approval of the Loan Documents by the Bankruptcy Court;
and (ii) the preparation and review of pleadings, documents and reports
related to the Chapter 11 Cases and any subsequent case under Chapter 7 of the
Bankruptcy Code, attendance at meetings, court hearings or conferences related
to the Chapter 11 Cases and any subsequent case under Chapter 7 of the
Bankruptcy Code, and general monitoring of the Chapter 11 Cases and any
subsequent case under Chapter 7 of the Bankruptcy Code.
(f) All amounts due under this Section shall be payable promptly
after written demand therefor. Each Borrower shall be jointly liable for all
expense reimbursement and indemnification obligations under this Section
10.03, and all other Obligations of the Borrowers under this Agreement.
SECTION 10.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit and including,
with respect to each Borrower, the estate of such Borrower, any trustee or
successor-in-interest of such Borrower in its Chapter 11 Case or any
subsequent case commenced under Chapter 7 of the Bankruptcy Code), except that
(i) no Borrower may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and
any attempted assignment or transfer by any Borrower without such consent
112
shall be null and void) and (ii) no Lender may assign or otherwise transfer
its rights or obligations hereunder except in accordance with this Section.
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors
and assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit), Participants (to the extent provided in
paragraph (c) of this Section) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Agents, the Issuing Bank, the
Arranger and the Lenders) any legal or equitable right, remedy or claim under
or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld or delayed) of:
(A) the Parent Borrower; provided that no consent of the Parent
Borrower shall be required (1) for an assignment to a Lender, an
Affiliate of a Lender or an Approved Fund or (2) if an Event of
Default has occurred and is continuing;
(B) the Administrative Agent; and
(C) the Swingline Lender.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an
Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender's Commitment or
Loans of any Class, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of
the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be
less than $1,000,000 unless each of the Parent Borrower and the
Administrative Agent otherwise consents; provided that no such
consent of the Parent Borrower shall be required if an Event of
Default has occurred and is continuing;
(B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and
obligations under this Agreement, except that this clause (B) shall
not be construed to prohibit the assignment of a proportionate part
of all the assigning Lender's rights and obligations in respect of
one Class of Commitments or Loans;
(C) the parties to each such assignment relating to the
assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and
recordation fee of $3,500; and
(D) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire and all
applicable tax documentation.
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For the purposes of this Section 10.04(b), the term "Approved
Fund" has the following meaning:
"Approved Fund" means any Person (other than a natural person)
that is engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business and that
is administered, managed or controlled by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers, manages
or controls a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of
an Assignment and Assumption covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Sections 2.14, 2.15, 2.16 and 10.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply
with this Section 10.04 shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an agent
of the Parent Borrower, shall maintain at one of its offices a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each
Lender pursuant to the terms hereof from time to time (the "Register").
The entries in the Register shall be conclusive, and the Parent Borrower,
each Domestic Subsidiary Borrower, the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by
the Parent Borrower, the Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
and all applicable tax documentation executed by an assigning Lender and
an assignee, the assignee's completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing
and recordation fee referred to in this Section and any written consent
to such assignment required by this Section, the Administrative Agent
shall accept such Assignment and Assumption and record the information
contained therein in the Register. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(c) (i) Any Lender may, without the consent of any Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or
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other entities (a "Participant") in all or a portion of such Lender's rights
and obligations under this Agreement (including all or a portion of its
Commitment of any Class and the Loans owing to it); provided that (A) such
Lender's obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) each Borrower, the Administrative
Agent, the Issuing Bank and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in clauses (i) through (vii) of the first
proviso to Section 10.02(b) that affects such Participant. Subject to
paragraph (c)(ii) of this Section, the Borrowers agree that each Participant
shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 10.08 as
though it were a Lender; provided such Participant agrees to be subject to
Section 2.17(d) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.16 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is
made with the Parent Borrower's prior written consent. A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to
the benefits of Section 2.16 unless the Parent Borrower is notified of
the participation sold to such Participant and such Participant agrees,
for the benefit of the Borrowers, to comply with Section 2.16(e) as
though it were a Lender.
(d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
(e) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPC"), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Parent Borrower, the option to
provide to the Borrowers all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to the Borrowers pursuant to this
Agreement; provided, however, that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof. The making of a Loan by an SPC hereunder shall utilize the
applicable Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall
115
remain with the Granting Lender). In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior
indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the
United States or any State thereof, or the laws of Canada or any province or
territory thereof. In addition, notwithstanding anything to the contrary
contained in this Section 10.04, any SPC may (i) with notice to, but without
the prior written consent of, the Parent Borrower and the Administrative Agent
and without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to the Granting Lender or to any financial institutions
(consented to by the Parent Borrower and the Administrative Agent) providing
liquidity and/or credit support to or for the account of such SPC to support
the funding or maintenance of Loans and (ii) disclose on a confidential basis
any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC.
