BUCKEYE CELLULOSE CORPORATION
CREDIT AGREEMENT
Dated as of May 28, 1997
FLEET NATIONAL BANK, Agent
SUNTRUST BANK, CENTRAL FLORIDA N.A., Documentation Agent
TORONTO DOMINION (TEXAS), INC., Documentation Agent
TABLE OF CONTENTS
Page
1. Definitions; Certain Rules of Construction............................. 1
2. The Credits............................................................ 23
2.1. Revolving Credit ................................................. 23
2.1.1. Revolving Loan............................................. 23
2.1.2. Maximum Amount of Revolving Credit......................... 23
2.1.3. Borrowing Requests......................................... 24
2.1.4. Revolving Loan Account; Revolving Notes.................... 24
2.2. Money Market Rate Credit.......................................... 24
2.2.1. Request by the Company..................................... 25
2.2.2. Dissemination of Requests for Bids for Money Market Loans.. 25
2.2.3. Bids for Money Market Loans................................ 25
2.2.4. Acceptance of Bids by the Borrower......................... 26
2.2.5. Funding by the Agent; Money Market Loan Account, etc....... 27
2.2.6. Prepayments in Respect of Money Market Loans............... 28
2.3. Swingline Credit.................................................. 28
2.3.1. Swingline Loan............................................. 28
2.3.2. Borrowing Requests......................................... 28
2.3.3. Swingline Loan Account; Swingline Notes.................... 29
2.3.4. Conversion of Swingline Loan into Revolving Loan........... 29
2.4. Letters of Credit................................................. 30
2.4.1. Issuance of Letters of Credit.............................. 30
2.4.2. Requests for Letters of Credit............................. 30
2.4.3. Form and Expiration of Letters of Credit................... 30
2.4.4. Lenders' Participation in Letters of Credit................ 31
2.4.5. Presentation............................................... 31
2.4.6. Payment of Drafts.......................................... 31
2.4.7. Uniform Customs and Practice............................... 31
2.4.8. Subrogation................................................ 33
2.4.9. Modification, Consent, etc................................. 33
2.5. Irish Loans; Mandatory Borrowing.................................. 33
2.5.1. Irish Loan Advances........................................ 33
2.5.2. Conversion of Irish Loans into Revolving Loan.............. 34
2.6. Application of Proceeds........................................... 35
2.6.1. Revolving Loan............................................. 35
2.6.2. Money Market Loan.......................................... 35
2.6.3. Swingline Loan............................................. 35
2.6.4. Letters of Credit.......................................... 35
2.6.5. Specifically Prohibited Applications....................... 35
2.7. Nature of Obligations of Lenders to Make Extensions of Credit..... 35
2.7.1. Revolving Loans............................................ 35
2.7.2. Money Market Loans......................................... 36
2.7.3. Swingline Loans............................................ 36
2.7.4. Letters of Credit.......................................... 36
3. Interest; LIBOR Pricing Options; Fees.................................. 36
3.1. Interest on Revolving Loan........................................ 36
3.2. LIBOR Pricing Options............................................. 36
3.2.1. Election of LIBOR Pricing Options.......................... 36
3.2.2. Notice to Lenders and Company.............................. 37
3.2.3. Selection of LIBOR Interest Periods........................ 37
3.2.4. Additional Interest........................................ 37
3.2.5. Violation of Legal Requirements............................ 38
3.2.6. Funding Procedure.......................................... 38
3.3. Interest on Money Market Loans and Swingline Loan................. 39
3.4. Computations of Interest and Fees................................. 39
3.5. Commitment Fees................................................... 39
3.6. Letter of Credit Fees............................................. 40
3.7. Reserve Requirements, etc......................................... 40
3.8. Taxes............................................................. 40
3.9. Capital Adequacy.................................................. 41
3.10.Regulatory Changes................................................ 41
3.11.Mitigation........................................................ 42
4. Payment................................................................ 42
4.1. Payment at Maturity............................................... 42
4.2. Contingent Required Prepayments................................... 42
4.2.1. Excess Credit Exposure..................................... 43
4.2.2. Net Asset Sale Proceeds.................................... 43
4.2.3. Excess Letter of Credit Exposure........................... 43
4.3. Voluntary Prepayments............................................. 43
4.4. Letters of Credit................................................. 43
4.5. Reborrowing; Application of Payments, etc......................... 44
4.5.1. Reborrowing................................................ 44
4.5.2. Order of Application....................................... 44
4.5.3. Payments for Lenders....................................... 44
5. Conditions to Extending Credit......................................... 44
5.1. Conditions on Initial Closing Date................................ 44
5.1.1. Notes...................................................... 44
5.1.2. Guarantors Contribution Agreement.......................... 45
5.1.3. Subsidiary Subordination Agreement......................... 45
5.1.4. Payment of Fees............................................ 45
5.1.5. Legal Opinions............................................. 45
5.1.6. Concurrent Transaction..................................... 45
5.1.7. Capitalization, etc........................................ 46
Proper Proceedings.......................................................... 47
5.1.9. General................................................... 47
5.2. Conditions to Each Extension of Credit........................... 47
5.2.1. Officer's Certificate..................................... 47
5.2.2. Legality, etc............................................. 47
6. General Covenants...................................................... 48
6.1. Taxes and Other Charges; Accounts Payable........................ 48
6.1.1. Taxes and Other Charges................................... 48
6.1.2. Accounts Payable.......................................... 48
6.2. Conduct of Business, etc......................................... 48
6.2.1. Types of Business......................................... 48
6.2.2. Maintenance of Properties................................. 48
6.2.3. Statutory Compliance...................................... 49
6.2.4. Compliance with Material Agreements....................... 49
6.3. Insurance........................................................ 49
6.3.1. Business Interruption Insurance........................... 49
6.3.2. Property Insurance........................................ 49
6.3.3. Liability Insurance....................................... 50
6.4. Financial Statements and Reports................................. 50
6.4.1. Annual Reports............................................ 50
6.4.2. Quarterly Reports......................................... 51
6.4.3. Monthly Reports........................................... 52
6.4.4. Other Reports............................................. 52
6.4.5. Notice of Litigation; Notice of Defaults.................. 53
6.4.6. ERISA Reports............................................. 53
6.4.7. Other Information......................................... 54
6.5. Certain Financial Tests........................................ 54
6.5.1. Consolidated Net Worth.................................... 54
6.5.2. Consolidated Total Net Debt to Consolidated EBITDA........ 54
6.5.3. Consolidated EBITDA to Consolidated Interest Expense...... 54
6.5.4. Environmental Capital Expenditures........................ 54
6.5.5. Business Capital Expenditures............................. 54
6.6. Indebtedness..................................................... 55
6.7. Guarantees; Letters of Credit.................................... 57
6.8. Liens............................................................ 57
6.9. Investments and Acquisitions..................................... 59
6.10. Distributions.................................................... 61
6.11. Asset Dispositions and Mergers................................... 62
6.12. Lease Obligations................................................ 63
6.13. Issuance of Stock by Subsidiaries; Subsidiary Distributions, etc. 63
6.13.1. Issuance of Stock by Subsidiaries....................... 63
6.13.2. No Restrictions on Subsidiary Distributions............. 63
6.14. Voluntary Prepayments of Other Indebtedness...................... 64
6.15. Derivative Contracts............................................. 65
6.16. Negative Pledge Clauses.......................................... 65
6.17. ERISA, etc....................................................... 65
6.18. Transactions with Affiliates..................................... 66
6.19. Environmental Laws............................................... 66
6.19.1. Compliance with Law and Permits......................... 66
6.19.2. Notice of Claims, etc................................... 66
6.20. Interpretation of Covenants...................................... 66
7. Representations and Warranties......................................... 66
7.1. Organization and Business........................................ 66
7.1.1. The Company.............................................. 66
7.1.2. Subsidiaries............................................. 67
7.1.3. Qualification............................................ 67
7.1.4. Capitalization........................................... 67
7.2. Financial Statements and Other Information; Material Agreements.. 68
7.2.1. Financial Statements and Other Information............... 68
7.2.2. Material Agreements...................................... 69
7.3. Agreements Relating to Financing Debt, Investments, etc.......... 69
7.4. Changes in Condition............................................. 69
7.5. Title to Assets.................................................. 70
7.6. Operations in Conformity With Law, etc........................... 70
7.7. Litigation....................................................... 70
7.8. Authorization and Enforceability................................. 70
7.9. No Legal Obstacle to Agreements.................................. 70
7.10. Defaults......................................................... 71
7.11. Licenses, etc.................................................... 71
7.12. Tax Returns...................................................... 72
7.13. Certain Business Representations................................. 72
7.13.1. Labor Relations.......................................... 72
7.13.2. Antitrust................................................ 72
7.13.3. Consumer Protection...................................... 72
7.13.4. Burdensome Obligations................................... 72
7.13.5. Future Expenditures...................................... 73
7.14. Environmental Regulations ....................................... 73
7.14.1. Environmental Compliance ................................ 73
7.14.2. Environmental Litigation ................................ 73
7.14.3. Hazardous Material....................................... 74
7.14.4. Environmental Condition of Properties.................... 74
7.14.5. No Other Representations and Warranties.................. 74
7.15. Pension Plans.................................................... 74
7.16. Foreign Trade Regulations; Government Regulation; Margin Stock... 74
7.16.1. Foreign Trade Regulations................................ 74
7.16.2. Government Regulation.................................... 74
7.16.3. Margin Stock............................................. 75
7.17. Disclosure....................................................... 75
7.18. Special Qualifications Regarding Merfin.......................... 75
8. Defaults.............................................................. 75
8.1. Events of Default................................................ 75
8.1.1. Payment.................................................. 75
8.1.2. Specified Covenants...................................... 75
8.1.3. Other Covenants.......................................... 76
8.1.4. Representations and Warranties........................... 76
8.1.5. Cross Default, etc....................................... 76
8.1.6. Ownership; Liquidation; etc.............................. 76
8.1.7. Enforceability, etc...................................... 77
8.1.8. Judgments .............................................. 78
8.1.9. ERISA.................................................... 78
8.1.10. Bankruptcy, etc. ........................................ 78
8.1.11. Environmental Matters.................................... 79
8.2. Certain Actions Following an Event of Default.................... 79
8.2.1. Terminate Obligation to Extend Credit ................... 79
8.2.2. Specific Performance; Exercise of Rights................. 79
8.2.3. Acceleration............................................. 79
8.2.4. Enforcement of Payment; Setoff ......................... 80
8.2.5. Cumulative Remedies..................................... 80
8.3. Annulment of Defaults ........................................... 80
8.4. Waivers.......................................................... 80
9. Guarantees............................................................. 81
9.1. Guarantees of Credit Obligations ................................ 81
9.2. Continuing Obligation............................................ 81
9.3. Waivers with Respect to Credit Obligations....................... 82
9.4. Lenders' Power to Waive, etc .................................... 83
9.5. Information Regarding the Company, etc........................... 84
9.6. Certain Guarantor Representations ............................... 84
9.7. Subrogation...................................................... 85
9.8. Subordination.................................................... 85
9.9. Future Subsidiaries; Further Assurances.......................... 85
10. Expenses; Indemnity ................................................... 86
10.1. Expenses ........................................................ 86
10.2. General Indemnity ............................................... 86
10.3. Indemnity With Respect to Letters of Credit...................... 87
11. Operations; Agent ................................................... 87
11.1. Interests in Revolving Loan ..................................... 87
11.2. Agent's Authority to Act, etc ................................... 87
11.3. Company to Pay Agent, etc ....................................... 87
11.4. Lender Operations for Advances, Letters of Credit, etc........... 88
11.4.1. Advances ................................................ 88
11.4.2. Letters of Credit........................................ 88
11.4.3. Agent to Allocate Payments, etc. ........................ 88
11.4.4. Delinquent Lenders; Nonperforming Lenders ............... 89
11.5. Sharing of Payments, etc. ....................................... 89
11.6. Amendments, Consents, Waivers, etc............................... 90
11.7. Agent's Resignation ............................................ 91
11.8. Concerning the Agent............................................ 91
11.8.1. Action in Good Faith, etc............................. 91
11.8.2. No Implied Duties, etc................................ 91
11.8.3. Validity, etc......................................... 92
11.8.4. Compliance............................................ 92
11.8.5. Employment of Agents and Counsel...................... 92
11.8.6. Reliance on Documents and Counsel..................... 92
11.8.7. Agent's Reimbursement ................................ 93
11.8.8. Agent's Fees.......................................... 93
11.9. Rights as a Lender.............................................. 93
11.10. Independent Credit Decision..................................... 93
11.11. Indemnification ................................................ 94
12. Successors and Assigns; Lender Assignments and Participations.......... 94
12.1. Assignments by Lenders.......................................... 94
12.1.1. Assignees and Assignment Procedures................... 94
12.1.2. Terms of Assignment and Acceptance.................... 95
12.1.3. Register ............................................. 96
12.1.4. Acceptance of Assignment and Assumption............... 96
12.1.5. Federal Reserve Bank ................................. 96
12.1.6. Further Assurances ................................... 97
12.2. Credit Participants ............................................ 97
12.3. Replacement of Lender........................................... 97
13. Confidentiality ....................................................... 99
14. Foreign Lenders ....................................................... 99
15. Notices................................................................100
16. Course of Dealing; Amendments and Waivers..............................101
17. Venue; Service of Process .............................................101
18. WAIVER OF JURY TRIAL...................................................102
19. Status for Other Debt Documents .......................................102
20. General................................................................102
BUCKEYE CELLULOSE CORPORATION
CREDIT AGREEMENT
This Agreement, dated as of May 28, 1997, is among Buckeye Cellulose
Corporation, a Delaware corporation (the "Company"), the Subsidiaries of the
Company from time to time party hereto, the Lenders from time to time party
hereto, Fleet National Bank, both in its capacity as a Lender and in its
capacity as agent for itself and the other Lenders and each of SunTrust Bank,
Central Florida N.A. and Toronto Dominion (Texas), Inc., both in its capacity as
a Lender and in its capacity as documentation agent for itself and the other
Lenders. The parties agree as follows:
Recitals: Pursuant to this Agreement, the Lenders are extending to the
Company a $275,000,000 revolving credit facility, including a $50,000,000 letter
of credit facility and a $15,000,000 swingline credit facility. A competitive
bid facility is also available under this Agreement and up to $15,000,000 in
Irish punt loans advanced independently by certain of the Lenders would be
treated as loans under this Agreement. All facilities mature on May 28, 2002.
Each of the Company's domestic Subsidiaries guarantees the credit facilities,
and the credit facilities will be secured by a pledge of 66% of the stock of all
foreign Subsidiaries owned by the Company and its domestic Subsidiaries.
1. Definitions; Certain Rules of Construction. Certain capitalized terms are
used in this Agreement and in the other Credit Documents with the specific
meanings defined below in this Section 1. Except as otherwise explicitly
specified to the contrary or unless the context clearly requires otherwise, (a)
the capitalized term "Section" refers to sections of this Agreement, (b) the
capitalized term "Exhibit" refers to exhibits to this Agreement, (c) references
to a particular Section include all subsections thereof, (d) the word
"including" shall be construed as "including without limitation", (e) accounting
terms not otherwise defined herein have the meaning provided under GAAP, (f)
references to a particular statute or regulation include all rules and
regulations thereunder and any successor statute, regulation or rules, in each
case as from time to time in effect and (g) references to a particular Person
include such Person's successors and assigns to the extent not prohibited by
this Agreement and the other Credit Documents. References to "the date hereof"
mean the date first set forth above.
1.1. "Accumulated Benefit Obligations" means the actuarial present value of
the accumulated benefit obligations under any Plan, calculated in accordance
with Statement No. 87 of the Financial Accounting Standards Board.
1.2. "Acquired Merfin Debt" means the Financing Debt of Merfin and its
Subsidiaries entered into prior to the acquisition by the Company of Merfin and
designated on Exhibit 7.3 as "Acquired Merfin Debt".
1.3. "Acquired Merfin Debt Reserve Amount" means, at any date (a) when any
Acquired Merfin Debt is outstanding, $50,000,000 minus the amount of Acquired
Merfin Debt permanently repaid, whether through the proceeds of the Revolving
Loan, other Indebtedness permitted by Section 6.6 or otherwise, minus
1
up to $15,000,000 in an Equivalent Amount of United States Funds in Acquired
Merfin Debt of Merfin and its Canadian Subsidiaries permitted by Section 6.6.19,
and (b) when (i) all Acquired Merfin Debt of Merfin Europe Limited is repaid and
(ii) all Acquired Merfin Debt of Merfin and its Canadian Subsidiaries in an
aggregate amount exceeding $15,000,000 in an Equivalent Amount of United States
Funds is repaid as contemplated by Section 6.6.19, zero.
1.4. "Acquired Merfin Liens" means Liens on the assets of Merfin and its
Subsidiaries created prior to the acquisition by the Company of Merfin to secure
Acquired Merfin Debt.
1.5. "Acquisition Subsidiary" means Buckeye Acquisition, Inc., a company
existing under the Company Act of British Columbia, Canada and the
special-purpose Wholly Owned Subsidiary of the Company formed to make the Tender
Offer and consummate the acquisition of Merfin, as contemplated under Section
6.9.9.
1.6. "Affected Lender" is defined in Section 12.3.
1.7. "Affiliate" means, with respect to the Company (or any other specified
Person), any other Person directly or indirectly controlling, controlled by or
under direct or indirect common control with the Company, and shall include (a)
any officer or director or general partner of the Company and (b) any Person of
which the Company or any Affiliate (as defined in clause (a) above) of the
Company shall, directly or indirectly, beneficially own either (i) at least 5%
of the outstanding equity securities having the general power to vote or (ii) at
least 5% of all equity interests.
1.8. "Agent" means Fleet in its capacity as agent for the Lenders
hereunder, as well as its successors and assigns in such capacity pursuant to
Section 11.7.
1.9. "Agreement" means this Agreement as from time to time amended,
modified and in effect.
1.10. "Applicable Margin" means, for any month, the percentage in the table
below indicated by the ratio which (a) Consolidated Total Debt on the last day
of the most recently ended fiscal quarter for which financial statements have
been (or are required to have been) furnished by the Company to the Lenders in
accordance with Section 6.4.1 or 6.4.2, as the case may be, prior to the first
day of such month bore to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters ended on the last day of such fiscal quarter or by
the Senior Debt Rating, determined as provided below:
Ratio of Consolidated Total
Debt to Consolidated EBITDA Senior Debt Rating Applicable Margin
--------------------------- ------------------ -----------------
Greater than or equal to 3.35 OR less than BB/Ba2 1.125%
Greater than or equal to 3.00 but less than 3.35
2
OR BB/Ba2 0.875%
Greater than or equal to 2.50
but less than 3.00 OR BB+/Ba1 0.750%
Greater than or equal to 2.00
but less than 2.50 OR BBB-/Baa3 0.625%
Less than 2.00 OR BBB/Baa2 0.450%
On the Initial Closing Date the Applicable Margin shall be (i) 0.750% if
the Senior Debt Rating is confirmed at BB+ by S&P or Ba1 by Xxxxx'x or (ii)
0.875% if the Senior Debt Rating is "unconfirmed" or on "watch" by both S&P and
Xxxxx'x; provided, however, that upon availability of June 30, 1997 audited
financial statements provided by the Company in accordance with Section 6.4.1 or
a confirmed Senior Debt Rating, the Applicable Margin under this clause (ii)
shall then be determined in accordance with the table above. In the event that
either (A) the ratio of Consolidated Total Debt to Consolidated EBITDA and the
Senior Debt Rating would result in different Applicable Margins in accordance
with the table above or (B) S&P and Xxxxx'x provide Senior Debt Ratings that
would result in different Applicable Margins in accordance with the table above,
the lower Applicable Margin shall apply.
1.11. "Applicable Rate" means, at any date, the sum of:
(a) (i) with respect to each portion of the Revolving Loan subject to
a LIBOR Pricing Option, the sum of the Applicable Margin (which may change
during the LIBOR Interest Period for such LIBOR Pricing Option in
accordance with the definition of "Applicable Margin") plus the LIBOR Rate
with respect to such LIBOR Pricing Option;
(ii) with respect to each other portion of the Revolving Loan, the
Base Rate;
plus (b) an additional 2% effective on the day the Agent notifies the
Company that the interest rates hereunder are increasing as a result of the
occurrence and continuance of an Event of Default until the earlier of such
time as (i) such Event of Default is no longer continuing or (ii) such
Event of Default is deemed no longer to exist, in each case pursuant to
Section 8.3.
1.12. "Approved Subordinated Debt" means the Company's 8 1/2 % Senior
Subordinated Notes due 2005 in the original principal amount of $150,000,000,
issued pursuant to the indenture dated November 28, 1995 between the Company and
Union Planters National Bank, as trustee, as in effect on the date hereof.
1.13. "Assignee" is defined in Section 12.1.1.
3
1.14. "Assignment and Acceptance" is defined in Section 12.1.1.
1.15. "Banking Day" means any day other than Saturday, Sunday or a day on
which banks in Boston, Massachusetts are authorized or required by law or other
governmental action to close and, if such term is used with reference to a LIBOR
Pricing Option, any day on which dealings are effected by first-class banks in
the London inter-bank markets in New York, New York.
1.16. "Bankruptcy Code" means Title 11 of the United States Code.
1.17. "Bankruptcy Default" means an Event of Default referred to in Section
8.1.10.
1.18. "Base Rate" means, on any date, the greater of (a) the rate of
interest announced by Fleet at the Boston Office as its prime rate or (b) the
sum of 1/2% plus the Federal Funds Rate.
1.19. "Boston Office" means the principal banking office of Fleet in
Boston, Massachusetts.
1.20. "Business Capital Expenditures" means Capital Expenditures that are
not Environmental Capital Expenditures. For purposes of computing Business
Capital Expenditures incurred by Merfin and its Subsidiaries for periods through
June 30, 1998, such Business Capital Expenditures shall be deemed to be the
greater of (a) $10,000,000 or (b) the actual Business Capital Expenditures
incurred by Merfin and its Subsidiaries since July 1, 1997.
1.21. "By-laws" means all written by-laws, rules, regulations and all other
documents relating to the management, governance or internal regulation of any
Person other than an individual, or interpretive of the Charter of such Person,
all as from time to time in effect.
1.22. "Capital Expenditures" means, for any period, amounts added or
required to be added to the property, plant and equipment or other fixed assets
account on the Consolidated balance sheet of the Company and its Subsidiaries,
prepared in accordance with GAAP, in respect of (a) the acquisition,
construction, improvement or replacement of land, buildings, machinery,
equipment, leaseholds and any other real or personal property (excluding repairs
to any real or personal property made out of the proceeds of a casualty
insurance policy), (b) to the extent not included in clause (a) above,
materials, contract labor and direct labor relating thereto (excluding amounts
properly expensed as repairs and maintenance in accordance with GAAP) and (c)
software development costs to the extent not expensed.
1.23. "Capitalized Lease" means any lease which is required to be
capitalized on the balance sheet of the lessee in accordance with GAAP,
including Statement Nos. 13 and 98 of the Financial Accounting Standards Board.
1.24. "Capitalized Lease Obligations" means the amount of the liability
4
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with GAAP, including Statement Nos.
13 and 98 of the Financial Accounting Standards Board.
1.25. "Cash Equivalents" means:
(a) negotiable certificates of deposit, time deposits (including sweep
accounts), demand deposits and bankers' acceptances having a maturity of 12
months or less and issued by any United States financial institution having
capital and surplus and undivided profits aggregating at least $100,000,000
and rated at least Prime-1 by Xxxxx'x or A-1 by S&P or issued by any Lender
or by Union Planters National Bank so long as it has capital and surplus
and undivided profits aggregating at least $100,000,000 and is rated at
least A2 by Xxxxx'x or P2 by S&P or issued by any Lender;
(b) negotiable certificates of deposit, time deposits (including sweep
accounts), demand deposits and bankers' acceptances having a maturity of
nine months or less and issued by any foreign financial institution having
capital and surplus and undivided profits aggregating at least $200,000,000
in the equivalent amount of United States Funds and rated at least Prime-1
by Xxxxx'x or A-1 by S&P or issued by any Lender;
(c) corporate obligations having a maturity of 12 months or less and
rated at least Prime-1 by Xxxxx'x or A-1 by S&P or issued by any Lender;
(d) any direct obligation of the United States of America or any
agency or instrumentality thereof, or of any state or municipality thereof,
(i) which has a remaining maturity at the time of purchase of not more than
one year or which is subject to a repurchase agreement with any Lender (or
any other financial institution referred to in clause (a) above)
exercisable within one year from the time of purchase and (ii) which, in
the case of obligations of any state or municipality, is rated at least Aa
by Xxxxx'x or AA by S&P; and
(e) any mutual fund or other pooled investment vehicle rated at least
Aa by Xxxxx'x or AA by S&P which invests principally in obligations
described above.
1.26. "CERCLA" means the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
1.27. "CERCLIS" means the federal Comprehensive Environmental Response
Compensation Liability Information System List (or any successor document)
promulgated under CERCLA.
1.28. "Charter" means the articles of organization, certificate of
incorporation, statute, constitution, joint venture agreement, partnership
agreement, trust indenture, limited liability company agreement or other charter
5
document of any Person other than an individual, each as from time to time in
effect.
1.29. "Closing Date" means the Initial Closing Date, each other date on
which any extension of credit is made pursuant to Sections 2.1, 2.3 or 2.4 and
the Money Market Loan Closing Dates.
1.30. "Code" means the federal Internal Revenue Code of 1986.
1.31. "Commitment" means, with respect to any Lender, such Lender's
obligations to extend the credits contemplated by Section 2. The original
Commitments are set forth in Section 11.1 and the current Commitments are
recorded from time to time in the Register.
1.32. "Commitment Fee Rate" is defined in Section 3.5.
1.33. "Company" means Buckeye Cellulose Corporation, a Delaware
corporation.
1.34. "Computation Covenants" means Sections 6.5, 6.6.7, 6.6.13, 6.6.14,
6.6.15, 6.6.16, 6.6.18, 6.7.3, 6.9.5, 6.9.6, 6.9.7, 6.9.8, 6.10.2, 6.10.5,
6.11.1, 6.11.4, 6.12.2 and 6.17.
1.35. "Concurrent Transaction" means the transaction described in clause
(a) of Section 5.1.6.
1.36. "Consolidated" and "Consolidating", when used with reference to any
term, mean that term as applied to the accounts of the Company (or other
specified Person) and all of its Subsidiaries (or other specified group of
Persons), or such of its Subsidiaries as may be specified, consolidated (or
combined) or consolidating (or combining), as the case may be, in accordance
with GAAP and with appropriate deductions for minority interests in
Subsidiaries.
1.37. "Consolidated EBITDA" means, for any period, the total of (a)
Consolidated Net Income minus (b) to the extent included in computing such
Consolidated Net Income any extraordinary and nonrecurring gains plus (c) all
amounts deducted in computing such Consolidated Net Income in respect of:
(i) depreciation and amortization;
(ii) Consolidated Interest Expense;
(iii) taxes based upon or measured by income; and
(iv) any extraordinary and nonrecurring losses.
1.38. "Consolidated Interest Expense" means, for any period, (a) the
aggregate amount of interest expense, including commitment fees, payments in the
6
nature of interest under Capitalized Leases and net payments under Interest Rate
Protection Agreements, net of interest income accrued by the Company and its
Subsidiaries in accordance with GAAP on a Consolidated basis, minus (b) to the
extent included in the foregoing clause (a), amortization of Indebtedness
financing costs; provided, however that (i) Consolidated Interest Expense for
any period of four consecutive fiscal quarters of the Company ending with the
first full fiscal quarter after the Initial Closing Date (i.e., September 1997)
shall be four times Consolidated Interest Expense for such first full fiscal
quarter; (ii) Consolidated Interest Expense for any period of four consecutive
fiscal quarters of the Company ending with the first two full fiscal quarters
after the Initial Closing Date shall be two times Consolidated Interest Expense
for such first two full fiscal quarters; and (iii) Consolidated Interest Expense
for any period of four consecutive fiscal quarters of the Company ending with
the first three full fiscal quarters after the Initial Closing Date shall be
1.33 times Consolidated Interest Expense for such first three full fiscal
quarters.
1.39. "Consolidated Net Income" means, for any period, the net income (or
loss) of the Company and its Subsidiaries, determined in accordance with GAAP on
a Consolidated basis; provided, however, that Consolidated Net Income shall not
include:
(a) the income (or loss) of any Person accrued prior to the date such
Person becomes a Subsidiary or is merged into or consolidated with the
Company or any of its Subsidiaries; provided, however, that (i) in the
event of an acquisition permitted by Section 6.9, for purposes only of
calculating the Applicable Rate and the ratios in Section 6.5 (but not for
Section 6.10 or any other Section), the net income (or loss) of any
acquired domestic Person or of Merfin and its Subsidiaries shall be
included in Consolidated Net Income for up to four fiscal quarters prior to
the acquisition date, adjusted on a pro forma basis for specific and
quantified reductions in expenses (excluding projected changes in business
conditions, such as projected yield improvement or increased sales)
resulting from the acquisition as agreed between the Company and the Agent
and (ii) with respect to the acquisition by the Company and its
Subsidiaries of Merfin and its Subsidiaries, Consolidated Net Income shall
not be reduced on account of investment bank fees and other reasonable
transaction expenses.
(b) the income (or loss) of any Person (other than a Subsidiary) in
which the Company or any of its Subsidiaries has an ownership interest;
provided, however, that (i) Consolidated Net Income shall include amounts
in respect of the income of such Person when actually received in cash by
the Company or such Subsidiary in the form of dividends or similar
Distributions and (ii) Consolidated Net Income shall be reduced by the
aggregate amount of all Investments, regardless of the form thereof, made
by the Company or any of its Subsidiaries in such Person for the purpose of
funding any deficit or loss of such Person;
(c) all amounts included in computing such net income (or loss) in
respect of the write-up of any asset or the retirement of any Indebtedness
or equity at less than face value after June 30, 1996;
7
(d) the income of any Subsidiary to the extent (i) the payment of such
income in the form of a Distribution or repayment of Indebtedness to the
Company or a Wholly Owned Subsidiary is not permitted, whether on account
of any Charter or By-law restriction, any agreement, instrument, deed or
lease or any law, statute, judgment, decree or governmental order, rule or
regulation applicable to such Subsidiary or (ii) the income of such
Subsidiary does not exceed the tax liability incurred by the Company and
its Subsidiaries resulting from the repatriation of foreign earnings under
the Code caused by the payment of such income in the form of a Distribution
or repayment of Indebtedness to the Company or a Wholly Owned Subsidiary;
and
(e) any after-tax gains or losses attributable to returned surplus
assets of any Plan.
1.40. "Consolidated Net Worth" means, at any date, the total of:
(a) stockholders' equity of the Company and its Subsidiaries
determined in accordance with GAAP on a Consolidated basis, excluding the
effect of any foreign currency translation adjustments;
minus (b) 75% of the amount by which such stockholders' equity has
been increased after the Initial Closing Date by the issuance and sale by
the Company or any of its Subsidiaries of equity securities in a public
offering.
1.41. "Consolidated Total Debt" means, at any date, all Financing Debt of
the Company and its Subsidiaries on a Consolidated basis.
1.42. "Consolidated Total Net Debt" means, at any date, Consolidated Total
Debt minus cash and Cash Equivalents (other than cash and Cash Equivalents owned
by Foreign Subsidiaries and items described in clause (b) of the definition of
"Cash Equivalents") to the extent such cash and Cash Equivalents exceed
$3,000,000.
1.43. "Credit Documents" means:
(a) this Agreement, the Notes, each Letter of Credit, each draft
presented or accepted under a Letter of Credit, the Subsidiary
Subordination Agreement, any pledge agreement contemplated by Section 9.9,
the documents evidencing any Irish Loan and each Interest Rate Protection
Agreement provided by a Lender (or an Affiliate of a Lender) to the Company
or any of its Subsidiaries, each as from time to time in effect;
(b) all financial statements, reports, notices or certificates
delivered to the Agent or any of the Lenders by the Company, any of its
Subsidiaries or any other Obligor in connection herewith or therewith; and
(c) any other present or future agreement or instrument from time to
time entered into among the Company, any of its Subsidiaries
8
or any other Obligor, on one hand, and the Agent, any Letter of Credit
Issuer or all the Lenders, on the other hand, relating to, amending or
modifying this Agreement or any other Credit Document referred to above or
which is stated to be a Credit Document, each as from time to time in
effect.
1.44. "Credit Obligations" means all present and future liabilities,
obligations and Indebtedness of the Company, any of its Subsidiaries or any
other Obligor owing to the Agent or any Lender under or in connection with this
Agreement or any other Credit Document, including obligations in respect of
principal, interest, reimbursement obligations under Letters of Credit and
Interest Rate Protection Agreements provided by a Lender (or an Affiliate of a
Lender), Irish Loans, commitment fees, Letter of Credit fees, amounts provided
for in Sections 3.2.4, 3.7, 3.8, 3.9, 3.10 and 10 and other fees, charges,
indemnities and expenses from time to time owing hereunder or under any other
Credit Document (whether accruing before or after a Bankruptcy Default).
