EXECUTION COPY
NORTH AMERICAN CHEMICAL COMPANY
NORTH AMERICAN SALT COMPANY
GREAT SALT LAKE MINERALS CORPORATION,
as Borrowers
▇▇▇▇▇▇ CHEMICAL NORTH AMERICA, INC.,
as Guarantor
US$130,000,000
CREDIT AND GUARANTEE AGREEMENT
dated as of October 15, 1993,
as amended and restated as of
February 27, 1997
GENERAL ELECTRIC CAPITAL CORPORATION,
as Collateral Agent and as Administrative Agent
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.............................................................................. 2
1.1 Defined Terms..................................................................................... 2
1.2 Other Definitional Provisions..................................................................... 30
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT
COMMITMENTS.............................................................................. 30
2.1 Revolving Credit Commitments...................................................................... 30
2.2 Revolving Credit Notes............................................................................ 31
2.3 [INTENTIONALLY OMITTED] .......................................................................... 31
2.4 [INTENTIONALLY OMITTED] .......................................................................... 31
2.5 Procedure for Borrowing........................................................................... 32
2.6 Use of Proceeds of Loans.......................................................................... 32
SECTION 3. AMOUNT AND TERMS OF LETTER OF CREDIT
SUB-FACILITY............................................................................. 32
3.1 Issuance ......................................................................................... 32
3.2 Advances Automatic; Participations................................................................ 34
3.3 Cash Collateral................................................................................... 34
3.4 Fees and Expenses................................................................................. 36
3.5 Request for Incurrence of L/C Obligations......................................................... 36
3.6 Obligations Absolute.............................................................................. 36
3.7 Nature of Lenders' Duties......................................................................... 37
3.8 Application....................................................................................... 38
SECTION 4. [INTENTIONALLY OMITTED].................................................................. 38
SECTION 5. AMOUNT AND TERMS OF SWING LINE SUB-FACILITY.............................................. 38
5.1 Swing Line Commitments............................................................................ 38
5.2 Swing Line Loan Note.............................................................................. 39
5.3 Procedure for Swing Line Loan Borrowing........................................................... 39
5.4 Refunding of Swing Line Loans..................................................................... 39
5.5 Unconditional Obligation to Refund Swing Line Loans............................................... 40
5.6 Use of Proceeds of Swing Line Loans............................................................... 41
SECTION 6. PROVISIONS RELATING TO CERTAIN EXTENSIONS OF
CREDIT; FEES AND PAYMENTS................................................................ 41
6.1 Commitment Fee.................................................................................... 41
6.2 Termination or Reduction of Commitments........................................................... 41
6.3 Optional Prepayments.............................................................................. 41
6.4 Mandatory Prepayments............................................................................. 42
6.5 [INTENTIONALLY OMITTED] .......................................................................... 43
6.6 Conversion and Continuation Options............................................................... 43
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6.7 Minimum Amounts of Tranches....................................................................... 44
6.8 Interest Rates and Payment Dates.................................................................. 44
6.9 Computation of Interest and Fees.................................................................. 44
6.10 Inability to Determine Interest Rate............................................................. 45
6.11 Pro Rata Treatment and Payments.................................................................. 45
6.12 Illegality....................................................................................... 46
6.13 Requirements of Law.............................................................................. 47
6.14 Taxes ......................................................................................... 48
6.15 Replacement of Claimant.......................................................................... 50
6.16 Indemnity........................................................................................ 51
6.17 Repayment of Obligations......................................................................... 52
SECTION 7. REPRESENTATIONS AND WARRANTIES........................................................... 52
7.1 Financial Condition............................................................................... 52
7.2 No Change......................................................................................... 53
7.3 Corporate Existence; Compliance with Law.......................................................... 53
7.4 Corporate Power; Authorization; Enforceable Obligations........................................... 53
7.5 No Legal Bar...................................................................................... 54
7.6 No Material Litigation............................................................................ 54
7.7 No Default........................................................................................ 54
7.8 Ownership of Property; Liens...................................................................... 54
7.9 Intellectual Property............................................................................. 54
7.10 No Burdensome Restrictions....................................................................... 55
7.11 Taxes ......................................................................................... 55
7.12 Federal Regulations.............................................................................. 55
7.13 ERISA ......................................................................................... 55
7.14 Investment Company Act; Other Regulations........................................................ 56
7.15 Subsidiaries; Guarantors......................................................................... 56
7.16 Environmental Matters............................................................................ 56
7.17 Solvency......................................................................................... 57
7.18 ▇▇▇▇▇▇▇ Valley Manufacturing Process............................................................. 57
7.19 No Other Restriction............................................................................. 57
SECTION 8. CONDITIONS PRECEDENT..................................................................... 58
8.1 Conditions to Effectiveness....................................................................... 58
8.2 Conditions to Each Extension of Credit............................................................ 61
SECTION 9. AFFIRMATIVE COVENANTS.................................................................... 62
9.1 Financial Statements.............................................................................. 62
9.2 Certificates; Other Information................................................................... 63
9.3 Payment of Obligations............................................................................ 65
9.4 Conduct of Business and Maintenance of Existence.................................................. 65
9.5 Maintenance of Property; Insurance................................................................ 65
9.6 Inspection of Property; Books and Records; Discussions............................................ 66
9.7 Notices ......................................................................................... 66
9.8 Environmental Laws................................................................................ 67
9.9 Canadian Currency Risk............................................................................ 67
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9.10 Inventory........................................................................................ 67
9.11 Field Analyses................................................................................... 67
SECTION 10. NEGATIVE COVENANTS....................................................................... 67
10.1 Financial Condition Covenants.................................................................... 68
10.2 Limitation on Indebtedness....................................................................... 68
10.3 Limitation on Liens.............................................................................. 69
10.4 Limitation on Guarantee Obligations.............................................................. 71
10.5 Limitation on Capital Expenditures............................................................... 72
10.6 Limitation on Leases............................................................................. 73
10.7 Limitation on Fundamental Changes................................................................ 73
10.8 Limitation on Sale of Assets..................................................................... 75
10.9 Limitation on Restricted Payments................................................................ 76
10.10 Limitation on Investments, Loans and Advances................................................... 78
10.11 Limitation on Modifications of Debt Instruments and Other Agreements;
Optional Payments of Debt Instruments.................................................... 79
10.12 Limitation on Transactions with Affiliates...................................................... 80
10.13 Limitation on Changes in Fiscal Year............................................................ 80
10.14 Limitation on Negative Pledge Clauses........................................................... 81
10.15 Limitation on Lines of Business................................................................. 81
10.16 Payments in Respect of Accounts................................................................. 81
10.17 Maintenance of Bank Accounts.................................................................... 81
10.18 Restriction on Cash Balances.................................................................... 82
10.19 Subsidiaries.................................................................................... 82
10.20 Amendments to Charter and By-Laws............................................................... 82
10.21 Limitation on Dividend Restrictions............................................................. 82
SECTION 11. GUARANTEES............................................................................... 82
11.1 Guarantees....................................................................................... 82
11.2 No Subrogation, Contribution, Reimbursement or Indemnity......................................... 83
11.3 Modification of Obligations...................................................................... 83
11.4 Waiver ......................................................................................... 84
11.5 Reinstatement.................................................................................... 85
11.6 Payment of Obligations........................................................................... 85
SECTION 12. EVENTS OF DEFAULT........................................................................ 85
SECTION 13. THE ADMINISTRATIVE AGENT AND THE COLLATERAL
AGENT.................................................................................... 89
13.1 Appointment...................................................................................... 89
13.2 Delegation of Duties............................................................................. 89
13.3 Exculpatory Provisions........................................................................... 89
13.4 Reliance by Administrative Agent and Collateral Agent............................................ 90
13.5 Notice of Default................................................................................ 90
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13.6 Non-Reliance on Administrative Agent, Collateral Agent and Other
Lenders.................................................................................. 91
13.7 Indemnification.................................................................................. 91
13.8 Administrative Agent and Collateral Agent........................................................ 92
13.9 Successor Administrative Agent and Collateral Agent.............................................. 92
SECTION 14. MISCELLANEOUS............................................................................ 93
14.1 Amendments and Waivers........................................................................... 93
14.2 [INTENTIONALLY OMITTED] ......................................................................... 94
14.3 Notices ......................................................................................... 94
14.4 No Waiver; Cumulative Remedies................................................................... 95
14.5 Survival of Representations and Warranties....................................................... 95
14.6 Payment of Expenses and Taxes.................................................................... 96
14.7 Successors and Assigns; Participations and Assignments........................................... 98
14.8 Adjustments; Set-off............................................................................. 101
14.9 Designation under Senior Subordinated Notes...................................................... 101
14.10 Counterparts.................................................................................... 101
14.11 Severability.................................................................................... 102
14.12 Integration..................................................................................... 102
14.13 Separate Obligations............................................................................ 102
14.14 Application of Proceeds of Collateral........................................................... 102
14.15 GOVERNING LAW................................................................................... 103
14.16 Submission to Jurisdiction; Waivers............................................................. 103
14.17 Acknowledgements................................................................................ 104
14.18 WAIVERS OF JURY TRIAL........................................................................... 104
14.19 Confidentiality................................................................................. 105
SCHEDULES
Schedule I Addresses for Notices
Schedule II Commitments
Schedule III Subsidiaries and Guarantors
Schedule V Indebtedness
Schedule VI Liens
Schedule VII Guarantee Obligations
Schedule VIII Existing Letters of Credit
Schedule IX Borrowers' Accounts
Schedule X Administrative Agent's Account
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EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Swing Line Note
Exhibit C Form of Guarantee
Exhibit D Form of GSLMC Security Agreement
Exhibit E Form of NACC Security Agreement
Exhibit F Form of NASC Security Agreement
Exhibit G Form of Lock Box Agreement
Exhibit H Form of Assignment and Acceptance
Exhibit I-1 Form of Landlord's Letter
Exhibit I-2 Form of Warehousemen Notice
Exhibit J Form of Borrowing Base Certificate
Exhibit K [INTENTIONALLY OMITTED]
Exhibit L Stockholders' Agreement
Exhibit M Tax Sharing Agreement
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CREDIT AND GUARANTEE AGREEMENT, dated as of October 15, 1993, as
amended and restated as of February 27, 1997, among:
(a) NORTH AMERICAN CHEMICAL COMPANY, a Delaware corporation ("NACC"),
NORTH AMERICAN SALT COMPANY, a Delaware corporation ("NASC"), GREAT
SALT LAKE MINERALS CORPORATION, a Delaware corporation ("GSLMC")
(collectively, the "Borrowers");
(b) ▇▇▇▇▇▇ CHEMICAL NORTH AMERICA, INC., a Delaware corporation, as
guarantor (in such capacity, "HCNA");
(c) the several banks and other financial institutions from time to time
parties to this Agreement (the "Lenders"); and
(d) GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("GE
Capital"), as collateral agent for the Lenders hereunder (in such
capacity, the "Collateral Agent") and as administrative agent for the
Lenders hereunder (in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrowers and HCNA have entered into the Credit and
Guarantee Agreement, dated as of October 15, 1993, as amended and restated as of
July 10, 1995, as further amended prior to the date hereof (as so amended, the
"Existing Credit Agreement") with Barclays Bank PLC and GE Capital, as
co-agents, GE Capital, as collateral agent, Barclays Bank PLC, as administrative
agent, and the several banks and other financial institutions parties thereto;
WHEREAS, the parties hereto have agreed to amend and restate the
Existing Credit Agreement as provided herein on the terms set forth in this
Agreement, which Agreement shall become effective upon the satisfaction of
certain conditions precedent set forth herein; and
WHEREAS, it is the intent of the parties hereto that this Agreement
not constitute a novation of the obligations and liabilities existing under the
Existing Credit Agreement or evidence repayment of all or any of such
obligations and liabilities and that this Agreement amend and restate in its
entirety the Existing Credit Agreement and re-evidence the obligations of the
Borrowers outstanding thereunder;
NOW, THEREFORE, in consideration of the above premises, the parties
hereto hereby agree that on the Closing Date (as
defined below) the Existing Credit Agreement shall be amended and restated to
read in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Acceleration Date": as defined in Section 12.
"Accounts": as defined in "Eligible Receivables".
"Adjusted Fixed Charges": for any period, with respect to HCNA and
its Subsidiaries, the sum of (a) Capital Expenditures made during such
period (other than Major Project Capital Expenditures, except to the
extent the same are made with Transferred HCNA Amounts), provided that,
for purposes of calculating "Adjusted Fixed Charges", the amount of
Capital Expenditures actually made by HCNA and its Subsidiaries during
HCNA's fiscal year 1997 shall be adjusted by (i) increasing such amount by
$3,000,000 in the first fiscal quarter, (ii) increasing such amount by
$2,000,000 in the second fiscal quarter, (iii) decreasing such amount by
$2,000,000 in the third fiscal quarter, and (iv) decreasing such amount by
$3,000,000 in the fourth fiscal quarter, and (b) the greater of scheduled
and (without duplication of payments scheduled for prior periods) actual
payments of principal of Indebtedness (other than Indebtedness hereunder
and under the Canadian Credit Agreement and other than any such scheduled
or actual payments financed with the proceeds of (i) extraordinary asset
sales, (ii) the issuance of Capital Stock, (iii) the issuance of
Indebtedness having no scheduled amortization prior to the first
anniversary of the incurrence thereof and a longer Weighted Average Life
to Maturity than the Indebtedness being repaid or prepaid or (iv) the
issuance of Indebtedness incurred in accordance with subsection 10.2(g) in
order to refinance Indebtedness of NACC with respect to North American
Terminals, Inc.'s San Diego terminal in a principal amount not exceeding
$8,000,000), determined on a consolidated basis in accordance with GAAP,
for such period.