SECTION 10.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that any Agent, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other
amount payable under this Agreement is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.14, 2.15, 2.16, 10.03 and 10.13 and
Article VIII shall survive and remain in full force and effect regardless of
the consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This
Agreement, the other Loan Document and any separate letter agreements with
respect to fees payable to the Agents, the Arranger or the Issuing Bank
constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it
shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or other
electronic transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.
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SECTION 10.07. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized (notwithstanding the provisions of Section 362 of the Bankruptcy
Code, without any application, motion or notice to, or order from, the
Bankruptcy Court) at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of any Borrower against any of and all the obligations of the
Borrowers now or hereafter existing under this Agreement or any other Loan
Document held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) that such Lender
may have.
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) Each of the Borrowers hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of the
Bankruptcy Court, in any action or proceeding arising out of or relating to
any Loan Document, or for recognition or enforcement of any judgment, and each
of parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in the Bankruptcy Court; provided, however that the Agents, the Lenders and
the Borrowers acknowledge that (i) any appeals from the Bankruptcy Court may
have to be heard by a court other than the Bankruptcy Court and (ii) matters
pertaining to any order of the Canadian Court may have to be heard by the
Canadian Court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right
that the Administrative Agent, the Collateral Agent, the Issuing Bank or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against any Borrower or its properties in
the courts of any jurisdiction.
(c) Each of the Borrowers hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or any
other Loan Document in any court referred to in paragraph (b) of this Section.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
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(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 10.01. Nothing in
this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 10.12. Confidentiality. Each of the Agents, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and
its Affiliates' investment advisors, directors, officers, employees and
agents, including accountants, legal counsel and other advisors (the
"Representatives") and any direct or indirect contractual counterparty in swap
agreements entered into in connection with a Lender's outstanding Loans from
time to time or to such contractual counterparty's professional advisor (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential and, in the case of any such contractual
counterparty or its professional advisor, such persons shall agree in writing
to be bound by the provisions of this Section 10.12), (b) to the extent
requested or demanded by any Governmental Authority or any self-regulatory
organization (including the National Association of Insurance Commissioners or
other similar organization), (c) to the extent required by applicable laws or
regulations or by any subpoena, order or similar legal process; provided that,
to the extent reasonably practicable and not prohibited by applicable laws or
regulations or by any judicial or administrative order, such Person will
provide the Parent Borrower with prior notice of such disclosure, (d) any
nationally recognized rating agency that requires access to information about
a Lender's investment portfolio in connection with ratings issued with respect
to such Lender, (e) to any other party to this Agreement, (f) in connection
with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (g) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement, or (ii) any actual
or prospective counterparty (or its advisors) to any swap
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or derivative transaction relating to the Parent Borrower and its obligations,
(h) with the consent of the Parent Borrower or (i) to the extent such
Information (i) becomes publicly available other than as a result of a breach
of this Section or (ii) becomes available to any Agent, the Issuing Bank or
any Lender on a nonconfidential basis from a source other than the Parent
Borrower, any Subsidiary or any of their Representatives that is not known to
such Person to be subject to any obligation of confidentiality to the Parent
Borrower or any Subsidiary. For the purposes of this Section, "Information"
means all information received from the Parent Borrower, any Subsidiary or any
of their Representatives relating to the Parent Borrower, the Subsidiaries or
their businesses, other than any such information that is available to any
Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to
disclosure by the Parent Borrower or any Subsidiary. Any Person required to
maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 10.13. Conversion of Currencies. (a) If, for the purpose
of obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto agrees, to
the fullest extent that it may effectively do so, that the rate of exchange
used shall be that at which in accordance with normal banking procedures in
the relevant jurisdiction the first currency could be purchased with such
other currency on the Business Day immediately preceding the day on which
final judgment is given.
(b) The obligations of the Borrowers in respect of any sum due to
any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than the currency in which such sum is stated to be
due hereunder (the "Agreement Currency"), be discharged only to the extent
that, on the Business Day following receipt by the Applicable Creditor of any
sum adjudged to be so due in the Judgment Currency, the Applicable Creditor
may in accordance with normal banking procedures in the relevant jurisdiction
purchase the Agreement Currency with the Judgment Currency; if the amount of
the Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, each of the Borrowers agrees,
as a separate obligation and notwithstanding any such judgment, to indemnify
the Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 10.13 shall survive the termination of this
Agreement and the payment of all other amounts owing hereunder.