1.45. "Credit Participant" is defined in Section 12.2.
1.46. "Default" means any Event of Default and any event or condition which
with the passage of time or giving of notice, or both, would become an Event of
Default and the filing against the Company, any of its Subsidiaries or any other
Obligor of a petition commencing an involuntary case under the Bankruptcy Code.
1.47. "Delinquency Period" is defined in Section 11.4.4.
1.48. "Delinquent Lender" is defined in Section 11.4.4.
1.49. "Delinquent Payment" is defined in Section 11.4.4.
1.50. "Distribution" means, with respect to the Company (or other specified
Person):
(a) the declaration or payment of any dividend or distribution,
including dividends payable in shares of capital stock of or other equity
interests in the Company (or such specified Person), on or in respect of
any shares of any class of capital stock of or other equity interests in
the Company (or such specified Person);
(b) the purchase, redemption or other retirement of any shares of any
class of capital stock of or other equity interest in the Company (or such
specified Person) or of options, warrants or other rights for the purchase
of such shares, directly, indirectly through a Subsidiary or otherwise;
(c) any other distribution on or in respect of any shares of any class
of capital stock of or equity or other beneficial interest in the Company
(or such specified Person);
(d) any payment of principal or interest with respect to, or any
purchase, redemption or defeasance of, any Indebtedness of the Company (or
9
such specified Person) which by its terms or the terms of any agreement is
subordinated to the payment of the Credit Obligations; and
(e) any payment, loan or advance by the Company (or such specified
Person) to, or any other Investment by the Company (or such specified
Person) in, the holder of any shares of any class of capital stock of or
equity interest in the Company (or such specified Person), or any Affiliate
of such holder;
PROVIDED, HOWEVER, that the term "Distribution" shall not include (i) dividends
payable in perpetual common stock of or other similar equity interests in the
Company (or such specified Person) or (ii) payments in the ordinary course of
business in respect of (A) reasonable compensation paid to employees, officers
and directors, (B) advances to employees for travel expenses, drawing accounts
and similar expenditures, or (C) rent paid to, or accounts payable for services
rendered or goods sold by, non-Affiliates that own capital stock of or other
equity interests in the Company (or such specified Person), or (iii) payments of
principal and interest with respect to the Senior Notes.
1.51. "Distribution Percentage" means at any date, the percentage set forth
below opposite the ratio that Consolidated Total Net Debt as of such date bears
to Consolidated EBITDA for the then most recently completed period of four
consecutive fiscal quarters for which financial reports have been furnished to
the Lenders in accordance with Section 6.4.1 or 6.4.2:
Consolidated Total Net Debt
to Consolidated EBITDA Ratio Distribution Percentage
---------------------------- -----------------------
Greater than three times 25%
Three times or less 40%
1.52. "Environmental Capital Expenditures" means Capital Expenditures of
the type contemplated by Exhibit 1.
1.53. "Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules and regulations (including applicable
consent decrees and administrative orders and the Fenholloway River Agreement)
relating to public health and safety and protection of the environment,
including OSHA.
1.54. "Equivalent Amount of United States Funds" means, as of any date of
calculation with respect to a particular amount of foreign currency, an amount
of United States Funds equal to such amount of foreign currency, computed (a) in
the case of a Mandatory Borrowing under Section 2.5.2, at the Agent's spot rate
on such date at New York, New York; provided, however, that if no rate of
exchange exists for effecting such spot purchases, the Equivalent Amount of
United States Funds shall mean the amount of United States Funds equivalent to
the actual cost to the Agent of obtaining the foreign currency in the amount and
at the place of payment on such date and (b) in all other cases, at the foreign
exchange rate published for such date in the Wall Street Journal.
10
1.55. "ERISA" means the federal Employee Retirement Income Security Act of
1974.
1.56. "ERISA Group Person" means the Company, any Subsidiary of the Company
and any Person which is a member of the controlled group or under common control
with the Company or any Subsidiary within the meaning of section 414 of the Code
or section 4001(a)(14) of ERISA.
1.57. "Event of Default" is defined in Section 8.1.
1.58. "Exchange Act" means the federal Securities Exchange Act of 1934.
1.59. "Federal Funds Rate" means, for any day, the rate equal to the
weighted average (rounded upward to the nearest 1/8%) of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, (a) as such weighted average is published for such day
(or, if such day is not a Banking Day, for the immediately preceding Banking
Day) by the Federal Reserve Bank of New York or (b) if such rate is not so
published for such Banking Day, as determined by the Agent using any reasonable
means of determination. Each determination by the Agent of the Federal Funds
Rate shall, in the absence of manifest error, be conclusive.
1.60. "Fenholloway River Agreement" means the agreement between the State
of Florida Department of Environmental Protection and Buckeye Florida Limited
Partnership dated as of March 29, 1995.
1.61. "Final Maturity Date" means May 28, 2002.
1.62. "Financial Officer" of the Company (or other specified Person) means
its chief executive officer, chief financial officer, chief operating officer,
chairman, president, comptroller, treasurer or any of its vice presidents whose
primary responsibility is for its financial affairs, all of whose incumbency and
signatures have been certified to the Agent by the secretary or other
appropriate attesting officer of the Company (or such specified Person).
1.63. "Financing Debt" means each of the items described in clauses (a)
through (f) of the definition of the term "Indebtedness".
1.64. "Fleet" means Fleet National Bank.
1.65. "Foreign Subsidiary" means each Subsidiary that is organized under
the laws of and conducting its business primarily in a jurisdiction outside of
the United States of America.
1.66. "Foreign Trade Regulations" means (a) any act that prohibits or
restricts, or empowers the President or any executive agency of the United
States of America to prohibit or restrict, exports to or financial transactions
with any foreign country or foreign national, (b) the regulations with respect
11
to certain prohibited foreign trade transactions set forth at 22 C.F.R. Parts
120-130 and 31 C.F.R. Part 500 and (c) any order, regulation, ruling,
interpretation, direction, instruction or notice relating to any of the
foregoing.
1.67. "Funding Liability" means (a) any deposit which was used (or deemed
by Section 2.2.6 or 3.2.6 to have been used) to fund any portion of a Money
Market Loan or any portion of the Revolving Loan subject to a LIBOR Pricing
Option, and (b) any portion of a Money Market Loan or any portion of the
Revolving Loan subject to a LIBOR Pricing Option funded (or deemed by Section
2.2.6 or 3.2.6 to have been funded) with the proceeds of any such deposit.
1.68. "GAAP" means generally accepted accounting principles as from time to
time in effect, including the statements and interpretations of the United
States Financial Accounting Standards Board; provided, however, that for
purposes of compliance with Section 6 (other than Section 6.4) and the related
definitions, "GAAP" means such principles as in effect on June 30, 1996 as
applied by the Company and its Subsidiaries in the preparation of the audited
financial statements referred to in Section 7.2.1(a), and consistently followed,
without giving effect to any subsequent changes thereto.
1.69. "Guarantee" means, with respect to the Company (or other specified
Person):
(a) any guarantee by the Company (or such specified Person), of the
payment or performance of, or any contingent obligation by the Company (or
such specified Person), in respect of, any Indebtedness or other obligation
of any primary obligor;
(b) any other arrangement whereby credit is extended to a primary
obligor on the basis of any promise or undertaking of the Company (or such
specified Person), including any binding "comfort letter" or "keep well
agreement" written by the Company (or such specified Person), to a creditor
or prospective creditor of such primary obligor, to (i) pay the
Indebtedness of such primary obligor, (ii) purchase an obligation owed by
such primary obligor, (iii) pay for the purchase or lease of assets or
services regardless of the actual delivery thereof or (iv) maintain the
capital, working capital, solvency or general financial condition of such
primary obligor;
(c) any liability of the Company (or such specified Person), as a
general partner of a partnership in respect of Indebtedness or other
obligations of such partnership;
(d) any liability of the Company (or such specified Person) as a joint
venturer of a joint venture in respect of Indebtedness or other obligations
of such joint venture; and
(e) reimbursement obligations, whether contingent or matured, of the
Company (or such specified Person) with respect to letters of credit,
bankers acceptances, surety bonds, other financial guarantees and Interest
Rate Protection Agreements (without duplication of other Indebtedness
supported or guaranteed thereby),
12
whether or not any of the foregoing are reflected on the balance sheet of the
Company (or such specified Person) or in a footnote thereto; provided, however,
that the term "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business. The amount of any Guarantee and the
amount of Indebtedness resulting from such Guarantee shall be the maximum amount
that the guarantor may become obligated to pay in respect of the obligations
(whether or not such obligations are outstanding at the time of computation).
1.70. "Guarantor" means each Subsidiary listed on the signature page hereto
or which subsequently becomes party to this Agreement as a Guarantor; provided,
however, that (a) in no event shall a Foreign Subsidiary constitute a Guarantor
and (b) the Company shall be a Guarantor with respect to Irish Loans
participated to the Lenders under Section 2.5.2.
1.71. "Guarantors Contribution Agreement" is defined in Section 5.1.2.
1.72. "Hazardous Material" means any pollutant, toxic or hazardous material
or waste, including any "hazardous substance" or "pollutant" or "contaminant" as
defined in section 101(14) of CERCLA or any other Environmental Law or regulated
as toxic or hazardous under RCRA or any other Environmental Law.
1.73. "Indebtedness" means all obligations, contingent or otherwise, which
in accordance with GAAP are required to be classified upon the balance sheet of
the Company (or other specified Person) as liabilities, but in any event
including (without duplication):
(a) borrowed money;
(b) indebtedness evidenced by notes, debentures or similar
instruments;
(c) Capitalized Lease Obligations;
(d) the deferred purchase price of assets or securities, including
related noncompetition, consulting and stock repurchase obligations (other
than ordinary trade accounts payable within six months after the incurrence
thereof in the ordinary course of business);
(e) mandatory redemption or dividend rights on capital stock (or other
equity);
(f) reimbursement obligations, whether contingent or matured, with
respect to letters of credit, bankers acceptances, surety bonds, other
financial guarantees and Interest Rate Protection Agreements (without
duplication of other Indebtedness supported or guaranteed thereby);
(g) liabilities secured by any Lien existing on property owned or
13
acquired by the Company (or such specified Person), whether or not the
liability secured thereby shall have been assumed; and
(h) all Guarantees in respect of Indebtedness of others.
1.74. "Indemnified Party" is defined in Section 10.2.
1.75. "Initial Closing Date" means May 28, 1997 or such other date prior to
July 21, 1997 agreed to by the Company and the Agent as the first Closing Date
hereunder.
1.76. "Interest Rate Protection Agreement" means any interest rate swap,
interest rate cap, interest rate hedge or other contractual arrangement that
converts variable interest rates into fixed interest rates, fixed interest rates
into variable interest rates or other similar arrangements.
1.77. "Investment" means, with respect to the Company (or other specified
Person):
(a) any share of capital stock, partnership or other equity interest,
evidence of Indebtedness or other security issued by any other Person;
(b) any loan, advance or extension of credit to, or contribution to
the capital of, any other Person;
(c) any Guarantee of the Indebtedness of any other Person;
(d) any acquisition of all or any part of the business of any other
Person or the assets comprising such business or part thereof, excluding
Capital Expenditures permitted by Sections 6.5.4 and 6.5.5 and purchases of
inventory and other items in the ordinary course of business; and
(e) any other similar investment.
The investments described in the foregoing clauses (a) through (e) shall be
included in the term "Investment" whether they are made or acquired by purchase,
exchange, issuance of stock or other securities, merger, reorganization or any
other method; provided, however, that the term "Investment" shall not include
(i) current trade and customer accounts receivable for property leased, goods
furnished or services rendered in the ordinary course of business and payable in
accordance with customary trade terms, (ii) deposits, advances and prepayments
to suppliers for property leased, goods furnished and services rendered in the
ordinary course of business, (iii) advances to employees for travel expenses,
drawing accounts and similar expenditures, (iv) stock or other securities
acquired in connection with the satisfaction or enforcement of Indebtedness or
claims due to the Company (or such specified Person) or as security for any such
Indebtedness or claim or (v) demand deposits in banks or similar financial
institutions.
14
In determining the amount of outstanding Investments:
(A) the amount of any Investment shall be the cost thereof minus any
returns of capital in cash on such Investment (determined in accordance
with GAAP without regard to amounts realized as income on such Investment);
(B) the amount of any Investment in respect of a purchase described in
clause (d) above shall be increased by the amount of any Indebtedness
assumed in connection with such purchase or secured by any asset acquired
in such purchase (whether or not any Financing Debt is assumed) or for
which any Person that becomes a Subsidiary is liable on the date on which
the securities of such Person are acquired and shall be reduced by the
amount of any reductions in such Financing Debt; and
(C) no Investment shall be increased as the result of an increase in
the undistributed retained earnings of the Person in which the Investment
was made or decreased as a result of an equity interest in the losses of
such Person.
1.78. "Irish Lender" means any Lender (or any Affiliate of a Lender) that
extends Irish Loans.
1.79. "Irish Loans" means any advances or other extensions of credit
denominated in Irish Punts made by a Lender (or any Affiliate of a Lender) to
Merfin Europe Limited pursuant to a request by the Company under Section 2.5.1.
1.80. "Irish Loan Equivalents" means, at any date, an Equivalent Amount of
United States Funds equal to the aggregate principal amount of Irish Loans then
outstanding, computed as of the later of (a) the date the most recent advance of
any Irish Loan was made or (b) the last day of the most recently completed
fiscal quarter of the Company.
1.81. "Legal Requirement" means any present or future requirement imposed
upon any of the Lenders or the Company and its Subsidiaries by any law, statute,
rule, regulation, directive, order, decree, guideline (or any interpretation
thereof by courts or of administrative bodies) of the United States of America,
or any jurisdiction in which any LIBOR Office is located or any state or
political subdivision of any of the foregoing, or by any board, governmental or
administrative agency, central bank or monetary authority of the United States
of America, any jurisdiction in which any LIBOR Office is located, or any
political subdivision of any of the foregoing, in each case having the force of
law; provided, however, that any such requirement imposed on any of the Lenders
not having the force of law shall be deemed to be a Legal Requirement for
purposes of Sections 3.2.1(a), 3.2.4, 3.7, 3.8, 3.9 and 3.10 if such Lender
reasonably believes that compliance therewith is in the best interest of such
Lender.
1.82. "Lender" means each of the Persons listed as lenders on the signature
page hereto, including Fleet in its capacity as a Lender and such other Persons
who may from time to time own a Percentage Interest in the Credit Obligations,
but the term "Lender" shall not include any Credit Participant in such capacity.
15
1.83. "Lending Officer" means such individuals whom the Agent or the
Swingline Lender, as the case may be, may designate by notice to the Company
from time to time as an officer who may receive telephone requests for
borrowings under Sections 2.1.3 or 2.3.1.
1.84. "Letter of Credit" is defined in Section 2.4.1.
1.85. "Letter of Credit Exposure" means, at any date, the sum of (a) the
aggregate face amount of all drafts that may then or thereafter be presented by
beneficiaries under all Letters of Credit then outstanding, plus (b) the
aggregate face amount of all drafts that the Letter of Credit Issuer has
previously accepted under Letters of Credit but has not paid.
1.86. "Letter of Credit Issuer" means, for any Letter of Credit, Fleet, or
in the event Fleet does not for any reason issue a requested Letter of Credit,
another Lender designated by the Agent to issue such Letter of Credit in
accordance with Section 2.4.
1.87. "LIBOR Basic Rate" means, for any LIBOR Interest Period:
(a) the rate of interest at which U.S. dollar deposits are offered in
the London interbank market in an amount approximately equal to the portion
of the Loan subject to the related LIBOR Pricing Option for a period of
time equal to such LIBOR Interest Period that appears on the Telerate Page
3750 as of 11:00 a.m. London time two Business Days prior to the Business
Day on which such LIBOR Interest Period begins or
(b) if no such rate appears on the Telerate Page 3750, the rate of
interest determined by the Agent to be the average of up to four interest
rates per annum at which U.S. Dollar deposits are offered in the London
interbank market in an amount approximately equal to the portion of the
Loan subject to the related LIBOR Pricing Option, for a period of time
equal to such LIBOR Interest Period which appear on the Xxxxxx'x Screen
LIBO Page as of 11:00 a.m. London time two Business Days prior to the
Business Day on which such LIBOR Interest Period begins if at least two
such offered rates so appear on the Xxxxxx'x Screen LIBO Page or
(c) if no such rate appears on the Telerate Page 3750 and fewer than
two offered rates appear on the Xxxxxx'x Screen LIBO Page, the rate of
interest at which deposits in an amount comparable to the portion of the
Loan as to which the related LIBOR Pricing Option has been elected and
which have a term corresponding to such LIBOR Interest Period are offered
to the Agent by first class banks in the London inter-bank market for
delivery in immediately available funds at a LIBOR Office on the first day
of such LIBOR Interest Period as determined by the Agent at approximately
10:00 a.m. (Boston time) two Banking Days prior to the date upon which such
16
LIBOR Interest Period is to commence (which determination by such Reference
Lender shall, in the absence of manifest error, be conclusive).
1.88. "LIBOR Interest Period" means any period, selected as provided in
Section 3.2.1, of one, two, three or six months, commencing on any Banking Day
and ending on the corresponding date in the subsequent calendar month so
indicated (or, if such subsequent calendar month has no corresponding date, on
the last day of such subsequent calendar month); provided, however, that subject
to Section 3.2.3, if any LIBOR Interest Period so selected would otherwise begin
or end on a date which is not a Banking Day, such LIBOR Interest Period shall
instead begin or end, as the case may be, on the immediately preceding or
succeeding Banking Day as determined by the Agent in accordance with the then
current banking practice in the London inter-bank market with respect to
deposits at the applicable LIBOR Office, which determination by the Agent shall,
in the absence of manifest error, be conclusive.
1.89. "LIBOR Office" means such non-United States office or international
banking facility of any Lender as the Lender may from time to time select.
1.90. "LIBOR Pricing Options" means the options granted pursuant to Section
3.2.1 to have the interest on any portion of the Loan computed on the basis of a
LIBOR Rate.
1.91. "LIBOR Rate" for any LIBOR Interest Period means the rate, rounded
upward to the nearest 1/100%, obtained by dividing (a) the LIBOR Basic Rate for
such LIBOR Interest Period by (b) an amount equal to 1 minus the LIBOR Reserve
Rate; provided, however, that if at any time during such LIBOR Interest Period
the LIBOR Reserve Rate applicable to any outstanding LIBOR Pricing Option
changes, the LIBOR Rate for such LIBOR Interest Period shall automatically be
adjusted to reflect such change, effective as of the date of such change to the
extent required by the Legal Requirement implementing the change in the LIBOR
Reserve Rate.
1.92. "LIBOR Reserve Rate" means the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by any Legal Requirement to be maintained by any Lender against (a)
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System applicable to LIBOR Pricing Options, (b)
any other category of liabilities that includes deposits by reference to which
the interest rate on portions of the Loan subject to LIBOR Pricing Options is
determined, (c) the principal amount of or interest on any portion of the Loan
subject to a LIBOR Pricing Option or (d) any other category of extensions of
credit, or other assets, that includes loans subject to a LIBOR Pricing Option
by a non-United States office of any of the Lenders to United States residents.
1.93. "Lien" means, with respect to the Company (or any other specified
Person):
(a) any lien, encumbrance, mortgage, pledge, charge or security
interest of any kind upon any property or assets of the Company (or such
17
specified Person), whether now owned or hereafter acquired, or upon the
income or profits therefrom;
(b) the acquisition of, or the agreement to acquire, any property or
asset upon conditional sale or subject to any other title retention
agreement, device or arrangement (including a Capitalized Lease);
(c) the sale, assignment, pledge or transfer for security of any
accounts, general intangibles or chattel paper of the Company (or such
specified Person), with recourse; and
(d) the transfer of any tangible property or assets for the purpose of
subjecting such items to the payment of previously outstanding Indebtedness
in priority to payment of the general creditors of the Company (or such
specified Person).
1.94. "Loan" means the Revolving Loan, the Money Market Loan and the Swing
Line Loan, collectively.
1.95. "Loan Accounts" means each of the Revolving Loan Accounts, the Money
Market Loan Accounts and the Swingline Loan Account.
1.96. "Mandatory Borrowing" means a special mandatory borrowing under the
Revolving Loan contemplated by Sections 2.3.4 and 2.5.2.
1.97. "Margin Stock" means "margin stock" within the meaning of Regulations
G, T, U or X of the Board of Governors of the Federal Reserve System.
1.98. "Material Adverse Change" means, since any specified date or from the
circumstances existing immediately prior to the happening of any specified
event, a material adverse change in the business, assets, financial condition or
income of the Company and its Subsidiaries (on a Consolidated basis).
1.99. "Material Agreements" is defined in Section 7.2.2.
1.100."Maximum Amount of Revolving Credit" is defined in Section 2.1.2.
1.101."MDCP" means Madison Dearborn Capital Partners, L.P., a Delaware
limited partnership.
1.102."Merfin" means Merfin International Inc., a company existing under
the Company Act of British Columbia, Canada.
1.103."Money Market Loan" is defined in Section 2.2.
1.104."Money Market Loan Accounts" is defined in Section 2.2.5.
18
1.105."Money Market Loan Closing Date" is defined in Section 2.2.1.
1.106."Money Market Loan Interest Payment Date" is defined in Section
2.2.1.
1.107."Money Market Loan Maturity Date" is defined in Section 2.2.1.
1.108."Money Market Note" is defined in Section 2.2.5.
1.109."Money Market Rates" is defined in Section 2.2.3.
1.110."Moody's" means Xxxxx'x Investors Service, Inc.
1.111. "Multiemployer Plan" means any Plan that is a "multiemployer plan"
as defined in section 4001(a)(3) of ERISA.
1.112. "Net Asset Sale Proceeds" means the cash proceeds of any sale or
disposition of assets after the Initial Closing Date (including by way of merger
of a Subsidiary) by the Company or any of its Subsidiaries (other than asset
sales permitted by Section 6.11.1) net of (a) any Indebtedness permitted by
Section 6.6.7 (Capitalized Leases and purchase money indebtedness) secured by
assets being sold in such transaction required to be paid from such proceeds,
(b) income taxes that, as estimated by the Company in good faith, will be
required to be paid by the Company or any of its Subsidiaries in cash as a
result of, and within 15 months after, such sale or disposition and (c) all
reasonable expenses of the Company or any of its Subsidiaries incurred in
connection with the transaction.
1.113. "Nonperforming Lender" is defined in Section 11.4.4.
1.114. "Notes" means the Revolving Notes, the Money Market Notes and the
Swingline Note.
1.115. "Obligor" means the Company, each Guarantor and each Person
guaranteeing, providing collateral for or subordinating obligations to, the
Credit Obligations.
1.116. "OSHA" means the federal Occupational Health and Safety Act.
1.117. "Overdue Reimbursement Rate" means, on any date, a per annum rate of
interest equal to the highest Applicable Rate then in effect.
1.118. "Payment Date" means the last Banking Day of each March, June,
September and December occurring after the Initial Closing Date.
1.119. "PBGC" means the Pension Benefit Guaranty Corporation or any
successor entity.
19
1.120. "Percentage Interest" means, with respect to any Lender, the
Commitment of such Lender with respect to the respective portions of the Loan
and Letter of Credit Exposure. For purposes of determining votes or consents by
the Lenders, the Percentage Interest of any Lender shall be computed as follows:
(a) at all times when no Event of Default under Section 8.1.1 and no Bankruptcy
Default exists, the ratio that the respective Commitments of such Lender bears
to the total Commitments of all Lenders as from time to time in effect and
reflected in the Register, and (b) at all other times, the ratio that the
respective amounts of the outstanding Loan and Letter of Credit Exposure owing
to such Lender bear to the total outstanding Loan and Letter of Credit Exposure
owing to all Lenders.
1.121. "Performing Lender" is defined in Section 11.4.4.
1.122. "Permitted Reinvestment" means, with respect to any transaction
resulting in Net Asset Sale Proceeds, the acquisition by the Company or a
Subsidiary of a business or other assets permitted by Section 6.9.5, or of other
assets permitted by Section 6.9, that occurs on the date of, or within 270 days
after, such transaction.
1.123. "Permitted Reinvestment Reserve Amount" is defined in Section 4.2.2.
1.124. "Person" means any present or future natural person or any
corporation, association, partnership, joint venture, limited liability, joint
stock or other company, business trust, trust, organization, business or
government or any governmental agency or political subdivision thereof.
1.125. "Plan" means, at any date, any pension benefit plan subject to Title
IV of ERISA maintained, or to which contributions have been made or are required
to be made, by any ERISA Group Person within six years prior to such date.
1.126. "Pledge Agreement" is defined in Section 6.9.5.
1.127. "Prior Credit Agreement" means the Credit Agreement dated as of
November 28, 1995, as in effect on the Initial Closing Date, among the Company,
the lenders parties thereto, Fleet National Bank, as lender and as agent for
itself and the other Lenders parties thereto, and SunTrust Bank, Central Florida
N.A., as lender and as co-agent for itself and the other lenders parties
thereto.
1.128. "RCRA" means the federal Resource Conservation and Recovery Act, 42
X.X.X.xx. 690, et seq.
1.118A "Redemption Subordinated Debt" means the Company's Senior
Subordinated Notes due 2008 in the original principal amount of $100,000,000,
pursuant to the Indenture between the Company and Union Planters National Bank,
as trustee, dated as of July 2, 1996 as in effect on the date hereof.
20
1.129. "Register" is defined in Section 12.1.3.
1.130. "Replacement Lender" is defined in Section 12.3.
1.131. "Request Date" is defined in Section 2.2.1.
1.132. "Required Lenders" means, with respect to any approval, consent,
modification, waiver or other action to be taken by the Agent or the Lenders
under the Credit Documents which require action by the Required Lenders, such
Lenders as own at least 51% of the Percentage Interests (so long as such 51% of
the Percentage Interests comprises the Percentage Interests of at least three
Lenders at any time when the total number of Lenders is at least five);
provided, however, that with respect to any matters referred to in the proviso
to Section 11.6, Required Lenders means such Lenders as own at least the
respective portions of the Percentage Interests required by Section 11.6.
1.133. "Revolving Loan" is defined in Section 2.1.
1.134. "Revolving Loan Account" is defined in Section 2.1.4.
1.135. "Revolving Notes" is defined in Section 2.1.4.
1.136. "Securities Act" means the federal Securities Act of 1933.
1.137. "Senior Debt Rating" means the credit rating given to the Senior
Notes (or any comparable unsecured senior debt facilities issued by the Company
to refinance such Senior Notes) by either Moody's or S&P.
1.138. "Senior Notes" means the 10 1/4% Senior Notes due 2001 issued by the
Company under the Indenture dated as of May 27, 1993, between the Company and
Bankers Trust Company, as trustee, as now in effect.
1.139. "S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc.
1.140. "Subsidiary" means any Person of which the Company (or other
specified Person) shall at the time, directly or indirectly through one or more
of its Subsidiaries, (a) own at least 50% of the outstanding capital stock (or
other shares of beneficial interest) entitled to vote generally, (b) hold at
least 50% of the partnership, joint venture or similar interests or (c) be a
general partner or joint venturer; provided, however, that "Subsidiary" shall
not include any Unrestricted Affiliate, regardless of the percentage ownership
or voting power of the Company or such Subsidiary in such Unrestricted
Affiliate.
1.141. "Subsidiary Subordination Agreement" is defined in Section 5.1.3.
21
1.142. "Swingline Borrower" means the Company.
1.143. "Swingline Lender" means Fleet, in its capacity as swingline lender
hereunder.
1.144. "Swingline Loan" is defined in Section 2.3.3.
1.145. "Swingline Loan Account" is defined in Section 2.3.3.
1.146. "Swingline Note" is defined in Section 2.3.3.
1.147. "Swingline Rate" means the rate equal to the sum of (a) the
Applicable Rate calculated on the basis of the Base Rate, minus 1/2% per annum,
plus (b) an additional 2% per annum effective on the day the Agent notifies the
Company that the interest rates hereunder are increasing as a result of the
occurrence and continuance of an Event of Default until the earlier of such time
as (i) such Event of Default is no longer continuing or (ii) such Event of
Default is deemed no longer to exist, in each case pursuant to Section 8.3.
1.148. "Tax" means any present or future tax, levy, duty, impost,
deduction, withholding or other charges of whatever nature at any time required
by any Legal Requirement (a) to be paid by any Lender or (b) to be withheld or
deducted from any payment otherwise required hereby to be made to any Lender, in
each case on or with respect to such Lender's obligations hereunder, the Loan,
any payment in respect of the Credit Obligations or any Funding Liability not
included in the foregoing; provided, however, that the term "Tax" shall not
include taxes imposed upon or measured by the net income of such Lender (other
than withholding taxes that are not creditable for the jurisdiction imposing
such withholding taxes against taxes imposed upon or measured by the net income
of such Lender).
1.149. "Tender Offer" means the offer by Acquisition Subsidiary to purchase
all of the outstanding shares of capital stock of Merfin pursuant to the Tender
Offer Circular.
1.150. "Tender Offer Circular" means the Offer to Purchase for Cash all of
the Common Shares of Merfin issued by the Acquisition Subsidiary on March 25,
1997, together with the related accompanying circular, each as from time to time
amended and in effect.
1.151. "Uniform Customs and Practice" is defined in Section 2.4.7.
1.152. "United States Funds" means such coin or currency of the United
States of America as at the time shall be legal tender therein for the payment
of public and private debts.
1.153. "Unrestricted Affiliate" means a Person which the Company indicates
in writing to the Agent will constitute an "Unrestricted Affiliate".
22
1.154. "Wholly Owned Subsidiary" means any Subsidiary of which all of the
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally (other than directors' qualifying shares or, in the case of
Foreign Subsidiaries, shares required to be held by foreign nationals) is owned
by the Company (or other specified Person) directly, or indirectly through one
or more Wholly Owned Subsidiaries.
2. The Credits.
2.1. Revolving Credit .
2.1.1. Revolving Loan . Subject to all the terms and conditions of
this Agreement and so long as no Default exists, from time to time on and
after the Initial Closing Date and prior to the Final Maturity Date the
Lenders will, severally in accordance with their respective Percentage
Interests, make loans to the Company in such amounts as may be requested by
the Company in accordance with Section 2.1.3. The sum of the aggregate
principal amount of loans made under this Section 2.1.1 at any one time
outstanding plus the Money Market Loans plus the Swingline Loan plus the
Letter of Credit Exposure plus the Irish Loan Equivalents shall in no event
exceed the Maximum Amount of Revolving Credit. In no event will the
principal amount of loans made by any Lender pursuant to this Section 2.1
at any one time outstanding exceed such Lender's Commitment.
2.1.2. Maximum Amount of Revolving Credit . The term "Maximum Amount
of Revolving Credit" means on any date specified in the table below the
lesser of (a) (i) the amount specified opposite such period in such table:
Period Amount
------ ------
Prior to May 28, 2001 $275,000,000
From May 28, 2001 through the Final Maturity Date $200,000,000
minus (ii) Net Asset Sale Proceeds to the extent (A) such Net Asset Sale
Proceeds exceed both (1) $5,000,000 in any fiscal year and (2) $25,000,000
in the aggregate after the Initial Closing Date and (B) the amount of such
excess in the foregoing clause (A) is not allocated to an effective
Permitted Reinvestment Reserve Amount, minus (iii) the Acquired Merfin Debt
Reserve Amount, minus (iv) an Equivalent Amount of United States Funds
equal to Indebtedness of Merfin Europe Limited in Ireland (whether
outstanding or committed) permitted by Section 6.6.16(b), computed as of
the date the most recent advance of any such Indebtedness was made; or (b)
the amount (in an integral multiple of $1,000,000) to which the then
applicable amount set forth in such table shall have been irrevocably
reduced from time to time by notice from the Company to the Agent. The
Company shall not give a notice reducing the amount applicable to any
23
period in the table above unless it shall also reduce the amounts
applicable to all subsequent periods in such table to at least the same
specified lower amount, so that the Maximum Amount of Revolving Credit for
any subsequent period shall not exceed the reduced Maximum Amount of
Revolving Credit applicable to any prior period.
2.1.3. Borrowing Requests . The Company may from time to time request
a loan under Section 2.1.1 by providing to the Agent a notice (which may be
given by a telephone call received by a Lending Officer if promptly
confirmed in writing). Such notice must be not later than noon (Boston
time) on the first Banking Day (third Banking Day if any portion of such
loan will be subject to a LIBOR Pricing Option on the requested Closing
Date) prior to the requested Closing Date for such loan. The notice must
specify (a) the amount of the requested loan (which shall not be less than
$3,000,000 and an integral multiple of $500,000) and (b) the requested
Closing Date therefor (which shall be a Banking Day). Upon receipt of such
notice, the Agent will promptly inform each other Lender (by telephone or
otherwise). Each such loan will be made at the Boston Office by depositing
the amount thereof to the general account of the Company with the Agent. In
connection with each such loan, the Company shall furnish to the Agent a
certificate in substantially the form of Exhibit 5.2.1.