"Adjusted Operating Income": for any period, consolidated income
before taxes on or measured by net income or gain (as determined in
accordance with GAAP) for such period:
(a) minus, to the extent included in the computation of consolidated
income before taxes for such period, the sum of (i) all
extraordinary gains of HCNA and its Subsidiaries recorded during
such period (as determined for HCNA and its Subsidiaries on a
consolidated basis
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in accordance with GAAP) and (ii) all non-cash foreign exchange
gains of HCNA and its Subsidiaries recorded during such period (as
determined for HCNA and its Subsidiaries on a consolidated basis in
accordance with GAAP);
(b) minus, to the extent not deducted in the computation of consolidated
income before taxes for such period, all taxes on or measured by
income (including, without limitation, withholding taxes) paid in
cash by HCNA and its Subsidiaries with respect to such period or
payable in cash by HCNA and its Subsidiaries within twelve months
following the last day of such period with respect thereto;
(c) minus, capitalized interest in respect of capital expenditures for
such period;
(d) plus, to the extent not included in the calculation of consolidated
income before taxes, all tax refunds actually received in cash by
HCNA and its Subsidiaries during such period (whether or not
deducted in such period); and
(e) plus, to the extent deducted in the calculation of consolidated
income before taxes for such period, the sum of (i) all
extraordinary losses of HCNA and its Subsidiaries recorded during
such period (as determined for HCNA and its Subsidiaries on a
consolidated basis in accordance with GAAP), (ii) depreciation and
amortization (including, without limitation, amortization of
capitalized financing fees included in interest expense calculated
in accordance with GAAP) of HCNA and its Subsidiaries during such
period, (iii) all non- cash foreign exchange losses of HCNA and its
Subsidiaries recorded during such period (as determined for HCNA and
its Subsidiaries on a consolidated basis in accordance with GAAP),
(iv) any non-cash interest related to the amortization of the ECMC
Transaction and (v) without duplication of any of the foregoing, any
other non-cash charges against income.
"Administrative Agent": as defined in the preamble.
"Administrative Agent's Account": the account specified on Schedule
X, or such other account as shall be specified by the Administrative Agent
in a written notice to the Borrowers and the Lenders.
"Affiliate": as to any Person, (a) any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person or (b) any other Person
(other than a Subsidiary) which is the vehicle for a joint venture in
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which such Person holds Capital Stock (or any Subsidiary of such joint
venture vehicle). For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (x) vote 10% or more of
the Voting Stock of such Person or (y) direct or cause the direction of
the management and policies of such Person, whether by contract or
otherwise; provided, however, that in no event shall any of Chase
Manhattan Capital Corporation, The Prudential Insurance Company of America
or Prudential Reinsurance Company be deemed to be Affiliates of HCNA and
its Subsidiaries with respect to any transaction occurring in the ordinary
course of business of HCNA and its Subsidiaries.
"Affiliates Guarantee": the Guarantee executed and delivered by
certain Affiliates of the Borrowers, substantially in the form of Exhibit
C, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Aggregate Commitment": $130,000,000, as such amount may be reduced
from time to time in accordance with the terms of this Agreement, provided
that for the purposes of (i) the definition of "Aggregate Required
Lenders" and (ii) the definition of "Commitment Percentage" when such
definition is used in the definition of "Majority Lenders" or "Required
Lenders", "Aggregate Commitment" shall mean the aggregate amount of the
Commitments of all Lenders other than Non-Responding Lenders.
"Aggregate Outstanding Extensions of Credit": as to any Lender with
respect to a Borrower at any time, an amount equal to the sum of (a) the
aggregate principal amount of all then outstanding Revolving Credit Loans
made by such Lender to such Borrower and (b) such Lender's Commitment
Percentage of the aggregate amount of L/C Obligations and Swing Line Loans
then outstanding to such Borrower; provided that, only for purposes of
calculating the commitment fees owing pursuant to subsection 6.1, the
aggregate amount of Swing Line Loans then outstanding shall be deemed to
be held entirely by the Swing Line Lender and not by any other Lender.
"Aggregate Required Lenders": at any time, Lenders hereunder and
Lenders under (and as defined in) the Canadian Credit Agreement which, in
the aggregate, have Commitments hereunder and Commitments thereunder (as
defined in the Canadian Credit Agreement) aggregating at least 66-2/3% of
the sum of the Aggregate Commitment hereunder and the Aggregate Commitment
thereunder (and as defined therein).
"Aggregate U.S. Borrowing Base Availability": at any time, the sum
of each Borrowing Base then in effect with respect to each Borrower.
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"Agreement": this Credit and Guarantee Agreement, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"ANSAC": American National Soda Ash Corporation.
"Application": an application, in such form as the relevant L/C
Issuer may specify from time to time, requesting such L/C Issuer to open a
Letter of Credit.
"Assignee": as defined in subsection 14.7(c).
"Assignment and Acceptance": as defined in subsection 14.7(c).
"Available Commitment": as to any Lender, at any time, an amount
equal to the excess, if any, of (a) such Lender's Commitment over (b) such
Lender's Aggregate Outstanding Extensions of Credit to all Borrowers.
"Base Rate": for any day, a rate per annum equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the CP Rate in effect on
such day and (c) the Federal Funds Effective Rate in effect on such day
plus 0.50%. For purposes hereof: "Prime Rate" shall mean, for any day, the
per annum base rate on corporate loans posted by at least 75% of the
nation's 30 largest banks as most recently reported in the "Money Rates"
column (or any comparable successor column) of The Wall Street Journal on
or prior to such day, provided that if The Wall Street Journal changes its
method of reporting such rate, the Prime Rate shall be the highest rate
per annum reported by Bank of America National Trust and Savings
Association or The First National Bank of Boston as its "prime rate" or
"reference rate"; "CP Rate" shall mean, for any day, the per annum
commercial paper rate for 90-day commercial paper placed directly by GE
Capital as most recently reported in the "Money Rates" column (or any
comparable successor column) of The Wall Street Journal on or prior to
such day, provided that if The Wall Street Journal ceases to publish such
rate, the CP Rate shall be the published rate for 90-day dealer placed
commercial paper (sold through dealers by major corporations) as
determined by the Administrative Agent; and "Federal Funds Effective Rate"
shall mean, for any day, the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by
it. If for any reason the Administrative Agent shall have determined
(which
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determination shall be conclusive absent manifest error) that it is unable
to ascertain the CP Rate or the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative Agent to
obtain sufficient quotations in accordance with the terms thereof, the
Base Rate shall be determined without regard to clause (b) or (c), as the
case may be, of the first sentence of this definition, as appropriate,
until the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Prime Rate, the CP Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, the CP
Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans bearing interest at a rate based upon the
Base Rate (including, without limitation, Swing Line Loans).
"Borrowers": as defined in the preamble to this Agreement; each, a
"Borrower".
"Borrowing Base": with respect to any Borrower at any date, the
amount equal to the sum of (a) 85% of Eligible Receivables of such
Borrower and (b) 50% of Eligible Inventory of such Borrower (provided that
during the period from July 1 of each year to January 31 of the next
succeeding year, the Borrowing Base with respect to NASC shall be the sum
of (a) 85% of Eligible Receivables of NASC and (b) 65% of Eligible
Inventory of NASC). The Borrowing Base shall be determined from time to
time by the Collateral Agent by reference to the Borrowing Base
Certificate then most recently delivered to it; provided that the
information contained in such Borrowing Base Certificate shall not be
conclusive in calculating the Borrowing Base and, after consultation with
the relevant Borrower (and, in the case of any change in the method of
calculating the Borrowing Base, upon reasonable notice to the relevant
Borrower), the Collateral Agent shall be entitled to adjust (in accordance
with the standards set forth in the definitions of the terms "Eligible
Inventory" and "Eligible Receivables") the amounts and other information
contained therein to the extent that the Collateral Agent believes in its
reasonable credit judgment that such adjustment is appropriate to reflect
the then current amounts of Eligible Inventory and Eligible Receivables.
"Borrowing Base Certificate": with respect to each Borrower, a
certificate, substantially in the form of Exhibit J, delivered pursuant to
subsection 9.2(e).
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.5 as a date on which a Borrower requests the Lenders to make
Loans hereunder.
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"Business": as defined in subsection 7.16.
"Business Day": a day other than a Saturday, Sunday or other day on which
commercial banks in New York City (or, in the case of matters relating to
Eurodollar Loans, New York City or London, England) are authorized or required
by law to close.
"Canadian Credit Agreement": the Credit and Guarantee Agreement,
dated as of October 15, 1993, as amended and restated as of February 27,
1997, among Sifto, the Subsequent Borrower (if any) designated thereunder,
the guarantors parties thereto, the banks and other financial institutions
from time to time parties thereto, the Collateral Agent named therein and
General Electric Capital Canada Inc., as administrative agent, as the same
may be further amended, restated, supplemented or otherwise modified from
time to time.
"Canadian Lender": any "Lender" under (and as defined in) the
Canadian Credit Agreement; collectively the "Canadian Lenders".
"Capital Expenditures": of any Person, expenditures by such Person
in respect of the purchase or other acquisition of fixed or capital assets
having a useful life of greater than one year (excluding (a) any such
asset acquired in connection with normal replacement and maintenance
programs properly charged to current operations as an expense deducted in
determining Consolidated Net Income, (b) payments on account of Financing
Leases, (c) to the extent otherwise included therein, interest capitalized
during such period in accordance with GAAP, (d) expenditures of proceeds
of insurance, condemnation awards or indemnity payments to the extent that
such proceeds are expended or committed to be expended within 270 days
after receipt thereof, or in respect of which expenditures were previously
made, for equipment, fixed assets, real property or improvements, or for
replacements or substitutions therefor or additions thereto, in each case
as certified in reasonable detail to the Administrative Agent by a
Responsible Officer of HCNA (it being agreed that (x) to the extent such
proceeds are not expended or committed to be expended within 270 days
after receipt thereof in accordance with this clause (d) or (y) proceeds
are not received with respect to expenditures previously made and not
included in the calculation of "Capital Expenditures" in anticipation of
receiving such proceeds within 270 days of the initial expenditure, in
each case, such amount shall be included in the calculation of "Capital
Expenditures" thereafter) and (e) expenditures to the extent funded by
joint venture partners of HCNA or any of its Subsidiaries) which would, in
accordance with GAAP, be set forth as capital expenditures on a
consolidated statement of cash flows of such Person, including, in any
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event, investments by HCNA and its Subsidiaries in excess of $10,000,000
in the aggregate made subsequent to December 28, 1996 by such Person in
joint ventures in which HCNA or any of its Subsidiaries holds Capital
Stock pursuant to subsection 10.10(d). For the purposes of clause (d) of
this definition, proceeds shall be deemed to be committed to be expended
only to the extent that a written contract or a firm purchase order has
been executed and delivered requiring expenditure of such proceeds.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Collateral Account": as defined in subsection 3.3(a).
"Cash Equivalents": (a) with respect to HCNA and its Subsidiaries
(including, without limitation, the members of the Sifto Group), (i)
securities issued or directly and fully guaranteed or insured by the
United States Government or any agency or instrumentality thereof having
maturities of not more than twelve months from the date of acquisition,
(ii) time deposits and certificates of deposit having maturities of not
more than six months from the date of acquisition of the Administrative
Agent or any commercial bank having capital and surplus in excess of
$500,000,000, which has, or the holding company of which has, a commercial
paper rating meeting the requirements specified in clause (iv) below,
(iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) entered into
with any bank meeting the qualifications specified in clause (ii) above,
and (iv) commercial paper rated at least A-1 or the equivalent thereof by
Standard & Poor's Ratings Services or P-1 or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc. and in either case maturing within three
months after the date of acquisition; and
(b) with respect to members of the Sifto Group, (i) securities
issued or directly and fully guaranteed or insured by the Canadian
Government or any agency or instrumentality thereof having maturities of
not more than twelve months from the date of acquisition and (ii)
commercial paper rated at least R1 (high), R1 (middle) or R1 (low) or the
equivalent by Dominion Bond Rating Service, Inc. or A1+ or the equivalent
by CBRS Inc. and in either case maturing within three months after the
date of acquisition.
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"Closing Date": the date (which date shall be prior to or on
February 28, 1997) on which the conditions precedent set forth in
subsection 8.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Collateral Agent": as defined in the preamble.
"Collateral Cash Equivalents": any cash equivalents held in a Cash
Collateral Account.
"Commercial Letter of Credit": as defined in subsection 3.1(b).
"Commitment": as to any Lender, the obligation of such Lender to
make Revolving Credit Loans to and/or issue or participate in Letters of
Credit, as the case may be, issued on behalf of the Borrowers hereunder in
an aggregate principal and/or face amount at any one time outstanding not
to exceed the amount set forth opposite such Lender's name on Schedule II
under the heading "Commitments"; as to all Lenders collectively, the
"Commitments".
"Commitment Percentage": as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the
Aggregate Commitment; provided that, at any time after the Commitments
shall have expired or terminated, the Commitment Percentage of a Lender
instead shall be the percentage which the Aggregate Outstanding Extensions
of Credit of such Lender to all Borrowers constitutes of the Aggregate
Outstanding Extensions of Credit of all Lenders to all Borrowers.
"Commitment Period": the period from and including the Closing Date
to but not including the Termination Date or such earlier date on which
the Commitments shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with a Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes a
Borrower and which is treated as a single employer under Section 414 of
the Code.
"Consolidated EBITDA": for any period, with respect to HCNA and its
Subsidiaries on a consolidated basis, an amount equal to consolidated
income before taxes on or measured by net income or gain (as determined in
accordance with GAAP) for such period:
-9-
(a) minus, to the extent included in the computation of consolidated
income before taxes, interest income, income or gain from
extraordinary items for such period and non-cash foreign exchange
gains, all determined on a consolidated basis for HCNA and its
Subsidiaries in accordance with GAAP; and
(b) plus, to the extent deducted in the computation of consolidated
income before taxes, the sum of (i) Consolidated Interest Expense
(including, without limitation, interest expense imputed in respect
of any Financing Leases), (ii) expense or loss from extraordinary
items for such period, (iii) depreciation and other non-cash charges
against income for such period, (iv) amortized debt discount for
such period and (v) non-cash foreign exchange losses, all determined
on a consolidated basis for HCNA and its Subsidiaries in accordance
with GAAP.