SECTION 10.14. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any
Loan, together with all fees, charges and other amounts that are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") that may be contracted
for, charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of
such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest
and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and
the interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until
such cumulated amount, together
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with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 10.15. Conflict of Terms. Except as otherwise provided in
this Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement, the Interim Order, the Final Order, the Canadian Interim Order or
the Canadian Final Order conflicts with any provision in any of the other Loan
Documents, the provision contained in the Interim Order, the Final Order, the
Canadian Interim Order or the Canadian Final Order, as the case may be, shall
govern and control.
SECTION 10.16. Parties Including Trustees; Bankruptcy Court
Proceedings. This Agreement, the other Loan Documents, and all Liens created
hereby or pursuant hereto or to any other Loan Document shall be binding upon
each Loan Party, the estate of each Borrower, and any trustee or successor in
interest of any Borrower in the Chapter 11 Cases or any subsequent case
commenced under Chapter 7 of the Bankruptcy Code, and shall not be subject to
Section 365 of the Bankruptcy Code. This Agreement and the other Loan
Documents shall be binding upon, and inure to the benefit of, the successors
of the Agents and the Lenders and their respective assigns, transferees and
endorsees. The Liens created by this Agreement and the other Loan Documents
shall be and remain valid and perfected in the event of the substantive
consolidation or conversion of the Chapter 11 Cases or any other bankruptcy
case of any Loan Party to a case under Chapter 7 of the Bankruptcy Code or in
the event of dismissal of the Chapter 11 Cases or the release of any
Collateral from the jurisdiction of the Bankruptcy Court for any reason,
without the necessity that Lenders file financing statements or otherwise
perfect its security interests or Liens under applicable law.
SECTION 10.17. Pre-Petition Loan Agreement. The Borrowers hereby
agree that (i) this Agreement is separate and distinct from the Pre-Petition
Loan Agreement and (ii) the Pre-Petition Loan Agreement is in full force and
effect.
SECTION 10.18. Agents as Party in Interest. Each Borrower hereby
stipulates and agrees that, until the repayment in full of the Obligations and
the termination of this Agreement, each Agent is and shall remain a party in
interest in the Chapter 11 Cases and shall have the right to participate,
object and be heard in any motion or proceeding in connection therewith.
Without limitation of the foregoing, each Agent shall have the right to make
any motion or raise any objection it deems to be in its interest (specifically
including but not limited to objections to use of proceeds of the Loans, to
payment of professional fees and expenses or the amount thereof, to sales or
other transactions outside the ordinary course of business or to assumption or
rejection of any executory contract or lease), until the repayment in full of
the Obligations and the termination of this Agreement.
ARTICLE XI
Cross-Guaranty, Subrogation, Contribution and Subordination
SECTION 11.01. Cross-Guaranty. Each Borrower hereby agrees that
such Borrower is jointly and severally liable for, and hereby absolutely and
unconditionally
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guarantees to the Agents and Lenders and their respective successors and
assigns, the full and prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of, all Obligations owed or
hereafter owing to the Agents and the Lenders by each other Borrower. Each
Borrower agrees that its guaranty obligation hereunder is a continuing
guaranty of payment and performance and not of collection, that its
obligations under this Article XI shall not be discharged until payment and
performance, in full, of the Obligations has occurred, and that its
obligations under this Article XI shall be absolute and unconditional,
irrespective of, and unaffected by,
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Borrower is or may
become a party;
(b) the absence of any action to enforce this Agreement (including
this Article XI) or any other Loan Document or the waiver or consent by the
Agents and the Lenders with respect to any of the provisions thereof;
(c) the existence, value or condition of, or failure to perfect
its Lien against, any security for the Obligations or any action, or the
absence of any action, by the Agents and Lenders in respect thereof (including
the release of any such security);
(d) the insolvency of any Loan Party; or
(e) any other action or circumstances that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Borrower shall be regarded, and shall be in the same position, as
principal debtor with respect to the Obligations guaranteed hereunder.
SECTION 11.02. Waivers by the Borrowers. Each Borrower expressly
waives all rights it may have now or in the future under any statute, or at
common law, or at law or in equity, or otherwise, to compel the Agents or the
Lenders to marshal assets or to proceed in respect of the Obligations
guaranteed hereunder against any other Loan Party, any other party or against
any security for the payment and performance of the Obligations before
proceeding against, or as a condition to proceeding against, such Borrower. It
is agreed among each Borrower, the Agents and the Lenders that the foregoing
waivers are of the essence of the transaction contemplated by this Agreement
and the other Loan Documents and that, but for the provisions of this Article
XI and such waivers, the Agents and the Lenders would decline to enter into
this Agreement.