2.1.4. Revolving Loan Account; Revolving Notes . The Agent will
establish on its books a loan account for the Company (the "Revolving Loan
Account") which the Agent shall administer as follows: (a) the Agent shall
add to the Revolving Loan Account, and the Loan Account shall evidence, the
principal amount of all loans from time to time made by the Lenders to the
Company pursuant to Section 2.1.1 and (b) the Agent shall reduce the
Revolving Loan Account by the amount of all payments made on account of the
Indebtedness evidenced by the Revolving Loan Account. The aggregate
principal amount of the Indebtedness evidenced by the Revolving Loan
Account is referred to as the "Revolving Loan". The Revolving Loan shall be
deemed owed to each Lender severally in accordance with such Lender's
Percentage Interest therein, and all payments credited to the Revolving
Loan Account shall be for the account of each Lender in accordance with its
Percentage Interest. The Company's obligations to pay each Lender's
Percentage Interest in the Revolving Loan shall be evidenced by a separate
note of the Company in substantially the form of Exhibit 2.1.4 (the
"Revolving Notes"), payable to each Lender in maximum principal amount
equal to such Lender's Percentage Interest in the Revolving Loan.
2.2. Money Market Rate Credit . As provided in this Section 2.2, the
Company may request, and one or more Lenders, each acting in its sole and
absolute discretion, may offer to make, loans on a money market basis (each
such loan made by any of the Lenders pursuant to this Section 2.2, together
with money market loans in the aggregate amount of approximately $8,000,000
advanced by Fleet under the Prior Credit Agreement that will continue as
Money Market Loans under this Agreement, being referred to as a "Money
Market Loan"), which the Company may, in its sole and absolute discretion,
agree to accept; provided, however, that in no event shall the sum of the
aggregate Money Market Loans at any one time outstanding plus the Revolving
Loan plus the Swingline Loan plus the Letter of Credit Exposure plus Irish
Loan Equivalents exceed the Maximum Amount of Revolving Credit.
24
2.2.1. Request by the Company . Subject to all the terms and
conditions of this Agreement and so long as no Default exists, the Company
may, at any time prior to the Final Maturity Date, by telex or telecopy
notice to the Agent substantially in the form of Exhibit 2.2.1 received not
later than 12:00 noon (Boston time) on any Banking Day (the "Request
Date"), request bids for loans pursuant to this Section 2.2 to be made on
the following Banking Day (the "Money Market Loan Closing Date"), such
request to specify:
(a) the aggregate amount of the proposed loans, which shall not
be less than $3,000,000 and which shall be in integral multiples of
$500,000,
(b) the proposed maturity dates (each such date a "Money Market
Loan Maturity Date") for such proposed loans (which maturity dates
shall be not later than the earlier of (i) the 180th day following the
applicable Money Market Loan Closing Date and (ii) the Final Maturity
Date) and,
(c) the proposed dates (each such date a "Money Market Loan
Interest Payment Date"), if any, prior to the applicable Money Market
Loan Maturity Date on which accrued but unpaid interest shall be due
and payable on the principal amount of such proposed loans; provided,
however, that in the event the proposed Money Market Loan Maturity
Date is more than 90 days after the proposed Money Market Loan Closing
Date, the Company shall also pay accrued and unpaid interest on the
proposed loans on the 90th day after the proposed Money Market Loan
Closing Date. No more than 20 LIBOR Pricing Options and Money Market
Loans in the aggregate may be outstanding at any one time.
2.2.2. Dissemination of Requests for Bids for Money Market Loans .
Promptly upon receipt of each request submitted by the Company pursuant to
Section 2.2.1, and in any event not later than 3:00 p.m. (Boston time) on
the applicable Request Date, the Agent shall, by telex or telecopy notice
(or by telephonic notice on a reasonable efforts basis, promptly confirmed
by telex or telecopy) to each Lender in substantially the form of Exhibit
2.2.2, notify each Lender of such request, which notice shall constitute an
invitation on behalf of the Company for each Lender to submit bids
pertaining to the proposed Money Market Loans in accordance with Section
2.2.3.
2.2.3. Bids for Money Market Loans . Each Lender may, in its sole and
absolute discretion, respond to such invitation by submitting a bid by
telex or telecopy notice to the Agent no later than 10:00 a.m. (Boston
time) on the proposed Money Market Loan Closing Date. Such notice shall be
in substantially the form of Exhibit 2.2.3A, which notice shall constitute
an offer by such
25
Lender to the Company to make Money Market Loans on the proposed Money Market
Loan Closing Date in the principal amounts specified in the notice from such
Lender, which principal amounts (a) may be for all or any portion of the
proposed Money Market Loans, notwithstanding the Percentage Interest of such
Lender in the Revolving Loan and Letter of Credit Exposure, (b) may be different
principal amounts for different Money Market Loan Maturity Dates (subject to an
over-all maximum) and (c) shall be an integral multiple of $1,000,000 maturing
on the Money Market Loan Maturity Dates requested by the Company, with accrued
and unpaid interest on the principal amount thereof to be due and payable on the
Money Market Loan Interest Payment Dates, if any, requested by the Company, and
on such Money Market Loan Maturity Dates, such interest to accrue at the rates
per annum (which shall be in integral multiples of 1/100%) specified in such
notice (the "Money Market Rates"). The Agent shall disregard any bid (i) not
submitted by 10:00 a.m. (Boston time) on the proposed Money Market Loan Closing
Date or (ii) not substantially in the form of Exhibit 2.2.3A, or not complete,
or containing qualifying, conditional or similar language, or terms different
from or in addition to those set forth in the pertinent request, and any late or
non-conforming bid shall be deemed not to have been given for any purpose of
this Agreement. The Agent shall promptly, and in any event not later than 11:00
a.m. (Boston time) on the proposed Money Market Loan Closing Date, by telephonic
notice to the Company, confirmed in writing, forward to the Company in
substantially the form of Exhibit 2.2.3B, all bids submitted in compliance with
this Section 2.2.3. Notwithstanding the foregoing provisions of this Section
2.2.3, the Lender constituting the Agent, shall submit its own bid, if any, to
the Company by telex or telecopy not later than 9:45 a.m. (Boston time) on the
proposed Money Market Loan Closing Date.
2.2.4. Acceptance of Bids by the Borrower . Not later than Noon
(Boston time) on the applicable Money Market Loan Closing Date, the Company
shall by telex or telecopy notice to the Agent in substantially the form of
Exhibit 2.2.4A, indicate its acceptance or non-acceptance of each offer
submitted pursuant to Section 2.2.3. In the case of acceptance, such notice
shall be irrevocable and shall specify the aggregate principal amount of
each offered Money Market Loan that is accepted. Such notice shall be
deemed to constitute the certification of the Company that the closing
conditions for such Money Market Loans contained in Section 5.2 (other than
the delivery of an officer's certificate) have been satisfied. The Company
may accept each such offer in whole or in part; provided, however, that (a)
the aggregate principal amount of all Money Market Loans accepted and made
on any Money Market Loan Closing Date may not exceed the applicable amount
set forth in the applicable request, (b) the principal amount of each Money
Market Loan shall be an integral multiple of $1,000,000, and (c) acceptance
of offers for Money Market Loans with the same Money Market Loan Maturity
Date may be made only on the basis of ascending quoted Money Market Rates;
and provided, further, that if offers are made by two or more Lenders
having the same Money Market Rate for a greater aggregate principal amount
than the amount in respect of which offers at such rate are accepted, the
principal amount of such Money Market Loans in respect of which such offers
are accepted at such rate shall be allocated by the Agent among such
Lenders as nearly as possible (in integral multiples of $1,000,000) in
proportion to the aggregate principal amount of such offers. Determinations
by the Agent of the amounts of Money Market Loans pursuant to the
immediately preceding sentence shall be conclusive in the absence of
manifest error. The
26
Agent shall, not later than 1:00 p.m. (Boston time) on the Money Market
Loan Closing Date, notify each Lender who submitted an offer for the
particular loans requested pursuant to Section 2.2.1 whether any offer has
been accepted (substantially in the form of Exhibit 2.2.4B) or rejected
(substantially in the form of Exhibit 2.2.4C) and, if accepted, in what
principal amount and maturity. In the event the Company fails to provide
such notice to the Agent by 12:00 noon (Boston time) on the Money Market
Loan Closing Date, the Agent may conclusively presume that all such offers
have been rejected by the Company and, in such event, the Agent shall, not
later than 1:00 p.m. (Boston time), so notify each Lender which submitted
an offer. Each time a Money Market Loan is made, the Agent shall send a
notice to the Company and each Lender in substantially the form of Exhibit
2.2.4D specifying the principal amount and maturity date of such Money
Market Loan.
2.2.5. Funding by the Agent; Money Market Loan Account, etc. Each
Money Market Loan by any Lender will be made on the terms offered by such
Lender and accepted by the Company in accordance with this Section 2.2 at
the Boston Office on the applicable Money Market Loan Closing Date by
adding the amount thereof to the applicable Money Market Loan Accounts and
either (a) by crediting the amount thereof to the Revolving Loan Accounts
of the Company for the account of the Lenders in accordance with their
respective Percentage Interests therein or (b) if the Company shall have
specified by written notice to the Agent, by crediting the amount thereof
to the general account of the Company with the Agent at the Boston Office.
In conjunction with each closing under this Section 2.2, the Company shall
furnish to the Agent by telecopy not later than 4:00 p.m. (Boston time) on
the applicable Money Market Loan Closing Date (with a duplicate furnished
promptly by mail) a certificate dated such Money Market Loan Closing Date
in substantially the form of Exhibit 5.2.1 and signed by the Company,
together with any other documents required by Section 5.2.
(a) Money Market Loan Account. The Agent will establish on its books
separate loan accounts (the "Money Market Loan Accounts") for each Lender
extending a Money Market Loan to the Company which the Agent shall
administer as follows: (a) the Agent shall debit to the pertinent Money
Market Loan Account, and the pertinent Money Market Loan Account shall
evidence, the principal amount of all Money Market Loans from time to time
made by such Lender to the Company and (b) the Agent shall credit to the
pertinent Money Market Loan Account of the Company on whose behalf payment
is made, all payments made on account of the principal amount of
Indebtedness evidenced by the pertinent Money Market Loan Account. The
Agent shall also maintain records of the Money Market Rate and Money Market
Loan Maturity Date with respect to each Money Market Loan. Upon the request
of any Lender, the Company shall issue a note in substantially the form of
Exhibit 2.2.5 (a "Money Market Note") evidencing the Indebtedness evidenced
by such Lender's Money Market Loan Account.
(b) Maturity Date; Interest; Repayment . The stated maturity date of
each Money Market Loan shall be the applicable Money Market Loan Maturity
27
Date for such Money Market Loan. The Company will pay interest on the
principal amount of each Money Market Loan at the applicable Money Market
Rate (plus an additional 2% per annum effective on the day the Agent
notifies the Company that the interest rates hereunder are increasing as a
result of the occurrence and continuance of an Event of Default under
Section 8.1.1 until the earlier of such time as (a) such Event of Default
is no longer continuing or (b) such Event of Default is deemed pursuant to
Section 8.3 no longer to exist) for such Money Market Loan on each
applicable Money Market Loan Interest Payment Date, if any, and on the
applicable Money Market Loan Maturity Date for such Money Market Loan. Upon
the maturity of any Money Market Loan, so long as either (i) no Event of
Default then exists or (ii) the Agent shall have received the consent of
all the Lenders if an Event of Default then exists, the Agent shall debit
the Revolving Loan Accounts of the Company in the principal amount of such
Money Market Loan for the account of the Lenders in accordance with their
respective Revolving Percentage Interests and shall credit the same amount
to the pertinent Money Market Loan Account.
2.2.6. Prepayments in Respect of Money Market Loans . If any Money
Market Loan is prepaid by the Company prior to the applicable Money Market
Loan Maturity Date (including as a result of acceleration), the Company
will make the payment, if any, which would be required by Section 3.2.4
with respect to such prepayment (such payment to be calculated as if (a)
such Money Market Loan constituted a portion of the Revolving Loan subject
to a LIBOR Pricing Option and (b) the applicable Money Market Rate was the
Basic LIBOR Rate). For purposes of this Section 2.2.6, if any portion of a
Money Market Loan which was to have been made pursuant to this Section 2.2
is not outstanding after the close of business on the applicable Money
Market Loan Closing Date other than by reason of a Lender failing to
perform its obligations hereunder, the Company shall be deemed to have
prepaid such portion of the Money Market Loan.
2.3. Swingline Credit .
2.3.1. Swingline Loan . Subject to all the terms and conditions of
this Agreement and so long as no Default exists, from time to time on and
after the Initial Closing Date and prior to the Final Maturity Date, the
Swingline Lender will make loans to the Company in such amounts as may be
requested by the Company in accordance with Section 2.3.2. The sum of the
aggregate principal amount of loans made under this Section 2.3 at any one
time outstanding plus the Money Market Loans plus the Revolving Loan plus
the Letter of Credit Exposure plus Irish Loan Equivalents shall in no event
exceed the Maximum Amount of Revolving Credit. In no event will the
principal amount of loans made pursuant to this Section 2.3 at any one time
outstanding exceed $15,000,000.
2.3.2. Borrowing Requests . The Company may from time to time request
a loan under Section 2.3.1 by providing to the Swingline Lender a notice
(which may be given by a telephone call received by a Lending Officer).
Such notice must be not later than 2:00 p.m. (Boston time) on the requested
Closing Date (which must be a Banking Day) for such loan. The notice must
28
specify the amount of the requested loan (which shall be not less than
$100,000 and an integral multiple of $50,000). Each such loan will be made
at the Boston office by depositing the amount thereof to the general
account of the Company with the Swingline Lender. In connection with each
such loan, the Company shall furnish to the Swingline Lender a certificate
in substantially the form of Exhibit 5.2.1.
2.3.3. Swingline Loan Account; Swingline Notes . The Swingline Lender
will establish on its books a loan account for the Company (the "Swingline
Loan Account") which the Swingline Lender shall administer as follows: (a)
the Swingline Lender shall add to the Swingline Loan Account, and the
Swingline Loan Account shall evidence, the principal amount of all loans
from time to time made by the Swingline Lender to the Company pursuant to
Section 2.3.1 and (b) the Swingline Lender shall reduce the Swingline Loan
Account by the amount of all payments made on account of the Indebtedness
evidenced by the Swingline Loan Account. The aggregate principal amount of
the Indebtedness evidenced by the Swingline Loan Account is referred to as
the "Swingline Loan". The Company's obligation to pay the Swingline Loan
shall be evidenced by a note of the Company in substantially the form of
Exhibit 2.3.3 (the "Swingline Note"), payable to the Swingline Lender in
maximum principal amount equal to the Swingline Loan.
2.3.4. Conversion of Swingline Loan into Revolving Loan . On any
Banking Day after the occurrence and during the continuance of an Event of
Default, the Swingline Lender may, in its sole discretion, give notice to
the other Lenders and the Company that the Swingline Loan shall be paid in
full with a Mandatory Borrowing. Such a notice of a Mandatory Borrowing
shall be deemed to have been automatically given upon a Bankruptcy Default
or upon the exercise of any of the remedies provided in Section 8.2. Upon
the giving of any such notice or deemed notice, a Mandatory Borrowing under
the Revolving Loan in the amount of the Swingline Loan shall be made on the
next Banking Day from all Lenders in accordance with their respective
Percentage Interests in the Revolving Loan, and the proceeds thereof shall
be applied to the Swingline Lender as a repayment of the Swingline Loan.
Each Lender irrevocably agrees to make such loan pursuant to each such
Mandatory Borrowing notice in the amount and in the matter specified above
in this Section 2.3.4, notwithstanding (a) whether any conditions specified
in Section 5 have been satisfied, (b) that a Default or an Event of Default
has occurred and is continuing or (c) the date of such Mandatory Borrowing.
In the event that any Mandatory Borrowing cannot for any reason be made on
the date required above (including as a result of the commencement of a
proceeding under the Bankruptcy Code), each Lender shall promptly purchase
from the Swingline Lender as of the date the Mandatory Borrowing otherwise
would have occurred such participation in the Swingline Loan as shall be
necessary to cause the Lenders to share in the Swingline Loan ratably based
upon their respective Percentage Interests in the Revolving Loan. In the
event of such participations, all interest payable on the Swingline Loan
shall be for the account of the Swingline Lender until the date on which
the participations are required to be purchased and, to the extent
attributable to the purchased participations, shall
29
be payable to the participants from and after such date. At the time any such
purchase of participations is actually made, the purchasing Lender shall pay the
Swingline Lender interest on the principal amount of the participation purchased
at the overnight Federal Funds Rate for each day, commencing with the date the
Mandatory Borrowing otherwise would have occurred to the date of payment for
such participation.
2.4. Letters of Credit.
2.4.1. Issuance of Letters of Credit . Subject to all the terms and
conditions of this Agreement and so long as no Default exists, from time to
time on and after the Initial Closing Date and prior to the Final Maturity
Date, the Letter of Credit Issuer will issue for the account of the Company
one or more irrevocable documentary or standby letters of credit (together
with outstanding letters of credit in the aggregate amount of approximately
$1,300,000 issued by Fleet under the Prior Credit Agreement that will
continue as Letters of Credit issued under this Agreement, the "Letters of
Credit"). The sum of Letter of Credit Exposure plus the Revolving Loan plus
the Money Market Loan plus the Swingline Loan plus Irish Loan Equivalents
shall in no event exceed the Maximum Amount of Revolving Credit. Letter of
Credit Exposure shall in no event exceed $50,000,000.
2.4.2. Requests for Letters of Credit . The Company may from time to
time request a Letter of Credit to be issued by providing to the Letter of
Credit Issuer (and the Agent if the Letter of Credit Issuer is not the
Agent) a notice which is actually received not less than five Banking Days
prior to the requested Closing Date for such Letter of Credit specifying
(a) the amount of the requested Letter of Credit, (b) the beneficiary
thereof, (c) the requested Closing Date and (d) the principal terms of the
text for such Letter of Credit. Each Letter of Credit will be issued by
forwarding it to the Company or to such other Person as directed in writing
by the Company. In connection with the issuance of any Letter of Credit,
the Company shall furnish to the Letter of Credit Issuer (and the Agent if
the Letter of Credit Issuer is not the Agent) a certificate in
substantially the form of Exhibit 5.2.1 and any customary application forms
required by the Letter of Credit Issuer.
2.4.3. Form and Expiration of Letters of Credit . Each Letter of
Credit issued under this Section 2.4 and each draft accepted or paid under
such a Letter of Credit shall be issued, accepted or paid, as the case may
be, by the Letter of Credit Issuer at its principal office. No Letter of
Credit shall provide for the payment of drafts drawn thereunder, and no
draft shall be payable, at a date which is later than the earlier of (a)
the Final Maturity Date or (b) (i) in the case of any standby Letter of
Credit not described in clause (ii) below, the first anniversary of the
date of issuance, (ii) in the case of any direct-pay Letter of Credit
issued in connection with industrial development bonds permitted by
Sections 6.6.13 and 6.6.15, such expiration date as may be customary in
similar transactions and reasonably acceptable to the Required Lenders (but
in any event no earlier than the first anniversary of the date of issuance)
and (iii) in the case of any other Letter of Credit, the date 180 days
after the date of issuance. Each Letter of Credit and each draft accepted
under a Letter of Credit shall be in such form and minimum amount, and
30
shall contain such terms, as the Letter of Credit Issuer and the Company
may agree upon at the time such Letter of Credit is issued, including a
requirement of not less than three Banking Days after presentation of a
draft before payment must be made thereunder.
2.4.4. Lenders' Participation in Letters of Credit . Upon the issuance
of any Letter of Credit, a participation therein, in an amount equal to
each Lender's Percentage Interest, shall automatically be deemed granted by
the Letter of Credit Issuer to each Lender on the date of such issuance and
the Lenders shall automatically be obligated, as set forth in Section 11.5,
to reimburse the Letter of Credit Issuer to the extent of their respective
Percentage Interests for all obligations incurred by the Letter of Credit
Issuer to third parties in respect of such Letter of Credit not reimbursed
by the Company. The Letter of Credit Issuer will send to each Lender (and
to the Agent if the Letter of Credit Issuer is not the Agent) a
confirmation regarding the participations in Letters of Credit outstanding
during such month.
2.4.5. Presentation. The Letter of Credit Issuer may accept or pay any
draft presented to it, regardless of when drawn and whether or not
negotiated, if such draft, the other required documents and any transmittal
advice are presented to the Letter of Credit Issuer and dated on or before
the expiration date of the Letter of Credit under which such draft is
drawn. Except insofar as instructions actually received may be given by the
Company in writing expressly to the contrary with regard to, and prior to,
the Letter of Credit Issuer's issuance of any Letter of Credit for the
account of the Company and such contrary instructions are reflected in such
Letter of Credit, the Letter of Credit Issuer may honor as complying with
the terms of the Letter of Credit and with this Agreement any drafts or
other documents otherwise in order signed or issued by an administrator,
executor, conservator, trustee in bankruptcy, debtor in possession,
assignee for benefit of creditors, liquidator, receiver or other legal
representative of the party authorized under such Letter of Credit to draw
or issue such drafts or other documents.
2.4.6. Payment of Drafts . At such time as a Letter of Credit Issuer
makes any payment on a draft presented or accepted under a Letter of
Credit, the Company will on demand pay to such Letter of Credit Issuer in
immediately available funds the amount of such payment. Unless the Company
shall otherwise pay to the Letter of Credit Issuer the amount required by
the foregoing sentence, such amount shall be considered a loan under
Section 2.1.1 and part of the Revolving Loan as if the Company had paid in
full the amount required with respect to the Letter of Credit by borrowing
such amount under Section 2.1.1.
2.4.7. Uniform Customs and Practice . The Uniform Customs and Practice
for Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any subsequent revisions thereof approved by a
Congress of the International Chamber of Commerce and adhered to by the
Letter of Credit Issuer (the "Uniform Customs and Practice"), shall be
binding on the Company and the Letter of Credit Issuer except to the extent
otherwise provided herein, in any Letter of Credit or in any other Credit
Document. Anything in the Uniform Customs and Practice to the contrary
notwithstanding:
31
(a) Neither the Company nor any beneficiary of any Letter of Credit
shall be deemed an agent of any Letter of Credit Issuer.
(b) With respect to each Letter of Credit, neither the Letter of
Credit Issuer nor its correspondents shall be responsible for or shall have
any duty to ascertain (unless the Letter of Credit Issuer or such
correspondent is grossly negligent or willful in failing so to ascertain):
(i) the genuineness of any signature;
(ii) the validity, form, sufficiency, accuracy, genuineness or
legal effect of any endorsements;
(iii) delay in giving, or failure to give, notice of arrival,
notice of refusal of documents or of discrepancies in respect of which
any Letter of Credit Issuer refuses the documents or any other notice,
demand or protest;
(iv) the performance by any beneficiary under any Letter of
Credit of such beneficiary's obligations to the Company;
(v) inaccuracy in any notice received by the Letter of Credit
Issuer;
(vi) the validity, form, sufficiency, accuracy, genuineness or
legal effect of any instrument, draft, certificate or other document
required by such Letter of Credit to be presented before payment of a
draft, or the office held by or the authority of any Person signing
any of the same; or
(vii) failure of any instrument to bear any reference or adequate
reference to such Letter of Credit, or failure of any Person to note
the amount of any instrument on the reverse of such Letter of Credit
or to surrender such Letter of Credit or to forward documents in the
manner required by such Letter of Credit.
(c) The occurrence of any of the events referred to in the Uniform
Customs and Practice or in the preceding clauses of this Section 2.4.7
32
shall not affect or prevent the vesting of any of the Letter of Credit
Issuer's rights or powers hereunder or the Company's obligation to make
reimbursement of amounts paid under any Letter of Credit or any draft
accepted thereunder, unless such occurrence results from the gross
negligence or willful misconduct of the Letter of Credit Issuer.
(d) The Company will promptly examine (i) each Letter of Credit (and
any amendments thereof) sent to it by the Letter of Credit Issuer and (ii)
all instruments and documents delivered to it from time to time by the
Letter of Credit Issuer. The Company will notify the Letter of Credit
Issuer of any claim of noncompliance by notice actually received within
three Banking Days after receipt of any of the foregoing documents, the
Company being conclusively deemed to have waived any such claim against
such Letter of Credit Issuer and its correspondents unless such notice is
given. The Letter of Credit Issuer shall have no obligation or
responsibility to send any such Letter of Credit or any such instrument or
document to the Company.
(e) In the event of any conflict between the provisions of this
Agreement and the Uniform Customs and Practice, the provisions of this
Agreement shall govern.
2.4.8. Subrogation . Upon any payment by a Letter of Credit Issuer
under any Letter of Credit and until the reimbursement of such Letter of
Credit Issuer by the Company with respect to such payment, the Letter of
Credit Issuer shall be entitled to be subrogated to, and to acquire and
retain, the rights which the Person to whom such payment is made may have
against the Company and its Subsidiaries, all for the benefit of the
Lenders. The Company and its Subsidiaries will take such action as the
Letter of Credit Issuer may reasonably request, including requiring the
beneficiary of any Letter of Credit to execute such documents as the Letter
of Credit Issuer may reasonably request, to assure and confirm to the
Letter of Credit Issuer such subrogation and such rights, including the
rights, if any, of the beneficiary to whom such payment is made in accounts
receivable, inventory and other properties and assets of any Obligor.
2.4.9. Modification, Consent, etc. If the Company requests or consents
in writing to any modification or extension of any Letter of Credit, or
waives any failure of any draft, certificate or other document to comply
with the terms of such Letter of Credit, and if the Letter of Credit Issuer
consents thereto, the Letter of Credit Issuer shall be entitled to rely on
such request, consent or waiver. This Agreement shall be binding upon the
Company with respect to such Letter of Credit as so modified or extended,
and with respect to any action taken or omitted by such Letter of Credit
Issuer pursuant to any such request, consent or waiver.
2.5. Irish Loans; Mandatory Borrowing.
2.5.1. Irish Loan Advances. So long as no Default exists, the Company
may, at any time prior to the Final Maturity Date, by at least two Banking
Days telex or telecopy notice to the Agent and any other Lender selected by
the Company in its sole discretion, request bids for the advance of an
Irish Loan in Irish punts to Merfin Europe Limited in the amount and on the
date specified in such notice. The Lender receiving such notice may accept
or reject such request in its sole discretion. Any acceptance of such
request may be made within one Business Day after receipt of such request
by telex or telecopy notice to the Agent and the Company.
Prior to receiving any advance of an Irish Loan, the Company or Merfin
Europe Limited shall certify to the applicable Irish Lender that no Default
33
exists. The Company shall provide prompt written notice to the Agent of any
advance of, or payment on, any Irish Loan. The final maturity date of any Irish
Loan may not extend later than the Final Maturity Date. Aggregate Irish Loan
Equivalents shall not exceed the lesser of (a) $15,000,000 or (b) the excess, if
any, of the Maximum Amount of Revolving Credit over the sum of the Revolving
Loan plus the Money Market Loans plus the Swingline Loan plus Letter of Credit
Exposure.
The other Lenders will not have a direct participation under the Credit
Documents in any Irish Loan, but the Irish Lenders may refinance the Irish Loans
in an Equivalent Amount of United States funds pursuant to a Mandatory Borrowing
under Section 2.5.2.
2.5.2. Conversion of Irish Loans into Revolving Loan. On any Banking Day
after the occurrence and during the continuance of an Event of Default, any
Irish Lender may, in its sole discretion, give notice to the other Lenders and
the Company that the Irish Loans extended by it shall be paid in full with a
Mandatory Borrowing in an Equivalent Amount of United States Funds, computed as
of the date of payment. Such a notice of a Mandatory Borrowing shall be deemed
to have been automatically given upon a Bankruptcy Default or upon the exercise
of any of the remedies provided in Section 8.2. Upon the giving of any such
notice or deemed notice, a Mandatory Borrowing under the Revolving Loan in an
Equivalent Amount of United States Funds, computed as of the date of payment,
equal to the amount of the Irish Loans extended by such Irish Lender shall be
made on the next Banking Day from all Lenders in accordance with their
respective Percentage Interests in the Revolving Loan, and the proceeds thereof
shall be applied to the Irish Loans extended by such Irish Lender. Each Lender
irrevocably agrees to make such loan pursuant to each such Mandatory Borrowing
notice in the amount and in the manner specified above in this Section 2.5.2,
notwithstanding (a) whether any conditions specified in Section 5 have been
satisfied, (b) that a Default or an Event of Default has occurred and is
continuing or (c) the date of such Mandatory Borrowing.
In the event that any Mandatory Borrowing cannot for any reason be made on
the date required above (including as a result of the commencement of a
proceeding under the Bankruptcy Code), each Lender shall promptly purchase from
such Irish Lender as of the date the Mandatory Borrowing otherwise would have
occurred such participation in the Irish Loans extended by such Irish Lender as
shall be necessary to cause the Lenders to share in the Irish Loans extended by
it ratably based upon their respective Percentage Interests in the Revolving
Loan in an Equivalent Amount of United States Funds, computed as of the date of
payment. In the event of such participations, all interest payable on the Irish
Loans extended by such Irish Lender shall be for the account of such Irish
Lender until the date on which the participations are required to be purchased
and, to the extent attributable to the purchased participations, shall be
payable to the participants from and after such date. At the time any such
purchase of participations is actually made, the purchasing Lender shall pay
such Irish Lender interest on the principal amount of the participation
purchased at the overnight Federal Funds Rate for each day, commencing with the
34
date the Mandatory Borrowing otherwise would have occurred to the date of
payment for such participation. In no event shall the obligations of any Lender
under this Section 2.5.2 exceed such Lender's Commitment.
2.6. Application of Proceeds.
2.6.1. Revolving Loan. Subject to Section 2.6.5, the Company will
apply the proceeds of the Revolving Loan to refinance existing
Indebtedness, to make capital contributions and intercompany advances to
Acquisition Subsidiary (directly or through another Subsidiary) to finance
the Tender Offer contemplated by Section 5.1.6(a) and the subsequent
acquisition of Merfin (including related transaction costs), for working
capital, for acquisitions, for refinancing Indebtedness of Merfin and its
Subsidiaries and for other lawful corporate purposes of the Company and its
Subsidiaries; provided, however, that a portion of the Maximum Amount of
Revolving Credit equal to any then effective Permitted Reinvestment Reserve
Amount may only be borrowed to finance an Investment permitted by Section
6.9.5.
2.6.2. Money Market Loan . Subject to Section 2.6.5, the Company will
apply the proceeds of the Money Market Loan for working capital and other
lawful purposes.
2.6.3. Swingline Loan . Subject to Section 2.6.5, the Company will
apply the proceeds of the Swingline Loan for working capital and other
lawful corporate purposes.
2.6.4. Letters of Credit . Letters of Credit shall be issued only for
such lawful corporate purposes as the Company has requested in writing and
to which the Letter of Credit Issuer agrees.
2.6.5. Specifically Prohibited Applications. The Company will not,
directly or indirectly, apply any part of the proceeds of any extension of
credit made pursuant to the Credit Documents (a) to purchase or to carry
Margin Stock in amounts that would result in a violation of Rules G, T, U
or X of the Board of Governors of the Federal Reserve System, or (b) to any
transaction prohibited by the Foreign Trade Regulations, by other Legal
Requirements applicable to the Lenders or by the Credit Documents.
2.7. Nature of Obligations of Lenders to Make Extensions of Credit .
2.7.1. Revolving Loans. The Lenders' obligations to make Revolving
Loans under this Agreement are several and are not joint or joint and
several. If on any Closing Date any Lender shall fail to perform its
obligations under this Agreement, the Lenders that have not failed to
perform their obligations to make the extensions of credit contemplated by
Section 2 may, if any such Lender so desires, assume, in such proportions
as such Lenders may agree, the obligations of any Lender who has so failed
and the Percentage Interests shall be appropriately adjusted. The
35
provisions of this Section 2.7 shall not affect the rights of the Company
against any Lender failing to perform its obligations hereunder.
2.7.2. Money Market Loans. The obligation to make a Money Market Loan
shall be an obligation solely of the Lenders which offered to make such
loan in accordance with Section 2.2 and whose offers were accepted
thereunder.
2.7.3. Swingline Loans . The obligation to make a Swingline Loan shall
be an obligation solely of the Swingline Lender.
2.7.4. Letters of Credit. The obligation to issue a Letter of Credit
shall be an obligation solely of the Letter of Credit Issuer.