"Consolidated Free Cash Flow": for any period, Consolidated Net
Income (a) plus (to the extent deducted in determining Consolidated Net
Income) the sum of (i) depreciation and other non-cash charges against
income for such period and (ii) the provision for income taxes for such
period, and (b) minus the sum of (i) the amount of Permitted Capital
Expenditures (other than Major Project Capital Expenditures) actually made
during such period, (ii) income taxes paid or payable in cash for such
period and (iii) scheduled principal payments paid or payable on a
consolidated basis with respect to such period on account of Indebtedness.
"Consolidated Funded Debt": at any date, the amount of all
Indebtedness for borrowed money of HCNA and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense": for any period, interest expense of
HCNA and its Subsidiaries for such period (excluding the effects of
capitalizing interest with respect to capital expenditures, any
amortization of capitalized finance fees and any non-cash interest related
to the amortization of the ECMC Transaction), determined on a consolidated
basis in accordance with GAAP.
"Consolidated Lease Expense": for any period, the aggregate rental
obligations of HCNA and its Subsidiaries taken as a whole (determined on a
consolidated basis in accordance with GAAP) which are payable in respect
of such period under leases of real and/or personal property (net of
income from subleases thereof, but including taxes, insurance, maintenance
and similar expenses which the lessee is obligated to pay under the terms
of said leases), whether or not such obligations are reflected as
liabilities or
-10-
commitments on a consolidated balance sheet of HCNA and its Subsidiaries
or in the notes thereto, excluding, however, obligations under Financing
Leases.
"Consolidated Net Income": for any period, the consolidated net
income (or deficit) of HCNA and its Subsidiaries taken as a whole,
determined in accordance with GAAP; provided that there shall be excluded
(a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with HCNA or any
Subsidiary, (b) the income (or deficit) of any Person (other than a
Subsidiary) in which HCNA or any Subsidiary has an ownership interest,
except to the extent that any such income has been actually received by
HCNA or such Subsidiary in the form of dividends or similar distributions,
(c) the undistributed earnings of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any Contractual
Obligation or Requirement of Law applicable to such Subsidiary, (d) any
restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued during such
period, (e) any aggregate net gain (but not any aggregate net loss) during
such period arising from the sale, exchange or other disposition of
capital assets (such term to include all fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of
fixed assets and all securities), (f) any write-up of any asset, (g) any
net gain from the collection of the proceeds of life insurance policies,
(h) any net gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness of HCNA or any Subsidiary,
(i) in the case of a successor to HCNA by consolidation or merger or as a
transferee of its assets, any earnings of the successor corporation prior
to such consolidation, merger or transfer of assets, and (j) any deferred
credit representing the excess of equity in any Subsidiary at the date of
acquisition over the cost of the investment in such Subsidiary.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Debt Purchase Conditions": at any date with respect to any purchase
of Senior Secured Notes or Sifto Notes in reliance upon the provisions of
subsection 10.11(c), the simultaneous satisfaction of each of the
following conditions:
-11-
(a) no Default or Event of Default shall have occurred and be
continuing or would result therefrom;
(b) HCNA would have been in compliance with the Fixed Charge
Coverage Ratio required pursuant to subsection 10.1(b) for the
period of four consecutive fiscal quarters ending on the last day of
the most recent fiscal period with respect to which HCNA shall have
delivered financial statements pursuant to subsection 9.1(a) or
9.1(b) if such purchase had been consummated on the last day of such
fiscal period;
(c) the amount equal to (i) the average daily aggregate
Borrowing Bases of all Borrowers hereunder plus (ii) the average
daily aggregate Borrowing Bases of all Borrowers under (and as such
terms are defined in) the Canadian Credit Agreement during the
period of 90 consecutive days immediately preceding the date of such
purchase shall have exceeded by at least $40,000,000 the amount
equal to (x) the average daily Aggregate Outstanding Extensions of
Credit to all Borrowers from all Lenders hereunder plus (y) the
average daily Aggregate Outstanding Extensions of Credit to all
Borrowers from all Lenders under (and as such terms are defined in)
the Canadian Credit Agreement during such 90-day period; and
(d) there were no outstanding Loans hereunder and no
outstanding Loans under (and as such term is defined in) the
Canadian Credit Agreement immediately prior to and immediately
following such purchase.
"Default": any of the events specified in Section 12, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United States
of America.
"ECMC Transaction": the amendment of that certain Emission Control
Maintenance and Construction Agreement, dated as of December 15, 1988, by
and between ▇▇▇▇-▇▇▇▇▇ Chemical Corporation and ACE Cogeneration Company,
as assigned to NACC pursuant to that certain Master Agreement, dated
November 30, 1990, and as the same has been amended from time to time,
providing, among other things, for the payment by ACE Cogeneration Company
of not less than $22,000,000 in 1996.
"Eligible Inventory": shall mean, with respect to the relevant
Borrower, an amount equal to the book value of that inventory
("Inventory") of such Borrower, determined in accordance with GAAP
consistently applied, valued on a last-
-12-
in-first-out (LIFO) basis for NACC, provided, however, that the excess of
LIFO cost basis over FIFO cost for NACC shall not exceed $5,000,000, and
on a weighted average cost basis as to each other Borrower, excluding in
each instance capitalized warehouse costs, and subject to internal control
and management procedures applied in accordance with past practice, which
conforms to the following additional criteria:
(a) the Inventory consists of items which are in good saleable
condition (taking into account all applicable regulatory standards)
and are not deteriorating in quality or obsolete;
(b) the Inventory is located at a facility owned or leased by
a Borrower, or if the Inventory is stored at any location other than
premises owned or leased by such Borrower, such Borrower has
complied with all notice, reporting and filing requirements required
by the relevant Security Documents, as the case may be, with respect
to such Inventory to assure that the Collateral Agent has a
perfected security interest in and access to such Inventory;
provided that Inventory which is located at any location which is
not owned by such Borrower shall be deemed to be Eligible Inventory
only if either (i) a Landlord's Waiver has been obtained with
respect to such location and remains in full force and effect or
(ii) the Borrowing Base for such Borrower has been reduced by a
reserve reasonably satisfactory to the Collateral Agent to provide
for future obligations of the Borrower which will need to be
satisfied in order to remove such Inventory from such location in an
orderly manner over a reasonable period of time;
(c) the location at which such Inventory is stored holds
Inventory which, in the absence of the provisions of this clause
(c), would constitute Eligible Inventory having an aggregate book
value of not less than $100,000;
(d) the Inventory is subject to the Collateral Agent's
perfected security interest and no other Lien (other than Liens
permitted under the Security Agreement to which such Borrower is a
party) and is either (i) stored in the United States at a location
covered by a currently effective UCC financing statement filed by
the Collateral Agent, for the benefit of the holders of the
Obligations, or (ii) stored in Canada, The Netherlands or Belgium at
a location covered by a currently effective warehousing agreement,
personal property security act filing or other evidence of the
Collateral Agent's security interest, for the benefit of the holders
of the
-13-
Obligations, and the Collateral Agent and the Administrative Agent
reasonably believe that such financing statement or other evidence
of security interest results in a perfected security interest which
provides to the Collateral Agent substantially the same rights and
benefits as would a perfected security interest under the laws of a
jurisdiction located within the United States; provided, however,
that to be classified as Eligible Inventory, the aggregate book
value of Inventory which would in the absence of this provision,
constitute Eligible Inventory at all locations in The Netherlands
and Belgium shall be at least $1,000,000 in the aggregate and the
aggregate book value of Inventory which would, in the absence of
this provision, constitute Eligible Inventory at all locations in
The Netherlands and Belgium shall not exceed $10,000,000 in the
aggregate, provided, however, that such maximum amount shall be
increased on each anniversary of the Closing Date by the amount of
$2,500,000 but shall in no event exceed $15,000,000.
(e) the Inventory consists of goods at a location with respect
to which the relevant Borrower maintains adequate perpetual or
periodic records in accordance with past practice and, except to the
extent incorporated into the finished product, does not consist of
work in process (including, without limitation, bags and minerals),
minerals which have not been removed from mines or lakes, returned
or rejected goods, goods being returned to suppliers, spare parts,
maintenance items, packaging materials, shipping materials, supplies
or pallets;
(f) the Inventory consists of Inventory in transit, but only
to the extent that (i) such Inventory is in transit from (A) a
location in the United States or (in the case of NASC) Goderich,
Ontario, owned or leased by a Borrower (including a Public Warehouse
in the United States as to which the Collateral Agent has received a
Warehousemen Notice) and, in any such case, as to which a financing
statement or a filing under the Personal Property Security Act
(Ontario) (as amended from time to time) has been filed to (B) a
location in the United States owned or leased by a Borrower
(including a Public Warehouse in the United States as to which the
Collateral Agent has received a Warehousemen Notice) and, in any
such case, as to which a financing statement has been filed, (ii)
such goods are covered by non-negotiable documents of title which
explicitly state on their face that such documents are
"Non-Negotiable", (iii) in the case of NASC, such Inventory does not
have a book value in excess of $5,000,000, provided, however, that
such maximum amount shall be increased on each anniversary of the
Closing
-14-
Date by the amount of $1,000,000, but shall in no event exceed
$7,000,000, (iv) in the case of all Borrowers collectively, such
Inventory does not have a book value in excess of $11,000,000,
provided, however, that such maximum amount shall be increased on each
anniversary of the Closing Date by the amount of $1,000,000 but shall
in no event exceed $13,000,000, and (v) such Inventory which is located
at any location which is not owned by such Borrower shall be deemed to
be Eligible Inventory only if either (A) a Landlord's Waiver has been
obtained with respect to such location and remains in full force and
effect or (B) the Borrowing Base for such Borrower has been reduced by
a reserve reasonably satisfactory to the Collateral Agent to provide
for future obligations of the Borrower which will need to be satisfied
in order to remove such Inventory from such location in an orderly
manner over a reasonable period of time;
(g) the Inventory is not covered by a negotiable document of
title;
(h) the Inventory is not placed on consignment;
(i) if any of the Inventory consists of special order goods or
▇▇▇▇ and hold goods, reasonable reserves have been deducted in
respect of such Inventory in determining the Borrowing Base;
(j) the Inventory is not prepaid and is insured in accordance
with the requirements of the Loan Documents; and
(k) the Inventory is otherwise satisfactory to the Collateral
Agent in its reasonable credit judgment.