SECTION 11.03. Benefit of Guaranty. Each Borrower agrees that the
provisions of this Article XI are for the benefit of the Agents and Lenders
and their respective successors, transferees, endorsees and assigns, and
nothing herein contained shall impair, as between any other Borrower and the
Agents or the Lenders, the obligations of such other Borrower under the Loan
Documents.
SECTION 11.04. Waiver of Subrogation, Etc. Notwithstanding
anything to the contrary in this Agreement or in any other Loan Document, and
except as set forth in
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Section 11.07, each Borrower hereby expressly and irrevocably waives any and
all rights at law or in equity (notwithstanding the provisions of Section 362
of the Bankruptcy Code, without any application, motion or notice to, or order
from, the Bankruptcy Court) to subrogation, reimbursement, exoneration,
contribution, indemnification or set off and any and all defenses available to
a surety, guarantor or accommodation co-obligor. Each Borrower acknowledges
and agrees that this waiver is intended to benefit the Agents and the Lenders
and shall not limit or otherwise affect such Borrower's liability hereunder or
the enforceability of this Article XI, and that the Agents, the Lenders and
their respective successors and assigns are intended third party beneficiaries
of the waivers and agreements set forth in this Section 11.04.
SECTION 11.05. Election of Remedies. If any Agent or any Lender
may, under applicable law, proceed to realize its benefits under any of the
Loan Documents giving such Agent or such Lender a Lien upon any Collateral,
whether owned by any Borrower or by any other Person, either by judicial
foreclosure or by non judicial sale or enforcement, any Agent or any Lender
may, at its sole option, determine which of its remedies or rights it may
pursue without affecting any of its rights and remedies under this Article XI.
If, in the exercise of any of its rights and remedies, any Agent or any Lender
shall forfeit any of its rights or remedies, including its right to enter a
deficiency judgment against any Borrower or any other Person, whether because
of any applicable laws pertaining to "election of remedies" or the like, each
Borrower hereby consents to such action by such Agent or such Lender and
waives any claim based upon such action, even if such action by such Agent or
such Lender shall result in a full or partial loss of any rights of
subrogation that each Borrower might otherwise have had but for such action by
such Agent or such Lender. Any election of remedies that results in the denial
or impairment of the right of any Agent or any Lender to seek a deficiency
judgment against any Borrower shall not impair any other Borrower's obligation
to pay the full amount of the Obligations. In the event any Agent or any
Lender shall bid at any foreclosure or trustee's sale or at any private sale
permitted by law or the Loan Documents, such Agent or such Lender may bid all
or less than the amount of the Obligations and the amount of such bid need not
be paid by such Agent or such Lender but shall be credited against the
Obligations. The amount of the successful bid at any such sale, whether any
Agent, any Lender or any other party is the successful bidder, shall be
conclusively deemed to be the fair market value of the Collateral and the
difference between such bid amount and the remaining balance of the
Obligations shall be conclusively deemed to be the amount of the Obligations
guaranteed under this Article XI, notwithstanding that any present or future
law or court decision or ruling may have the effect of reducing the amount of
any deficiency claim to which any Agent or any Lender might otherwise be
entitled but for such bidding at any such sale.
SECTION 11.06. Limitation. Notwithstanding any provision herein
contained to the contrary, each Borrower's liability under this Article XI
(which liability is in any event in addition to amounts for which such
Borrower is primarily liable under Article II) shall be limited to an amount
not to exceed as of any date of determination the greater of:
(a) the net amount of all Loans advanced to any other Borrower
under this Agreement and then re-loaned or otherwise transferred to, or for
the benefit of, such Borrower; and
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(b) the amount that could be claimed by the Agents and the Lenders
from such Borrower under this Article XI without rendering such claim voidable
or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under
any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law after taking into account,
among other things, such Borrower's right of contribution and indemnification
from each other Borrower under Section 11.07.
SECTION 11.07. Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Borrower shall make a payment under
this Article XI of all or any of the Obligations (other than Loans made to
that Borrower for which it is primarily liable) (a "Guarantor Payment") that,
taking into account all other Guarantor Payments then previously or
concurrently made by any other Borrower, exceeds the amount that such Borrower
would otherwise have paid if each Borrower had paid the aggregate Obligations
satisfied by such Guarantor Payment in the same proportion that such
Borrower's "Allocable Amount" (as defined below) (as determined immediately
prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of
each of the Borrowers as determined immediately prior to the making of such
Guarantor Payment, then, following indefeasible payment in full in cash of the
Obligations and termination of the Commitments, such Borrower shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Borrower for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect immediately prior to
such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Borrower shall be equal to the maximum amount of the claim that could then be
recovered from such Borrower under this Article XI without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.