3. Interest; LIBOR Pricing Options; Fees.
3.1. Interest on Revolving Loan . The Revolving Loan shall accrue and bear
interest at a rate per annum which shall at all times equal the Applicable Rate.
Prior to any stated or accelerated maturity of the Revolving Loan, the Company
will, on each Payment Date, pay the accrued and unpaid interest on the portion
of the Revolving Loan which was not subject to a LIBOR Pricing Option. On the
last day of each LIBOR Interest Period or on any earlier termination of any
LIBOR Pricing Option, the Company will pay the accrued and unpaid interest on
the portion of the Revolving Loan which was subject to the LIBOR Pricing Option
which expired or terminated on such date. In the case of any LIBOR Interest
Period longer than three months, the Company will also pay the accrued and
unpaid interest on the portion of the Revolving Loan subject to the LIBOR
Pricing Option having such LIBOR Interest Period at three-month intervals, the
first such payment to be made on the last Banking Day of the three-month period
which begins on the first day of such LIBOR Interest Period. On the stated or
any accelerated maturity of the Revolving Loan, the Company will pay all accrued
and unpaid interest on the Revolving Loan, including any accrued and unpaid
interest on any portion of the Revolving Loan which is subject to a LIBOR
Pricing Option. All payments of interest on the Revolving Loan shall be made to
the Agent for the account of each Lender in accordance with such Lender's
Percentage Interest therein. On the Initial Closing Date the Company agrees to
pay the Lenders interest for any funds advanced to the Agent prior to the
Initial Closing Date at the request of the Company to facilitate the initial
closing hereunder at a rate equal to the Applicable Rate computed on the basis
of the Base Rate.
3.2. LIBOR Pricing Options.
3.2.1. Election of LIBOR Pricing Options. Subject to all of the terms
and conditions hereof and so long as no Default exists, the Company may
from time to time, by irrevocable notice to the Agent actually received not
less than three Banking Days prior to the commencement of the LIBOR
Interest Period selected in such notice, elect to have such portion of the
Revolving Loan as the Company may specify in such notice accrue and bear
interest during the LIBOR Interest Period so selected at the Applicable
Rate computed on the basis of the LIBOR Rate. No such election shall become
effective:
36
(a) if, prior to the commencement of any such LIBOR Interest Period,
the Agent determines that (i) the electing or granting of the LIBOR Pricing
Option in question would violate a Legal Requirement, (ii) LIBOR deposits
in an amount comparable to the principal amount of the Revolving Loan as to
which such LIBOR Pricing Option has been elected and which have a term
corresponding to the proposed LIBOR Interest Period are not readily
available in the London inter-bank market, or (iii) by reason of
circumstances affecting the London inter-bank market, adequate and
reasonable methods do not exist for ascertaining the interest rate
applicable to such deposits for the proposed LIBOR Interest Period; or
(b) if any Lender shall have advised the Agent by telephone or
otherwise at or prior to noon (Boston time) on the second Banking Day prior
to the commencement of such proposed LIBOR Interest Period (and shall have
subsequently confirmed in writing) that, after reasonable efforts to
determine the availability of such deposits, such Lender reasonably
anticipates that deposits in an amount equal to the Percentage Interest of
such Lender in the portion of the Revolving Loan as to which such LIBOR
Pricing Option has been elected and which have a term corresponding to the
LIBOR Interest Period in question will not be offered in the London
inter-bank market to such Lender at a rate of interest that does not exceed
the anticipated LIBOR Basic Rate. Any such Lender may be replaced by the
Company pursuant to Section 12.3.
3.2.2. Notice to Lenders and Company . The Agent will promptly inform
each Lender (by telephone or otherwise) of each notice received by it from
the Company pursuant to Section 3.2.1 and of the LIBOR Interest Period
specified in such notice. Upon determination by the Agent of the LIBOR Rate
for such LIBOR Interest Period or in the event such election shall not
become effective, the Agent will promptly notify the Company and each
Lender (by telephone or otherwise) of the LIBOR Rate so determined or why
such election did not become effective, as the case may be.
3.2.3. Selection of LIBOR Interest Periods. LIBOR Interest Periods
shall be selected so that:
(a) the minimum portion of the Revolving Loan subject to any LIBOR
Pricing Option shall be $3,000,000 and an integral multiple of $500,000;
(b) no more than 20 LIBOR Pricing Options and Money Market Options
shall be outstanding at any one time; and
(c) no LIBOR Interest Period with respect to any part of the Revolving
Loan subject to a LIBOR Pricing Option shall expire later than the Final
Maturity Date.
3.2.4. Additional Interest . If any portion of the Revolving Loan
subject to a LIBOR Pricing Option is repaid, or any LIBOR Pricing Option is
37
terminated for any reason (including acceleration of maturity, but
excluding the failure of any Lender to perform its obligations under this
Agreement), on a date which is prior to the last Banking Day of the LIBOR
Interest Period applicable to such LIBOR Pricing Option, the Company will
pay to the Agent for the account of each Lender in accordance with such
Lender's Percentage Interest, in addition to any amounts of interest
otherwise payable hereunder, an amount equal to the present value
(calculated in accordance with this Section 3.2.4) of interest for the
unexpired portion of such LIBOR Interest Period on the portion of the
Revolving Loan so repaid, or as to which a LIBOR Pricing Option was so
terminated, at a per annum rate equal to the excess, if any, of (a) the
rate applicable to such LIBOR Pricing Option minus (b) the rate of interest
obtainable by the Agent upon the purchase of debt securities customarily
issued by the Treasury of the United States of America which have a
maturity date approximating the last Banking Day of such LIBOR Interest
Period. The present value of such additional interest shall be calculated
by discounting the amount of such interest for each day in the unexpired
portion of such LIBOR Interest Period from such day to the date of such
repayment or termination at a per annum interest rate equal to the interest
rate determined pursuant to clause (b) of the preceding sentence, and by
adding all such amounts for all such days during such period. The
determination by the Agent of such amount of interest shall, in the absence
of manifest error, be conclusive. For purposes of this Section 3.2.4, if
any portion of the Revolving Loan which was to have been subject to a LIBOR
Pricing Option is not outstanding on the first day of the LIBOR Interest
Period applicable to such LIBOR Pricing Option other than for reasons
described in Section 3.2.1, the Company shall be deemed to have terminated
such LIBOR Pricing Option.
3.2.5. Violation of Legal Requirements . If any Legal Requirement
shall prevent any Lender from funding or maintaining through the purchase
of deposits in the London inter-bank market any portion of the Revolving
Loan subject to a LIBOR Pricing Option or otherwise from giving effect to
such Lender's obligations as contemplated by Section 3.2, (a) the Agent may
by notice to the Company terminate all of the affected LIBOR Pricing
Options to the extent not doing so would violate a Legal Requirement, (b)
the portion of the Revolving Loan subject to such terminated LIBOR Pricing
Options shall immediately bear interest thereafter at the Applicable Rate
computed on the basis of the Base Rate and (c) the Company shall make any
payment required by Section 3.2.4. Any such Lender may be replaced by the
Company pursuant to Section 12.3.
3.2.6. Funding Procedure . The Lenders may fund any portion of the
Revolving Loan subject to a LIBOR Pricing Option out of any funds available
to the Lenders. Regardless of the source of the funds actually used by any
of the Lenders to fund any portion of the Revolving Loan subject to a LIBOR
Pricing Option, however, all amounts payable hereunder, including the
interest rate applicable to any such portion of the Revolving Loan and the
amounts payable under Sections 3.2.4, 3.7, 3.8, 3.9 and 3.10, shall be
computed as if each Lender had actually funded such Lender's Percentage
Interest in such portion of the Revolving Loan through the purchase of
deposits in such amount of the type by which the LIBOR Basic Rate was
38
determined with a maturity the same as the applicable LIBOR Interest Period
relating thereto and through the transfer of such deposits from an office
of the Lender having the same location as the applicable LIBOR Office to
one of such Lender's offices in the United States of America.
3.3. Interest on Money Market Loans and Swingline Loan . The Company will
pay its portion of the interest on each Money Market Loan at the rate and on the
dates specified in Section 2.2.5(b). The Swingline Loan shall accrue and bear
interest at a rate per annum which shall at all times equal the Swingline Rate.
Interest on the Swingline Loan shall be calculated on a daily basis and on the
basis of a year of 360 days. Prior to any stated or accelerated maturity of the
Swingline Loan, the Swingline Borrower will on each Payment Date, beginning on
the first Payment Date after the Initial Closing Date, pay the accrued and
unpaid interest on such Indebtedness. On any stated or accelerated maturity of
the Swingline Loan all accrued and unpaid interest thereon shall be forthwith
due and payable. All payments of interest hereunder in respect of the Swingline
Loan shall be made by the Swingline Borrower to the Agent for the account of the
Swingline Lender.
3.4. Computations of Interest and Fees . For purposes of this Agreement,
interest, commitment fees and Letter of Credit fees (and any other amount
expressed as interest or such fees) shall be computed on the basis of a 360-day
year for actual days elapsed. If any payment required by this Agreement becomes
due on any day that is not a Banking Day, such payment shall, except as
otherwise provided in the LIBOR Interest Period, be made on the next succeeding
Banking Day. If the due date for any payment of principal is extended as a
result of the immediately preceding sentence, interest shall be payable for the
time during which payment is extended at the Applicable Rate.
3.5. Commitment Fees . In consideration of the Lenders' Commitments to make
the extensions of credit provided for in Section 2.1, while such Commitments are
outstanding, the Company will pay to the Agent for the account of the Lenders in
accordance with the Lenders' respective Percentage Interests, on each Payment
Date and on the Final Maturity Date (or the date of any earlier termination of
this Agreement), commencing on the first Payment Date after the Initial Closing
Date and ending on the earlier of the Final Maturity Date or any earlier
termination of this Agreement, an amount equal to interest computed at the
Commitment Fee Rate on the amount by which (a) the average daily Maximum Amount
of Revolving Credit during the three-month period or portion thereof ending on
such Payment Date exceeded (b) the sum of (i) the average daily Revolving Loan
during such period or portion thereof plus (ii) the average daily Letter of
Credit Exposure during such period or portion thereof. "Commitment Fee Rate"
means:
(a) at all times when the Applicable Margin is 1.125%, 0.275% per annum,
(b) at all times when the Applicable Margin is 0.875%, 0.250% per annum,
(c) at all times when the Applicable Margin is 0.750%, 0.225% per annum,
(d) at all times when the Applicable Margin is 0.625%, 0.200% per annum
and
39
(e) at all times when the Applicable Margin is 0.450%, 0.150% per annum.
3.6. Letter of Credit Fees . The Company will pay to the Agent for the
account of each of the Lenders, in accordance with the Lenders' respective
Percentage Interests, on each Payment Date, a Letter of Credit fee equal to
interest at a per annum rate equal to the Applicable Margin, as from time to
time in effect, on the average daily Letter of Credit Exposure during the
three-month period or portion thereof ending on such Payment Date. The Company
will pay to the Letter of Credit Issuer a facing fee equal to 1/4% of each
Letter of Credit and other customary service charges and expenses for its
services in connection with the Letters of Credit at the times and in the
amounts from time to time in effect in accordance with its general rate
structure, including fees and expenses relating to issuance, amendment,
negotiation, cancellation and similar operations.
3.7. Reserve Requirements, etc . If any Legal Requirement shall, after the
Initial Closing Date, (a) impose, modify, increase or deem applicable any
insurance assessment, reserve, special deposit or similar requirement against
any Funding Liability or the Letters of Credit, (b) impose, modify, increase or
deem applicable any other requirement or condition with respect to any Funding
Liability or the Letters of Credit, or (c) change the basis of taxation of
Funding Liabilities or payments in respect of any Letter of Credit (other than
changes in taxes imposed on or measured by the net income of such Lender) and
the effect of any of the foregoing shall be to increase materially the cost to
any Lender of issuing, making, funding or maintaining its respective Percentage
Interest in any portion of the Revolving Loan subject to a LIBOR Pricing Option,
any Money Market Loan or any Letter of Credit, to reduce materially the amounts
received or receivable by such Lender under this Agreement or to require such
Lender to make any material payment or forego any material amounts otherwise
payable to such Lender under this Agreement, then, within 15 days after the
receipt by the Company of a certificate from such Lender setting forth why it is
claiming compensation under this Section 3.7 and computations (in reasonable
detail) of the amount thereof, the Company shall pay to the Agent for the
account of such Lender such additional amounts as are specified by such Lender
in such certificate as sufficient to compensate such Lender for such increased
cost or such reduction, together with interest at the Overdue Reimbursement Rate
on such amount from the 15th day after receipt of such certificate until payment
in full thereof; provided, however, that the foregoing provisions shall not
apply to any Tax or to any reserves which are included in computing the LIBOR
Reserve Rate. The good faith determination by such Lender of the amount of such
costs shall, in the absence of manifest error, be conclusive. The Company shall
be entitled to replace any such Lender in accordance with Section 12.3.
3.8. Taxes . All payments of the Credit Obligations (including the Irish
Loans) shall be made without set-off or counterclaim and free and clear of any
deductions, including deductions for Taxes, unless the Company is required by
law to make such deductions. If (a) any Lender shall, after the Initial Closing
Date, become subject to any Tax with respect to any payment of the Credit
Obligations or its obligations hereunder or (b) the Company shall, after the
Initial Closing Date, become required to withhold or deduct any Tax on any
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payment on the Credit Obligations, within 15 days after the receipt by the
Company of a certificate from such Lender setting forth why it is claiming
compensation under this Section 3.8 and computations (in reasonable detail) of
the amount thereof, the Company shall pay to the Agent for such Lender's account
such additional amount as is necessary to enable such Lender to receive the
amount of Tax so imposed on the Lender's obligations hereunder or the full
amount of all payments which it would have received on the Credit Obligations
(including amounts required to be paid under Sections 3.7, 3.9, 3.10 and this
Section 3.8) in the absence of such Tax, as the case may be, together with
interest at the Overdue Reimbursement Rate on such amount from the 15th day
after receipt of such certificate until payment in full thereof. Whenever Taxes
must be withheld by the Company with respect to any payments of the Credit
Obligations, the Company shall promptly furnish to the Agent for the account of
the applicable Lender official receipts (to the extent that the relevant
governmental authority delivers such receipts) evidencing payment of any such
Taxes so withheld. If the Company fails to pay any such Taxes when due or fails
to remit to the Agent for the account of the applicable Lender the required
receipts evidencing payment of any such Taxes so withheld or deducted, the
Company shall indemnify the affected Lender for any incremental Taxes and
interest or penalties that may become payable by such Lender as a result of any
such failure. The good faith determination by such Lender of the amount of such
Tax and the basis therefor shall, in the absence of manifest error, be
conclusive. The Company shall be entitled to replace any such Lender in
accordance with Section 12.3. In the event any Lender receives a refund of any
taxes for which it has received payment from the Company under this Section 3.8,
such Lender shall promptly pay the amount of such refund to the Company,
together with any interest thereon actually earned by such Lender.
3.9. Capital Adequacy . If any Lender shall determine in good faith that
compliance by such Lender with any Legal Requirement imposed after the Initial
Closing Date regarding capital adequacy of banks or bank holding companies has
or would have the effect of reducing the rate of return on such Lender's capital
as a consequence of such Lender's commitment to make the extensions of credit
contemplated hereby, or such Lender's maintenance of the extensions of credit
contemplated hereby, to a level below that which such Lender could have achieved
but for such compliance (taking into consideration such Lender's policies with
respect to capital adequacy immediately before such compliance and assuming that
such Lender's capital was fully utilized prior to such compliance) by an amount
deemed by such Lender to be material, then, within 15 days after the receipt by
the Company of a certificate from such Lender setting forth why it is claiming
compensation under this Section 3.9 and computations (in reasonable detail) of
the amount thereof, the Company shall pay to the Agent for the account of such
Lender such additional amounts as shall be sufficient to compensate such Lender
for such reduced return, together with interest at the Overdue Reimbursement
Rate on each such amount from the 15th day after receipt of such certificate
until payment in full thereof. The good faith determination by such Lender of
the amount to be paid to it and the basis for computation thereof shall, in the
absence of manifest error, be conclusive. In determining such amount, such
Lender may use any reasonable averaging, allocation and attribution methods. The
Company shall be entitled to replace any such Lender in accordance with Section
12.3.
3.10. Regulatory Changes . If any Lender shall determine that (a) any
change in any Legal Requirement (including any new Legal Requirement) after the
date hereof shall directly or indirectly (i) reduce the amount of any sum
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received or receivable by such Lender with respect to the Loan or the Letters of
Credit or the return to be earned by such Lender on the Loan or the Letters of
Credit, (ii) impose a cost on such Lender or any Affiliate of such Lender that
is attributable to the making or maintaining of, or such Lender's commitment to
make, its portion of the Loan or the Letters of Credit, or (iii) require such
Lender or any Affiliate of such Lender to make any payment on, or calculated by
reference to, the gross amount of any amount received by such Lender under any
Credit Document (other than Taxes or income taxes), and (b) such reduction,
increased cost or payment shall not be fully compensated for by an adjustment in
the Applicable Rate or the Letter of Credit fees, then, within 15 days after the
receipt by the Company of a certificate from such Lender setting forth why it is
claiming compensation under this Section 3.10 and computations (in reasonable
detail) of the amount thereof, the Company shall pay to such Lender such
additional amounts as such Lender determines will, together with any adjustment
in the Applicable Rate, fully compensate for such reduction, increased cost or
payment, together with interest on such amount from the 15th day after receipt
of such certificate until payment in full thereof at the Overdue Reimbursement
Rate. The good faith determination by such Lender of the amount to be paid to it
and the basis for computation thereof hereunder shall, in the absence of
manifest error, be conclusive. In determining such amount, such Lender may use
any reasonable averaging and attribution methods. The Company shall be entitled
to replace any such Lender in accordance with Section 12.3.
3.11. Mitigation . Each Lender shall take such commercially reasonable
steps as it may determine are not disadvantageous to it, including changing
lending offices to the extent feasible, in order to reduce amounts otherwise
payable by the Company to such Lender pursuant to Sections 3.2.4, 3.7, 3.8 and
3.10 or to make LIBOR Pricing Options available under Section 3.2.1 and 3.2.5.
4. Payment.
4.1. Payment at Maturity . Except as set forth in Section 2.2.5, on each
Money Market Loan Maturity Date, the Company will pay to the Agent for credit to
the applicable Money Market Loan Account the outstanding principal amount of its
Money Market Loan maturing on such date, together with all accrued and unpaid
interest with respect thereto. On the Final Maturity Date, the Company shall pay
to the Agent for credit to the Revolving Loan Account the entire outstanding
principal amount of Indebtedness evidenced thereby, together with all accrued
and unpaid interest with respect thereto, and all other Credit Obligations owing
by it to any Lender (to the extent not already paid in accordance with the
preceding sentence). On the Final Maturity Date, the Swingline Borrower shall
pay to the Agent for credit to the Swingline Loan Account the entire outstanding
principal amount of Indebtedness evidenced thereby, together with all accrued
and unpaid interest with respect thereto. On any accelerated maturity of the
Indebtedness evidenced by any Loan Account, the Company shall pay to the Agent
for credit to the Loan Accounts the entire outstanding principal amount of
Indebtedness evidenced thereby, together with all accrued and unpaid interest
with respect thereto, and all other Credit Obligations owing by it to any
Lender.
4.2. Contingent Required Prepayments.
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4.2.1. Excess Credit Exposure . If at any time the sum of the
Revolving Loan plus the Money Market Loans plus the Swingline Loan plus the
Letter of Credit Exposure plus Irish Loan Equivalents exceeds the Maximum
Amount of Revolving Credit, the Company will promptly pay the amount of
such excess as a prepayment of the Swingline Loan or the Revolving Loan or
the Money Market Loans, as the case may be.
4.2.2. Net Asset Sale Proceeds . Upon receipt of Net Asset Sale
Proceeds that exceed both (a) $5,000,000 in any year and (b) $25,000,000 in
the aggregate after the Initial Closing Date, the Company shall within
three Banking Days pay the amount of such excess to the Agent as a
prepayment of the Revolving Loan; provided, however, that the Company may
elect to reserve all or a portion of such Net Asset Sale Proceeds up to
$50,000,000 in the aggregate, for Permitted Reinvestments. The amount so
reserved (the "Permitted Reinvestment Reserve Amount") must be applied to a
Permitted Reinvestment within 270 days after the transaction creating the
Permitted Reinvestment Reserve Amount. In the event the Permitted
Reinvestment is not consummated within such 270-day period (or if the
Company abandons its plans for a Permitted Reinvestment prior to the end of
such period), the Company shall within three Banking Days repay the
Revolving Loan in an amount equal to such Permitted Reinvestment Reserve
Amount. Upon receipt of Net Asset Sale Proceeds exceeding $50,000,000 after
the Initial Closing Date, the Company shall within three Banking Days pay
the amount of such excess to the Agent as a repayment of the Revolving
Loan.
4.2.3. Excess Letter of Credit Exposure . If at any time Letter of
Credit Exposure exceeds $50,000,000, the Company will promptly pay the
amount of such excess to the Agent to be applied as provided in Section
4.4.
4.3. Voluntary Prepayments . In addition to the prepayments required by
Section 4.2, at any time or from time to time upon not less than one Banking Day
prior written notice to the Agent (except that no such notice need be given in
the event of an automatic payment on a Money Market Loan Closing Date in
accordance with Section 2.2.5), the Company shall have the right to prepay,
without premium or penalty of any type (except as provided in Sections 2.2.6 or
3.2.4), all or any part of its Revolving Loan or any Money Market Loan in such
amounts as are not less than $3,000,000 and in integral multiples of $500,000,
unless such payment is equal to the entire outstanding principal amount of the
Revolving Loan or the Money Market Loan, as the case may be. At any time or from
time to time upon telephone notice to the Swingline Lender, given not later than
3:00 p.m. (Boston time) on any Banking Day, the Swingline Borrower shall have
the right to prepay, without premium or penalty of any type, all or any part of
the outstanding principal amount of its Swingline Loan in such amounts as are
not less than $100,000 and in integral multiples of $50,000, unless such payment
is equal to the entire outstanding principal amount of the Swingline Loan.
4.4. Letters of Credit. If on the stated or any accelerated maturity of
the Credit Obligations the Letter of Credit Issuer or the Lenders shall be
43
obligated in respect of a Letter of Credit or a draft accepted under a Letter of
Credit, the Company will either:
(a) prepay such obligation by depositing with the Agent an amount of
cash, or
(b) deliver to the Agent a standby letter of credit (designating the
Agent as beneficiary and issued by a bank and on terms reasonably
acceptable to the Agent), in each case in an amount equal to the portion of
the then Letter of Credit Exposure issued for the account of the Company.
Any such cash so deposited and the cash proceeds of any draw under any
standby letter of credit so furnished, including any interest thereon,
shall be returned by the Agent to the Company only when, and to the extent
that, the amount of such cash held by the Agent exceeds the Letter of
Credit Exposure at a time when no Default exists; provided, however, that
if an Event of Default occurs and the Credit Obligations become or are
declared immediately due and payable, the Agent may apply such cash,
including any interest thereon, to the payment of any of the Credit
Obligations.
4.5. Reborrowing; Application of Payments, etc.
4.5.1. Reborrowing . The amounts of the Revolving Loan and Swingline
Loan prepaid pursuant to Section 4.3 may be reborrowed from time to time
prior to the Final Maturity Date in accordance with Section 2.1 and 2.3,
respectively, subject to the limits set forth therein.
4.5.2. Order of Application . Unless specified by the Company to the
contrary, all prepayments shall be deemed to apply to the Revolving Loan.
Any prepayment of the Revolving Loan shall be applied first to the portion
of the Loan not then subject to LIBOR Pricing Options, then the balance of
any such prepayment shall be applied to the portion of the Revolving Loan
then subject to LIBOR Pricing Options, in the chronological order of the
respective maturities thereof, together with any payments required by
Section 3.2.4.
4.5.3. Payments for Lenders . All payments of principal on the
Revolving Loan hereunder shall be made to the Agent for the account of the
Lenders in accordance with the Lenders' respective Percentage Interests.
5. Conditions to Extending Credit.
5.1. Conditions on Initial Closing Date. The obligations of the Lenders to
make any extension of credit pursuant to Section 2 shall be subject to the
satisfaction, on or before the Initial Closing Date, of the conditions set forth
in this Section 5.1 as well as the further conditions in Section 5.2. If the
conditions set forth in this Section 5.1 are not met on or prior to the Initial
Closing Date, the Lenders shall have no obligation to make any extensions of
credit hereunder.
5.1.1. Notes . The Company shall have duly executed and delivered to
the Agent a Revolving Note for each Lender and a Swingline Note for the
Swingline Lender.
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5.1.2. Guarantors Contribution Agreement . Each of the Guarantors
shall have entered into a contribution agreement in substantially the form
of Exhibit 5.1.2 (the "Guarantors Contribution Agreement"), pursuant to
which the Guarantors shall make contributions among themselves with respect
to payments made in accordance with their respective guarantees of the
Credit Obligations, and shall have delivered it to the Agent.
5.1.3. Subsidiary Subordination Agreement . Each of the Subsidiaries
of the Company (other than Merfin and its Subsidiaries, whose obligation to
enter into such agreement is set forth in Section 6.13.5) shall have
entered into a Subsidiary Subordination Agreement in substantially the form
of Exhibit 5.1.3 (the "Subsidiary Subordination Agreement") and shall have
delivered it to the Agent.
5.1.4. Payment of Fees . The Company shall have paid to the Agent (a)
the fees separately agreed between the Company and the Agent and (b) the
reasonable fees and disbursements of the Agent's special counsel for which
statements have been rendered on or prior to the Initial Closing Date.
5.1.5. Legal Opinions . On the Initial Closing Date, the Lenders shall
have received from the following counsel their respective opinions with
respect to the transactions contemplated by the Credit Documents, which
opinions shall be in form and substance reasonably satisfactory to the
Required Lenders:
(a) Baker, Donelson, Bearman & Xxxxxxxx, special counsel for the
Company.
(b) Xxxxxxxx & Xxxxx, special counsel for the Company.
(c) Ropes & Xxxx, special counsel for the Agent.
The Company authorizes and directs its counsel to furnish the
foregoing opinions.
5.1.6. Concurrent Transaction . On or immediately prior to the Initial
Closing Date:
(a) Tender Offer. Acquisition Subsidiary shall have acquired
through the Tender Offer at least 75% of the outstanding capital stock
of Merfin.
(b) Satisfaction of Conditions and Consents. All of the
conditions to the obligations of the parties to the Concurrent
Transaction shall have been satisfied in all material respects. Any
material consent, authorization, order or approval of any Person
required in connection with the Concurrent Transaction shall have been
obtained and shall be in full force and effect.
45
(c) Tender Offer Documents. The Company shall have furnished to
the Agent a copy of each of the Tender Offer Circular, together with
all amendments thereto, and all other material agreements to which the
Company or any of its Subsidiaries is party (other than agreements
entered into by Merfin prior to the date it becomes a Subsidiary of
the Company), in each case in connection with the Tender Offer, and
all such documents shall be in form and substance reasonably
satisfactory to the Agent.
(d) Officer's Certificate. Contemporaneously with the making by
the Lenders of the first extension of credit under Section 2, the
Agent shall have received a certificate of a Financial Officer to the
effect that the Concurrent Transaction has been consummated and to the
effect that each of the conditions set forth in this Section 5.1.6 has
been satisfied.
5.1.7. Capitalization, etc . On the Initial Closing Date, immediately
after giving effect to the Concurrent Transaction, the initial advance
under this Agreement and the transactions contemplated thereby and hereby:
(a) The capitalization of the Company will consist of (i)
$6,900,000 in Senior Notes, $149,500,000 in Approved Subordinated
Debt, $99,500,000 in Redemption Subordinated Debt, up to DM 15,000,000
in Indebtedness by the Company's German Subsidiary to Dresdner Bank
A.G., the Acquired Merfin Debt and other Indebtedness permitted by
Section 6.6 and (ii) Consolidated Net Worth exceeding $96,000,000.
(b) The Maximum Amount of Revolving Credit shall exceed the sum
of the Revolving Loan plus the Letter of Credit Exposure plus the
Money Market Loan plus the Swingline Loan by at least $25,000,000 or
such lesser amount as the Company and the Agent reasonably agree is
sufficient for the working capital needs of the Company and its
Subsidiaries (including Merfin and its Subsidiaries) taken as a whole.
(c) The Redemption Subordinated Debt, the Approved Subordinated
Debt and the Senior Notes shall be unsecured, issued by the Company
and shall have conditions and terms reasonably satisfactory to the
Lenders, including but not limited to the absence of any Guarantees by
any Subsidiaries.
(d) After giving effect to the Concurrent Transaction, the Senior
Notes, the Approved Subordinated Debt, the Redemption Subordinated
Debt and the Credit Obligations, the Company and its Subsidiaries,
taken as a whole:
(i) will be solvent;
(ii) will have assets having a fair saleable value in excess
of the amount required to pay their probable liability on their
existing debts as such debts become absolute and mature;
(iii) will have access to adequate capital for the conduct
of their business; and
46
(iv) will have the ability to pay their debts from time to
time incurred as such debts mature.
(e) The Company shall have furnished to the Lenders a certificate
of a Financial Officer to such effect, together with detailed
computations verifying the items in clauses (a) and (b) above and
calculations pursuant to Section 7.2.1(e) demonstrating compliance
with the Computation Covenants, in each case giving pro forma effect
to the Concurrent Transaction and the incurrence of the Credit
Obligations.
5.1.8. Proper Proceedings . This Agreement, each other Credit Document
and the transactions contemplated hereby and thereby shall have been
authorized by all necessary corporate, partnership or other proceedings on
the part of the Company and the Guarantors. All necessary consents,
approvals and authorizations of any governmental or administrative agency
or any other Person of any of the transactions contemplated hereby or by
any other Credit Document shall have been obtained and shall be in full
force and effect.
5.1.9. General . All legal and corporate proceedings in connection
with the transactions contemplated by this Agreement shall be satisfactory
in form and substance to the Agent and the Agent shall have received copies
of all documents, including certified copies of the Charter and By-Laws of
the Company and the other Obligors, records of corporate and partnership
proceedings, certificates as to signatures and incumbency of officers and
opinions of counsel, which the Agent may have reasonably requested in
connection therewith, such documents where appropriate to be certified by
proper corporate or governmental authorities.
5.2. Conditions to Each Extension of Credit . The obligations of the
Lenders to make any extension of credit pursuant to Section 2 shall be subject
to the satisfaction, on or before the Closing Date for such extension of credit,
of the following conditions:
5.2.1. Officer's Certificate . The representations and warranties
contained in Section 7 shall be true and correct on and as of such Closing
Date with the same force and effect as though made on and as of such date
(except as to any representation or warranty which refers to a specific
earlier date and except to the extent set forth in Section 7.18 with
respect to Merfin and its Subsidiaries); no Default shall exist on such
Closing Date prior to or immediately after giving effect to the requested
extension of credit; no Material Adverse Change shall have occurred since
June 30, 1996 (or, with respect to Merfin and its Subsidiaries, the Initial
Closing Date); and the Company shall have furnished to the Agent in
connection with the requested extension of credit a certificate to these
effects, in substantially the form of Exhibit 5.2.1, signed by a Financial
Officer.
5.2.2. Legality, etc . The making of the requested extension of credit
shall not (a) subject any Lender to any penalty or Tax (other than a Tax
for which the Company is required to reimburse the Lenders under Section
47
3.8) or (b) be prohibited by any Legal Requirement. If any Lender is unable
to perform its obligations hereunder due to a lending restriction under
clauses (a) or (b), the Company shall be entitled to replace such Lender
pursuant to Section 12.3.
6. General Covenants. Each of the Company and the Guarantors covenants that,
until all of the Credit Obligations shall have been paid in full and until the
Lenders' commitments to extend credit under this Agreement and any other Credit
Document shall have been irrevocably terminated, the Company and its
Subsidiaries will comply with the following provisions:
6.1. Taxes and Other Charges; Accounts Payable .
6.1.1. Taxes and Other Charges . Each of the Company and its
Subsidiaries shall duly pay and discharge, or cause to be paid and
discharged, before the same becomes in arrears, all material taxes,
assessments and other governmental charges imposed upon such Person and its
properties, sales or activities, or upon the income or profits therefrom,
as well as all material claims for labor, materials or supplies which if
unpaid might by law become a Lien upon any of its property; provided,
however, that any such tax, assessment, charge or claim need not be paid if
the validity or amount thereof shall at the time be contested in good faith
by appropriate proceedings and if such Person shall, in accordance with
GAAP, have set aside on its books adequate reserves with respect thereto;
and provided, further, that each of the Company and its Subsidiaries shall
pay or bond, or cause to be paid or bonded, all such taxes, assessments,
charges or other governmental claims immediately upon the commencement of
proceedings to foreclose any Lien which may have attached as security
therefor (except to the extent such proceedings have been dismissed or
stayed).