"Eligible Receivables": shall mean, with respect to the relevant
Borrower, an amount equal to the book value of those accounts receivable
("Accounts") of such Borrower, determined in accordance with GAAP
consistently applied and subject to internal control and management
procedures applied in accordance with past practice, which conform to each
of the following additional criteria:
(a) the Account is not evidenced by chattel paper or an
instrument or security of any kind, unless such chattel paper or
instrument or security has been duly endorsed to and is in the
possession of the Collateral Agent, for the benefit of the holders
of the Obligations;
(b) if the chief executive offices of the account debtor are
located outside the United States, either:
-15-
(i) the chief executive offices of the account
debtor are located in Canada and the Collateral Agent then
holds a first priority security interest in the Account and
such security interest is perfected under the laws of both the
United States and Canada;
(ii) the Account is payable in the full amount of the
face value of the Account in Dollars and is supported by an
irrevocable letter of credit issued by a United States
financial institution (or a foreign financial institution
confirmed by a United States financial institution) reasonably
satisfactory to the Collateral Agent and in form and substance
reasonably acceptable to the Collateral Agent, and the letter
of credit and all documents required to draw thereon have been
delivered to (and the rights of the relevant Borrower therein
have been assigned to) the Collateral Agent for the benefit of
the holders of the Obligations; or
(iii) in the case of non-United States Accounts which
do not satisfy the requirements of clause (i) or (ii) of this
paragraph (b), such Accounts shall be deemed to be Eligible
Accounts only to the extent that the aggregate amount thereof
owing to all Borrowers does not exceed an amount equal to the
lesser of $8,000,000 and 15% of the aggregate Eligible
Receivables of all Borrowers (calculated without regard to
Accounts which are deemed to be Eligible Receivables pursuant
to the provisions of this clause (iii));
(c) the Account is not subject to any Lien whatsoever (other
than Liens permitted under the Security Agreement to which such
Borrower is a party), except for the Collateral Agent's perfected
security interest, and a currently effective UCC financing statement
filed by the Collateral Agent against such Borrower covering such
Account is on file and all other filings, registrations and
recordings of the Security Documents shall have been properly filed,
registered and recorded in all offices of all jurisdictions where
such filing, registration or recording is necessary or advantageous
to create, perfect and maintain the security interests granted in
favor of the Collateral Agent;
(d) the Account arises solely from the sale of goods or the
performance of services by such Borrower in the ordinary course of
business and is documented by an invoice in a customary form used by
such Borrower and reasonably acceptable to the Collateral Agent and
-16-
(i) is due less than ninety (90) days (or, in the case of Accounts
payable by ANSAC, one hundred twenty (120) days) after the date of
such invoice or (ii) is covered by an irrevocable letter of credit
of a type described in clause (b) (ii) above;
(e) the Account has not remained unpaid later than the earlier
to occur of (i) sixty (60) days past the due date specified in the
applicable invoice and (ii) ninety (90) days (or, in the case of
Accounts payable by ANSAC, one hundred twenty (120) days) past the
original invoice date;
(f) the account debtor is not insolvent or the subject of any
bankruptcy or insolvency proceeding of any kind and the Collateral
Agent has not notified such Borrower that the creditworthiness of
such account debtor is unacceptable to the Collateral Agent in its
reasonable business judgment;
(g) the Account does not arise out of transactions with any
employee, officer, director, stockholder or other Affiliate of HCNA
or any of its Subsidiaries (it being understood that ANSAC and any
Person that holds, directly or indirectly, at least a 20% minority
ownership interest in the Soda Ash Subsidiary as part of a soda ash
joint venture designed to benefit from the exempt sale provisions of
the ANSAC rules shall not be deemed to be Affiliates of HCNA or any
of its Subsidiaries for purposes of this clause (g));
(h) (i) in the case of Accounts due from an account debtor
(other than ANSAC) whose total indebtedness to such Borrower on
Accounts then exceeds 25% of the aggregate amount of all of such
Borrower's Eligible Receivables, such Accounts shall be deemed to be
ineligible to the extent that they exceed such percentage, (ii) in
the case of Accounts due from an account debtor (other than ANSAC)
whose total indebtedness to all Borrowers on Accounts then exceeds
5% of the aggregate amount of all Eligible Receivables of all
Borrowers, such Accounts shall be deemed to be ineligible (with such
ineligibility being applied ratably to the Accounts owing to the
Borrowers from such account debtor) to the extent that they exceed
such percentage and (iii) in the case of Accounts due from ANSAC,
such Accounts shall be deemed ineligible to the extent that they
exceed 25% of the aggregate amount of Eligible Receivables of all
Borrowers (with such ineligibility being applied ratably to the
Accounts owing to the Borrowers from ANSAC);
-17-
(i) the Account is not due from an account debtor whose
indebtedness to such Borrower on Accounts which are more than 60
days past due (or, in the case of Accounts owing from account
debtors located outside of the United States or Canada, 30 days past
due) exceeds 50% of such account debtor's total indebtedness to such
Borrower;
(j) the Account is payable to such Borrower;
(k) the Account does not arise out of a ▇▇▇▇ and hold sale
prior to the shipment thereof and, if the Account arises out of a
sale to any Person to which such Borrower is indebted (other than
any Governmental Authority with respect to which none of such
indebtedness owing by such Borrower is then due and payable), the
amount of such indebtedness is deducted in determining the Borrowing
Base;
(l) the Account is net of any returns, discounts, claims,
credits and allowances and net of reserves with respect to Accounts
for rebates, billbacks, foreign exchange losses, and net of all
other reserves established by such Borrower with respect to
Accounts, other than bad debt reserves;
(m) the Account is not subject to any defense, counterclaim or
setoff, other than with respect to taxes not then due and payable to
Governmental Authorities which are account debtors;
(n) the Account does not arise with respect to goods which are
delivered on a cash-on-delivery basis or placed on consignment,
guaranteed sale or other terms by reason of which the payment by the
account debtor may be conditional;
(o) the Account is one upon which (i) such Borrower's right to
receive payment is absolute and is not contingent upon the
fulfillment of any condition whatsoever and (ii) such Borrower is
able to bring suit or otherwise enforce its remedies against the
account debtor through judicial process; and
(p) the Account is otherwise satisfactory to the Collateral
Agent in its reasonable credit judgment.
"Environmental Compliance Program": as defined in subsection 9.2(f).
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law
-18-
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the
environment, as from time to time in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System;
provided that a Lender shall be deemed to be subject to Eurocurrency
Reserve Requirements only from and after the date that such Lender has
certified to the Borrowers that a Governmental Authority has imposed any
Eurocurrency Reserve Requirements subsequent to the Closing Date which
increase the cost to such Lender of making or maintaining Eurodollar Loans
hereunder.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate of interest
determined on the basis of the rate per annum for deposits in Dollars for
a period equal to such Interest Period commencing on the first day of such
Interest Period appearing on Page 3750 of the Telerate Screen as of 11:00
A.M., London time, two Business Days prior to the beginning of such
Interest Period; provided, that in the event that such rate does not
appear on Page 3750 of the Telerate Screen (or otherwise on the Telerate
Service), the Eurodollar Base Rate shall be determined by reference to
such other publicly available service for displaying eurodollar rates as
shall be determined by the Administrative Agent.
"Eurodollar Loans": Loans bearing interest at a rate which is based
upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
-------------------------------------------
1.00 - Eurocurrency Reserve Requirements
-19-
"Event of Default": any of the events specified in Section 12,
provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"Existing Credit Agreement": as defined in the preamble.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee or disclosed
in a footnote thereto.
"Fixed Charge Coverage Ratio": for any Person for any period, the
ratio of (i) Adjusted Operating Income plus, for purposes of subsection
10.1(b) only, in the case of any period which ends on or prior to the date
which is twelve months after the Closing Date, the aggregate amount of
amendment, upfront and other similar fees and legal, accounting and other
fees and expenses payable in connection with the execution and delivery of
this Agreement and the Canadian Credit Agreement and the consummation of
the transactions contemplated hereby or thereby to (ii) Adjusted Fixed
Charges for such period.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time; provided that, to the
extent that the Administrative Agent determines that a change in GAAP
materially affects the calculation of any of the covenants contained in
subsection 10.1, GAAP shall mean, solely with respect to the covenants so
affected, generally accepted accounting principles consistent with those
utilized in preparing the audited financial statements referred to in
subsection 7.1.
"GE Capital": as defined in the preamble to this Agreement.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GSLMC Security Agreement": the Security Agreement executed and
delivered by GSLMC, substantially in the form of Exhibit D, as the same
may be amended, restated, supplemented or otherwise modified from time to
time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit)
-20-
with respect to which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in any such case guaranteeing or
in effect guaranteeing any Indebtedness, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of
the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as determined by the
Borrower (and reasonably acceptable to the Administrative Agent) in good
faith.
"Guarantees": the collective reference to the Affiliate Guarantee,
the guarantees contained in Section 11 and each guarantee provided
pursuant to subsection 10.19.
"Guarantor": any Person delivering a Guarantee pursuant to this
Agreement (including, without limitation, HCNA and each Borrower).
"Hazardous Materials": any hazardous materials, hazardous wastes,
hazardous constituents, hazardous or toxic substances, petroleum products
(including crude oil or any fraction thereof), defined or regulated as
such in or under any Environmental Law.
"HCG": ▇▇▇▇▇▇ Chemical Group, Inc., a Delaware corporation.
-21-
"HCNA": as defined in the preamble.
"Incremental Investment": as defined in "Permitted Investment
Amount".
"Indebtedness": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced
by a note, bond, debenture or similar instrument, (c) all obligations of
such Person under Financing Leases and (d) all obligations of such Person
in respect of letters of credit, acceptances and similar obligations
issued or created for the account of such Person.
"Insignificant Subsidiary": at any time, each Subsidiary that,
together with its Subsidiaries, for the most recent fiscal year for which
the relevant financial information is available, had revenues, determined
in accordance with GAAP, of less than $1,000,000.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in subsection 6.9.
"Interest Coverage Ratio": for any period with respect to HCNA and
its Subsidiaries, the ratio of (i) Consolidated EBITDA to (ii)
Consolidated Interest Expense for such period.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (c) as to
any Eurodollar Loan having an Interest Period longer than three months,
the last day of such Interest Period and each other day which is three
months, or a whole multiple thereof, after the first day of such Interest
Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as
selected by the
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relevant Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six months thereafter, as selected by
such Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then
current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date;
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
(4) each Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan owing by it
during an Interest Period for such Loan.
"Interim Accounting Period": with respect to each Borrower, each
period of four or five weeks into which the fiscal quarter of such
Borrower is divided, based upon a fiscal year of four thirteen-week fiscal
quarters, with each such fiscal quarter being divided into two four-week
periods followed by one five-week period.
"Inventory": as defined in "Eligible Inventory".
"Investment Company Act": the Investment Company Act of 1940, as
amended from time to time.
"Investments": as defined in subsection 10.10.
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"Landlord's Waiver": a Landlord's Letter, substantially in the form
of Exhibit I-1 or a Warehousemen Notice, as the context shall require.
"L/C Commitment": $40,000,000.
"L/C Issuer": as defined in subsection 3.1(a).
"L/C Obligations": at any time with respect to a Borrower, an amount
equal to the sum (without duplication) of (a) the aggregate then undrawn
and unexpired amount of the then outstanding Letters of Credit issued for
the account of such Borrower, (b) the aggregate amount of drawings under
Letters of Credit issued for the account of such Borrower which have not
then been reimbursed by such Borrower (through the incurrence of Revolving
Credit Loans) pursuant to subsection 3.2 and (c) the maximum amount of all
other outstanding obligations incurred by the Administrative Agent and the
Lenders at the request of such Borrower, whether direct or indirect,
contingent or otherwise, due or not due, in connection with the issuance
of a reimbursement agreement or guaranty by the Administrative Agent with
respect to any Letter of Credit.
"Lenders": as defined in the preamble to this Agreement.
"Letters of Credit": as defined in subsection 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement and any Financing Lease having substantially the same economic
effect as any of the foregoing).
"Loan": any loan (including, without limitation, a Swing Line Loan)
made by a Lender pursuant to this Agreement to any Borrower.
"Loan Documents": this Agreement, the Notes, the Applications, the
Guarantees, the Security Documents and any other agreements or documents
executed in connection with this Agreement or the transactions
contemplated hereby, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Loan Parties": each Borrower, each Guarantor and each Subsidiary of
HCNA which is a party to a Loan Document.
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"Lock Box Agreement": each lock box agreement executed and delivered
by the Borrowers, substantially in the form of Exhibit G (with such
revisions thereto as may be negotiated among the Collateral Agent, the
Administrative Agent, the relevant Borrower and the relevant lock box
bank), as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Majority Lenders": at any time, Lenders the Commitment Percentages
of which aggregate more than 50%.
"Major Project Capital Expenditures": (i) Capital Expenditures by
HCNA or any of its Subsidiaries in respect of the purchase or other
acquisition of fixed or capital assets comprising (a) up to $9,400,000
with respect to packaging equipment for evaporated salt produced as a
by-product of an unrelated industrial operation in New Johnsville,
Tennessee, (b) up to $5,500,000 with respect to additional production
capacity of 500,000 tons to the Goderich mine, (c) up to $2,500,000 with
respect to Phase II of the West Pond Development Plan to expand the pond
area, increase solar capacity and access an area of higher brine
concentration in order to reduce the use of higher cost raw materials and
(d) up to $5,200,000 by GSLMC with respect to the sulfate of potash
("SOP") expansion plan for the implementation of plant cooling processes
for improved yields and extended production of the ▇▇▇▇▇ plant and
additional loading and storage facilities to support expanded potash and
magnesium chloride production, or (ii) Capital Expenditures with respect
to any other major project which may be substituted for any of the
foregoing projects in whole or in part upon (x) delivery of a certificate
of a Responsible Officer of HCNA or any Borrower stating that (1) such
Responsible Officer has no knowledge of any material adverse effect which
could reasonably be expected to result from such replacement project and
(2) such Responsible Officer believes to the best of such Responsible
Officer's knowledge that such replacement project has economic payback and
return characteristics at least as favorable as those of the project being
replaced and (y) approval of the Administrative Agent (which approval
shall not be unreasonably withheld).
"Material Adverse Effect": a material adverse effect on:
(a) the business, operations, property or financial or other
condition of either (i) with respect to the use of such term in
subsection 10.19, any Borrower and its Subsidiaries taken as a whole
and (ii) with respect to any other provision of this Agreement or
any other Loan Document, HCNA and its Subsidiaries taken as a whole;
or
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(b) the validity or enforceability of this Agreement, any of
the Notes or any Application or any of the other Loan Documents or
the rights or remedies of the Administrative Agent, the Collateral
Agent or the Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated
as such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Maximum Available Credit": an amount equal to (a) the lesser of (i)
the Aggregate Commitment and (ii) the Aggregate U.S. Borrowing Base
Availability minus (b) the Sifto Reserve, if any.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NACC Security Agreement": the Security Agreement executed and
delivered by NACC, substantially in the form of Exhibit E as the same may
be amended, restated, supplemented or otherwise modified from time to
time.
"NASC Security Agreement": the Security Agreement executed and
delivered by NASC, substantially in the form of Exhibit F as the same may
be amended, restated, supplemented or otherwise modified from time to
time.
"Non-Responding Lender": with respect to any proposed amendment,
restatement, supplement, waiver, consent or other modification to this
Agreement or any other Loan Document pursuant to subsection 14.1 or any
other determination to be made by the Majority Lenders, the Required
Lenders or the Aggregate Required Lenders, as the case may be, hereunder
or under any other Loan Document (each, a "Proposed Determination"), in
each case as to which the Lenders have been given a Qualified
Determination Notice, any Lender which fails to provide an affirmative or
negative written response to the Administrative Agent within 10 Business
Days, after receiving such Qualified Determination Notice. For the
purposes of this definition, "Qualified Determination Notice" shall mean
any written notice delivered to each Lender at least 10 Business Days
prior to the response deadline for the relevant Proposed Determination. In
the event that a Qualified Determination Notice is not given with respect
to a Proposed Determination, no Lender shall be deemed to be a
"Non-Responding Lender" in respect of such Proposed Determination.
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"Notes": the collective reference to the Revolving Credit Notes and
the Swing Line Notes; each, a "Note".
"Obligations": the collective reference to the unpaid principal of
and interest on the Notes and all other obligations and liabilities of the
Borrowers to the Administrative Agent, the Collateral Agent and the
Lenders (including, without limitation, interest accruing after the
maturity of the Loans and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Borrower whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, the Notes, the
Applications, the other Loan Documents or any other document made,
delivered or given in connection herewith or therewith, in each case
whether on account of principal, interest, reimbursement obligations
(including, without limitation, all L/C Obligations), fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent, to the Collateral
Agent or to the Lenders that are required to be paid by a Borrower or HCNA
pursuant to the terms of this Agreement or any other Loan Document).