(c) This Section 11.07 is intended only to define the relative
rights of the Borrowers and nothing set forth in this Section 11.07 is
intended to or shall impair the obligations of the Borrowers, jointly and
severally, to pay any amounts as and when the same shall become due and
payable in accordance with the terms of this Agreement, including Section
11.01. Nothing contained in this Section 11.07 shall limit the liability of
any Borrower to pay the Loans made directly or indirectly to that Borrower and
accrued interest, fees and expenses with respect thereto for which such
Borrower shall be primarily liable.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of the Borrower to which
such contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against other Loan
Parties under this Section 11.07 shall be exercisable upon the full and
indefeasible payment of the Obligations and the termination of the
Commitments.
SECTION 11.08. Liability Cumulative. The liability of the
Borrowers under this Article XI is in addition to and shall be cumulative with
all liabilities of each Borrower to the
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Agents and the Lenders under this Agreement and the other Loan Documents to
which such Borrower is a party or in respect of any Obligations or obligation
of the other Borrower, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
SECTION 11.09. Subordination.
(a) Each Loan Party covenants and agrees that the payment of any
indebtedness and all obligations and liabilities owing by any Loan Party in
favor of any other Loan Party, whether now existing or hereafter incurred
(collectively, the "Intercompany Obligations") is subordinated, to the extent
and in the manner provided in this Section 11.09, to the prior payment in full
of all Obligations owed or hereafter owing to the Agents and the Lenders by
the Borrowers and that such subordination is for the benefit of the Agents for
themselves and the Lenders.
(b) Each Loan Party hereby (i) authorizes the Agents on behalf of
the Lenders to demand specific performance of the terms of this Section 11.09
at any time when any Loan Party shall have failed to comply with any
provisions of this Section 11.09 which are applicable to it and (ii)
irrevocably waives any defense based on the adequacy of a remedy at law, which
might be asserted as a bar to such remedy of specific performance.
(c) Upon any distribution of assets of any Loan Party in any
dissolution, winding up, liquidation or reorganization (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or otherwise):
(i) The Agents and Lenders shall first be entitled to receive
payment in full in cash of the Obligations before any Loan Party is
entitled to receive any payment on account of the Intercompany
Obligations.
(ii) Any payment or distribution of assets of any Loan Party of any
kind or character, whether in cash, property or securities, to which any
other Loan Party would be entitled except for the provisions of this
Section 11.09(c), shall be paid by the liquidating trustee or agent or
other Person making such payment or distribution directly to the
Administrative Agent for the benefit of the Lenders in the manner set
forth herein, to the extent necessary to make payment in full of all
Obligations remaining unpaid after giving effect to any concurrent
payment or distribution or provisions therefor to the Administrative
Agent for itself and Lenders.
(iii) In the event that notwithstanding the foregoing provisions of
this Section 11.09(c), any payment or distribution of assets of any Loan
Party of any kind or character, whether in cash, property or securities,
shall be received by any other Loan Party on account of any Intercompany
Obligations before all Obligations are paid in full, such payment or
distribution shall be received and held in trust for and shall be paid
over to the Administrative Agent for itself and Lenders for application
to the payment of the Obligations until all of the Obligations shall have
been paid in full, after giving effect to any concurrent payment or
distribution or provision therefor to the Administrative Agent for itself
and Lenders.
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(d) No right of the Administrative Agent, any Lender or any other
present or future holders of the Obligations to enforce subordination as
provided herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of any Loan Party or by any act or failure
to act, in good faith, by any Loan Party, or by any noncompliance by any Loan
Party with the terms of the Intercompany Obligations, regardless of any
knowledge thereof which any Loan Party may have or be otherwise charged with.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
BORROWERS: PLIANT CORPORATION
By:_______________________________________
Name:
Title:
UNIPLAST HOLDINGS INC.
By:_______________________________________
Name:
Title:
UNIPLAST U.S., INC.
By:_______________________________________
Name:
Title:
CREDIT AGREEMENT S-1
AGENTS AND LENDERS: GENERAL ELECTRIC CAPITAL CORPORATION,
individually, as Administrative Agent,
Collateral Agent, Swingline Lender and
as a Lender
By:_______________________________________
Name:
Title: Duly Authorized Signatory
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
individually, as Syndication Agent and
as a Lender
By:_______________________________________
Name:
Title:
CREDIT AGREEMENT S-2