6.1.2. Accounts Payable . Each of the Company and its Subsidiaries
shall promptly pay when due (taking into account any applicable grace
periods), or in conformity with customary trade terms and historical
practices, all other Indebtedness incident to the operations of such Person
not referred to in Section 6.1.1; provided, however, that any such
Indebtedness need not be paid if the validity or amount thereof shall at
the time be contested in good faith and if such Person shall, in accordance
with GAAP, have set aside on its books adequate reserves with respect
thereto.
6.2. Conduct of Business, etc.
6.2.1. Types of Business . The Company and its Subsidiaries shall
engage principally in the business of (a) specialty cellulose pulps, (b)
nonwoven and air-laid fabrics and (c) other activities substantially
related thereto.
6.2.2. Maintenance of Properties. Each of the Company and its
Subsidiaries:
(a) shall keep its properties in such repair, working order and
condition, and shall from time to time make such repairs, replacements,
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additions and improvements thereto as are necessary for the efficient
operation of its businesses (in its reasonable judgment) and shall comply
at all times in all material respects with all material franchises,
licenses and leases to which it is party so as to prevent any loss or
forfeiture thereof or thereunder, except where (i) compliance is at the
time being contested in good faith by appropriate proceedings or (ii)
failure to comply with the provisions being contested have not resulted, or
do not create a material risk of resulting, in the aggregate in any
Material Adverse Change; and
(b) shall do all things necessary to preserve, renew and keep in full
force and effect and in good standing its legal existence and authority
necessary to continue its business; provided, however, that this Section
6.2.2 (b) shall not prevent the merger, consolidation, reorganization,
amalgamation or liquidation of Subsidiaries permitted by Section 6.11.
6.2.3. Statutory Compliance . Each of the Company and its Subsidiaries
shall comply in all material respects with all valid and applicable
statutes, laws, ordinances, zoning and building codes and other rules and
regulations of the United States of America, of the states and territories
thereof and their counties, municipalities and other subdivisions and of
any foreign country or other jurisdictions applicable to such Person,
except where failure so to comply would not reasonably be expected to
result in the aggregate in any Material Adverse Change; provided, however,
that compliance with Environmental Laws shall be governed solely by Section
6.19.
6.2.4. Compliance with Material Agreements . Each of the Company and
its Subsidiaries shall comply in all material respects with the Material
Agreements (to the extent not in violation of the other provisions of this
Agreement or any other Credit Document). Without the prior written consent
of the Required Lenders, no Material Agreement so designated in Exhibit
7.2.2 shall be amended, modified, waived or terminated in any manner that
would have in any material respect an adverse effect on the interests of
the Lenders.
6.3. Insurance.
6.3.1. Business Interruption Insurance . The Company and its
Subsidiaries shall maintain with financially sound and reputable insurers
insurance related to interruption of business, either for loss of revenues
or for extra expense as it relates to the loss of revenues, in an amount of
at least $1,000,000,000 in the aggregate and otherwise in the manner
customary for businesses of similar size engaged in similar activities at
similar locations.
6.3.2. Property Insurance . Each of the Company and its Subsidiaries
shall keep its assets which are of an insurable character insured by
financially sound and reputable insurers against theft and fraud and
against loss or damage by fire, explosion and hazards insured against by
extended coverage to the extent, in amounts and with deductibles at least
as favorable as those generally maintained by businesses of similar size
engaged in similar activities.
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6.3.3. Liability Insurance . Each of the Company and its Subsidiaries
shall maintain with financially sound and reputable insurers insurance
against liability for hazards, risks and liability to persons and property,
including product liability insurance, to the extent, in amounts and with
deductibles at least as favorable as those generally maintained by
businesses of similar size engaged in similar activities at similar
locations; provided, however, that it may effect workers' compensation
insurance or similar coverage with respect to operations in any particular
state or other jurisdiction through an insurance fund operated by such
state or jurisdiction or by meeting the self-insurance requirements of such
state or jurisdiction.
6.4. Financial Statements and Reports . Each of the Company and its
Subsidiaries shall maintain a system of accounting in which correct entries
shall be made of all transactions in relation to their business and affairs in
accordance with generally accepted accounting practice. The fiscal year of the
Company and its Subsidiaries shall end on June 30 in each year; provided,
however, that the fiscal year of Merfin and its Subsidiaries may end on December
31. The fiscal quarters of the Company and its Subsidiaries shall end on
September 30, December 31, March 31 and June 30 in each year.
6.4.1. Annual Reports . The Company shall furnish to the Lenders as
soon as available, and in any event within 95 days after the end of each
fiscal year, the Consolidated and Consolidating balance sheets of the
Company and its Subsidiaries as at the end of such fiscal year, the
Consolidated and Consolidating statements of income and Consolidated
statements of changes in shareholders' equity and of cash flows of the
Company and its Subsidiaries for such fiscal year (all in reasonable
detail) and together, in the case of Consolidated financial statements,
with comparative figures for the immediately preceding fiscal year, all
accompanied by:
(a) Unqualified reports of Ernst & Young LLP (or, if they cease to be
auditors of the Company and its Subsidiaries, other independent certified
public accountants of recognized national standing reasonably satisfactory
to the Required Lenders), containing no material uncertainty, to the effect
that they have audited the foregoing Consolidated financial statements in
accordance with generally accepted auditing standards and that such
Consolidated financial statements present fairly, in all material respects,
the financial position of the Company and its Subsidiaries covered thereby
at the dates thereof and the results of their operations for the periods
covered thereby in conformity with GAAP.
(b) The statement of such accountants that they have caused this
Agreement to be reviewed and that in the course of their audit of the
Company and its Subsidiaries no facts have come to their attention that
cause them to believe that any Default exists and in particular that they
have no knowledge of any Default under Sections 6.5 through 6.18 or, if
such is not the case, specifying such Default and the nature thereof. This
50
statement is furnished by such accountants with the understanding that the
examination of such accountants cannot be relied upon to give such
accountants knowledge of any such Default except as it relates to
accounting or auditing matters within the scope of their audit.
(c) A certificate of the Company signed by a Financial Officer to the
effect that such officer has caused this Agreement to be reviewed and has
no knowledge of any Default, or if such officer has such knowledge,
specifying such Default and the nature thereof, and what action the Company
has taken, is taking or proposes to take with respect thereto.
(d) Computations by the Company, substantially in the form
historically prepared by the Company, comparing the financial statements
referred to above with the most recent budget for such fiscal year
furnished to the Lenders in accordance with Section 6.4.4.
(e) Computations by the Company demonstrating, as of the end of such
fiscal year, compliance with the Computation Covenants, certified by a
Financial Officer.
(f) Calculations, as at the end of such fiscal year, of (i) the
Accumulated Benefit Obligations for each Plan covered by Title IV of ERISA
(other than Multiemployer Plans) and (ii) the fair market value of the
assets of such Plan allocable to such benefits.
(g) Supplements to Exhibits 7.1 and 7.3 showing any changes in the
information set forth in such Exhibits not previously furnished to the
Lenders in writing, as well as any changes in the Charter, Bylaws or
incumbency of officers of the Company or its Subsidiaries from those
previously certified to the Agent.
(h) In the event of a change in GAAP after June 30, 1996, computations
by the Company, certified by a Financial Officer, reconciling the financial
statements referred to above with financial statements prepared in
accordance with GAAP as applied to the other covenants in Section 6 and
related definitions.
6.4.2. Quarterly Reports . The Company shall furnish to the Lenders as
soon as available and, in any event, within 45 days after the end of each
of the first three fiscal quarters of the Company, the internally prepared
Consolidated balance sheets of the Company and its Subsidiaries as of the
end of such fiscal quarter, the Consolidated statements of income, of
changes in shareholders' equity and of cash flows of the Company and its
Subsidiaries for such fiscal quarter and for the portion of the fiscal year
then ended (all in reasonable detail) and together, with comparative
figures for the same period in the preceding fiscal year, all accompanied
by:
(a) A certificate of the Company signed by a Financial Officer to the
effect that such financial statements have been prepared in accordance with
GAAP and present fairly, in all material respects, the financial position
of the Company and its Subsidiaries covered thereby at the dates thereof
and the results of their operations for the periods covered thereby,
subject only to normal year-end audit adjustments and the addition of
footnotes.
51
(b) A certificate of the Company signed by a Financial Officer to the
effect that such officer has caused this Agreement to be reviewed and has
no knowledge of any Default, or if such officer has such knowledge,
specifying such Default and the nature thereof and what action the Company
has taken, is taking or proposes to take with respect thereto.
(c) Computations by the Company, substantially in the form
historically prepared by the Company comparing the financial statements
referred to above with the most recent budget for the period covered
thereby furnished to the Lenders in accordance with Section 6.4.4.
(d) Computations by the Company demonstrating, as of the end of such
quarter, compliance with the Computation Covenants, certified by a
Financial Officer.
(e) Supplements to Exhibits 7.1 and 7.3 showing any changes in the
information set forth in such Exhibits not previously furnished to the
Lenders in writing, as well as any changes in the Charter, Bylaws or
incumbency of officers of the Company and its Subsidiaries from those
previously certified to the Agent.
(f) In the event of a change in GAAP after June 30, 1996, computations
by the Company, certified by a Financial Officer, reconciling the financial
statements referred to above with financial statements prepared in
accordance with GAAP as applied to the other covenants in Section 6 and
related definitions.
6.4.3. Monthly Reports . The Company shall furnish to the Lenders as
soon as available and, in any event, within 30 days after the end of each
month, the internally prepared financial data for such month in the form
prepared by management for its internal purposes. A sample of this monthly
report appears as Exhibit 6.4.
6.4.4. Other Reports . The Company shall promptly furnish to the
Lenders:
(a) As soon as prepared and in any event before the beginning of each
fiscal year, an annual plan for each fiscal quarter in such fiscal year of
the Company and its Subsidiaries, prepared in a manner substantially
consistent with the Company's historical practices and with the manner in
which the financial projections described in Section 7.2.1 were prepared.
(b) On at least a quarterly basis, any material updates of such budget
and projections formally prepared by the Company.
(c) Any management letters furnished to the Company or any of its
Subsidiaries by the Company's auditors.
52
(d) All budgets, projections, statements of operations and other
reports furnished generally to the shareholders of the Company.
(e) Such registration statements, proxy statements and reports,
including Forms X-0, X-0, X-0, X-0, 10-K, 10-Q and 8-K, as may be filed by
the Company or any of its Subsidiaries with the Securities and Exchange
Commission.
(f) Any 90-day letter or 30-day letter from the federal Internal
Revenue Service (or the equivalent notice received from state or other
taxing authorities) asserting tax deficiencies against the Company or any
of its Subsidiaries.
(g) Progress reports as required under the Fenholloway River Agreement
(whether on a quarterly basis or otherwise).
6.4.5. Notice of Litigation; Notice of Defaults . Except with respect
to matters arising under Environmental Laws for which notices as required
by Section 6.19, the Company shall promptly furnish to the Lenders notice
of any litigation or any administrative or arbitration proceeding (a) which
would reasonably be expected to create a material risk of resulting, after
giving effect to any applicable insurance, in the payment by the Company
and its Subsidiaries of more than $3,000,000 or (b) which results, or would
reasonably be expected to create a material risk of resulting, in a
Material Adverse Change. Promptly upon acquiring knowledge thereof, the
Company shall notify the Lenders of the existence of any Default,
specifying the nature thereof and what action the Company or any Subsidiary
has taken, is taking or proposes to take with respect thereto.
6.4.6. ERISA Reports . The Company shall furnish to the Lenders as
soon as reasonably available the following items with respect to any Plan:
(a) any request for a waiver of the funding standards or an extension
of the amortization period,
(b) any reportable event (as defined in section 4043 of ERISA), unless
the notice requirement with respect thereto has been waived by regulation,
(c) any notice received by any ERISA Group Person that the PBGC has
instituted or intends to institute proceedings to terminate any Plan, or
that any Multiemployer Plan is insolvent or in reorganization,
(d) notice of the possibility of the termination of any Plan by its
administrator pursuant to section 4041 of ERISA, and
(e) notice of the intention of any ERISA Group Person to withdraw, in
whole or in part, from any Multiemployer Plan.
53
6.4.7. Other Information . From time to time at reasonable intervals
upon request of any authorized officer of any Lender, the Company shall
furnish to the Lenders such other information, substantially consistent in
form and substance to information historically prepared by the Company,
regarding the business, assets, financial condition or income of the
Company and its Subsidiaries as such officer may reasonably request,
including copies of all tax returns and material licenses, agreements,
leases and instruments to which any of the Company or its Subsidiaries is
party. The Lenders' authorized officers and representatives shall have the
right during normal business hours upon reasonable notice and at reasonable
intervals to inspect the properties and to examine the books and records of
the Company and its Subsidiaries and to make copies and notes therefrom for
the purpose of ascertaining compliance with or obtaining enforcement of
this Agreement or any other Credit Document.
6.5. Certain Financial Tests .
6.5.1. Consolidated Net Worth . Consolidated Net Worth shall not at
any time be less than $96,000,000; provided, however, that on the last day
of each fiscal quarter of the Company, the then effective dollar amount in
this Section 6.5.1 shall be increased by 50% of Consolidated Net Income (if
positive) of the Company and its Subsidiaries determined in accordance with
GAAP for the quarter then ended.
6.5.2. Consolidated Total Net Debt to Consolidated EBITDA .
Consolidated Total Net Debt shall not on any date exceed 375% of
Consolidated EBITDA for the most recently completed period of four
consecutive fiscal quarters for which financial reports have been furnished
to the Lenders in accordance with Section 6.4.1 or 6.4.2.
6.5.3. Consolidated EBITDA to Consolidated Interest Expense. For each
period of four consecutive fiscal quarters of the Company, commencing with
the period ending September 30, 1997, Consolidated EBITDA shall equal or
exceed the percentage of Consolidated Interest Expense set forth in the
table below for such period:
Period Ending Percentage
------------- ----------
Prior to September 30, 1999 300%
September 30, 1999 and thereafter 325%
6.5.4. Environmental Capital Expenditures . The aggregate amount of
Environmental Capital Expenditures shall not exceed the aggregate amount
set forth in Exhibit 1.
6.5.5. Business Capital Expenditures . For each period of four
consecutive fiscal quarters of the Company, commencing with the period
54
ending September 30, 1997, the excess of (a) Consolidated EBITDA minus (b)
Business Capital Expenditures shall equal or exceed 175% of Consolidated
Interest Expense.
6.6. Indebtedness. Neither the Company nor any of its Subsidiaries shall
create, incur, assume or otherwise become or remain liable with respect to any
Indebtedness except the following:
6.6.1. Indebtedness in respect of the Credit Obligations.
6.6.2. Guarantees permitted by Section 6.7.
6.6.3. Current liabilities, other than Financing Debt, incurred in the
ordinary course of business (including (a) accrued salaries, vacation and
benefits, accounts payable for services, inventory and equipment and other
trade accounts payable and (b) such current liabilities incurred in the
ordinary course of business by Persons acquired by the Company and its
Subsidiaries in accordance with Section 6.9).
6.6.4. To the extent that payment thereof shall not at the time be
required by Section 6.1, Indebtedness in respect of taxes, assessments,
governmental charges and claims for labor, materials and supplies.
6.6.5. Indebtedness secured by Liens of carriers, warehouses,
mechanics and landlords permitted by Sections 6.8.4 and 6.8.5.
6.6.6. Indebtedness in respect of judgments or awards (a) which have
been in force for less than the applicable appeal period or (b) in respect
of which the Company or any Subsidiary shall at the time in good faith be
prosecuting an appeal or proceedings for review and, in the case of each of
clauses (a) and (b), the Company or such Subsidiary shall have taken
appropriate reserves therefor in accordance with GAAP and execution of such
judgment or award shall not be levied.
6.6.7. To the extent permitted by Section 6.8.8, Indebtedness in
respect of Capitalized Lease Obligations or secured by purchase money
security interests; provided, however, that the aggregate principal amount
of all Indebtedness permitted by this Section 6.6.7 at any one time
outstanding shall not exceed $15,000,000.
6.6.8. Indebtedness in respect of deferred taxes arising in the
ordinary course of business.
6.6.9. Indebtedness in respect of inter-company loans and advances
among the Company and its Subsidiaries which are not prohibited by Section
6.9.
6.6.10. Indebtedness of the Company in respect of the Approved
Subordinated Debt, the Senior Notes and the Redemption Subordinated Debt.
55
6.6.11. Unfunded pension liabilities and obligations with respect to
Plans so long as the Company is in compliance with Section 6.17.
6.6.12. Indebtedness outstanding on the date hereof and described in
Exhibit 7.3 (other than Acquired Merfin Debt) and all renewals and
extensions thereof not in excess of the amount thereof outstanding
immediately prior to such renewal or extension.
6.6.13. Indebtedness of the Company not in excess of $35,000,000 in
respect of an industrial development bond or other special purpose
financing for environmental equipment at its Xxxxx, Florida plant.
6.6.14. Indebtedness (other than Financing Debt) in addition to the
Indebtedness permitted by the other provisions of this Section 6.6;
provided, however, that the aggregate amount of all such Indebtedness at
any one time outstanding shall not exceed $15,000,000.
6.6.15. Financing Debt and unfunded pension liabilities of
Subsidiaries acquired in accordance with Section 6.9.5 or otherwise assumed
by the Company and its Subsidiaries in acquisitions permitted by Section
6.9.5 in an aggregate amount not exceeding $15,000,000 for all such
acquisitions after the Initial Closing Date.
6.6.16. Indebtedness of Foreign Subsidiaries in respect of credit
facilities to finance working capital and other valid business purposes in
an amount not to exceed the following amounts in the aggregate at any one
time outstanding:
(a) in the case of Merfin and its Canadian Subsidiaries, $15,000,000
in the aggregate in the Equivalent Amount of United States Funds, computed
as of the most recent date such Indebtedness was incurred, minus an
Equivalent Amount of United States Funds, computed as of the later of (i)
the Initial Closing Date or (ii) the most recent date such Indebtedness was
incurred equal to the amount of Acquired Merfin Debt then outstanding or
committed with respect to Merfin and its Canadian Subsidiaries.
(b) in the case of Merfin Europe Limited, $15,000,000 in the aggregate
in the Equivalent Amount of United States Funds, computed as of the most
recent date such Indebtedness was incurred, minus an Equivalent Amount of
United States Funds, computed as of the later of (i) the Initial Closing
Date or (ii) the most recent date such Indebtedness was incurred, equal to
the amount of Acquired Merfin Debt then outstanding or committed and
reasonably allocable to finance Merfin Europe Limited, minus the Irish Loan
Equivalents; provided, however, that Indebtedness may be outstanding under
this Section 6.6.16(b) only in the event tax or business reasons justify
Merfin Europe Limited in not using Irish Loans, to which reasons the Agent
shall have provided its consent, which may not be unreasonably withheld.
56
(c) in the case of any other Foreign Subsidiaries, $15,000,000 in the
aggregate in the Equivalent Amount of United States Funds, computed as of
the most recent date such Indebtedness was incurred.
6.6.17. Indebtedness in respect of foreign currency hedging agreements
entered into in the ordinary course of business.
6.6.18. Indebtedness issued by the Company, either publicly or
privately, in respect of unsecured term debt that is either subordinated
to, or pari passu with, the Credit Obligations, has a maturity extending
beyond the Final Maturity Date, has no amortization prior to the Final
Maturity Date and is subject to terms and covenants no more restrictive on
the Company and its Subsidiaries than those contained herein; provided,
however, that the aggregate principal amount of such Indebtedness may not
exceed $100,000,000; and provided, further, however, that the aggregate
principal amount of such Indebtedness may be as much as $150,000,000 so
long as the Maximum Amount of Revolving Credit is permanently reduced on a
dollar-for-dollar basis by the amount that the Indebtedness permitted by
this Section 6.6.18 exceeds $100,000,000, unless the Required Lenders
otherwise agree.
6.6.19. Acquired Merfin Debt; provided, however, that by August 31,
1997 (a) all Acquired Merfin Debt of Merfin Europe Limited must be repaid
and (b) all Acquired Merfin Debt of Merfin and its Canadian Subsidiaries in
an aggregate amount exceeding $15,000,000 in an Equivalent Amount of United
States Funds, computed as of the later of (i) the Initial Closing Date or
(ii) the most recent date any such Indebtedness was incurred, must be
repaid.
6.7. Guarantees; Letters of Credit . Neither the Company nor any of its
Subsidiaries shall become or remain liable with respect to any Guarantee,
including reimbursement obligations under letters of credit or other financial
guarantees by third parties, except the following:
6.7.1. Letters of Credit and Guarantees of the Credit Obligations.
6.7.2. Guarantees by the Company and its Subsidiaries of Indebtedness
incurred by its Subsidiaries and permitted by Section 6.6.
6.7.3. Guarantees by the Company of loans by third parties to its
employees to purchase capital stock of the Company in an amount not to
exceed $4,000,000 in the aggregate at any one time outstanding.
6.7.4. Letters of Credit issued by foreign financial institutions for
the account of Foreign Subsidiaries in an aggregate face amount not
exceeding $10,000,000 in the equivalent amount of United States Funds at
any one time outstanding.
57
6.8. Liens . Neither the Company nor any of its Subsidiaries shall create,
incur or enter into, or suffer to be created or incurred or to exist, any Lien,
except the following:
6.8.1. Liens to secure taxes, assessments and other governmental
charges, to the extent that payment thereof shall not at the time be
required by Section 6.1.
6.8.2. Deposits or pledges made (a) in connection with, or to secure
payment of, workers' compensation, unemployment insurance, old age pensions
or other social security, (b) in connection with casualty insurance
maintained in accordance with Section 6.3, (c) to secure the performance of
bids, tenders, contracts (other than contracts relating to Financing Debt),
utilities or leases, (d) to secure statutory obligations or surety or
appeal bonds, (e) to secure indemnity, performance or other similar bonds
in the ordinary course of business or (f) in connection with contested
amounts to the extent that payment thereof shall not at that time be
required by Section 6.1.
6.8.3. Liens in respect of judgments or awards, to the extent that
such judgments or awards are permitted by Section 6.6.6.
6.8.4. Liens of carriers, warehouses, mechanics, suppliers and similar
Liens, in each case (a) in existence less than 90 days from the later of
(i) the date of creation thereof or (ii) the date payment of Indebtedness
secured thereby is due, or (b) being contested in good faith by the Company
or any Subsidiary in appropriate proceedings (so long as the Company or
such Subsidiary shall, in accordance with GAAP, have set aside on its books
adequate reserves with respect thereto).
6.8.5. Encumbrances in the nature of (a) zoning restrictions, (b)
easements, (c) restrictions of record on the use of real property, (d)
landlords' and lessors' Liens on rented premises and (e) restrictions on
transfers or assignment of leases, licenses and other contracts, which in
each case do not materially detract from the value of the encumbered
property or impair the use thereof in the business of the Company or any
Subsidiary.
6.8.6. Restrictions under federal and state securities laws and
shareholder agreements on the transfer of securities.
6.8.7. Restrictions under Foreign Trade Regulations on the transfer or
licensing of certain assets of the Company and its Subsidiaries.
6.8.8. Liens constituting (a) purchase money security interests
(including mortgages, conditional sales, Capitalized Leases and any other
title retention or deferred purchase devices) in real property, interests
in leases or tangible personal property (other than inventory) existing or
created on the date on which such property is acquired or within 90 days
thereafter, and (b) the renewal, extension or refunding of any security
interest referred to in the foregoing clause (a) in an amount not to exceed
the amount thereof remaining unpaid immediately prior to such renewal,
extension or refunding; PROVIDED,
58
HOWEVER, that (i) each such security interest shall attach solely to the
particular item of property so acquired, and the principal amount of
Indebtedness (including Indebtedness in respect of Capitalized Lease
Obligations) secured thereby shall not exceed the cost (including all such
Indebtedness secured thereby, whether or not assumed) of such item of
property; and (ii) the aggregate principal amount of all Indebtedness
secured by Liens permitted by this Section 6.8.8 shall not exceed the
amount permitted by Section 6.6.7.
6.8.9. Liens securing industrial development bonds or other special
purpose financing permitted by Section 6.6.13 or 6.6.15 on the assets being
acquired, constructed or improved with the proceeds of such bonds.
6.8.10. Liens securing the Credit Obligations.
6.8.11. Rights of set-off held by any banks.
6.8.12. Liens on foreign assets owned by Foreign Subsidiaries to
secure Indebtedness of Foreign Subsidiaries in respect of credit facilities
permitted by Section 6.6.16.
6.8.13. Pledge of certificates of deposit of the Company constituting
Guarantees permitted by Section 6.7.3.
6.8.14. Liens existing on the Initial Closing Date as described on
Exhibit 6.8.14 (other than Acquired Merfin Liens).
6.8.15. Acquired Merfin Liens; provided, however, that the Company and
its Subsidiaries shall repay the Acquired Merfin Debt secured by Acquired
Merfin Liens to the extent contemplated by Section 6.6.19.
6.9. Investments and Acquisitions . Neither the Company nor any of its
Subsidiaries shall have outstanding, acquire, commit itself to acquire or hold
any Investment (including any Investment consisting of the acquisition of any
business) except for the following:
6.9.1. Investments of the Company and its Subsidiaries in Wholly Owned
Subsidiaries (a) which are domestic Subsidiaries as of the date of this
Agreement or (b) which become domestic Wholly Owned Subsidiaries after the
Initial Closing Date and become Guarantors to the extent required by
Section 9.9; provided, however, that no such Investment shall involve the
transfer by the Company of any substantial assets (other than cash).
6.9.2. Intercompany loans and advances from any Subsidiary to the
Company or any Guarantor that are subordinated to the Credit Obligations in
accordance with the Subsidiary Subordination Agreement.
59
6.9.3. Investments in Cash Equivalents.
6.9.4. Guarantees permitted by Section 6.7.
6.9.5. So long as immediately before and after giving effect thereto
no Default exists, and so long as the Company (if the Company is party
thereto) or a Guarantor (if the Company is not party thereto) is the
surviving entity, the Company and its Subsidiaries may acquire another
entity in the same line of business as the Company as described in Section
6.2.1 for a purchase price not exceeding, except with the consent of the
Required Lenders:
(a) at all times when Consolidated Total Net Debt (calculated on a pro
forma basis giving effect to the proposed acquisition) is less than 150% of
Consolidated EBITDA for the most recent period of four consecutive fiscal
quarters (calculated on a pro forma basis giving effect to the proposed
acquisition as if such acquisition had been consummated at the beginning of
such period) for which financial reports have been (or are required to have
been) furnished to the Lenders in accordance with Sections 6.4.1 or 6.4.2,
$75,000,000 for any single acquisition and $75,000,000 in cumulative
aggregate purchase price for all acquisitions permitted by this Section
6.9.5 during the period from the Initial Closing Date through the Final
Maturity Date and
(b) at all other times, $35,000,000 for any single acquisition and
$50,000,000 in cumulative aggregate purchase price for all acquisitions
permitted by this Section 6.9.5 during the period from the Initial Closing
Date through the Final Maturity Date;
PROVIDED, HOWEVER, that the (i) the acquisition must be approved by the
target entity's board of directors, (ii) the Company must be in compliance
with the Computation Covenants immediately after giving effect to such
acquisition, (iii) the acquired entity must not have any environmental
liabilities which, after giving effect to such acquisition, would
reasonably be expected to result in a Material Adverse Change and (iv) any
Subsidiary acquired under this Section 6.9.5 shall guarantee the Credit
Obligations, or a pledge of such Subsidiary's stock shall be furnished to
the Agent under a Pledge Agreement in substantially the form of Exhibit 9.9
(each a "Pledge Agreement"), in either case as contemplated by Section 9.9.
6.9.6. Investments in Unrestricted Affiliates engaged in businesses
contemplated by Section 6.2.1 in an aggregate outstanding amount not to
exceed, at the time any such Investment is made, (a) $25,000,000 at all
times when Consolidated Total Net Debt exceeds 150% of Consolidated EBITDA
for the most recent period of four consecutive fiscal quarters for which
financial reports have been (or are required to have been) furnished to the
Lenders in accordance with Sections 6.4.1 or 6.4.2 and (b) $45,000,000 at
all other times.
60
6.9.7. Loans or advances to employees of the Company in an amount not
to exceed (a) $1,000,000 in the aggregate outstanding at any time for the
purchase of capital stock of the Company and (b) $2,000,000 in the
aggregate outstanding at any time for all other purposes.
6.9.8. So long as immediately before and after giving effect thereto
no Default exists, Investments of the Company and its Subsidiaries in
foreign Wholly Owned Subsidiaries; provided, however, that (a) such
Investments shall not involve the transfer of substantial assets (other
than cash) from the Company and its domestic Subsidiaries to its Foreign
Subsidiaries and (b) cash Investments (other than Investments outstanding
on the Initial Closing Date or made to consummate the acquisition of Merfin
in accordance with Section 6.9.9) of the Company and its domestic
Subsidiaries in its Foreign Subsidiaries made pursuant to this Section
shall not exceed the sum of (i) $35,000,000 at any one time outstanding
plus (ii) the amount of Capital Expenditures permitted by Sections 6.5.4
and 6.5.5 incurred by such Foreign Subsidiaries.
6.9.9. In addition to all other Investments allowed by this Section
6.9 and notwithstanding the foregoing provisions of this Section 6.9, the
Acquisition Subsidiary may purchase the outstanding capital stock of Merfin
and may merge into, or amalgamate with, Merfin, all as contemplated by the
Tender Offer Circular.
6.9.10. On or about the time Acquisition Subsidiary acquires all the
capital stock of Merfin, the Company and its Subsidiaries may make
appropriate transfers among themselves so that direct Wholly Owned
Subsidiaries of Merfin may become direct Wholly Owned Subsidiaries of the
Company and its other Wholly Owned Subsidiaries.
6.9.11. The Company and its Subsidiaries may make Loans to employees
of Merfin and its Subsidiaries in an amount equal to the exercise price of
options to acquire Merfin stock owned by such employees, which loans shall
be promptly repaid through the subsequent exercise of such options and sale
of the resulting Merfin stock by such employees to the Acquisition
Subsidiary at a price not exceeding fair value.
6.10. Distributions . Neither the Company nor any of its Subsidiaries shall
make any Distribution except for the following:
6.10.1. Subsidiaries of the Company may make Distributions to the
Company or any Wholly Owned Subsidiary of the Company, and the Company and
its Subsidiaries may make Investments permitted by Section 6.9.
6.10.2. So long as immediately before and after giving effect thereto
no Default exists, the Company may make Distributions in an aggregate
amount since the Initial Closing Date which shall not exceed the sum of (a)
the sum of the respective applicable Distribution Percentages, on a fiscal
quarter by fiscal quarter basis, of Consolidated Net Income (which may be a
negative number) for each fiscal quarter since March 31, 1997 through the
fiscal quarter then most recently ended for which financial statements have
61
been furnished to the Lenders in accordance with Section 6.4.2, plus (b)
$10,000,000 in the aggregate after the Initial Closing Date, which amount
in this clause (b) may be applied only to pay dividends to stockholders or
to repurchase shares of the Company's capital stock from its stockholders
after the amount in clause (a) has already been applied in its entirety to
pay dividends or to make stock repurchases.
6.10.3. The Company may pay interest and principal of the Approved
Subordinated Debt and the Redemption Subordinated Debt, each in accordance
with the respective subordination provisions thereof.
6.10.4. So long as immediately before and after giving effect thereto
no Default exists, the Company may repay intercompany Indebtedness owing to
its Subsidiaries.
6.10.5. So long as immediately before and after giving effect thereto
no Default exists, the Company may repurchase shares of its stock from
employees whose employment with the Company and its Subsidiaries has
terminated, to the extent required by the Company's nonqualified employee
benefit plans and contracts in an aggregate amount not exceeding $1,000,000
in any fiscal year.
6.10.6. Acquisition Subsidiary may purchase Merfin stock from Merfin
employees as contemplated by Section 6.9.11.
6.11. Asset Dispositions and Mergers . Neither the Company nor any of
its Subsidiaries shall merge or enter into a consolidation or sell, lease,
sell and lease back, sublease or otherwise dispose of any of its assets,
except the following:
6.11.1. The Company and any of its Subsidiaries may sell or otherwise
dispose of (a) inventory in the ordinary course of business, (b) tangible
assets to be replaced in the ordinary course of business within 12 months
by other tangible assets of equal or greater value and (c) tangible assets
that are no longer used or useful in the business of the Company or such
Subsidiary; provided, however, that the fair market value of all items so
sold or disposed of pursuant to this clause (c) plus all items sold or
disposed of pursuant to Section 6.11.4 shall not exceed $5,000,000 in any
fiscal year.