"Original Closing Date": October 15, 1993.
"Participant": as defined in subsection 14.7(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Capital Expenditures": as defined in subsection 10.5.
"Permitted Investment Amount": at any date, (a) for purposes of
subsection 10.10(d), an amount not to exceed $10,000,000 at any one time
outstanding and (b) for purposes of subsections 10.2(e), 10.4(h) and
10.10(h) in the aggregate, an amount not to exceed $10,000,000 at any one
time outstanding. For purposes of this definition, the amount of an
Investment which, at any date, shall be deemed to be "outstanding" shall
be the amount (to the extent that such amount is not less than zero) equal
to (x) the aggregate amount (1) invested by HCNA and its Subsidiaries
after the Closing Date in joint ventures in which HCNA or any of its
Subsidiaries holds Capital Stock or (2) loaned to, or invested in, any
Subsidiary of HCNA which is not a Guarantor (other than the Sifto Group,
as to which loans and investments shall not be included in the calculation
of the Permitted Investment Amount), as the case may be (such amount
invested or loaned after the Closing Date, the
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"Incremental Investment"), minus (y) the aggregate amount of cash
dividends, principal repayments or other cash distributions (other than
interest payments) actually received by HCNA and its Subsidiaries during
the period from the Closing Date to the date of calculation on account of
such Incremental Investment (as reported on the financial statements of
HCNA and its Subsidiaries delivered pursuant to subsection 9.1(a) or
9.1(b), as the case may be, for such period).
"Permitted Refinancing Indebtedness": Indebtedness that refunds,
refinances or otherwise replaces any other Indebtedness ("Refinanced
Indebtedness"); provided, that (a) the aggregate principal amount (or, if
issued with original issue discount, the aggregate issue price) of such
refinancing Indebtedness is equal to or less than the sum of (i) the
aggregate principal amount (or, if issued with original issue discount,
the aggregate accreted value) then outstanding of such Refinanced
Indebtedness and (ii) any premiums, fees or customary taxes payable in
connection with such refinancing, (b) no scheduled principal payments
shall be payable in respect of such refinancing Indebtedness prior to
February 28, 2003, (c) each obligor, guarantor and item of collateral in
respect of such refinancing Indebtedness shall also have been, to at least
the same extent, an obligor, guarantor, or item of collateral, as the case
may be, in respect of such Refinanced Indebtedness, (d) the interest rate
and other operating costs applicable to such refinancing Indebtedness
shall be consistent with current market conditions and the other terms and
conditions of such refinancing Indebtedness (including, without
limitation, any subordination provisions) shall be no less favorable to
the interests of the relevant obligor and the Lenders than the terms and
conditions of such Refinanced Indebtedness and (e) after giving effect to
the incurrence of such Refinancing Indebtedness, HCNA shall be in
compliance with the covenants set forth in subsection 10.1, determined on
a pro forma basis as if such refinancing had occurred on the first day of
the most recent period of four consecutive quarters for which the relevant
historical financial information is available.
"Person": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which a Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
-28-
"Properties": as defined in subsection 7.16.
"Public Debt": the collective reference to the Senior Secured Notes,
the Senior Subordinated Notes and the Sifto Notes.
"Public Warehouse": any warehouse other than a warehouse which is
(a) owned or leased entirely by HCNA or any of its Subsidiaries and (b)
under the control and management of HCNA or such Subsidiary, as the case
may be.
"Refunded Swing Line Loans": as defined in subsection 5.4.
"Register": as defined in subsection 14.7(d) .
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the thirty day notice period
is waived under subsections .22, .23, .25, .27, .28, .29, .30, .31, .32,
.34 or .35 of the PBGC Reg. Section 4043.
"Required Lenders": at any time, Lenders the Commitment Percentages
of which aggregate at least 66-2/3%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer": of any Person, the chief executive officer
and the president of such Person or, with respect to financial matters,
the chief financial officer and the treasurer of such Person.
"Restricted Payment Allowance Condition": with respect to Permitted
Investments and Restricted Payments, the simultaneous satisfaction of each
of the following conditions:
(a) no Default or Event of Default shall have occurred and be
continuing or would result therefrom;
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(b) the Interest Coverage Ratio of HCNA for the period of four
consecutive fiscal quarters ending on the date of the financial
statements of HCNA then most recently delivered to the
Administrative Agent pursuant to subsection 9.1(a) or 9.1(b), as the
case may be, shall not be less than 2.25 to 1.0; and
(c) the Fixed Charge Coverage Ratio of HCNA for the period of
four consecutive fiscal quarters ending on the date of the financial
statements of HCNA then most recently delivered to the
Administrative Agent pursuant to subsection 9.1(a) or 9.1(b), as the
case may be, shall not be less than 1.30 to 1.0.
"Restricted Payments": as defined in subsection 10.9.
"Revocation Period": as defined in subsection 3.1(f).
"Revolving Credit Loans": as defined in subsection 2.1(a).
"Revolving Credit Note": as defined in subsection 2.2.
"Sale/Leaseback Documents": any agreements or documents executed in
connection with the Sale/Leaseback Transaction.
"Sale/Leaseback Transaction": the sale/leaseback transaction
involving the Argus Utility Plant for $75,000,000 consummated on July 15,
1996 and more specifically described in the Sale/Leaseback Documents.
"Security Agreements": the collective reference to the NASC Security
Agreement, the NACC Security Agreement and the GSLMC Security Agreement.
"Security Documents": the collective reference to the Security
Agreements, the Lock Box Agreements and all other security documents
delivered to the Administrative Agent or the Collateral Agent which ▇▇▇▇▇
▇ ▇▇▇▇ on any asset or assets of any Person to secure the obligations and
liabilities of a Borrower hereunder, under the Notes, under the
Applications and/or under any of the other Loan Documents or to secure any
guarantee of any such obligations and liabilities.
"Senior Secured Notes": the Senior Secured Notes, due July 15, 2001,
issued by HCNA in an original aggregate principal amount of $200,000,000,
and any Permitted Refinancing Indebtedness in respect thereof, as the same
may be amended, restated, supplemented or otherwise modified from time to
time in accordance with the provisions of subsection 10.11(a).
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"Senior Subordinated Notes": the Senior Subordinated Notes, due July
15, 2003, issued by HCNA in an original aggregate principal amount of
$335,000,000, and any Permitted Refinancing Indebtedness in respect
thereof, as the same may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the provisions of subsection
10.11(a).
"Services Agreement": the Services Agreement described in the
Existing Credit Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with
the provisions of subsection 10.11(b).
"Sifto": Sifto Canada Inc., a corporation organized and existing
under the laws of the Province of Ontario, Canada.
"Sifto Group": the collective reference to (i) Sifto, (ii) the
Subsequent Borrower, (iii) any Subsidiaries of Sifto and the Subsequent
Borrower which are Guarantors (as defined in the Canadian Credit
Agreement) pursuant to the Canadian Credit Agreement and (iv) any Canadian
holding company for Sifto and the Subsequent Borrower which is a Guarantor
(as defined in the Canadian Credit Agreement) pursuant to the Canadian
Credit Agreement and which has no material liabilities and holds no
material assets other than the Capital Stock of Sifto and the Subsequent
Borrower.
"Sifto Notes": the Senior Secured Notes, due July 15, 2000, issued
by Sifto in an original aggregate principal amount of $100,000,000, and
any Permitted Refinancing Indebtedness in respect thereof, as the same may
be amended, restated, supplemented, or otherwise modified from time to
time in accordance with the provisions of subsection 10.11(a).
"Sifto Reserve": for any period set forth below during which any
Sifto Notes (other than any Permitted Refinancing Indebtedness in respect
thereof) are outstanding, the amount set forth opposite such period:
Period Sifto Reserve
------ -------------
03/14/00 - 04/13/00 $13,000,000
04/14/00 - 05/13/00 $21,666,667
05/14/00 - 06/13/00 $30,333,333
06/14/00 and thereafter $39,000,000
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
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"Soda Ash Subsidiary": any Subsidiary of HCNA (other than a
Borrower) organized for the purpose of engaging substantially in the
production or marketing of soda ash.
"Solvent": with respect to any Person, shall mean that:
(a) the present value of such Person's assets is in excess of
the total amount of such Person's liabilities;
(b) such Person is able to pay its debts as they become due;
and
(c) such Person does not have unreasonably small capital to
carry on its business as theretofore operated and all businesses in
which such Person is about to engage.
"Standby Letter of Credit": as defined in subsection 3.1(b).
"Stockholders' Agreement: the Stockholders' Agreement, dated as of
October 15, 1993, as amended, attached hereto as Exhibit L, among HCG and
the Stockholders (as defined therein), as the same may be further amended,
restated, supplemented or otherwise modified from time to time in
accordance with the provisions of subsection 10.11(b).
"Subsequent Borrower": as defined in the Canadian Credit Agreement.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of Voting Stock sufficient to elect a majority of
the board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall
refer to a Subsidiary or Subsidiaries of a Borrower.
"Swing Line Commitment": at any date, the obligation of the Swing
Line Lender to make Swing Line Loans pursuant to subsection 5.1 in the
amount referred to therein.
"Swing Line Lender": GE Capital.
"Swing Line Loans": as defined in subsection 5.1.
"Swing Line Note": as defined in subsection 5.2.
"Taxes": as defined in subsection 6.14(a).
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"Tax Sharing Agreement": the Tax Sharing Agreement, dated as of
October 15, 1993, between HCG and HCNA, attached hereto as Exhibit M, as
the same may be amended, restated, supplemented or otherwise modified from
time to time in accordance with the provisions of subsection 10.11(b).
"Termination Date": the earlier of (a) February 28, 2002 and (b)
February 15, 2001, if any Senior Secured Notes (other than Permitted
Refinancing Indebtedness in respect thereof) are outstanding on such date.
"Tranche": at any date, the collective reference to all Eurodollar
Loans which then have Interest Periods in effect which began on the same
date and are scheduled to end on the same later date (whether or not such
Loans shall originally have been made on the same day).
"Transferee": as defined in subsection 14.7(f).
"Transferred HCNA Amounts": as defined in subsection 10.5.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"UCC": the Uniform Commercial Code as from time to time in effect in
the State of New York and, as to perfection and enforcement of security
interests, the Uniform Commercial Code as from time to time in effect in
each jurisdiction where, pursuant to the Uniform Commercial Code as from
time to time in effect in the State of New York, perfection and the effect
of non-perfection is to be determined.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"Voting Stock": of a Person, Capital Stock of such Person having
ordinary voting power (other than Capital Stock having such power only by
reason of the happening of a contingency) to elect directors of such
Person.
"Warehousemen Notice": a Warehousemen Notice, substantially in the
form of Exhibit I-2.
"Weighted Average Life to Maturity": when applied to any
Indebtedness, at any date, the number of years obtained by dividing (a)
the sum of the products obtained by multiplying (i) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (ii) the number of years (calculated
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to the nearest one-twelfth) that will elapse between such date and the
making of such payment, by (b) the then outstanding principal amount of
such Indebtedness.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in the Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to HCNA
and its Subsidiaries not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section ,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) Terms defined in the UCC and not otherwise defined herein shall
have the meanings ascribed thereto in the UCC.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT
COMMITMENTS
2.1 Revolving Credit Commitments. (a) The Borrowers acknowledge and
confirm that the Lenders have made revolving credit loans to the Borrowers under
the Existing Credit Agreement that are outstanding on the date hereof in the
aggregate principal amount of $19,000,000. The Borrowers hereby reaffirm their
obligations to pay such existing revolving credit loans in accordance with the
terms and provisions of this Agreement and the other Loan Documents and agree
that such revolving credit loans constitute Revolving Credit Loans for all
purposes of this Agreement. Subject to the terms and conditions hereof, each
Lender severally agrees to make revolving credit loans ("Revolving Credit
Loans") to the Borrowers from time to time during the Commitment Period in an
aggregate principal amount at any one time outstanding which, when added to such
Lender's Commitment Percentage of the aggregate amount of L/C Obligations and
Swing Line Loans then outstanding with respect to all Borrowers, does not exceed
the amount of such Lender's Commitment; provided that no Revolving Credit Loans
shall be made to a Borrower if, after giving effect thereto and the use of
proceeds thereof, (x) the Aggregate Outstanding Extensions of Credit then owing
by such Borrower to all Lenders would exceed
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the Borrowing Base then in effect with respect to such Borrower or (y) the
Aggregate Outstanding Extensions of Credit then owing by all Borrowers to all
Lenders would exceed the Maximum Available Credit. During the Commitment Period
the Borrowers may use the Commitments by borrowing, prepaying the Revolving
Credit Loans in whole or in part, and reborrowing, all in accordance with the
terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans, or (iii) a combination thereof, as
determined by the relevant Borrower and notified to the Administrative Agent in
accordance with subsections 2.5 and 6.6, provided that no Revolving Credit Loan
shall be made as a Eurodollar Loan after the day that is one month prior to the
Termination Date.
2.2 Revolving Credit Notes. The Revolving Credit Loans made by each
Lender to a Borrower shall be evidenced by a promissory note of such Borrower,
substantially in the form of Exhibit A, with appropriate insertions as to payor,
payee, date and principal amount (a "Revolving Credit Note"), payable to the
order of such Lender and in a principal amount equal to the lesser of (a) the
amount of the initial Commitment of such Lender and (b) the aggregate unpaid
principal amount of all Revolving Credit Loans made by such Lender to such
Borrower. Each Lender is hereby authorized to record the date, Type and amount
of each Revolving Credit Loan made by such Lender to such Borrower, each
continuation thereof, each conversion of all or a portion thereof to another
Type, the date and amount of each payment or prepayment of principal thereof
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto, on its books and records maintained for such purpose, and any
such recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided that the failure of such Lender to make such
recordation (or any error in recordation) shall not affect the obligations of
such Borrower hereunder or under its Revolving Credit Note. Each Revolving
Credit Note shall (x) be dated the Original Closing Date, (y) be stated to
mature on the Termination Date and (z) provide for the payment of interest in
accordance with subsection 6.8.