6.11.2. Any Subsidiary of the Company may merge, amalgamate or be
liquidated or reorganized into the Company or any Wholly Owned Subsidiary
of the Company so long as after giving effect to any such merger to which
the Company or a Guarantor is a party the Company or (if the Company is not
party thereto) a Guarantor shall be the surviving or resulting Person.
6.11.3. So long as immediately before and after giving effect thereto
no Default exists, the Company may, in addition to transactions permitted
under 6.11.1, sell or otherwise dispose of assets for fair value; provided,
62
however, that the Company shall make any prepayments of the Loan required
by Section 4.2.2.
6.11.4. So long as immediately before and after giving effect thereto
no Default exists, the Company may sell or otherwise dispose of assets for
fair market value so long as the fair market value of all items so sold or
disposed of pursuant to this Section 6.11.4 plus all items sold or disposed
of pursuant to Section 6.11.1(c) shall not exceed $5,000,000 in any fiscal
year.
6.11.5. Mergers constituting Investments permitted by Section 6.9.5.
6.11.6. Asset transfers and related transactions among the Company and
its Subsidiaries constituting Investments permitted by Section 6.9.10.
6.12. Lease Obligations . Neither the Company nor any of its Subsidiaries
shall be or become obligated as lessee under any lease except:
6.12.1. Capitalized Leases permitted by Sections 6.6.7, 6.8.8 and
6.8.9.
6.12.2. Leases other than Capitalized Leases; provided, however, that
the aggregate fixed rental obligations for any year (excluding payments
required to be made by the lessee in respect of taxes, insurance and
operating expenses whether or not denominated as rent) shall not exceed
$15,000,000.
6.13. Issuance of Stock by Subsidiaries; Subsidiary Distributions,
etc.
6.13.1. Issuance of Stock by Subsidiaries . No Wholly Owned Subsidiary
shall issue or sell any shares of its capital stock or other evidence of
beneficial ownership (except for directors' qualifying shares and, in the
case of Foreign Subsidiaries, shares required to be held by foreign
nationals and stock issuances by Merfin contemplated by Section 6.9.11) to
any Person other than the Company or any Wholly Owned Subsidiary of the
Company.
6.13.2. No Restrictions on Subsidiary Distributions . Except for this
Agreement and the Credit Documents and except as provided in the credit
facilities of the Foreign Subsidiaries permitted by Section 6.16.4 or in
the documents relating to the Acquired Merfin Debt or required by law,
neither the Company nor any Subsidiary shall enter into or be bound by any
agreement (including covenants requiring the maintenance of specified
amounts of net worth or working capital) restricting the right of any
Subsidiary to make Distributions or extensions of credit to the Company
(directly or indirectly through another Subsidiary).
6.13.3. Restricted Operations of MDCP Subsidiary. The Subsidiary of
the Company formed to repurchase shares of the Company's capital stock from
63
MDCP will conduct no operations other than acquiring and owning the capital
stock of the Company repurchased from MDCP and activities incidental
thereto. Such Subsidiary will own no material assets other than shares of
stock of the Company, which shares have been delisted from any securities
exchange or quotation system and are no longer publicly tradable.
6.13.4. Restricted Operations of Acquisition Subsidiary. Acquisition
Subsidiary will conduct no operations other than making the Tender Offer
and acquiring and owning the capital stock of Merfin and activities
incidental thereto. Acquisition Subsidiary will own no material assets
other than the stock of Merfin, cash and Cash Equivalents. Acquisition
Subsidiary will incur no Indebtedness (other than intercompany Indebtedness
owing to the Company or a Wholly Owned Subsidiary of the Company). Upon the
acquisition of at least 75% of Merfin's outstanding stock, Acquisition
Subsidiary will commence procedures to acquire the remaining stock of
Merfin (by merger or amalgamation into Merfin or otherwise) as promptly as
practicable.
6.13.5. Merfin and Foreign Subsidiary Matters. Within 30 days after
the date Acquisition Subsidiary acquires all the stock of Merfin:
(a) The Company and its domestic Subsidiaries shall pledge to the
Agent as security for the Credit Obligations 66% of the stock of
Acquisition Subsidiary or any of Merfin and its Foreign Subsidiaries (to
the extent such Person becomes owned directly by the Company and its
domestic Subsidiaries) pursuant to a Pledge Agreement in substantially the
form of Exhibit 9.9.
(b) Merfin and its Subsidiaries shall duly authorize, execute and
deliver to the Agent the Subsidiary Subordination Agreement.
(c) In the event Merfin Systems Inc. becomes owned by the Company and
its domestic Subsidiaries, such Subsidiary shall duly authorize, execute
and deliver to the Agent a joinder to this Agreement as a Guarantor.
Prior to June 28, 1997, the Company and its domestic Subsidiaries shall pledge
to the Agent as security for the Credit Obligations 66% of the stock of each
Foreign Subsidiary owned by them (other than Merfin) pursuant to a Pledge
Agreement in substantially the form of Exhibit 9.9 or in such other form
acceptable to the Agent. In connection with each such pledge, the Company shall
deliver to the Agent a legal opinion of local counsel for each such Foreign
Subsidiary confirming the validity and enforceability of such pledge.
6.14. Voluntary Prepayments of Other Indebtedness . Neither the Company nor
any of its Subsidiaries shall make any voluntary prepayment of principal of or
interest on any Financing Debt (other than the Credit Obligations and the
Acquired Merfin Debt) or make any voluntary redemptions or repurchases of
Financing Debt (other than the Credit Obligations and the Acquired Merfin Debt)
64
in an aggregate amount exceeding $3,000,000 since the Initial Closing Date,
except that the Company may refinance Financing Debt and may purchase Senior
Notes outstanding after the Initial Closing Date.
6.15. Derivative Contracts. Neither the Company nor any of its Subsidiaries
shall enter into any Interest Rate Protection Agreement, foreign currency
exchange contract or other financial or commodity derivative contracts except to
provide hedge protection for an underlying economic transaction in the ordinary
course of business.
6.16. Negative Pledge Clauses . Neither the Company nor any of its
Subsidiaries shall enter into any agreement, instrument, deed or lease which
prohibits or limits the ability of the Company or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of their respective
properties, assets or revenues, whether now owned or hereafter acquired, except
the following:
6.16.1. This Agreement and the other Credit Documents.
6.16.2. Covenants in documents creating Liens permitted by
Section 6.8 prohibiting further Liens on the assets encumbered
thereby.
6.16.3. Covenants in the indentures for the Approved Subordinated
Debt and the Senior Notes, each as in effect on the Initial Closing
Date, and in the indenture for the Redemption Subordinated Debt, as in
effect on the Amendment Date.
6.16.4. Covenants in the credit facilities of the Foreign
Subsidiaries permitted by Section 6.6.16 prohibiting further Liens on
the assets of the Foreign Subsidiaries, restrictions required by law
or customary non-assignment provisions.
6.16.5. Covenants contained in the documents for the Acquired
Merfin Debt.
6.17. ERISA, etc. Each of the Company and its Subsidiaries shall comply,
and shall cause all ERISA Group Persons to comply, in all material respects,
with the provisions of ERISA and the Code applicable to each Plan. Each of the
Company and its Subsidiaries shall meet, and shall cause all ERISA Group Persons
to meet, all minimum funding requirements applicable to them with respect to any
Plan pursuant to section 302 of ERISA or section 412 of the Code, without giving
effect to any waivers of such requirements or extensions of the related
amortization periods which may be granted, except if the failure to comply would
not reasonably be expected to result in a Material Adverse Change. At no time
shall the Accumulated Benefit Obligations under any Plan that is not a
Multiemployer Plan exceed the fair market value of the assets of such Plan
allocable to such benefits by more than $5,000,000. The Company and its
Subsidiaries shall not withdraw, and shall cause all other ERISA Group Persons
not to withdraw, in whole or in part, from any Multiemployer Plan so as to give
rise to withdrawal liability exceeding $5,000,000 in the aggregate. At no time
shall the actuarial present value of unfunded liabilities for post-employment
health care benefits, whether or not provided under a Plan, calculated in a
manner consistent with Statement No. 106 of the Financial Accounting Standards
Board, exceed $25,000,000.
65
6.18. Transactions with Affiliates. Neither the Company nor any of its
Subsidiaries shall effect any transaction with any of their respective
Affiliates (except for the Company and its Subsidiaries) on a basis less
favorable, in the reasonable, good faith judgment of the Company, to the Company
and its Subsidiaries than would be the case if such transaction had been
effected with a non-Affiliate.
6.19. Environmental Laws.
6.19.1. Compliance with Law and Permits. Each of the Company and its
Subsidiaries shall use and operate all of its facilities and properties in
material compliance with all Environmental Laws (for purposes of this
sentence, any such facility that is now or hereafter listed on the National
Priorities List pursuant to procedures described in 40 C.F.R. ss.300.425
shall be deemed solely for purposes of this sentence not to be in material
compliance with Environmental Laws), keep all necessary permits, approvals,
certificates, licenses and other authorizations relating to environmental
matters in effect and remain in material compliance therewith, and handle
all Hazardous Materials in material compliance with all applicable
Environmental Laws, except where such failure to use, operate, keep, or
handle in compliance would not reasonably be expected to result in a
Material Adverse Change.
6.19.2. Notice of Claims, etc. Each of the Company and its
Subsidiaries shall, as soon as reasonably practicable, notify the Agent,
and provide copies (when applicable) of (a) any failure to comply with
Section 6.19.1 or (b) upon receipt, of all written claims, complaints,
notices or inquiries from governmental authorities relating to any alleged
noncompliance with or liability under Environmental Laws with respect to
the facilities or properties that might reasonably be expected to result in
payments by the Company and its Subsidiaries in an aggregate amount
exceeding $5,000,000 in excess of applicable insurance.
6.20. Interpretation of Covenants . In Sections 6.6 through 6.19, the
various permitted transactions provided in the subsections to each Section
are cumulative and not exclusive of each other. The Company and its
Subsidiaries may decide in their reasonable discretion which of the various
applicable subsections shall apply to a particular transaction.
7. Representations and Warranties. In order to induce the Lenders to extend
credit to the Company hereunder, each of the Company and such of its
Subsidiaries as are party hereto from time to time jointly and severally
represents and warrants as follows:
7.1. Organization and Business.
7.1.1. The Company . The Company is a duly organized and validly
existing corporation, in good standing under the laws of Delaware with all
power and authority, corporate or otherwise, necessary to (a) enter into
66
and perform this Agreement and each other Credit Document to which it is
party and (b) own its properties and carry on the business now conducted by
it. Certified copies of the Charter and By-laws of the Company have been
previously delivered to the Agent and are correct and complete. Exhibit
7.1, as from time to time hereafter supplemented in accordance with
Sections 6.4.1 and 6.4.2, sets forth, as of the later of the date hereof or
as of the end of the most recent fiscal quarter for which financial
statements are required to be furnished in accordance with such Sections,
(i) the jurisdiction of incorporation of the Company, (ii) the address of
the Company's principal executive office and chief place of business, (iii)
each name, including any trade name, under which the Company conducts its
business and (iv) the jurisdictions in which the Company keeps tangible
personal property.
7.1.2. Subsidiaries . Each Subsidiary of the Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized, with all power and authority,
corporate or otherwise, necessary to (a) enter into and perform this
Agreement and each other Credit Document to which it is party, (b)
guarantee the Credit Obligations and (c) own its properties and carry on
the business now conducted by it. Certified copies of the Charter and
By-laws of each Subsidiary of the Company have been previously delivered to
the Agent and are correct and complete. Exhibit 7.1, as from time to time
hereafter supplemented in accordance with Sections 6.4.1 and 6.4.2, sets
forth, as of the later of the date hereof or as of the end of the most
recent fiscal quarter for which financial statements are required to be
furnished in accordance with such Sections, (i) the name and jurisdiction
of organization of each Subsidiary of the Company, (ii) the address of the
chief executive office and principal place of business of each such
Subsidiary, (iii) each name under which each such Subsidiary conducts its
business, (iv) each jurisdiction in which each such Subsidiary keeps
tangible personal property, and (v) the number of authorized and issued
shares and ownership of each such Subsidiary.
7.1.3. Qualification . Each of the Company and its Subsidiaries is
duly and legally qualified to do business as a foreign corporation or other
entity and is in good standing in each state or jurisdiction in which such
qualification is required and is duly authorized, qualified and licensed
under all laws, regulations, ordinances or orders of public authorities, or
otherwise, to carry on its business in the places and in the manner in
which it is conducted, except for failures to be so qualified, authorized
or licensed which would not in the aggregate reasonably be expected to
result, or create a material risk of resulting, in any Material Adverse
Change.
7.1.4. Capitalization . Other than the conversion rights of NIRO A/S
with respect to the ordinary shares of Merfin Europe Limited that would
arise only upon a payment default pursuant to the Loan Stock Instrument of
Merfin Europe Limited dated as of August 13, 1996, no options, warrants,
conversion rights, preemptive rights or other statutory or contractual
67
rights to purchase shares of capital stock or other securities of any
Subsidiary now exist, nor has any Subsidiary authorized any such right, nor
is any Subsidiary obligated in any other manner to issue shares of its
capital stock or other securities (except that the representation and
warranty contained in this Section 7.1.4 is made with respect to Merfin and
its Subsidiaries only from and after the date on which Merfin becomes a
Wholly Owned Subsidiary of the Company).
7.2. Financial Statements and Other Information; Material Agreements.
7.2.1. Financial Statements and Other Information . The Company has
previously furnished to the Lenders copies of the following:
(a) The audited Consolidated balance sheets of the Company and its
Subsidiaries as at June 30 in each of 1995 and 1996 and the audited
Consolidated statements of income, changes in shareholders' equity and cash
flows of the Company and its Subsidiaries for the fiscal years of the
Company then ended.
(b) The unaudited Consolidated balance sheet of the Company and its
Subsidiaries as at March 31, 1997 and the unaudited Consolidated statements
of income, changes in shareholders' equity and cash flows of the Company
and its Subsidiaries for the portion of the fiscal year then ended.
(c) The audited Consolidated balance sheets of Merfin and its
Subsidiaries as at December 31, 1996 and the audited Consolidated
statements of income, changes in shareholder's equity and cash flows of
Merfin and its Subsidiaries for the year then ended.
(d) The three-year financial and operational projections for the
Company previously supplied to the Lenders and included as part of the
offering memorandum for the initial syndication of the Credit Obligations.
(e) Calculations demonstrating pro forma compliance with the
Computation Covenants as of December 31, 1996 (including Merfin).
(f) The Tender Offer Circular.
The audited Consolidated financial statements (including the notes
thereto) referred to in clause (a) above were prepared in accordance with
GAAP and fairly present the financial position of the Company and its
Subsidiaries on a Consolidated basis at the respective dates thereof and
the results of their operations for the periods covered thereby. The
unaudited Consolidated financial statements referred to in clause (b) above
were prepared in accordance with GAAP and fairly present the financial
position of the Company and its Subsidiaries at the respective dates
thereof and the results of their operations for the periods covered
thereby, subject to normal year-end audit adjustment and the addition of
footnotes in the case of interim financial statements. Neither the Company
nor any of its Subsidiaries has any known contingent liability material to
the Company and its Subsidiaries on a Consolidated basis which is not
68
reflected in the balance sheets referred to in clauses (a) or (b) above (or
delivered pursuant to Sections 6.4.1 or 6.4.2) or in the notes thereto or
otherwise disclosed to the Agent in writing.
To the best of the knowledge of the Company, the audited Consolidated
financial statements of Merfin and its Subsidiaries referred to in clause
(c) above were prepared in accordance with Canadian generally accepted
accounting principles, consistently applied, and fairly present in all
material respects the financial position of Merfin and its Subsidiaries on
a Consolidated basis at the date thereof and the results of their
operations for the year then ended.
In the Company's judgment, the financial and operational projections
referred to in clause (d) above constitute a reasonable basis as of the
Initial Closing Date for the assessment of the future performance of the
Company and its Subsidiaries during the periods indicated therein, it being
understood that any projected financial information represents an estimate,
based on various assumptions, of future results of operations which may or
may not in fact occur.
The Tender Offer Circular as in effect on the date hereof does not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein not
misleading in light of the circumstances under which they were made;
provided, however, that with respect to statements or omissions regarding
Merfin and its Subsidiaries, this representation is made only to the best
of the Company's knowledge.
7.2.2. Material Agreements . The Company has previously furnished to
the Lenders correct and complete copies, including all exhibits, schedules
and amendments thereto, of the agreements and registration statements, each
as in effect on the date hereof, listed in Exhibit 7.2.2 (the "Material
Agreements").
7.3. Agreements Relating to Financing Debt, Investments, etc. Exhibit 7.3,
as from time to time hereafter supplemented in accordance with Sections 6.4.1
and 6.4.2, sets forth (a) the amounts (as of the dates indicated in Exhibit 7.3,
as so supplemented) of all Financing Debt of the Company and its Subsidiaries
and all agreements which relate to such Financing Debt, (b) all Liens and
Guarantees with respect to such Financing Debt and (c) all agreements which
directly or indirectly require the Company or any Subsidiary to make any
Investment. The Company has furnished the Lenders with correct and complete
copies of any agreements described in clauses (a), (b) and (c) above requested
by the Required Lenders.
7.4. Changes in Condition . Since June 30, 1996 no Material Adverse Change
has occurred and between June 30, 1996 and the date hereof, neither the Company
nor any Subsidiary of the Company has entered into any material transaction
outside the ordinary course of business except for the transactions permitted by
this Agreement and the Material Agreements; PROVIDED, HOWEVER, that the
69
representation and warranty contained in this Section 7.4 is made with respect
to Merfin and its Subsidiaries only for the period from and after the Initial
Closing Date.
7.5. Title to Assets. The Company and its Subsidiaries have good and
marketable title to, or adequate license or leasehold rights in, all assets
necessary for or used in the operations of their business as now conducted by
them and reflected in the most recent balance sheet referred to in Section 7.2.1
(or the balance sheet most recently furnished to the Lenders pursuant to
Sections 6.4.1 or 6.4.2), and to all assets acquired subsequent to the date of
such balance sheet, subject to no Liens except for Liens permitted by Section
6.8 and except for assets disposed of as permitted by Section 6.11.
7.6. Operations in Conformity With Law, etc. The operations of the Company
and its Subsidiaries as now conducted or proposed to be conducted are not in
violation of, nor is the Company or its Subsidiaries in default under, any Legal
Requirement presently in effect, except for such violations and defaults as do
not and would not reasonably be expected, in the aggregate, to result, or create
a material risk of resulting, in any Material Adverse Change. The Company has
received no notice of any such violation or default and has no knowledge of any
basis on which the operations of the Company or its Subsidiaries, as now
conducted and as currently proposed to be conducted after the date hereof, would
be held so as to violate or to give rise to any such violation or default.
7.7. Litigation. No litigation, at law or in equity, or any proceeding
before any court, board or other governmental or administrative agency or any
arbitrator is pending or, to the knowledge of the Company or any Guarantor,
threatened which may involve any material risk of any final judgment, order or
liability which, after giving effect to any applicable insurance, has resulted,
or is reasonably expected to create a material risk of resulting, in any
Material Adverse Change or which seeks to enjoin the consummation, or which
questions the validity, of any of the transactions contemplated by this
Agreement or any other Credit Document. No judgment, decree or order of any
court, board or other governmental or administrative agency or any arbitrator
has been issued against or binds the Company or any of its Subsidiaries which
has resulted, or is reasonably likely to create a material risk of resulting, in
any Material Adverse Change.
7.8. Authorization and Enforceability. Each of the Company and each other
Obligor has taken all corporate action required to execute, deliver and perform
this Agreement and each other Credit Document to which it is party. No consent
of stockholders of the Company is necessary in order to authorize the execution,
delivery or performance of this Agreement or any other Credit Document to which
the Company is party. Each of this Agreement and each other Credit Document
constitutes the legal, valid and binding obligation of each Obligor party
thereto and is enforceable against such Obligor in accordance with its terms
except as the enforceability of such documents may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws from time to time
in effect and affecting the rights of creditors generally and by general
principles of equity, good faith and fair dealing.
7.9. No Legal Obstacle to Agreements. Neither the execution and delivery of
70
this Agreement or any other Credit Document, nor the making of any borrowings
hereunder, nor the guaranteeing of the Credit Obligations, nor the consummation
of any transaction referred to in or contemplated by this Agreement or any other
Credit Document, nor the fulfillment of the terms hereof or thereof or of any
other agreement, instrument, deed or lease contemplated by this Agreement or any
other Credit Document, has constituted or resulted in or will constitute or
result in:
(a) any breach or termination of the provisions of any agreement,
instrument, deed or lease to which the Company, any of its Subsidiaries or
any other Obligor is a party or by which it is bound, or of the Charter or
By-laws of the Company, any of its Subsidiaries or any other Obligor;
(b) the violation in any material respect of any law, statute,
judgment, decree or governmental order, rule or regulation applicable to
the Company, any of its Subsidiaries or any other Obligor;
(c) the creation under any agreement, instrument, deed or lease of any
Lien (other than Liens which secure the Credit Obligations) upon any of the
assets of the Company, any of its Subsidiaries or any other Obligor; or
(d) any redemption, retirement or other repurchase obligation of the
Company, any of its Subsidiaries or any other Obligor under any Charter,
By-law, agreement, instrument, deed or lease.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person is required to
be obtained or made by the Company, any of its Subsidiaries or any other Obligor
in connection with the execution, delivery and performance of this Agreement,
the Notes or any other Credit Document, the transactions contemplated hereby or
thereby, the making of any borrowing hereunder or the guaranteeing of the Credit
Obligations.
7.10. Defaults. Neither the Company nor any of its Subsidiaries is in
default under any provision of its Charter or By-laws or of this Agreement or
any other Credit Document. Neither the Company nor any of its Subsidiaries is in
default under any provision of any agreement, instrument, deed or lease to which
it is party or by which it or its property is bound. Neither the Company nor any
of its Subsidiaries has violated any law, judgment, decree or governmental
order, rule or regulation, in each case so as to result, or to be reasonably
expected to create a material risk of resulting, in any Material Adverse Change.
7.11. Licenses, etc. The Company and its Subsidiaries have all patents,
patent applications, patent licenses, patent rights, trademarks, trademark
rights, trade names, trade name rights, copyrights, licenses, franchises,
permits, authorizations and other rights as are necessary for the conduct of the
71
business of the Company and its Subsidiaries as now conducted by them. All of
the foregoing are in full force and effect in all material respects, and each of
the Company and its Subsidiaries is in substantial compliance with the foregoing
without any known conflict with the valid rights of others which has resulted,
or is reasonably likely to create a material risk of resulting, in any Material
Adverse Change. No event has occurred which permits, or after notice or lapse of
time or both would permit, the revocation or termination of any such license,
franchise or other right or which affects the rights of any of the Company and
its Subsidiaries thereunder so as to result, or is reasonably expected to create
a material risk of resulting, in any Material Adverse Change. No litigation or
other proceeding or dispute exists with respect to the validity or, where
applicable, the extension or renewal, of any of the foregoing which has
resulted, or is reasonably likely to create a material risk of resulting, in any
Material Adverse Change.
7.12. Tax Returns. Each of the Company and its Subsidiaries has filed all
material tax and information returns which are required to be filed by it and
has paid, or made adequate provision for the payment of, all taxes which have
become due pursuant to such returns or to any assessment received by it, except
with respect to those taxes that the Company or its Subsidiaries are contesting
in good faith. Neither the Company nor any of its Subsidiaries knows of any
material additional assessments or any basis therefor. The Company reasonably
believes that the charges, accruals and reserves on the books of the Company and
its Subsidiaries in respect of taxes or other governmental charges are adequate.
7.13. Certain Business Representations.
7.13.1. Labor Relations. No dispute or controversy between the Company
or any of its Subsidiaries and any of their respective employees has
resulted, or is reasonably likely to result, in any Material Adverse
Change, and neither the Company nor any of its Subsidiaries anticipates
that its relationships with its unions or employees will result, or are
reasonably likely to result, in any Material Adverse Change. The Company
has not experienced a strike or other labor interruption in the past five
years. The Company and each of its Subsidiaries is in compliance in all
material respects with all federal and state laws with respect to (a)
non-discrimination in employment with which the failure to comply, in the
aggregate, has resulted, or is reasonably likely to create a material risk
of resulting, in a Material Adverse Change and (b) the payment of wages.
7.13.2. Antitrust. Each of the Company and its Subsidiaries is in
compliance in all material respects with all federal and state antitrust
laws relating to its business and the geographic concentration of its
business.
7.13.3. Consumer Protection. Neither the Company nor any of its
Subsidiaries is in violation of any rule, regulation, order, or
interpretation of any rule, regulation or order of the Federal Trade
Commission (including truth-in-lending), with which the failure to comply,
in the aggregate, has resulted, or is reasonably likely to create a
material risk of resulting, in a Material Adverse Change.
72
7.13.4. Burdensome Obligations. Neither the Company nor any of its
Subsidiaries is party to or bound by any agreement, instrument, deed or
lease or is subject to any Charter, By-law or other restriction, commitment
or requirement which, in the opinion of the management of such Person, is
so unusual or burdensome as in the foreseeable future to result, or to be
reasonably likely to create a material risk of resulting, in a Material
Adverse Change.
7.13.5. Future Expenditures. Neither the Company nor any of its
Subsidiaries anticipate that the future expenditures, if any, by the
Company and its Subsidiaries needed to meet the provisions of any federal,
state or foreign governmental statutes, orders, rules or regulations will
be so burdensome as to result, or create a material risk of resulting, in
any Material Adverse Change.
7.14. Environmental Regulations. Except to the extent set forth in Exhibit
7.14:
7.14.1. Environmental Compliance . Each of the Company and its
Subsidiaries is in compliance in all material respects with the
Environmental Laws in effect in any jurisdiction in which any properties of
the Company or any of its Subsidiaries are located or where any of them
conducts its business, and with all applicable published rules and
regulations (and applicable standards and requirements) of the federal
Environmental Protection Agency and of any similar agencies in states or
foreign countries in which the Company or its Subsidiaries conducts its
business other than those which in the aggregate have not resulted, and do
not create a material risk of resulting, in a Material Adverse Change.
7.14.2. Environmental Litigation . As of the date hereof and except
where any matter described in clauses (i) or (ii) would not reasonably be
expected to result in a Material Adverse Change, (i) no suit, claim, action
or proceeding of which the Company or any of its Subsidiaries has been
given notice or otherwise has knowledge is now pending before any court,
governmental agency or board or other forum, or to the Company's or any of
its Subsidiaries' knowledge, threatened by any Person for, and (ii) neither
the Company nor any of its Subsidiaries have received written
correspondence from any federal, state or local governmental authority with
respect to:
(a) noncompliance by the Company or any of its Subsidiaries with any
Environmental Law;
(b) personal injury, wrongful death or other tortious conduct relating
to materials, commodities or products used, generated, sold, transferred or
manufactured by the Company or any of its Subsidiaries (including products
made of, containing or incorporating asbestos, lead or other hazardous
materials, commodities or toxic substances); or
(c) the release into the environment by the Company or any of its
Subsidiaries of any Hazardous Material generated by the Company or any of
73
its Subsidiaries whether or not occurring at or on a site owned, leased or
operated by the Company or any of its Subsidiaries.
7.14.3. Hazardous Material . The disposal or arrangement for disposal
at any waste disposal or dump sites at which Hazardous Material generated
by either the Company or any of its Subsidiaries has been disposed of
directly by the Company or any of its Subsidiaries and all independent
contractors to whom the Company or any of its Subsidiaries have delivered
Hazardous Material for disposal, or to the Company's or any of its
Subsidiaries' knowledge, where Hazardous Material finally came to be
located, has not resulted, and would not reasonably be expected to result
in a Material Adverse Change.
7.14.4. Environmental Condition of Properties . No release of any
Hazardous Material is present in any real property currently or formerly
owned or operated by the Company or any of its Subsidiaries except that
which has not resulted, and could not reasonably be expected to result in a
Material Adverse Change.
7.14.5. No Other Representations and Warranties . The representations
and warranties in this Section 7.14 constitute the sole and exclusive
representations and warranties of the Company and its Subsidiaries with
respect to all matters arising under Environmental Laws.
7.15. Pension Plans. Each Plan (other than a Multiemployer Plan) and, to
the knowledge of the Company and its Subsidiaries, each Multiemployer Plan is in
material compliance with the applicable provisions of ERISA and the Code. As of
the date hereof, each Multiemployer Plan and each Plan that constitutes a
"defined benefit plan" (as defined in ERISA) are set forth in Exhibit 7.15. Each
ERISA Group Person has met all of the funding standards applicable to all Plans
that are not Multiemployer Plans, and no condition exists which would permit the
institution of proceedings to terminate any Plan that is not a Multiemployer
Plan under section 4042 of ERISA. To the best knowledge of the Company and each
Subsidiary, no Plan that is a Multiemployer Plan is currently insolvent or in
reorganization or has been terminated within the meaning of ERISA.
7.16. Foreign Trade Regulations; Government Regulation; Margin Stock .
7.16.1. Foreign Trade Regulations . Neither the execution and delivery
of this Agreement or any other Credit Document, nor the making by the
Company of any borrowings hereunder, nor the guaranteeing of the Credit
Obligations by any Guarantor has constituted or resulted in or will
constitute or result in the violation of any Foreign Trade Regulation.
7.16.2. Government Regulation . Neither the Company nor any of its
Subsidiaries, nor any Person controlling the Company or any of its
Subsidiaries or under common control with the Company or any of its
74
Subsidiaries, is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act, the
Interstate Commerce Act or any statute or regulation which regulates the
incurring by the Company or any of its Subsidiaries of Financing Debt as
contemplated by this Agreement and the other Credit Documents.
7.16.3. Margin Stock . Neither the Company nor any of its Subsidiaries
owns any Margin Stock in excess of 25% of the value of the assets subject
to any negative pledge arrangement or covenants restricting asset sales.
The Merfin stock acquired in the Tender Offer and the resulting merger or
amalgamation does not constitute Margin Stock.
7.17. Disclosure . Neither this Agreement nor any other Credit Document to
be furnished to the Lenders by or on behalf of the Company or any of its
Subsidiaries in connection with the transactions contemplated hereby or by such
Credit Document contains any untrue statement of material fact or omits to state
a material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
No fact is actually known to the Company or any of its Subsidiaries which has
not been disclosed to the Lenders and which has resulted, or in the future (so
far as the Company or any of its Subsidiaries can reasonably foresee) will
result, or is reasonably expected to create a material risk of resulting, in any
Material Adverse Change, except to the extent that present or future general
economic conditions may result in a Material Adverse Change.
7.18. Special Qualifications Regarding Merfin . If any representation or
warranty regarding Merfin or any Subsidiary of Merfin set forth in this
Agreement or any other Credit Document is not true and correct as a result of
matters, circumstances or events occurring or existing prior to the Initial
Closing Date, the failure of such representation or warranty to be true and
correct shall not be taken into account for purposes of Section 5.2.1 or 8.1.4
unless such failure remains uncured to the reasonable satisfaction of the
Required Lenders for more than 30 days after a Financial Officer of the Company
becomes aware of such failure.
8. Defaults.
8.1. Events of Default . The following events are referred to as "Events of
Default":
8.1.1. Payment . The Company shall fail to make any payment in respect
of: (a) interest or any fee on or in respect of any of the Credit
Obligations owed by it as the same shall become due and payable, and such
failure shall continue for a period of three Banking Days, or (b) any
Credit Obligation with respect to payments made by any Letter of Credit
Issuer under any Letter of Credit or any draft drawn thereunder within
three Banking Days after demand therefor by such Letter of Credit Issuer or
(c) principal of any of the Credit Obligations owed by it as the same shall
become due, whether at maturity or by acceleration or otherwise.
8.1.2. Specified Covenants . The Company or any of its Subsidiaries
shall fail to perform or observe any of the provisions of Sections 6.5
through 6.16.
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8.1.3. Other Covenants . The Company, any of its Subsidiaries or any
other Obligor shall fail to perform or observe any covenant, agreement or
provision to be performed or observed by it under this Agreement or any
other Credit Document (other than covenants, agreements or provisions with
which the failure to comply would constitute an Event of Default under
Sections 8.1.2, 8.1.9 or 8.1.11), and such failure shall not be rectified
or cured to the written satisfaction of the Required Lenders within 30 days
after the earlier of (a) notice thereof by the Agent to the Company or (b)
a Financial Officer shall have actual knowledge thereof.
8.1.4. Representations and Warranties . Subject to Section 7.18 in the
case of Merfin and its Subsidiaries, any representation or warranty of or
with respect to the Company, any of its Subsidiaries or any other Obligor
made to the Lenders or the Agent in, pursuant to or in connection with this
Agreement or any other Credit Document shall be materially false on the
date as of which it was made.
8.1.5. Cross Default, etc.
(a) The Company or any of its Subsidiaries shall fail to make any
payment when due (after giving effect to any applicable grace periods) in
respect of any Financing Debt (other than the Credit Obligations)
outstanding in an aggregate amount of principal (whether or not due) and
accrued interest exceeding $5,000,000;
(b) the Company or any of its Subsidiaries shall fail to perform or
observe the terms of any agreement or instrument relating to such Financing
Debt, and such failure shall continue, without having been duly cured,
waived or consented to, beyond the period of grace, if any, specified in
such agreement or instrument, and such failure shall permit the
acceleration of such Financing Debt;
(c) all or any part of such Financing Debt of the Company or any of
its Subsidiaries shall be accelerated or shall become due or payable prior
to its stated maturity (except with respect to voluntary prepayments
thereof) for any reason whatsoever;
(d) any Lien on any property of the Company or any of its Subsidiaries
securing any such Financing Debt shall be enforced by foreclosure or
similar action; or
(e) any holder of any such Financing Debt shall exercise any right of
rescission or put right with respect thereto.
8.1.6. Ownership; Liquidation; etc. Except as permitted by Section
6.11:
(a) the Company shall cease to own, directly or indirectly, all the
capital stock of its Wholly Owned Subsidiaries (other than director's
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qualifying shares and, in the case of Foreign Subsidiaries, shares required
to be owned by foreign nationals);
(b) (i) any "person" or "group" (as such terms are used in sections
13(d) and 14(d) of the Exchange Act), other than the current members of the
Company's management who directly (or indirectly through Affiliates) own
capital stock of the Company is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act except that a
Person shall be deemed to have "beneficial ownership" of all securities
that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the total voting stock of the Company;
(ii) the Company consolidates with, or mergers with or into, another
Person or sells, assigns, conveys, transfers, leases or otherwise disposes
of all or substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which any voting stock of the Company is
reclassified or changed into or exchanged for cash, securities or other
property, other than any such transaction where (A) any voting stock of the
Company is reclassified or changed into or exchanged for voting stock
(other than redeemable capital stock) of the surviving or transferee
corporation and (B) immediately after such transaction no "person" or
"group" (as such terms are used in sections 13(d) and 14(d) of the Exchange
Act), other than the current members of the Company's management who
directly (or indirectly through Affiliates) own capital stock of the
Company, is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 35% of the total
voting stock of the surviving or transferee corporation;
(iii) during any consecutive two-year period, individuals who at the
beginning of such period constituted the board of directors of the Company
(together with any new directors whose election by such board of directors
or whose nomination for election by the stockholders of the Company was
approved by a vote of 66-2/3% of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the board of directors of the Company then in
office; or
(iv) any final order, judgment or decree of a court of competent
jurisdiction shall be entered against the Company decreeing the dissolution
or liquidation of the Company; and
(c) the Company or any of its Subsidiaries or any other Obligor shall
initiate any action to dissolve, liquidate or otherwise terminate its
existence.
8.1.7. Enforceability, etc. Any Credit Document shall cease for any
reason (other than the scheduled termination thereof in accordance with its
77
terms) to be enforceable in accordance with its terms or in full force and
effect; or any party to any Credit Document shall so assert in a judicial
or similar proceeding; or the security interests (if any) created by this
Agreement or any other Credit Documents shall cease to be enforceable and
of the same effect and priority purported to be created hereby.
8.1.8. Judgments. A final judgment (a) which, with other outstanding
final judgments against the Company and its Subsidiaries, exceeds an
aggregate of $5,000,000 in excess of applicable insurance coverage shall be
rendered against the Company or any of its Subsidiaries, or (b) which
grants injunctive relief that results, or is reasonably likely to create a
material risk of resulting, in a Material Adverse Change and in either case
if, (i) within 30 days after entry thereof, such judgment shall not have
been discharged or execution thereof stayed pending appeal or (ii) within
30 days after the expiration of any such stay, such judgment shall not have
been discharged.
8.1.9. ERISA . Any "reportable event" (as defined in section 4043 of
ERISA) shall have occurred that reasonably could be expected to result in
termination of a Plan or the appointment by the appropriate United States
District Court of a trustee to administer any Plan or the imposition of a
Lien in favor of a Plan; or any ERISA Group Person shall fail to pay when
due amounts aggregating in excess of $5,000,000 which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice
of intent to terminate a Plan shall be filed under Title IV of ERISA by any
ERISA Group Person or administrator; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to
be appointed to administer any Plan or a proceeding shall be instituted by
a fiduciary of any Plan against any ERISA Group Person to enforce section
515 or 4219(c)(5) of ERISA and such proceeding shall not have been
dismissed within 30 days thereafter; or a condition shall exist by reason
of which the PBGC would be entitled to obtain a decree adjudicating that
any Plan must be terminated.
8.1.10. Bankruptcy, etc. The Company, any of its Subsidiaries or any
other Obligor shall:
(a) commence a voluntary case under the Bankruptcy Code or authorize,
by appropriate proceedings of its board of directors or other governing
body, the commencement of such a voluntary case;
(b) (i) have filed against it a petition commencing an involuntary
case under the Bankruptcy Code that shall not have been dismissed within 60
days after the date on which such petition is filed, or (ii) file an answer
or other pleading within such 60-day period admitting or failing to deny
the material allegations of such a petition or seeking, consenting to or
acquiescing in the relief therein provided, or (iii) have entered against
it an order for relief in any involuntary case commenced under the
Bankruptcy Code;
(c) seek relief as a debtor under any applicable law, other than the
78
Bankruptcy Code, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the
rights of creditors, or consent to or acquiesce in such relief;
(d) have entered against it an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering or
approving its liquidation or reorganization as a debtor or any modification
or alteration of the rights of its creditors or (iii) assuming custody of,
or appointing a receiver or other custodian for, all or a substantial
portion of its property; or
(e) make an assignment for the benefit of, or enter into a composition
with, its creditors, or appoint, or consent to the appointment of, or
suffer to exist a receiver or other custodian for, all or a substantial
portion of its property.
8.1.11. Environmental Matters . The Company or any of its Subsidiaries
shall fail to comply with any Environmental Law in effect in any
jurisdiction in which any properties of the Company or any of its
Subsidiaries are located or where any of them conducts its business, which
failure would be reasonably likely to result in or create a material risk
of resulting in a Material Adverse Change and within 30 days after such
noncompliance, the Company or its Subsidiaries shall continue to be out of
compliance with such Environmental Law; provided, however, that such 30-day
period may be extended for up to an additional 150 days so long as (a) such
noncompliance is reasonably capable of cure within such 150-day period, and
the Company and its Subsidiaries shall have commenced, and shall continue
to pursue diligently, a cure for such noncompliance and (b) no Material
Adverse Change shall have occurred.
8.2. Certain Actions Following an Event of Default . If any one or more
Events of Default shall occur, then in each and every such case:
8.2.1. Terminate Obligation to Extend Credit . Upon request of the
Required Lenders, the Agent on behalf of the Lenders shall terminate the
obligations of the Lenders to make any further extensions of credit under
the Credit Documents by furnishing notice of such termination to the
Company.
8.2.2. Specific Performance; Exercise of Rights . Upon request of the
Required Lenders, the Agent on behalf of the Lenders shall proceed to
protect and enforce the Lenders' rights by suit in equity, action at law
and/or other appropriate proceeding, either for specific performance of any
covenant or condition contained in this Agreement or any other Credit
Document or in any instrument or assignment delivered to the Lenders
pursuant to this Agreement or any other Credit Document, or in aid of the
exercise of any power granted in this Agreement or any other Credit
Document or any such instrument or assignment.
8.2.3. Acceleration . Upon request of the Required Lenders, the Agent
on behalf of the Lenders shall by notice in writing to the Company (a)
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declare all or any part of the unpaid balance of the Credit Obligations
then outstanding to be immediately due and payable, and (b) require the
Company immediately to deposit with the Agent in cash an amount equal to
the then Letter of Credit Exposure (which cash shall be held and applied as
provided in Section 4.5), and thereupon such unpaid balance or part thereof
and such amount equal to the Letter of Credit Exposure shall become so due
and payable without presentation, protest or further demand or notice of
any kind, all of which are hereby expressly waived; provided, however, that
if a Bankruptcy Default shall have occurred, the unpaid balance of the
Credit Obligations shall automatically become immediately due and payable.
8.2.4. Enforcement of Payment; Setoff . Upon request of the Required
Lenders, the Agent on behalf of the Lenders shall proceed to enforce
payment of the Credit Obligations in such manner as it may elect, and to
cancel, or instruct other Letter of Credit Issuers to cancel, any
outstanding Letters of Credit which permit the cancellation thereof. The
Lenders may offset and apply toward the payment of the Credit Obligations
(and/or toward the curing of any Event of Default) any Indebtedness from
the Lenders to the respective Obligors, including any Indebtedness
represented by deposits in any account maintained with the Lenders,
regardless of the adequacy of any security for the Credit Obligations. The
Lenders shall have no duty to determine the adequacy of any such security
in connection with any such offset.
8.2.5. Cumulative Remedies . To the extent not prohibited by
applicable law which cannot be waived, all of the Lenders' rights hereunder
and under each other Credit Document shall be cumulative.
8.3. Annulment of Defaults . Once an Event of Default has occurred, such
Event of Default shall be deemed to exist and be continuing for all purposes of
the Credit Documents until the Required Lenders or the Agent (with the consent
of the Required Lenders) shall have waived such Event of Default in writing,
stated in writing that the same has been cured to such Lenders' reasonable
satisfaction or entered into an amendment to this Agreement which by its express
terms cures such Event of Default, at which time such Event of Default shall no
longer be deemed to exist or to have continued. No such action by the Lenders or
the Agent shall extend to or affect any subsequent Event of Default or impair
any rights of the Lenders upon the occurrence thereof. The making of any
extension of credit during the existence of any Default or Event of Default
shall not constitute a waiver thereof.
8.4. Waivers . To the extent that such waiver is not prohibited by the
provisions of applicable law that cannot be waived, each of the Company and the
other Obligors waives:
(a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by this Agreement or any
other Credit Document), protests, notices of protest and notices of
dishonor;
(b) any requirement of diligence or promptness on the part of any
80
Lender in the enforcement of its rights under this Agreement, the Notes or
any other Credit Document;
(c) any right it may have to claim or recover from the Agent or any
Lender any special, exemplary, punitive or consequential damages;
(d) any and all notices of every kind and description which may be
required to be given by any statute or rule of law; and
(e) any defense (other than indefeasible payment in full) which it may
now or hereafter have with respect to its liability under this Agreement,
the Notes or any other Credit Document or with respect to the Credit
Obligations.
9. Guarantees.
9.1. Guarantees of Credit Obligations. Each Guarantor unconditionally
jointly and severally guarantees that the Credit Obligations will be performed
and will be paid in full in cash when due and payable, whether at the stated or
accelerated maturity thereof or otherwise, this guarantee being a guarantee of
payment and not of collectability and being absolute and in no way conditional
or contingent. In the event any part of the Credit Obligations shall not have
been so paid in full when due and payable, each Guarantor will, immediately upon
notice by the Agent or, without notice, immediately upon the occurrence of a
Bankruptcy Default, pay or cause to be paid to the Agent for the account of each
Lender in accordance with the Lenders' respective Percentage Interests the
amount of such Credit Obligations which are then due and payable and unpaid. The
obligations of each Guarantor hereunder shall not be affected by the invalidity,
unenforceability or irrecoverability of any of the Credit Obligations as against
any other Obligor, any other guarantor thereof or any other Person. For purposes
hereof, the Credit Obligations shall be due and payable when and as the same
shall be due and payable under the terms of this Agreement or any other Credit
Document notwithstanding the fact that the collection or enforcement thereof may
be stayed or enjoined under the Bankruptcy Code or other applicable law.
9.2. Continuing Obligation. Each Guarantor acknowledges that the Lenders
and the Agent have entered into this Agreement (and, to the extent that the
Lenders or the Agent may enter into any future Credit Document, will have
entered into such agreement) in reliance on this Section 9 being a continuing
irrevocable agreement, and such Guarantor agrees that its guarantee may not be
revoked in whole or in part. The obligations of the Guarantors hereunder shall
terminate when the commitment of the Lenders to extend credit under this
Agreement shall have terminated and all of the Credit Obligations have been
indefeasibly paid in full in cash and discharged; provided, however, that:
(a) if a claim is made upon the Lenders at any time for repayment or
recovery of any amounts or any property received by the Lenders from any
source on account of any of the Credit Obligations and the Lenders repay or
return any amounts or property so received (including interest thereon to
the extent required to be paid by the Lenders) or
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(b) if the Lenders become liable for any part of such claim by reason
of (i) any judgment or order of any court or administrative authority
having competent jurisdiction, or (ii) any settlement or compromise of any
such claim,
then the Guarantors shall remain liable under this Agreement for the amounts so
repaid or property so returned or the amounts for which the Lenders become
liable (such amounts being deemed part of the Credit Obligations) to the same
extent as if such amounts or property had never been received by the Lenders,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any of the Credit Obligations. Not later than five days
after receipt of notice from the Agent, the Guarantors shall jointly and
severally pay to the Agent an amount equal to the amount of such repayment or
return for which the Lenders have so become liable. Payments hereunder by a
Guarantor may be required by the Agent on any number of occasions.
9.3. Waivers with Respect to Credit Obligations. Except to the extent
expressly required by this Agreement or any other Credit Document, each
Guarantor waives, to the fullest extent permitted by the provisions of
applicable law, all of the following (including all defenses, counterclaims and
other rights of any nature based upon any of the following):
(a) presentment, demand for payment and protest of nonpayment of any
of the Credit Obligations, and notice of protest, dishonor or
nonperformance;
(b) notice of acceptance of this guarantee and notice that credit has
been extended in reliance on the Guarantor's guarantee of the Credit
Obligations;
(c) notice of any Default or of any inability to enforce performance
of the obligations of the Company or any other Person with respect to any
Credit Document, or notice of any acceleration of maturity of any Credit
Obligations;
(d) demand for performance or observance of, and any enforcement of
any provision of, the Credit Obligations, this Agreement or any other
Credit Document or any pursuit or exhaustion of rights or remedies against
the Company or any other Person in respect of the Credit Obligations or any
requirement of diligence or promptness on the part of the Agent or the
Lenders in connection with any of the foregoing;
(e) any act or omission on the part of the Agent or the Lenders which
may impair or prejudice the rights of the Guarantor, including rights to
obtain subrogation, exoneration, contribution, indemnification or any other
reimbursement from the Company or any other Person, or otherwise operate as
a deemed release or discharge;
(f) any statute of limitations or any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than the obligation of the principal;
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(g) any "single action" or "anti-deficiency" law which would otherwise
prevent the Lenders from bringing any action, including any claim for a
deficiency, against the Guarantor before or after the Agent's or the
Lenders' commencement or completion of any foreclosure action, whether
judicially, by exercise of power of sale or otherwise, or any other law
which would otherwise require any election of remedies by the Agent or the
Lenders;
(h) all demands and notices of every kind with respect to the
foregoing; and
(i) to the extent not referred to above, all defenses (other than
payment) which the Company may now or hereafter have to the payment of the
Credit Obligations, together with all suretyship defenses, which could
otherwise be asserted by such Guarantor.
Each Guarantor represents that it has obtained the advice of counsel as to the
extent to which suretyship and other defenses may be available to it with
respect to its obligations hereunder in the absence of the waivers contained in
this Section 9.3.
No delay or omission on the part of the Agent or the Lenders in exercising
any right under this Agreement or any other Credit Document or under any
guarantee of the Credit Obligations shall operate as a waiver or relinquishment
of such right. No action which the Agent or the Lenders or the Company may take
or refrain from taking with respect to the Credit Obligations, including any
amendments thereto or modifications thereof or waivers with respect thereto,
shall affect the provisions of this Agreement or the obligations of the
Guarantor hereunder. None of the Lenders' or the Agent's rights shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of any Obligor, or by any noncompliance by the Company with the terms,
provisions and covenants of this Agreement, regardless of any knowledge thereof
which the Agent or the Lenders may have or otherwise be charged with.
9.4. Lenders' Power to Waive, etc. Each Guarantor grants to the Lenders
full power in their discretion, without notice to or consent of such Guarantor,
such notice and consent being expressly waived to the fullest extent permitted
by applicable law, and without in any way affecting the liability of the
Guarantor under its guarantee hereunder:
(a) To waive compliance with, and any Default under, and to consent to
any amendment to or modification or termination of any terms or provisions
of, or to give any waiver in respect of, this Agreement, any other Credit
Document, the Credit Obligations or any guarantee thereof (each as from
time to time in effect);
(b) To grant any extensions of the Credit Obligations (for any
duration), and any other indulgence with respect thereto, and to effect any
total or partial release (by operation of law or otherwise), discharge,
compromise or settlement with respect to the obligations of the Obligors or
any other Person in respect of the Credit Obligations, whether or not
rights against the Guarantor under this Agreement are reserved in
connection therewith;
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(c) To collect or liquidate or realize upon any of the Credit
Obligations in any manner or to refrain from collecting or liquidating or
realizing upon any of the Credit Obligations; and
(d) To extend credit under this Agreement, any other Credit Document
or otherwise in such amount as the Lenders may determine, including
increasing the amount of credit and the interest rate and fees with respect
thereto, even though the condition of the Obligors (financial or otherwise
on an individual or Consolidated basis) may have deteriorated since the
date hereof.
9.5. Information Regarding the Company, etc. Each Guarantor has made such
investigation as it deems desirable of the risks undertaken by it in entering
into this Agreement and is fully satisfied that it understands all such risks.
Each Guarantor waives any obligation which may now or hereafter exist on the
part of the Agent or the Lenders to inform it of the risks being undertaken by
entering into this Agreement or of any changes in such risks and, from and after
the date hereof, each Guarantor undertakes to keep itself informed of such risks
and any changes therein. Each Guarantor expressly waives any duty which may now
or hereafter exist on the part of the Agent or the Lenders to disclose to the
Guarantor any matter related to the business, operations, character, collateral,
credit, condition (financial or otherwise), income or prospects of the Company
or its Affiliates or their properties or management, whether now or hereafter
known by the Agent or the Lenders. Each Guarantor represents, warrants and
agrees that it assumes sole responsibility for obtaining from the Company all
information concerning this Agreement and all other Credit Documents and all
other information as to the Company and its Affiliates or their properties or
management as such Guarantor deems necessary or desirable.
9.6. Certain Guarantor Representations . Each Guarantor represents that:
(a) it is in its best interest and in pursuit of the purposes for
which it was organized as an integral part of the business conducted and
proposed to be conducted by the Company and its Subsidiaries, and
reasonably necessary and convenient in connection with the conduct of the
business conducted and proposed to be conducted by them, to induce the
Lenders to enter into this Agreement and to extend credit to the Company by
making the Guarantees contemplated by this Section 9,
(b) the credit available hereunder will directly or indirectly inure
to its benefit,
(c) by virtue of the foregoing it is receiving at least reasonably
equivalent value from the Lenders for its Guarantee,
(d) it will not be rendered insolvent as a result of entering into
this Agreement,
(e) after giving effect to the transactions contemplated by this
84
Agreement, it will have assets having a fair saleable value in excess of
the amount required to pay its probable liability on its existing debts as
they become absolute and matured,
(f) it has, and will have, access to adequate capital for the conduct
of its business,
(g) it has the ability to pay its debts from time to time incurred in
connection therewith as such debts mature, and
(h) it has been advised by the Agent that the Lenders are unwilling to
enter into this Agreement unless the Guarantees contemplated by this
Section 9 are given by it.
9.7. Subrogation. Each Guarantor agrees that, until the Credit Obligations
are paid in full, it will not exercise any right of reimbursement, subrogation,
contribution, offset or other claims against the other Obligors arising by
contract or operation of law in connection with any payment made or required to
be made by such Guarantor under this Agreement. After the payment in full of the
Credit Obligations, each Guarantor shall be entitled to exercise against the
Company and the other Obligors all such rights of reimbursement, subrogation,
contribution and offset, and all such other claims, to the fullest extent
permitted by law.
9.8. Subordination. Each Guarantor covenants and agrees that, after the
occurrence of an Event of Default, all Indebtedness, claims and liabilities then
or thereafter owing by the Company or any other Obligor to such Guarantor
whether arising hereunder or otherwise are subordinated to the prior payment in
full of the Credit Obligations and are so subordinated as a claim against such
Obligor or any of its assets, whether such claim be in the ordinary course of
business or in the event of voluntary or involuntary liquidation, dissolution,
insolvency or bankruptcy, so that no payment with respect to any such
Indebtedness, claim or liability will be made or received while any Event of
Default exists.
9.9. Future Subsidiaries; Further Assurances. The Company will from time to
time cause (a) any present Wholly Owned Subsidiary that is not a Guarantor
within 30 days after notice from the Agent or (b) any future Wholly Owned
Subsidiary within 30 days after any such Person becomes a Wholly Owned
Subsidiary, to join this Agreement as a Guarantor pursuant to a joinder
agreement in form and substance satisfactory to the Agent; provided, however,
that in the event such a Wholly Owned Subsidiary is prohibited by any valid law,
statute, rule or regulation from guaranteeing the Credit Obligations, or if such
a guarantee by any Foreign Subsidiary would result in a repatriation of a
material amount of foreign earnings under the Code (including the "deemed
dividend" provisions of section 956 of the Code), (i) such guarantee will be
limited to the extent necessary to comply with such prohibition or to prevent
such repatriation of foreign earnings or (ii) if such limitation on the
guaranteed amount is not sufficient to avoid such prohibition or repatriation,
the Company and its other Subsidiaries will pledge the stock of such Wholly
Owned Subsidiary (or as much of such stock as may be pledged without resulting
in such a repatriation) to the Agent to secure the Credit Obligations pursuant
to a pledge agreement in substantially the form of Exhibit 9.9, subject to
Section 6.13.5. Each Guarantor will, promptly upon the request of the Agent from
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time to time, execute, acknowledge and deliver, and file and record, all such
instruments, and take all such action, including providing a legal opinion with
respect to its guarantee, as the Agent deems necessary or advisable to carry out
the intent and purposes of this Section 9.
10. Expenses; Indemnity.
10.1. Expenses . Whether or not the transactions contemplated hereby shall
be consummated, the Company will pay:
(a) all reasonable expenses of the Agent (including the out-of-pocket
expenses related to forming the group of Lenders and reasonable fees and
disbursements of the counsel to the Agent) in connection with the
preparation and duplication of this Agreement, each other Credit Document,
any environmental audit report, the transactions contemplated hereby and
thereby and amendments, waivers, consents and other operations hereunder
and thereunder;
(b) all recording and filing fees and transfer and documentary stamp
and similar taxes at any time payable in respect of this Agreement, any
other Credit Document or the incurrence of the Credit Obligations; and
(c) all other reasonable expenses incurred by the Lenders or the
holder of any Credit Obligation in connection with the enforcement of any
rights hereunder or under any other Credit Document, including costs of
collection and reasonable attorneys' fees (including a reasonable allowance
for the hourly cost of attorneys employed by the Lenders on a salaried
basis) and expenses.
10.2. General Indemnity. The Company shall indemnify the Lenders and the
Agent and hold them harmless from any liability, loss or damage resulting from
the violation by the Company of Section 2.6. In addition, the Company shall
indemnify each Lender, the Agent, each of the Lenders' or the Agent's directors,
officers and employees, and each Person, if any, who controls any Lender or the
Agent (each Lender, the Agent and each of such directors, officers, employees
and control Persons is referred to as an "Indemnified Party") and hold each of
them harmless from and against any and all claims, damages, liabilities and
reasonable expenses (including reasonable fees and disbursements of counsel with
whom any Indemnified Party may consult in connection therewith and all
reasonable expenses of litigation or preparation therefor) which any Indemnified
Party may incur or which may be asserted against any Indemnified Party in
connection with (a) the Indemnified Party's compliance with or contest of any
subpoena or other process issued against it in any proceeding involving the
Company or any of its Subsidiaries or their Affiliates or the Tender Offer, (b)
any litigation or investigation involving the Company, any of its Subsidiaries
or their Affiliates, or any officer, director or employee thereof or the Tender
Offer, (c) the existence or exercise of any security rights with respect to the
Credit Security in accordance with the Credit Documents, or (d) this Agreement,
any other Credit Document or any transaction contemplated hereby or thereby,
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including the Tender Offer; PROVIDED, HOWEVER, that the foregoing indemnity
shall not apply (i) to litigation commenced by the Company against the Lenders
or the Agent which seeks enforcement of any of the rights of the Company
hereunder or under any other Credit Document and is determined adversely to the
Lenders or the Agent in a final nonappealable judgment or (ii) to the extent
such claims, damages, liabilities and expenses result from a Lender's or the
Agent's gross negligence or willful misconduct or (iii) to litigation initiated
by Merfin or its Affiliates with respect to any prior banking relationship
between any Lender and Merfin.
10.3. Indemnity With Respect to Letters of Credit. The Company shall
indemnify each Letter of Credit Issuer and its correspondents and hold each of
them harmless from and against any and all claims, losses, liabilities, damages
and reasonable expenses (including reasonable attorneys' fees) arising from or
in connection with any Letter of Credit, including any such claim, loss,
liability, damage or expense arising out of any transfer, sale, delivery,
surrender or endorsement of any invoice, xxxx of lading, warehouse receipt or
other document at any time held by the Agent, any other Letter of Credit Issuer
or held for their respective accounts by any of their correspondents, in
connection with any Letter of Credit, except to the extent such claims, losses,
liabilities, damages and expenses result from gross negligence or willful
misconduct on the part of the Agent or any other Letter of Credit Issuer.
11. Operations; Agent.
11.1. Interests in Revolving Loan . The percentage interest of each Lender
in the Revolving Loan and Letters of Credit, and the related Commitments, shall
be computed based on the maximum principal amount for each Lender as set forth
in Exhibit 11.1.
11.2. Agent's Authority to Act, etc. Each of the Lenders appoints and
authorizes Fleet to act for the Lenders as the Lenders' Agent in connection with
the transactions contemplated by this Agreement and the other Credit Documents
on the terms set forth herein. In acting hereunder, the Agent is acting for the
account of Fleet to the extent of its Percentage Interest in the Revolving Loan
and of its interest in Money Market Loans and Swingline Loans made by it and for
the account of the other Lenders to the extent of the Lenders' respective
Percentage Interests or each of their interests in the Money Market Loans and
Swingline Loans made by them, and all action in connection with the enforcement
of, or the exercise of any remedies (other than the Lenders' rights of set-off
as provided in Section 8.2.4 or in any Credit Document) in respect of the Credit
Obligations and Credit Documents shall be taken by the Agent.
11.3. Company to Pay Agent, etc. The Company and each Guarantor shall be
fully protected in making all payments in respect of the Credit Obligations to
the Agent, in relying upon consents, modifications and amendments executed by
the Agent purportedly on the Lenders' behalf, and in dealing with the Agent as
herein provided. The Agent may charge the accounts of the Company, on the dates
when the amounts thereof become due and payable, with the amounts of the
principal of and interest on the Loan, any amounts paid by the Letter of Credit
Issuers to third parties under Letters of Credit or drafts presented thereunder,
commitment fees, Letter of Credit fees and all other fees and amounts owing
under any Credit Document.
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11.4. Lender Operations for Advances, Letters of Credit, etc.
11.4.1. Advances. On each Closing Date, each Lender shall advance to
the Agent in immediately available funds such Lender's Percentage Interest
in the portion of the Revolving Loan advanced on such Closing Date prior to
12:00 noon (Boston time). If such funds are not received at such time, but
all applicable conditions set forth in Section 5 have been satisfied, each
Lender authorizes and requests the Agent to advance for the Lender's
account, pursuant to the terms hereof, the Lender's respective Percentage
Interest in such portion of the Revolving Loan and agrees to reimburse the
Agent in immediately available funds for the amount thereof prior to 2:00
p.m. (Boston time) on the day any portion of the Revolving Loan is advanced
hereunder; provided, however, that the Agent is not authorized to make any
such advance for the account of any Lender who has previously notified the
Agent in writing that such Lender will not be performing its obligations to
make further advances hereunder; and provided, further, that the Agent
shall be under no obligation to make any such advance.
11.4.2. Letters of Credit . Each of the Lenders authorizes and
requests each Letter of Credit Issuer to issue the Letters of Credit
provided for in Section 2.4 and to grant each Lender a participation in
each of such Letters of Credit in an amount equal to its Percentage
Interest in the amount of each such Letter of Credit. Promptly upon the
request of the Letter of Credit Issuer, each Lender shall reimburse the
Letter of Credit Issuer in immediately available funds for such Lender's
Percentage Interest in the amount of all obligations to third parties
incurred by the Letter of Credit Issuer in respect of each Letter of Credit
and each draft accepted under a Letter of Credit to the extent not
reimbursed by the Company. The Letter of Credit Issuer will notify each
Lender of the issuance of any Letter of Credit, the amount and date of
payment of any draft drawn or accepted under a Letter of Credit and whether
in connection with the payment of any such draft the amount thereof was
added to the Revolving Loan or was reimbursed by the Company.
11.4.3. Agent to Allocate Payments, etc. All payments of principal and
interest in respect of the extensions of the Revolving Loan made pursuant
to this Agreement, reimbursement of amounts paid by any Letter of Credit
Issuer to third parties under Letters of Credit or drafts presented
thereunder, commitment fees, Letter of Credit fees and other fees under
this Agreement shall, as a matter of convenience, be made by the Company
and the Guarantors to the Agent in immediately available funds. The share
of each Lender shall be credited to such Lender by the Agent in immediately
available funds in such manner that the principal amount of the Credit
Obligations to be paid shall be paid proportionately in accordance with the
Lenders' respective Percentage Interests in such Credit Obligations, except
as otherwise provided in this Agreement. Under no circumstances shall any
Lender be required to produce or present its Notes as evidence of its
interests in the Credit Obligations in any action or proceeding relating to
the Credit Obligations.
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11.4.4. Delinquent Lenders; Nonperforming Lenders . In the event that
any Lender fails to reimburse the Agent pursuant to Section 11.4.1 for the
Percentage Interest of such Lender (a "Delinquent Lender") in any credit
advanced by the Agent pursuant hereto, overdue amounts (the "Delinquent
Payment") due from the Delinquent Lender to the Agent shall bear interest,
payable by the Delinquent Lender on demand, at a per annum rate equal to
(a) the Federal Funds Rate for the first three days overdue and (b) the sum
of 2% plus the Federal Funds Rate for any longer period. Such interest
shall be payable to the Agent for its own account for the period commencing
on the date of the Delinquent Payment and ending on the date the Delinquent
Lender reimburses the Agent on account of the Delinquent Payment (to the
extent not paid by the Company as provided below) and the accrued interest
thereon (the "Delinquency Period"), whether pursuant to the assignments
referred to below or otherwise. Upon notice by the Agent, the Company will
pay to the Agent the principal (but not the interest) portion of the
Delinquent Payment. During the Delinquency Period, in order to make
reimbursements for the Delinquent Payment and accrued interest thereon, the
Delinquent Lender shall be deemed to have assigned to the Agent all
interest, commitment fees and other payments made by the Company under
Section 3 that would have thereafter otherwise been payable under the
Credit Documents to the Delinquent Lender. During any other period in which
any Lender is not performing its obligations to extend credit under Section
2 (a "Nonperforming Lender"), the Nonperforming Lender shall be deemed to
have assigned to each Lender that is not a Nonperforming Lender (a
"Performing Lender") all principal and other payments made by the Company
under Section 4 that would have thereafter otherwise been payable under the
Credit Documents to the Nonperforming Lender. The Agent shall credit a
portion of such payments to each Performing Lender in an amount equal to
the Percentage Interest of such Performing Lender in an amount equal to the
Percentage Interest of such Performing Lender divided by one minus the
Percentage Interest of the Nonperforming Lender until the respective
portions of the Loan owed to all the Lenders are the same as the Percentage
Interests of the Lenders immediately prior to the failure of the
Nonperforming Lender to perform its obligations under Section 2. The
foregoing provisions shall be in addition to any other remedies the Agent,
the Performing Lenders or the Company may have under law or equity against
the Delinquent Lender as a result of the Delinquent Payment or against the
Nonperforming Lender as a result of its failure to perform its obligations
under Section 2.