2.3 [INTENTIONALLY OMITTED]
2.4 [INTENTIONALLY OMITTED]
2.5 Procedure for Borrowing. A Borrower may borrow under the
Commitments during the Commitment Period on any Business Day, provided that such
Borrower shall give the Administrative Agent irrevocable notice (which notice
must be received by the Administrative Agent prior to 11:00 A.M., New York City
time), (a) in the case of Revolving Credit Loans only, at least three Business
Days prior to the requested Borrowing Date, if all or any part of the requested
Revolving Credit Loans are to be initially Eurodollar Loans or (b) at least one
Business
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Day prior to the requested Borrowing Date, otherwise. Such notice shall
specify (i) the identity of the Borrower seeking to borrow on such Borrowing
Date, (ii) the amount to be borrowed, (iii) the requested Borrowing Date, (iv)
whether the borrowing is to be of Eurodollar Loans, Base Rate Loans or a
combination thereof and (v) if the borrowing is to be entirely or partly of
Eurodollar Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Periods therefor. Each borrowing by a
Borrower under the Commitments (other than any borrowing of Swing Line Loans or
of Revolving Credit Loans the proceeds of which are used to refund Swing Line
Loans) shall be in an amount equal to (x) in the case of Base Rate Loans under
the Commitments, $1,000,000 or a whole multiple of $500,000 in excess thereof
(or, if the then Available Commitments are less than $1,000,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $5,000,000 or a whole multiple
of $500,000 in excess thereof. Upon receipt of any such notice from a Borrower,
the Administrative Agent shall promptly notify each Lender thereof. Each Lender
will make the amount of its pro rata share of each borrowing available to the
Administrative Agent, for the account of the relevant Borrower, at the
Administrative Agent's Account prior to 11:00 A.M., New York City time, on the
Borrowing Date requested by such Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to such
Borrower by the Administrative Agent making a wire transfer promptly, and, in
any event, by 12:00 Noon, New York City time, of the amount made available to
the Administrative Agent by the Lenders, in like funds as received by the
Administrative Agent, to such Borrower's account listed on Schedule IX or such
other account as may be notified by such Borrower to the Administrative Agent
from time to time in writing.
2.6 Use of Proceeds of Loans. The proceeds of all Loans shall be
used by the Borrowers for working capital and other general corporate purposes
of the Borrowers.
SECTION 3. AMOUNT AND TERMS OF LETTER OF CREDIT SUB-FACILITY
3.1 Issuance. (a) Subject to the terms and conditions of this
Agreement, the Administrative Agent and the Lenders agree to incur, from time to
time prior to the Termination Date, upon the request of the applicable Borrower
and for such Borrower's account, L/C Obligations by causing letters of credit
("Letters of Credit") to be issued (by a bank or other legally authorized Person
selected by such Borrower and acceptable to the Administrative Agent in its sole
discretion (each, an "L/C Issuer")) for such Borrower's account and guaranteed
by the Administrative Agent; provided, however, that if the L/C Issuer is a
Lender, then such Letters of Credit shall not be guaranteed by the
Administrative Agent but rather each Lender shall, subject to the terms and
conditions hereinafter set
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forth, purchase (or be deemed to have purchased) risk participations in all
Letters of Credit issued with the written consent of the Administrative Agent,
as more fully described in subsection 3.2(b). No Letter of Credit shall be
issued if, after giving effect to such issuance, (i) the aggregate L/C
Obligations of all Borrowers would exceed the L/C Commitment, (ii) the Available
Commitment of any Lender would be less than zero, (iii) the Aggregate
Outstanding Extensions of Credit then owing by the relevant Borrower to all
Lenders would exceed the Borrowing Base then in effect for such Borrower or (iv)
the Aggregate Outstanding Extensions of Credit then owing by all Borrowers to
all Lenders would exceed the Maximum Available Credit. No Letter of Credit shall
have an expiry date which is more than one year following the date of issuance
thereof, and neither the Administrative Agent nor the Lenders shall be under any
obligation to incur L/C Obligations in respect of, or purchase risk
participations in, any Letter of Credit having an expiry date which is later
than the Termination Date.
(b) Each Letter of Credit shall (i) be denominated in Dollars, (ii)
be in a face amount of not less than $50,000 at time of issue and (iii) be
either (1) a standby letter of credit issued to support obligations of a
Borrower, contingent or otherwise, which are of a type for which Revolving
Credit Loans would be available if the obligations were then due and payable (a
"Standby Letter of Credit"), or (2) a commercial letter of credit issued in
respect of the purchase of goods or services by a Borrower in the ordinary
course of business (a "Commercial Letter of Credit").
(c) The Borrowers acknowledge and confirm that each of Barclays Bank
PLC, First Security Bank, National Association, and Nationsbank of Georgia, N.A.
shall be an L/C Issuer and has issued certain letters of credit that are
outstanding on the date hereof and listed on Schedule VIII. The Borrowers hereby
reaffirm their obligations in respect of such letters of credit provided for in
this Agreement and the other Loan Documents and agree that such letters of
credit constitute Letters of Credit for all purposes of this Agreement.
(d) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(e) No L/C Issuer shall at any time be obligated to issue any Letter
of Credit hereunder if such issuance would conflict with, or cause such L/C
Issuer or any Lender to exceed any limits imposed by, any applicable Requirement
of Law; provided that each L/C Issuer and each Lender hereby agree to use
reasonable efforts to permit such Letter of Credit to be issued within the
restrictions of such applicable Requirement of Law.
(f) With respect to each outstanding Letter of Credit issued for the
account of a Borrower hereunder which by its terms
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is automatically renewed or extended unless notice to the contrary is received
by the beneficiary thereunder within the time period specified therein (such
time period, the "Revocation Period"), such Letter of Credit automatically shall
be renewed or extended on its then current expiry date unless, not less than 10
Business Days prior to the end of the Revocation Period, either (i) such
Borrower has provided written notice to the L/C Issuer that it has elected not
to extend or renew such Letter of Credit or (ii) the Required Lenders have
provided notice to such L/C Issuer (notice of which determination such L/C
Issuer shall promptly provide to such Borrower) that they have elected not to
permit the renewal or extension of such Letter of Credit.
(g) Any Borrower may cause an L/C Issuer to cease to be an L/C
Issuer for the purposes of this Agreement by delivering a written notice to the
Administrative Agent and such L/C Issuer, provided that at such time, no Letters
of Credit issued by such L/C Issuer or L/C Obligations in respect of such
Letters of Credit shall be outstanding.
3.2 Advances Automatic; Participations. (a) In the event that the
Administrative Agent shall make any payment on or pursuant to any L/C
Obligation, such payment shall then be deemed automatically to constitute a
Revolving Credit Loan that is a Base Rate Loan to the applicable Borrower under
subsection 2.5 regardless of whether a Default or Event of Default shall have
occurred and be continuing and notwithstanding any Borrower's failure to satisfy
the conditions precedent set forth in Section 8, and each Lender shall be
obligated to pay its Commitment Percentage thereof to the Administrative Agent
for the Administrative Agent's own account. The failure of any Lender to make
available to the Administrative Agent its Commitment Percentage of any such
Revolving Credit Loan or payment by the Administrative Agent under or in respect
of a Letter of Credit shall not relieve any other Lender of its obligation
hereunder to make available to the Administrative Agent its Commitment
Percentage thereof, but no Lender shall be responsible for the failure of any
other Lender to make available such other Lender's Commitment Percentage of any
such payment.
(b) If the Administrative Agent shall have determined in its
discretion that it is not appropriate for any Borrower to incur Revolving Credit
Loans as contemplated by subsection 3.2(a) because of an Event of Default
described in subsection 12(g) or otherwise or if it shall be illegal or unlawful
for any Lender to be deemed to have assumed a ratable share of the reimbursement
obligations owed to an L/C Issuer, or if any L/C Issuer is a Lender, then (i)
immediately and without further action whatsoever, each Lender shall be deemed
to have irrevocably and unconditionally purchased from the Administrative Agent
(or such L/C Issuer,
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as the case may be) an undivided interest and participation
equal to such Lender's Commitment Percentage of the L/C Obligations in respect
of all Letters of Credit then outstanding (or the Letters of Credit issued by
such L/C Issuer, as the case may be), and (ii) thereafter, immediately upon
issuance of any Letter of Credit (or any Letter of Credit issued by such L/C
Issuer, as the case may be), each Lender shall be deemed to have irrevocably and
unconditionally purchased from the Administrative Agent (or such L/C Issuer, as
the case may be) an undivided interest and participation equal to such Lender's
Commitment Percentage of the L/C Obligations with respect to such Letter of
Credit on the date of such issuance. Each Lender shall fund its participation in
all payments or disbursements made in respect of the Letters of Credit in the
same manner as provided in this Agreement with respect to Revolving Credit
Loans.
3.3 Cash Collateral. (a) If the Borrowers are required to provide
cash collateral for any L/C Obligations pursuant to this Agreement, each
Borrower will pay to the Administrative Agent for the benefit of Lenders cash or
cash equivalents acceptable to the Administrative Agent in an amount equal to
the maximum amount then available to be drawn under each applicable Letter of
Credit outstanding issued for the account of such Borrower. Such funds or
Collateral Cash Equivalents and repayments or any interest income in respect
thereof shall be held by the Administrative Agent in a cash collateral account
(the "Cash Collateral Account") maintained at a bank or financial institution
acceptable to the Administrative Agent and such funds, repayments and interest
income shall be invested in Cash Equivalents to the extent deemed appropriate by
the Administrative Agent. The Cash Collateral Account shall be in the name of
the applicable Borrower and shall be pledged to, and subject to the control of,
the Administrative Agent, for the benefit of the Administrative Agent, the
Collateral Agent and the Lenders, in a manner satisfactory to the Administrative
Agent. Each Borrower hereby pledges and grants to the Administrative Agent, on
its own behalf and on behalf of the Collateral Agent and the Lenders, a first
priority security interest in all such funds and Collateral Cash Equivalents
held in the Cash Collateral Account from time to time and all proceeds thereof,
as security for the payment of all amounts due in respect of the L/C Obligations
and other Obligations (as defined herein and in the Canadian Credit Agreement),
whether or not then due, of such Borrower. This Agreement shall constitute a
security agreement under applicable law. Each Borrower shall execute and deliver
to the Administrative Agent such further documents and instruments as the
Administrative Agent reasonably may request to evidence the creation and
perfection of the security interest in the Cash Collateral Account.
(b) If any L/C Obligations, whether or not then due and payable,
shall for any reason be outstanding on the Termination Date or the Acceleration
Date, as the case may be, the Borrowers shall on such date either (i) provide
cash collateral therefor in the manner described above, (ii) cause all such
Letters of Credit and guaranties thereof to be canceled and returned, or (iii)
deliver a standby letter
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(or letters) of credit in guaranty of such L/C Obligations, which standby letter
(or letters) of credit shall be of like tenor and duration as, and in an amount
equal to the aggregate maximum amount then available to be drawn under, the
Letters of Credit to which such outstanding L/C Obligations relate and shall be
issued by a Person, and shall be subject to such terms and conditions, as shall
be reasonably satisfactory to the Administrative Agent in its sole discretion.
(c) From time to time after funds are deposited in the Cash
Collateral Account by any Borrower, the Administrative Agent may apply such
funds or Collateral Cash Equivalents and repayments or any interest income in
respect thereof then held in the Cash Collateral Account to the payment of any
amounts, in such order as the Administrative Agent may elect, as shall be or
shall become due and payable by such Borrower to the Lenders with respect to the
L/C Obligations of such Borrower and, upon the satisfaction in full of all L/C
Obligations of such Borrower, to any other Obligations (as defined herein and in
the Canadian Credit Agreement) then due and owing.
(d) Neither any Borrower nor any Person claiming on behalf of or
through any Borrower shall have any right to withdraw any of the funds or
Collateral Cash Equivalents held in the Cash Collateral Account, except that
upon the termination of all L/C Obligations and the payment of all amounts
payable by the Borrowers to the Lenders in respect thereof, any funds remaining
in the Cash Collateral Account shall be applied to other Obligations (as defined
herein and in the Canadian Credit Agreement) then due and owing and upon payment
in full of such Obligations, any remaining amount shall be paid to the Borrowers
or as otherwise required by law.
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3.4 Fees and Expenses. Each Borrower agrees to pay to the
Administrative Agent for the benefit of the Lenders, as compensation to the
Lenders for L/C Obligations incurred by such Borrower hereunder, (a) a letter of
credit commission for the ratable account of the Lenders with respect to each
Commercial Letter of Credit issued for such Borrower's account in an amount
equal to 2.00% per annum times the face amount of such Commercial Letter of
Credit, which fronting fee shall be payable in advance on the date of issuance
of such Commercial Letter of Credit for the number of days until the expiry date
thereof and (b) a letter of credit commission for the ratable account of the
Lenders with respect to each Standby Letter of Credit issued for such Borrower's
account, in arrears, at the rate of 2.50% per annum of the average daily amount
available to be drawn under such Standby Letter of Credit during the period for
which such fee is calculated, which commission shall be payable on the last day
of each March, June, September and December to occur while such Standby Letter
of Credit is outstanding and upon the expiry of such Standby Letter of Credit.
In addition, each Borrower shall pay to each L/C Issuer, on demand, such normal
and customary fees (including, without limitation, fronting fees), charges and
expenses of such L/C Issuer in respect of the issuance, negotiation, acceptance,
amendment, transfer and payment of each Letter of Credit issued by such L/C
Issuer for such Borrower's account or otherwise payable pursuant to the
Application and related documentation under which such Letter of Credit is
issued.