11.5. Sharing of Payments, etc. Each Lender agrees that (a) if by
exercising any right of set-off or counterclaim or otherwise, it shall receive
payment of (i) a proportion of the aggregate amount due with respect to its
Percentage Interest in the Revolving Loan and Letter of Credit Exposure which is
greater than (ii) the proportion received by any other Lender in respect of the
aggregate amount due with respect to such other Lender's Percentage Interest in
the Revolving Loan and Letter of Credit Exposure and (b) if such inequality
shall continue for more than 10 days, the Lender receiving such proportionately
greater payment shall purchase participations in the Percentage Interests in the
Revolving Loan and Letter of Credit Exposure held by the other Lenders, and such
other adjustments shall be made from time to time (including rescission of such
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purchases of participations in the event the unequal payment originally received
is recovered from such Lender through bankruptcy proceedings or otherwise), as
may be required so that all such payments of principal and interest with respect
to the Revolving Loan and Letter of Credit Exposure held by the Lenders shall be
shared by the Lenders pro rata in accordance with their respective Percentage
Interests; provided, however, that this Section 11.5 shall not impair the right
of any Lender to exercise any right of set-off or counterclaim it may have and
to apply the amount subject to such exercise to the payment of Indebtedness of
any Obligor other than such Obligor's Indebtedness with respect to the Revolving
Loan and Letter of Credit Exposure. Each Lender that grants a participation in
the Credit Obligations to a Credit Participant shall require as a condition to
the granting of such participation that such Credit Participant agree to share
payments received in respect of the Credit Obligations as provided in this
Section 11.5. The provisions of this Section 11.5 are for the sole and exclusive
benefit of the Lenders and no failure of any Lender to comply with the terms
hereof shall be available to any Obligor as a defense to the payment of the
Credit Obligations.
11.6. Amendments, Consents, Waivers, etc. Except as otherwise set forth
herein, the Agent may (and upon the written request of the Required Lenders the
Agent shall) take or refrain from taking any action under this Agreement or any
other Credit Document, including giving its written consent to any modification
of or amendment to and waiving in writing compliance with any covenant or
condition in this Agreement or any other Credit Document (other than an Interest
Rate Protection Agreement or the documents evidencing any Irish Loan) or any
Default or Event of Default, all of which actions shall be binding upon all of
the Lenders; provided, however, that:
(a) Except as provided below, without the written consent of the
Lenders owning at least a majority of the Percentage Interests, no written
modification of, amendment to, consent with respect to, waiver of
compliance with or waiver of a Default under, any of the Credit Documents
(other than an Interest Rate Protection Agreement or documents evidencing
any Irish Loan) shall be made.
(b) Without the written consent of such Lenders as own 100% of the
Percentage Interests (other than Delinquent Lenders during the existence of
a Delinquency Period so long as such Delinquent Lender is treated the same
as the other Lenders with respect to any actions enumerated below):
(i) No reduction shall be made in (A) the amount of principal of
the Loan or reimbursement obligations for payments made under Letters
of Credit, (B) the interest rate on the Loan or (C) the Letter of
Credit fees or commitment fees.
(ii) No change shall be made in the stated time of payment of all
or any portion of the Loan or interest thereon or reimbursement of
payments made under Letters of Credit or fees relating to any of the
foregoing payable to all of the Lenders and no waiver shall be made of
any Default under Section 8.1.1.
(iii) No increase shall be made in the amount, or extension of
the term, of the Commitments beyond that provided for under Section 2.
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(iv) No alteration shall be made of the Lenders' rights of
set-off contained in Section 8.2.4.
(v) No release of any Guarantor or pledged stock of Foreign
Subsidiaries shall be made (except that the Agent may release
particular Guarantors or pledged stock in dispositions permitted by
Section 6.11 without the written consent of the Lenders).
(vi) No amendment to or modification of this Section 11.6(b)
shall be made.
11.7. Agent's Resignation. The Agent may resign at any time by giving at
least 60 days' prior written notice of its intention to do so to each of the
Lenders and the Company and upon the appointment by the Required Lenders of a
successor Agent satisfactory to the Company. If no successor Agent shall have
been so appointed and shall have accepted such appointment within 45 days after
the retiring Agent's giving of such notice of resignation, then the retiring
Agent may with the consent of the Company, which shall not be unreasonably
withheld, appoint a successor Agent which shall be a bank or a trust company
organized under the laws of the United States of America or any state thereof
and having a combined capital, surplus and undivided profit of at least
$100,000,000; provided, however, that any successor Agent appointed under this
sentence may be removed upon the written request of the Required Lenders, which
request shall also appoint a successor Agent satisfactory to the Company. If the
Agent assigns its entire Percentage Interest in the Loans hereunder, the Company
shall be entitled to remove the Agent. A successor Agent shall be appointed in
accordance with this Section 11.7. Upon the appointment of a new Agent
hereunder, the term "Agent" shall for all purposes of this Agreement thereafter
mean such successor. After any retiring Agent's resignation hereunder as Agent,
or the removal hereunder of any successor Agent, the provisions of this
Agreement shall continue to inure to the benefit of such Agent as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
11.8. Concerning the Agent.
11.8.1. Action in Good Faith, etc. The Agent and its officers,
directors, employees and agents shall be under no liability to any of the
Lenders or to any future holder of any interest in the Credit Obligations
for any action or failure to act taken or suffered in good faith, and any
action or failure to act in accordance with an opinion of its counsel shall
conclusively be deemed to be in good faith. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, on instructions
given to the Agent by the required holders of Credit Obligations as
provided in this Agreement.
11.8.2. No Implied Duties, etc. The Agent shall have and may exercise
such powers as are specifically delegated to the Agent under this Agreement
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or any other Credit Document together with all other powers incidental
thereto. The Agent shall have no implied duties to any Person or any
obligation to take any action under this Agreement or any other Credit
Document except for action specifically provided for in this Agreement or
any other Credit Document to be taken by the Agent. Before taking any
action under this Agreement or any other Credit Document, the Agent may
request an appropriate specific indemnity satisfactory to it from each
Lender in addition to the general indemnity provided for in Section 11.11.
Until the Agent has received such specific indemnity, the Agent shall not
be obligated to take (although it may in its sole discretion take) any such
action under this Agreement or any other Credit Document. Each Lender
confirms that the Agent does not have a fiduciary relationship to it under
the Credit Documents. Each of the Company and its Subsidiaries party hereto
confirms that neither the Agent nor any other Lender has a fiduciary
relationship to it under the Credit Documents.
11.8.3. Validity, etc. The Agent shall not be responsible to any
Lender or any future holder of any interest in the Credit Obligations (a)
for the legality, validity, enforceability or effectiveness of this
Agreement or any other Credit Document, (b) for any recitals, reports,
representations, warranties or statements contained in or made in
connection with this Agreement or any other Credit Document and (c) for the
existence or value of any assets included in any security for the Credit
Obligations, (d) for the effectiveness of any Lien purported to be included
in any security for the Credit Obligations or (e) unless the Agent shall
have failed to comply with Section 11.8.1, for the perfection of any
security for the Credit Obligations.
11.8.4. Compliance . The Agent shall not be obligated to ascertain or
inquire as to the performance or observance of any of the terms of this
Agreement or any other Credit Document; and in connection with any
extension of credit under this Agreement or any other Credit Document, the
Agent shall be fully protected in relying on a certificate of the Company
as to the fulfillment by the Company of any conditions to such extension of
credit.
11.8.5. Employment of Agents and Counsel . The Agent may execute any
of its duties as Agent under this Agreement or any other Credit Document by
or through employees, agents and attorneys-in-fact and shall not be
responsible to any of the Lenders, the Company or any other Obligor for the
default or misconduct of any such agents or attorneys-in-fact selected by
the Agent acting in good faith. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and
its duties hereunder or under any other Credit Document.
11.8.6. Reliance on Documents and Counsel . The Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
affidavit, certificate, cablegram, consent, instrument, letter, notice,
order, document, statement, telecopy, telegram, telex or teletype message
or writing reasonably believed in good faith by the Agent to be genuine and
correct and to have been signed, sent or made by the Person in question,
including any telephonic or oral statement made by such Person, and, with
respect to legal matters, upon an opinion or the advice of counsel selected
by the Agent.
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11.8.7. Agent's Reimbursement . Each of the Lenders severally agrees
to reimburse the Agent, in the amount of such Lender's Percentage Interest,
for any reasonable expenses not reimbursed by the Company or the Guarantors
(without limiting the obligation of the Company or the Guarantors to make
such reimbursement): (a) for which the Agent is entitled to reimbursement
by the Company or the Guarantors under this Agreement or any other Credit
Document, and (b) after the occurrence of a Default, for any other
reasonable expenses incurred by the Agent on the Lenders' behalf in
connection with the enforcement of the Lenders' rights under this Agreement
or any other Credit Document.
11.8.8. Agent's Fees. The Company shall pay to the Agent for its own
account an agent's fee in the amounts separately agreed to from time to
time by the Company and the Agent.
11.9. Rights as a Lender. With respect to any credit extended by it
hereunder, Fleet shall have the same rights, obligations and powers hereunder as
any other Lender and may exercise such rights and powers as though it were not
the Agent, and unless the context otherwise specifies, Fleet shall be treated in
its individual capacity as though it were not the Agent hereunder. Without
limiting the generality of the foregoing, the Percentage Interest of Fleet shall
be included in any computations of Percentage Interests. Fleet and its
Affiliates may accept deposits from, lend money to, act as trustee for and
generally engage in any kind of banking or trust business with the Company, any
of its Subsidiaries or any Affiliate of any of them and any Person who may do
business with or own an equity interest in the Company, any of its Subsidiaries
or any Affiliate of any of them, all as if Fleet were not the Agent and without
any duty to account therefor to the other Lenders.
11.10. Independent Credit Decision. Each of the Lenders acknowledges that
it has independently and without reliance upon the Agent, based on the financial
statements and other documents referred to in Section 7.2, on the other
representations and warranties contained herein and on such other information
with respect to the Company and its Subsidiaries as such Lender deemed
appropriate, made such Lender's own credit analysis and decision to enter into
this Agreement and to make the extensions of credit provided for hereunder. Each
Lender represents to the Agent that such Lender will continue to make its own
independent credit and other decisions in taking or not taking action under this
Agreement or any other Credit Document. Each Lender expressly acknowledges that
neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
such Lender, and no act by the Agent taken under this Agreement or any other
Credit Document, including any review of the affairs of the Company and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent. Except for notices, reports and other documents expressly required to
be furnished to each Lender by the Agent under this Agreement or any other
Credit Document, the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition, financial or otherwise, or creditworthiness of
the Company or any Subsidiary which may come into the possession of the Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
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11.11. Indemnification. The holders of the Credit Obligations shall
indemnify the Agent and its officers, directors, employees and agents (to the
extent not reimbursed by the Obligors and without limiting the obligation of any
of the Obligors to do so), pro rata in accordance with their respective
Percentage Interests, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time be imposed on,
incurred by or asserted against the Agent or such Persons relating to or arising
out of this Agreement, any other Credit Document, the transactions contemplated
hereby or thereby, or any action taken or omitted by the Agent in connection
with any of the foregoing; provided, however, that the foregoing shall not
extend to actions or omissions which are taken by the Agent with gross
negligence or willful misconduct.
12. Successors and Assigns; Lender Assignments and Participations. Any reference
in this Agreement to any of the parties hereto shall be deemed to include the
successors and assigns of such party, and all covenants and agreements by or on
behalf of the Company, the Guarantors, the Agent or the Lenders that are
contained in this Agreement or any other Credit Documents shall bind and inure
to the benefit of their respective successors and assigns; provided, however,
that (a) the Company and its Subsidiaries may not assign their rights or
obligations under this Agreement except for mergers or liquidations permitted by
Section 6.11 and (b) the Lenders shall be not entitled to assign their
respective Percentage Interests in the Loan hereunder except as set forth below
in this Section 12.
12.1. Assignments by Lenders.
12.1.1. Assignees and Assignment Procedures. Each Lender may (a)
without the consent of the Agent or the Company if the proposed assignee is
already a Lender hereunder or a Wholly Owned Subsidiary of the same
corporate parent of which the assigning Lender is a Subsidiary, or (b)
otherwise with the consents of the Agent and (so long as no Event of
Default exists) the Company (which consents will not be unreasonably
withheld), in compliance with applicable laws in connection with such
assignment, assign to one or more commercial banks or other financial
institutions (each, an "Assignee") all or a portion of its interests,
rights and obligations under this Agreement and the other Credit Documents,
including all or a portion, which need not be pro rata between the Loan and
the Letter of Credit Exposure, of its Commitment, the portion of the Loan
and Letter of Credit Exposure at the time owing to it and the Notes held by
it, but excluding its rights and obligations as a Letter of Credit Issuer;
provided, however, that:
(i) the aggregate amount of the Commitment of the assigning
Lender subject to each such assignment to any Assignee other than
another Lender (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Agent)
shall be not less than $10,000,000 and in increments of $1,000,000 and
after giving effect to such assignment, the Commitment, if any, of the
assigning Lender shall be at least $10,000,000; and
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(ii) the parties to each such assignment shall execute and
deliver to the Agent an Assignment and Acceptance (the "Assignment and
Acceptance") substantially in the form of Exhibit 12.1.1, together
with the Note subject to such assignment and a processing and
recordation fee of $3,000 payable to the Agent by the assigning Lender
or the Assignee.
Upon acceptance and recording pursuant to Section 12.1.4, from and after the
effective date specified in each Assignment and Acceptance (which effective date
shall be at least five Banking Days after the execution thereof unless waived by
the Agent):
(A) the Assignee shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and
(B) the assigning Lender shall, to the extent provided in such
assignment, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 3.2.4, 3.7, 3.8, 3.9, 3.10 and 10, as well as to any
fees accrued for its account hereunder and not yet paid).
12.1.2. Terms of Assignment and Acceptance. By executing and
delivering an Assignment and Acceptance, the assigning Lender and Assignee
shall be deemed to confirm to and agree with each other and the other
parties hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Credit Document or any
other instrument or document furnished pursuant hereto;
(b) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Company and its Subsidiaries or the performance or observance by the
Company or any of its Subsidiaries of any of its obligations under this
Agreement, any other Credit Document or any other instrument or document
furnished pursuant hereto;
(c) such Assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
95
delivered pursuant to Section 7.2 or Section 6.4 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such Assignee will independently and without reliance upon the
Agent, such assigning Lender or any other Lender, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement;
(e) such Assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and
(f) such Assignee agrees that it will perform in accordance with the
terms of this Agreement all the obligations which are required to be
performed by it as a Lender.
12.1.3. Register. The Agent shall maintain at the Boston Office a
register (the "Register") for the recordation of (a) the names and
addresses of the Lenders and the Assignees which assume rights and
obligations pursuant to an assignment under Section 12.1.1, (b) the
Percentage Interest of each such Lender as set forth in Section 11.1 and
(c) the amount of the Revolving Loan, Money Market Loan, Swingline Loan,
Letter of Credit Exposure and Irish Loans owing to each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Company, the Agent and the Lenders may treat each
Person whose name is registered therein for all purposes as a party to this
Agreement. The Register shall be available for inspection by the Company or
any Lender at any reasonable time and from time to time upon reasonable
prior notice.
12.1.4. Acceptance of Assignment and Assumption. Upon its receipt of a
completed Assignment and Acceptance executed by an assigning Lender and an
Assignee together with the Note subject to such assignment, and the
processing and recordation fee referred to in Section 12.1.1, the Agent
shall (a) accept such Assignment and Acceptance, (b) record the information
contained therein in the Register and (c) give prompt notice thereof to the
Company. Within five Banking Days after receipt of notice, the Company, at
its own expense, shall execute and deliver to the Agent, in exchange for
the surrendered Note, a new Note to the order of such Assignee in a
principal amount equal to the applicable Commitment and Loan assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment and portion of the Loan, a new Note to the order of
such assigning Lender in a principal amount equal to the applicable
Commitment and Loan retained by it. Such new Note shall be in an aggregate
principal amount equal to the aggregate principal amount of such
surrendered Note, and shall be dated the date of the surrendered Note which
it replaces.
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12.1.5. Federal Reserve Bank. Notwithstanding the foregoing provisions
of this Section 13, any Lender may at any time pledge or assign all or any
portion of such Lender's rights under this Agreement and the other Credit
Documents to a Federal Reserve Bank; provided, however, that no such pledge
or assignment shall release such Lender from such Lender's obligations
hereunder or under any other Credit Document.
12.1.6. Further Assurances. The Company and its Subsidiaries shall
sign such documents and take such other actions from time to time
reasonably requested by an Assignee to enable it to share in the benefits
of the rights created by the Credit Documents.
12.2. Credit Participants. Each Lender may, without the consent of the
Company or the Agent, in compliance with applicable laws in connection with such
participation, sell to one or more commercial banks or other financial
institutions (each a "Credit Participant") participations in all or a portion of
its interests, rights and obligations under this Agreement and the other Credit
Documents (including all or a portion of its Commitment, the Loan and Letter of
Credit Exposure owing to it and the Note held by it); provided, however, 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;
(c) the Credit Participant shall be entitled to the benefit of the
cost protection provisions contained in Sections 3.2.4, 3.7, 3.8, 3.9, 3.10
and 10; provided, however, that the Credit Participant shall not be
entitled to receive any greater payment thereunder than the selling Lender
would have been entitled to receive with respect to the interest so sold if
such interest had not been sold; provided, further, that the Credit
Participant shall not be entitled to receive any greater payment hereunder
than the Credit Participant would have been entitled to receive if such
Credit Participant itself were a Lender; and
(d) the Company, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain
the sole right in its discretion as one of the Lenders to vote with respect
to the enforcement of the obligations of the Company relating to the Loan
and Letter of Credit Exposure and the approval of any amendment,
modification or waiver of any provision of this Agreement (other than
amendments, modifications, consents or waivers described in clause (b) of
the proviso to Section 11.6).
Each Obligor agrees, to the fullest extent permitted by applicable law, that any
Credit Participant and any Lender purchasing a participation from another Lender
pursuant to Section 11.5 may exercise all rights of payment (including the right
of set-off), with respect to its participation as fully as if such Credit
Participant or such Lender were the direct creditor of the Obligors and a Lender
hereunder in the amount of such participation.
12.3. Replacement of Lender. In the event that any Lender or, to the extent
applicable, any Credit Participant (the "Affected Lender"):
97
(a) fails to perform its obligations to fund any portion of the Loan
or to issue any Letter of Credit on any Closing Date when required to do so
by the terms of the Credit Documents or excused only by virtue of Section
5.2.2, or fails to provide its portion of any LIBOR Pricing Option pursuant
to Section 3.2.1 or on account of a Legal Requirement as contemplated by
Section 3.2.5;
(b) demands payment under the Reserve provisions of Section 3.7, the
Tax provisions of Section 3.8, the capital adequacy provisions of Section
3.9 or the regulatory change provisions in Section 3.10 in an amount the
Company deems materially in excess of the amounts with respect thereto
demanded by the other Lenders; or
(c) refuses to consent to a proposed amendment, modification, waiver
or other action requiring consent of the holders of 100% of the Percentage
Interests under Section 11.6(b) that is consented to by the Lenders owning
at least two-thirds of the Percentage Interests;
then, so long as no Event of Default exists, the Company shall have the right to
seek a replacement lender which is reasonably satisfactory to the Agent (the
"Replacement Lender"). The Replacement Lender shall purchase the interests of
the Affected Lender in the Loan, Letters of Credit and its Commitment and shall
assume the obligations of the Affected Lender hereunder and under the other
Credit Documents upon execution by the Replacement Lender of an Assignment and
Acceptance and the tender by it to the Affected Lender of a purchase price
agreed between it and the Affected Lender (or, if they are unable to agree, a
purchase price in the amount of the Affected Lender's Percentage Interest in the
Loan and Letter of Credit Exposure, or appropriate credit support for contingent
amounts included therein, and all other outstanding Credit Obligations then owed
to the Affected Lender). Such assignment by the Affected Lender shall be deemed
an early termination of any LIBOR Pricing Option to the extent of the Affected
Lender's portion thereof, and the Company will pay to the Affected Lender any
resulting amounts due under Section 3.2.4. Upon consummation of such assignment,
the Replacement Lender shall become party to this Agreement as a signatory
hereto and shall have all the rights and obligations of the Affected Lender
under this Agreement and the other Credit Documents with a Percentage Interest
equal to the Percentage Interest of the Affected Lender, the Affected Lender
shall be released from its obligations hereunder and under the other Credit
Documents, and no further consent or action by any party shall be required. Upon
the consummation of such assignment, the Company, the Agent and the Affected
Lender shall make appropriate arrangements so that a new Revolving Note is
issued to the Replacement Lender if it has acquired a portion of the Revolving
Loan. The Company and the Guarantors shall sign such documents and take such
other actions reasonably requested by the Replacement Lender to enable it to
share in the benefits of the rights created by the Credit Documents. The
Affected Lender shall use reasonable efforts to minimize any increased costs,
taxes and the impact of adverse Legal Requirements or market conditions. Until
the consummation of an assignment in accordance with the foregoing provisions of
98
this Section 12.3, the Company shall continue to pay to the Affected Lender any
Credit Obligations as they become due and payable.
13. Confidentiality. Each Lender will make no disclosure of confidential
information furnished to it by the Company or any of its Subsidiaries unless
such information shall have become public, except:
(a) in connection with operations under or the enforcement of this
Agreement or any other Credit Document, if and only to the extent required,
and in so doing shall require the Person to whom such disclosure is made to
enter into a confidentiality agreement with respect to the information
disclosed;
(b) pursuant to any statutory or regulatory requirement or any
mandatory court order, subpoena or other legal process;
(c) to any parent or corporate Affiliate of such Lender or to any
Credit Participant, proposed Credit Participant or proposed Assignee;
provided, however, that any such Person shall agree to comply with the
restrictions set forth in this Section 13 with respect to such information;
(d) to its independent counsel, auditors and other professional
advisors with an instruction to such Person to keep such information
confidential; and
(e) with the prior written consent of the Company, to any other
Person.
14. Foreign Lenders. If any Lender or Credit Participant is not incorporated or
organized under the laws of the United States of America or a state thereof,
such Lender or Credit Participant shall deliver to the Company and the Agent the
following:
(a) Two duly completed and executed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor form, as the case may be,
certifying in each case that such Person is entitled to receive payments
under this Agreement, the Notes and reimbursement obligations under Letters
of Credit payable to it, without deduction or withholding of any United
States federal income taxes; and
(b) A duly completed and executed Internal Revenue Service Form W-8 or
W-9 or successor form, as the case may be, to establish an exemption from
United States backup withholding tax.
Until such time as the Company and the Agent have received such forms
indicating that payments hereunder are not subject to deduction or withholding
of United States federal income tax, the Company shall withhold United States
federal income tax from such payments at the applicable statutory rate and
Section 3.8 shall not apply to such withholding.
99
Each such Lender or Credit Participant that delivers to the Company and the
Agent a Form 1001 or 4224 and Form W-8 or W-9 pursuant to this Section 14
further undertakes to deliver to the Company and the Agent two further copies of
Form 1001 or 4224 and Form W-8 or W-9, or successor applicable form, or other
manner of certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the Company and
the Agent. Such Forms 1001 or 4224 shall certify that such Lender or Credit
Participant is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes. Until such
time as the Company and the Agent have received such forms indicating that
payments hereunder are not subject to deduction or withholding of United States
federal income tax, the Company shall withhold United States federal income tax
from such payments at the applicable statutory rate and Section 3.8 shall not
apply to such withholding. The foregoing documents need not be delivered in the
event (i) any change in treaty, law or regulation or official interpretation
thereof has occurred after the date hereof which renders all such forms
inapplicable or which would prevent such Lender or Credit Participant from
delivering any such form with respect to it, or (ii) such Lender or Credit
Participant advises the Company that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax. In the
event of clause (ii), the Company shall withhold United States federal income
tax from payments to such Lender or Credit Participant in accordance with
applicable law, and Section 3.8 shall not apply to such withholding. For
purposes of the prior sentence, if any such Lender or Credit Participant
delivers two duly completed and executed copies of Form 1001 or successor form
establishing a reduced withholding tax rate under an applicable tax treaty, the
Company shall withhold United States federal income tax from such payments at
the reduced withholding tax rate established in such treaty. Notwithstanding the
foregoing, if a Lender or Credit Participant has delivered the forms required to
be delivered under clauses (i) and (ii) certifying that such Lender or Credit
Participant is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income tax and if,
subsequently, any change in treaty, law or regulation or official interpretation
thereof occurs which renders such forms inapplicable or which prevents such
Lender or Credit Participant from delivering any further such forms with respect
to it, then the Company shall withhold United States federal income tax form
payments to such Lender or Credit Participant in accordance with applicable law
and Section 3.8 shall apply to such withholding; provided, however, that if an
applicable tax treaty provides for a reduced withholding tax rate, Section 3.8
shall only apply if such Lender or Credit Participant delivers two duly
completed and executed copies of Form 1001 or successor form or otherwise
complies with any applicable requirements for establishing such reduced
withholding tax rate.
15. Notices. Except as otherwise specified in this Agreement, any notice
required to be given pursuant to this Agreement shall be given in writing. Any
notice, consent, approval, demand or other communication in connection with this
Agreement shall be deemed to be given if given in writing (including telex,
telecopy or similar teletransmission) addressed as provided below (or to the
addressee at such other address as the addressee shall have specified by notice
actually received by the addressor), and if either (a) actually delivered in
fully legible form to such address (evidenced in the case of a telex by receipt
100
of the correct answer back) or (b) in the case of a letter, unless actual
receipt of the notice is required by any Credit Document five days shall have
elapsed after the same shall have been deposited in the United States mails,
with first-class postage prepaid and registered or certified.
If to the Company or any of its Subsidiaries, to it at its address set
forth in Exhibit 7.1 (as supplemented pursuant to Sections 6.4.1 and 6.4.2), to
the attention of the chief financial officer.
If to any Lender or the Agent, to it at its address set forth on the
signature pages of this Agreement or in the Register, with a copy to the Agent.
16. Course of Dealing; Amendments and Waivers. No course of dealing between any
Lender or the Agent, on one hand, and the Company or any other Obligor, on the
other hand, shall operate as a waiver of any of the Lenders' or the Agent's
rights under this Agreement or any other Credit Document or with respect to the
Credit Obligations. Each of the Company and the Guarantors acknowledges that if
the Lenders or the Agent, without being required to do so by this Agreement or
any other Credit Document, give any notice or information to, or obtain any
consent from, the Company or any other Obligor, the Lenders and the Agent shall
not by implication have amended, waived or modified any provision of this
Agreement or any other Credit Document, or created any duty to give any such
notice or information or to obtain any such consent on any future occasion. No
delay or omission on the part of any Lender of the Agent in exercising any right
under this Agreement or any other Credit Document or with respect to the Credit
Obligations shall operate as a waiver of such right or any other right hereunder
or thereunder. A waiver on any one occasion shall not be construed as a bar to
or waiver of any right or remedy on any future occasion. No waiver, consent or
amendment with respect to this Agreement or any other Credit Document shall be
binding unless it is in writing and signed by the Agent or the Required Lenders.
17. Venue; Service of Process. Each of the Company and the other Obligors:
(a) Irrevocably submits to the nonexclusive jurisdiction of the state
courts of The Commonwealth of Massachusetts and to the nonexclusive
jurisdiction of the United States District Court for the District of
Massachusetts for the purpose of any suit, action or other proceeding
arising out of or based upon this Agreement or any other Credit Document or
the subject matter hereof or thereof.
(b) Waives to the extent not prohibited by applicable law that cannot
be waived, and agrees not to assert, by way of motion, as a defense or
otherwise, in any such proceeding brought in any of the above-named courts,
any claim that it is not subject personally to the jurisdiction of such
court, that its property is exempt or immune from attachment or execution,
that such proceeding is brought in an inconvenient forum, that the venue of
such proceeding is improper, or that this Agreement or any other Credit
Document, or the subject matter hereof or thereof, may not be enforced in
or by such court.
Each of the Company and the other Obligors consents to service of process in any
101
such proceeding in any manner at the time permitted by Chapter 223A of the
General Laws of The Commonwealth of Massachusetts and agrees that service of
process by registered or certified mail, return receipt requested, at its
address specified in or pursuant to Section 15 is reasonably calculated to give
actual notice.
18. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, EACH OF THE COMPANY, THE OTHER OBLIGORS, THE AGENT AND THE
LENDERS WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY CREDIT OBLIGATION OR IN
ANY WAY CONNECTED WITH THE DEALINGS OF THE LENDERS, THE AGENT, THE COMPANY OR
ANY OTHER OBLIGOR IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. Each
of the Company and the other Obligors acknowledges that it has been informed by
the Agent that the provisions of this Section 18 constitute a material
inducement upon which each of the Lenders has relied and will rely in entering
into this Agreement and any other Credit Document, and that it has reviewed the
provisions of this Agreement with its counsel. Any Lender, the Agent, the
Company or any other Obligor may file an original counterpart or a copy of this
Section 18 with any court as written evidence of the consent of the Company, the
other Obligors, the Agent and the Lenders to the waiver of their rights to trial
by jury.
19. Status for Other Debt Documents. This Agreement refinances and replaces the
Credit Agreement dated as of November 28, 1995, as amended, among the Company,
certain of its Subsidiaries, Fleet and the other Lenders parties thereto for
purposes of constituting the "Bank Credit Agreement" and "Bank Credit Facility"
as defined in the supplemental indenture for the Senior Notes, the indenture for
the Approved Subordinated Debt and the indenture for the Redemption Subordinated
Debt.
20. General. All covenants, agreements, representations and warranties made in
this Agreement or any other Credit Document or in certificates delivered
pursuant hereto or thereto shall be deemed to have been relied on by each
Lender, notwithstanding any investigation made by any Lender on its behalf, and
shall survive the execution and delivery to the Lenders hereof and thereof. The
invalidity or unenforceability of any provision hereof shall not affect the
validity or enforceability of any other provision hereof, and any invalid or
unenforceable provision shall be enforced to the maximum extent of its validity
or enforceability. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. This
Agreement and the other Credit Documents constitute the entire understanding of
the parties with respect to the subject matter hereof and thereof and supersede
all prior and contemporaneous understandings and agreements, whether written or
oral. This Agreement may be executed in any number of counterparts which
102
together shall constitute one instrument. This Agreement shall be governed by
and construed in accordance with the laws (other than the conflict of laws
rules) of The Commonwealth of Massachusetts.
103
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
BUCKEYE CELLULOSE CORPORATION
BUCKEYE FLORIDA CORPORATION
BUCKEYE XXXXX CORPORATION
ALPHA CELLULOSE HOLDINGS INC.
ALPHA CELLULOSE CORPORATION
BKI INVESTMENT CORPORATION
BKI FINANCE CORPORATION
By: /s/ R.E. XXXXXX
-------------------------------------------------
As an authorized officer of each of the foregoing
corporations
BUCKEYE FLORIDA, LIMITED PARTNERSHIP
By Buckeye Florida Corporation, general partner
By: /s/ R.E. XXXXXX
-------------------------------------------------
Title:
BKI MANAGEMENT COMPANY, L.P.
By Buckeye Cellulose Corporation, general partner
By: /s/ R.E. XXXXXX
-------------------------------------------------
Title:
BKI LIMITED CORPORATION
BKI HOLDING CORPORATION
BKI ASSET MANAGEMENT CORPORATION
By: /s/ XXXXXXX X. XXXXXX XX
-------------------------------------------------
Xxxxxxx X. Xxxxxx, XX, President
FLEET NATIONAL BANK
By: /s/ XXXXXXX XXXXXXX
-------------------------------------------------
Title: Managing Director
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
SUNTRUST BANK, CENTRAL FLORIDA N.A.
By: /s/ XXXX XXXXXXXX
-------------------------------------------------
Title: Vice President
000 Xxxxx Xxxxxx Xxxxxx Xxxxx 0
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
TORONTO DOMINION (TEXAS), INC.
By: /s/XXXX XXXXXXX
-------------------------------------------------
Title: Vice President
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
DRESDNER BANK AG
NEW YORK AND GRAND CAYMAN BRANCHES
By: /s/ XXXXXXXXXXX X. XXXXXXX
-------------------------------------------------
Title: Assistant Treasurer
By: /s/ XXXX XXXXXXX
-------------------------------------------------
Title: Vice President
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ X. XXX O'DELL II
-------------------------------------------------
Title: Vice President
000 Xxxxx Xxxx Xxxxxx, Xxxxx Xxxx
00xx Floor, Mail Code: 3940
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
By: /s/ (ILLEGIBLE SIGNATURE)
-------------------------------------------------
Title: Vice President
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By: /s/ (ILLEGIBLE SIGNATURE)
-------------------------------------------------
Title: National Account Officer
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Telecopy: (000) 000-0000
FIRST AMERICAN NATIONAL BANK
By: /s/ XXXXXXXXX XXXXXX
-------------------------------------------------
Title: SVP
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Telecopy: (000) 000-0000
ABN AMRO BANK, N.V.
By: /s/ (ILLEGIBLE SIGNATURE)
-------------------------------------------------
Title: Group Vice President
By: /s/ ILLEGIBLE SIGNATURE)
-------------------------------------------------
Title: Vice President
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. XXXXX
-------------------------------------------------
Title: Senior Manager Loan Operations
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
SUMITOMO BANK
By: /s/ (ILLEGIBLE SIGNATURE)
-------------------------------------------------
Title: Joint General Manger
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