3.5 Request for Incurrence of L/C Obligations. The relevant Borrower
shall give the Administrative Agent at least two Business Days' prior written
notice requesting the incurrence of any L/C Obligation, specifying the date such
L/C Obligation is to be incurred, identifying the beneficiary and the Borrower
to which such L/C Obligation relates and describing the nature of the
transactions proposed to be supported thereby. The notice shall be accompanied
by the form of the relevant Letter of Credit (which shall be acceptable to the
relevant L/C Issuer). Notwithstanding anything contained herein to the contrary,
Applications by any Borrower and approvals by the Administrative Agent may be
made and transmitted pursuant to electronic codes and security measures mutually
agreed upon and established by and among such Borrower, the Administrative Agent
and the relevant L/C Issuer. Subject to subsection 3.1(a), the Administrative
Agent shall cause the requested Letter of Credit to be issued by the relevant
L/C Issuer on the date specified in such notice, with the original of the
relevant Letter of Credit being delivered to the beneficiary and a copy thereof
being furnished to the relevant Borrower.
3.6 Obligations Absolute. The obligations of the Borrowers to
reimburse the Administrative Agent and Lenders for payments made with respect to
any L/C Obligation shall be absolute, unconditional and irrevocable, without
necessity of presentment, demand, protest or other formalities, and the
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obligations of each Lender to make payments to the Administrative Agent (or to
any L/C Issuer, as the case may be) with respect to Letters of Credit shall be
unconditional and irrevocable. Such obligations of the Borrowers and the Lenders
shall be paid strictly in accordance with the terms hereof under all
circumstances including the following circumstances:
(a) any lack of validity or enforceability of any Letter of
Credit, this Agreement, the other Loan Documents or any other agreement;
(b) the existence of any claim, set-off, defense or other right
which any Borrower or any of its respective Affiliates or any Lender may
at any time have against a beneficiary or any transferee of any Letter of
Credit (or any Persons or entities for whom any such transferee may be
acting), the Administrative Agent, any Lender, or any other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or therein or any unrelated transaction
(including any underlying transaction between any Borrower or any of its
respective Affiliates and the beneficiary for which any Letter of Credit
was procured);
(c) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(d) payment by the Administrative Agent or any L/C Issuer under
any Letter of Credit or guaranty thereof against presentation of a demand,
draft or certificate or other document which does not comply with the
terms of such Letter of Credit or such guaranty;
(e) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or
(f) the fact that a Default or an Event of Default shall have
occurred and be continuing.
3.7 Nature of Lenders' Duties. (a) As between the Administrative
Agent and any Lender and the Borrowers, the Borrowers assume all risks of the
acts and omissions of, or misuse of any Letter of Credit by beneficiaries of any
Letter of Credit. In furtherance and not in limitation of the foregoing, to the
fullest extent permitted by law, neither the Administrative Agent nor any Lender
shall be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party (other than the
Administrative Agent or such Lender, as the case may be) in connection with the
application for and issuance of any Letter of Credit, even if it should in fact
prove to be in any or all
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respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
any Letter of Credit to comply fully with conditions required in order to demand
payment under such Letter of Credit, provided that, in the case of any payment
by the Administrative Agent under any Letter of Credit or guaranty thereof, the
Administrative Agent shall be liable to the extent such payment was made solely
as a result of its gross negligence or willful misconduct (as finally determined
by a court of competent jurisdiction) in determining that the demand for payment
under such Letter of Credit or guaranty thereof complies on its face with any
applicable requirements for a demand for payment under such Letter of Credit or
guaranty thereof; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher (other than to the extent caused by
the gross negligence or willful misconduct of the Administrative Agent or such
Lender, as the case may be); (v) for errors in interpretation of technical terms
based on knowledge or lack of knowledge of any usage of any particular trade;
(vi) for any loss or delay in the transmission or otherwise of any document
required in order to make a payment under any Letter of Credit or guaranty
thereof or of the proceeds thereof (other than to the extent caused by the gross
negligence or willful misconduct of the Administrative Agent or such Lender, as
the case may be); (vii) for the credit of the proceeds of any drawing under any
Letter of Credit or guaranty thereof; and (viii) for any consequences arising
from causes beyond the control of the Administrative Agent or any Lender. None
of the above shall affect, impair or prevent the vesting of any of the
Administrative Agent's or any Lender's rights or powers hereunder or under this
Agreement.
(b) Nothing contained herein shall be deemed to limit or to expand
any waivers, covenants or indemnities made by the Borrowers in favor of any L/C
Issuer in any letter of credit application, reimbursement agreement or similar
document, instrument or agreement between or among the Borrowers and such L/C
Issuer.
3.8 Application. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. [INTENTIONALLY OMITTED]
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SECTION 5. AMOUNT AND TERMS OF SWING LINE SUB-FACILITY
5.1 Swing Line Commitments. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make swing line loans (the "Swing Line
Loans") to each Borrower on any Business Day from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed, in the aggregate for all Swing Line Loans then outstanding to all
Borrowers, $10,000,000; provided that in no event may the amount of any
borrowing of Swing Line Loans by any Borrower (i) exceed the aggregate Available
Commitments of all Lenders (after giving effect to the use of proceeds thereof),
(ii) cause the Aggregate Outstanding Extensions of Credit owing by such Borrower
to all Lenders to exceed the Borrowing Base then in effect with respect to such
Borrower or (iii) cause the Aggregate Outstanding Extensions of Credit then
owing by all Borrowers to all Lenders to exceed the Maximum Available Credit.
Amounts borrowed by a Borrower under this subsection 5.1 may be repaid and, to
but excluding the Termination Date, reborrowed.
(b) All Swing Line Loans shall be made and maintained as Base Rate
Loans and, notwithstanding the provisions of subsection 6.6(a), shall not be
entitled to be converted into Eurodollar Loans; provided that nothing contained
in this subsection 5.1 shall prohibit the conversion into Eurodollar Loans of
any Revolving Credit Loans the proceeds of which are utilized to refund Swing
Line Loans.
5.2 Swing Line Loan Note. The Swing Line Loans made by the Swing
Line Lender to a Borrower shall be evidenced by a promissory note of such
Borrower, substantially in the form of Exhibit B, with appropriate insertions as
to payor and date (the "Swing Line Note"), payable to the order of the Swing
Line Lender and representing the obligations of such Borrower to pay the
aggregate unpaid principal amount of the Swing Line Loans, with interest
thereon, as prescribed in subsection 6.8. The Swing Line Lender is hereby
authorized to record the date and amount of each Swing Line Loan made by the
Swing Line Lender to such Borrower and the date and amount of each payment or
prepayment of principal thereof, on its books and records maintained for such
purpose, and such recordation shall constitute prima facie evidence of the
accuracy of the information so recorded; provided that the failure of the Swing
Line Lender to make such recordation (or any error in recordation) shall not
affect the obligations of such Borrower hereunder or under its Swing Line Note.
The Swing Line Note of each Borrower shall (a) be dated the Original Closing
Date, (b) be stated to mature on the Termination Date and (c) provide for the
payment of interest in accordance with subsection 6.8.
5.3 Procedure for Swing Line Loan Borrowing. A Borrower may borrow
under the Swing Line Commitment during the Commitment Period on any Business
Day; provided that such Borrower shall give the Administrative Agent irrevocable
notice
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(which notice must be received by the Administrative Agent prior to 11:00 A.M.,
New York City time), on the requested borrowing date (which shall be a Business
Day) specifying the amount of each requested Swing Line Loan, which shall be in
a minimum amount of $500,000 or a multiple of $100,000 in excess thereof. Upon
receipt of any such notice from a Borrower, the Administrative Agent shall
promptly notify the Swing Line Lender thereof. The Swing Line Lender will make
the amount of its Swing Line Loan available to the Administrative Agent, for the
account of the relevant Borrower, at the Administrative Agent's Account prior to
2:00 P.M., New York City time, on the Borrowing Date requested by such Borrower
in funds immediately available to the Administrative Agent. The proceeds of each
Swing Line Loan will then be made immediately available to such Borrower by the
Administrative Agent making a wire transfer of the amount made available to the
Administrative Agent by the Swing Line Lender, in like funds as received by the
Administrative Agent, to such Borrower's account listed on Schedule IX or such
other account as may be notified by the Borrower to the Administrative Agent
from time to time in writing.
5.4 Refunding of Swing Line Loans. (a) The Administrative Agent, at
any time in its sole and absolute discretion, may (or, upon the request of the
Swing Line Lender, shall) on behalf of the relevant Borrower (which hereby
irrevocably directs the Administrative Agent to act on its behalf) request that
each Lender make a Revolving Credit Loan in an amount equal to such Lender's
Commitment Percentage of the then outstanding principal amount of Swing Line
Loans (the "Refunded Swing Line Loans") owing by such Borrower on the date such
notice is given (regardless of whether the Refunded Swing Line Loans comply with
the minimum borrowing provisions of subsection 2.5); provided that, at any time
as there shall be a Swing Line Loan of any Borrower outstanding for more than
seven Business Days, the Administrative Agent shall, on the eighth Business Day
after the making of such Swing Line Loan, request (on behalf of such Borrower,
which hereby irrevocably directs the Administrative Agent to act on its behalf)
that each Lender make a Revolving Credit Loan to such Borrower in an amount
equal to such Lender's Commitment Percentage of the principal amount of such
outstanding Swing Line Loan (regardless of whether Refunded Swing Line Loans
comply with the minimum borrowing provisions of subsection 2.5). In the event
that the Swing Line Lender makes its request for refunding of the Swing Line
Loans, each Lender shall make the proceeds of its Revolving Credit Loan
available in immediately available funds to the Administrative Agent, for the
benefit of the Swing Line Lender, at the Administrative Agent's Account prior to
11:00 A.M., New York City time, on the first Business Day following such request
(or, if such request is made prior to 10:00 A.M., New York City time, on any
date, then the proceeds of such Revolving Credit Loans shall instead be so made
available to the Administrative Agent prior to 2:00 P.M., New York City time, on
the date of such request); provided, however, that in the event that any of the
events described in Section
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12(g) (i) or (ii) shall have occurred and be continuing, the Lenders shall not
make such Revolving Credit Loans and the provisions of subsection 5.4(b) shall
apply.
(b) If, prior to the making of a Revolving Credit Loan pursuant to
subsection 5.4(a), one of the events described in Section 12(g) (i) or (ii)
shall have occurred and be continuing, each Lender will, on the date such
Revolving Credit Loan was to have been made, purchase from the Swing Line Lender
an undivided participating interest in the Swing Line Loan to be refunded in an
amount equal to its Commitment Percentage of such Swing Line Loan to be
refunded. Each Lender will immediately transfer to the Administrative Agent, in
immediately available funds, the amount of its participation.
(c) Whenever, at any time after the Swing Line Lender has received
from any Lender such Lender's participating interest in a Swing Line Loan to be
refunded pursuant to subsection 5.4(a), the Swing Line Lender receives any
payment on account thereof, the Swing Line Lender will distribute to such Lender
its participating interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded) in like funds as received;
provided, however, that in the event that such payment received by the Swing
Line Lender is required to be returned, such Lender will return to the Swing
Line Lender any portion thereof previously distributed by the Swing Line Lender
to it in like funds as such payment is required to be returned by the Swing Line
Lender.
5.5 Unconditional Obligation to Refund Swing Line Loans. (a) Each
Lender's obligation to make Revolving Credit Loans and to purchase participating
interests in accordance with subsections 5.4(a) and 5.4(b) above shall be
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Swing Line Lender,
any Borrower or any other Person for any reason whatsoever; (ii) the occurrence
or continuance of any Default or Event of Default; (iii) any adverse change in
the condition (financial or otherwise) of any Borrower or any other Person; (iv)
any breach of this Agreement by any Borrower or any other Person; (v) any
inability of any Borrower to satisfy the conditions precedent to borrowing set
forth in this Agreement on the date upon which such Revolving Credit Loan is to
be made or participating interest is to be purchased or (vi) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. If any Lender does not make available to the Administrative Agent
the amount required pursuant to subsections 5.4(a) or 5.4(b) above, as the case
may be, the Administrative Agent shall be entitled to recover such amount on
demand from such Lender, together with interest thereon for each day from the
date of non-payment until such amount is
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paid in full at the Federal Funds Effective Rate for the first two Business Days
and at the Base Rate thereafter.
5.6 Use of Proceeds of Swing Line Loans. The proceeds of Swing Line
Loans hereunder shall be used by the Borrowers for any purpose for which the
proceeds of Revolving Credit Loans may be used.
SECTION 6. PROVISIONS RELATING TO CERTAIN EXTENSIONS OF CREDIT; FEES AND
PAYMENTS
6.1 Commitment Fee. The Borrowers agree to pay to the Administrative
Agent, for the account of each Lender, a commitment fee for the period from and
including the first day of the Commitment Period to the Termination Date,
computed at the rate of 0.375% per annum on the average daily amount of the
Available Commitment of such Lender during the period for which payment is made
(computed (a) as to all Lenders other than the Swing Line Lender, without
reduction for such Lender's Commitment Percentage of any Swing Line Loans
outstanding during such period and (b) as to the Swing Line Lender, with
reduction for the full amount of the Swing Line Loans outstanding during such
period), payable quarterly in arrears on the last day of each March, June,
September and December and on the Termination Date or such earlier date as the
Commitments shall terminate as provided herein, commencing on the first of such
dates to occur after the Closing Date.
6.2 Termination or Reduction of Commitments. (a) The Borrowers shall
have the right, upon not less than five Business Days' notice to the
Administrative Agent, to terminate the Commitments or, from time to time, to
reduce the amount of the Commitments; provided that no such termination or
reduction shall be permitted if, after giving effect to any such reduction
and/or termination and to any prepayments of the Revolving Credit Loans made on
the effective date thereof, the Aggregate Outstanding Extensions of Credit then
outstanding from all Lenders to all Borrowers would exceed the Maximum Available
Credit. Any such reduction shall be in an amount equal to $5,000,000 or a whole
multiple of $500,000 in excess thereof and shall reduce permanently the
Commitments then in effect. Notwithstanding anything to the contrary contained
herein, in the event that the Aggregate Commitment is reduced (whether
voluntarily or otherwise) to an amount less than $25,000,000, the Commitments
shall immediately terminate.
6.3 Optional Prepayments. (a) Each Borrower may at any time and from
time to time prepay the Loans that are not Swing Line Loans (subject to the
provisions of subsection 6.16, in the case of Eurodollar Loans) owing by it, in
whole or in part, without premium or penalty, upon at least one Business Day's
irrevocable notice to the Administrative Agent (or, in the case of Base Rate
Loans, on same day notice to the extent that
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such notice is delivered to the Administrative Agent prior to 11:00 A.M., New
York City time, on the date of such prepayment) specifying the date and amount
of prepayment. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each Lender thereof. If any such notice is given by a Borrower,
the amount specified in such notice shall be due and payable from the Borrower
which has delivered such notice on the date specified therein, no later than
1:00 P.M., New York City time, together with any amounts payable pursuant to
subsection 6.16. Partial prepayments shall be in an aggregate principal amount
equal to the minimum amounts permitted to be borrowed as set forth in subsection
2.5.
(b) Each Borrower may at any time and from time to time prepay, in
whole or in part and without premium or penalty, any Swing Line Loans then owing
by it on any Business Day; provided that such Borrower has given irrevocable
notice to the Administrative Agent not later than 1:00 P.M., New York City time,
on the date of such prepayment.
6.4 Mandatory Prepayments. (a) In the event that the Aggregate
Outstanding Extensions of Credit owing by any Borrower to the Lenders at any
date exceed the Borrowing Base then in effect with respect to such Borrower,
such Borrower shall immediately prepay the Aggregate Outstanding Extensions of
Credit owing by it to the Lenders by the amount of such excess, with such
prepayment being applied, first, to its then outstanding Swing Line Loans,
second, to its then outstanding Revolving Credit Loans and, third, to cash
collateralize its then outstanding L/C Obligations by the amount of such excess.
(b) In the event that the Aggregate Outstanding Extensions of Credit
owing by all Borrowers to all Lenders exceed the Maximum Available Credit, the
Borrowers shall immediately prepay the Aggregate Outstanding Extensions of
Credit by the amount of such excess, with such prepayment being applied, first,
to the then outstanding Swing Line Loans, second, to the then outstanding
Revolving Credit Loans and, third, to cash collateralize the then outstanding
L/C Obligations by the amount of such excess.
(c) The Administrative Agent shall prepay the Aggregate Outstanding
Extensions of Credit with the proceeds of amounts received by it pursuant to the
Lock Box Agreements to the extent contemplated by the provisions of the
applicable Security Agreements and Lock Box Agreements. Any amounts that,
pursuant to the provisions of the applicable Security Agreements and Lock Box
Agreements, are applied to prepay the Aggregate Outstanding Extensions of Credit
shall be applied in the order specified in this subsection 6.4(c) and, provided,
that, so long as there shall have occurred and be continuing any Event of
Default under Section 12(a)(ii) as a result of a failure to pay (x) interest due
on the Revolving Credit Loans, (y) commitment fees on the Commitments or (z)
fees or commissions related to any Letter of
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Credit, proceeds of amounts received by it pursuant to the Lock Box Agreements
shall be applied first, to the extent necessary, to cure such Event of Default,
and provided, further, that after an acceleration pursuant to Section 12
proceeds of amounts received by it pursuant to the Lock Box Agreements shall be
applied, first, to then outstanding Swing Line Loans, second, to then
outstanding Revolving Credit Loans and third, to cash collateralize then
outstanding L/C Obligations.
(d) Notwithstanding anything to the contrary contained in this
Agreement, in the event that a Borrower would be required to pay amounts
pursuant to subsection 6.16 as a direct result of any prepayment made pursuant
to this subsection 6.4, then either:
(i) the amount so prepaid may be immediately reborrowed by any other
Borrower (subject to satisfaction by such other Borrower of all conditions
to borrowing set forth in this Agreement) at the Eurodollar Rate which was
in effect for the amounts so prepaid plus 2.75% (and with an Interest
Period ending on the date upon which the Interest Period for the amounts
so prepaid was scheduled to end), and no Lender shall be entitled to
amounts which otherwise would be owing pursuant to said subsection 6.16;
or
(ii) during such time as no Event of Default has occurred and is
continuing or otherwise with the consent of the Majority Lenders, such
Borrower may deposit the amount of such payment in a cash collateral
account maintained by the Administrative Agent (for the benefit of the
holders of the Obligations) until the earlier of (A) the last day of the
applicable Interest Period and (B) unless the Majority Lenders shall
otherwise consent, the date of the occurrence of an Event of Default, on
which earlier date such prepayment shall be made. Each Borrower hereby
grants to the Administrative Agent a first priority security interest in
all amounts from time to time on deposit in the cash collateral account
maintained with respect to it, as security for the payment of the
Obligations of such Borrower and expressly waives all rights (which rights
each Borrower hereby acknowledges and agrees are vested exclusively in the
Administrative Agent) to exercise dominion or control over any such
amounts. Amounts from time to time on deposit in such a cash collateral
account shall be invested by the Administrative Agent in such Cash
Equivalents as the relevant Borrower may from time to time specify.
6.5 [INTENTIONALLY OMITTED]
6.6 Conversion and Continuation Options. (a) Each Borrower may elect
from time to time to convert Eurodollar Loans owing by it to Base Rate Loans, by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election, provided that any such conversion of Eurodollar Loans
may only be made on the last day of an Interest Period with
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respect thereto. Each Borrower may elect from time to time to convert Base Rate
Loans which are Revolving Credit Loans owing by it to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election. Any such notice of conversion to Eurodollar Loans shall
specify the length of the initial Interest Period or Interest Periods therefor.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof. All or any part of outstanding Eurodollar Loans and Base
Rate Loans which are Revolving Credit Loans may be converted as provided herein,
provided that (i) no Loan may be converted into a Eurodollar Loan when any Event
of Default has occurred and is continuing and the Administrative Agent has, or
the Majority Lenders have, determined not to permit such a conversion in its or
their sole discretion and (ii) no Loan may be converted into a Eurodollar Loan
after the date that is one month prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
relevant Borrower giving notice to the Administrative Agent, in accordance with
the applicable provisions of the term "Interest Period" set forth in subsection
1.1, of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan may be continued as such (i) when any Event of
Default has occurred and is continuing and the Administrative Agent has, or the
Majority Lenders have, determined not to permit such a continuation in its or
their sole discretion or (ii) after the date that is one month prior to the
Termination Date and provided, further, that if the relevant Borrower shall fail
to give any required notice as described above in this subsection 6.6(b) or if
such continuation is not permitted pursuant to the preceding proviso such Loans
shall be automatically converted to Base Rate Loans on the last day of such then
expiring Interest Period.
6.7 Minimum Amounts of Tranches. All borrowings, prepayments,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Eurodollar Loans comprising each Tranche shall be equal to $5,000,000 or
a whole multiple of $500,000 in excess thereof and there shall not be more than
12 Tranches at any one time outstanding from all Borrowers in the aggregate.
6.8 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus 2.75%.
(b) Each Base Rate Loan (including, without limitation, each Swing
Line Loan) shall bear interest for each day at a rate per annum equal to the
Base Rate plus 1.50%.
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(c) If all or a portion of (i) the principal amount of any Loan is
not paid when such amount becomes due (whether at the stated maturity, by
acceleration or otherwise) or (ii) any interest payable thereon, any commitment
fee or any fee or commission relating to any Letter of Credit hereunder is not
paid within three days after such interest, commitment fee or other fee or
commission becomes due hereunder (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is the rate described in clause (b) of this subsection 6.8 plus
2.00%, in each case from the date upon which such amount becomes due hereunder
to the date upon which such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to subsection 6.8(c) shall be
payable from time to time on demand.
6.9 Computation of Interest and Fees. (a) All interest payable on
account of Eurodollar Loans and all fees with respect to Letters of Credit
hereunder shall be calculated on the basis of a 360-day year for the actual days
elapsed, and all other interest and fees payable hereunder shall be calculated
on the basis of a 365- (or 366- as the case may be) day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify the
relevant Borrower and the Lenders of each determination of a Eurodollar Rate.
Any change in the interest rate on a Loan resulting from a change in the Base
Rate or the Eurocurrency Reserve Requirements shall become effective as of the
opening of business on the day upon which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the relevant Borrowers
and the Lenders of the effective date and the amount of each such change in
interest rate. In the absence of specific instructions from such Borrower, all
fees and expenses payable by the Borrowers hereunder shall be allocated among
the Borrowers in such proportions as the Administrative Agent shall from time to
time determine.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of a Borrower, deliver to such
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to subsection 6.8.
6.10 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not
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exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost
to such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Eurodollar Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be converted to or continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the first day of such Interest Period,
to Base Rate Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans shall be made or continued as such, nor shall
any Borrower have the right to convert Loans to Eurodollar Loans.
6.11 Pro Rata Treatment and Payments. (a) Each borrowing (other than
of Swing Line Loans) by a Borrower from the Lenders hereunder, any conversion or
continuation pursuant to subsection 6.6 and any reduction of the Commitments of
the Lenders shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment by a Borrower on account of any
commitment fee hereunder shall be made pro rata according to the respective
Commitment Percentages of all Lenders, except that the commitment fee payable to
the Swing Line Lender shall be calculated in accordance with the provisions of
subsection 6.1. Each payment (including each prepayment) by a Borrower on
account of principal of and interest on the Loans (other than (i) Swing Line
Loans and (ii) payments from the proceeds of Collateral, which shall be applied
in accordance with the provisions of the relevant Security Documents and
subsections 6.4(c) and 14.14(d)) shall be made pro rata according to the
respective outstanding principal amounts of the Loans then held by the Lenders.
All payments (including prepayments) to be made by a Borrower hereunder and
under the Notes, whether on account of principal, interest, fees or otherwise,
shall be made without set-off or counterclaim and shall be made prior to 1:00
P.M., New York City time, on the due date thereof to the Administrative Agent,
for the account of the Lenders or the Swing Line Lender, as the case may be, at
the Administrative Agent's Account, in Dollars and in immediately available
funds. The Administrative Agent shall distribute such payments to the Lenders or
to the Swing Line Lender, as the case may be, promptly upon receipt in like
funds as received. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a
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day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its Commitment Percentage of such borrowing
available to the Administrative Agent, the Administrative Agent may assume that
such Lender, is making such amount available to the Administrative Agent, and
the Administrative Agent may, in reliance upon such assumption, make available
to the relevant Borrower a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate equal to the daily average Federal Funds
Effective Rate for the period until such Lender makes such amount immediately
available to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this subsection
6.11(b) shall be conclusive in the absence of manifest error. If such Lender's
Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall also be entitled to recover such amount
with interest thereon at the rate per annum applicable to Base Rate Loans which
are Revolving Credit Loans hereunder, on demand, from such Lender.
Notwithstanding anything to the contrary contained herein, the failure of any
Lender to make any Loan to be made by it hereunder on any Borrowing Date shall
not relieve any other Lender of its obligation to make its Loan on such
Borrowing Date, but no Lender shall be responsible for the failure of any other
Lender to make the Loan to be made by such other Lender on such Borrowing Date.
6.12 Illegality. Notwithstanding any other provision herein, if,
subsequent to the Closing Date, the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof shall make it unlawful
for any Lender to make or maintain Eurodollar Loans as contemplated by this
Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Loans,
continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar
Loans shall forthwith be canceled and (b) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required
-53-
by law. If any such conversion of a Eurodollar Loan occurs on a day which is not
the last day of the then current Interest Period with respect thereto, each
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to subsection 6.16.
6.13 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender (or any corporation controlling any Lender) with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the Closing Date:
(i) shall subject any Lender (or controlling corporation) to any tax
of any kind whatsoever with respect to this Agreement, any Note, any
Letter of Credit, any Application or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender (or controlling
corporation) in respect thereof (except for Taxes covered by subsection
6.14 and changes in the rate of tax on the overall taxable income of such
Lender (or controlling corporation) or franchise tax, if applicable, in
lieu thereof);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender (or controlling corporation) which is not otherwise
included in the determination of the Eurodollar Rate; or
(iii) shall impose on such Lender (or controlling corporation) any
other condition;
and the result of any of the foregoing is to increase the cost to such Lender
(or controlling corporation), by an amount which it deems to be material, of
making, converting into, continuing or maintaining Eurodollar Loans or issuing
or participating in Letters of Credit or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the relevant Borrower
shall promptly pay such Lender upon its demand, any additional amounts necessary
to compensate such Lender (or controlling corporation) for such additional or
increased cost or reduced amount receivable. If any Lender determines that it is
entitled to claim any additional amounts pursuant to this subsection 6.13, then,
promptly following such determination, it shall notify the relevant Borrower,
through the Administrative Agent, of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to this
subsection 6.13 submitted by such Lender through the Administrative Agent, to
such Borrower shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this
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Agreement and the payment of the Notes and all other amounts payable hereunder.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the Closing Date does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by such
Lender to the Borrowers (with a copy to the Administrative Agent) of a written
request therefor, the Borrowers shall pay to such Lender such additional amount
or amounts as will compensate such Lender for such reduction.
6.14 Taxes. (a) All payments made by the Borrowers and Guarantors
under this Agreement and the Notes shall be made free and clear of, and without
reduction or withholding or liability for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority excluding, in the case of the
Collateral Agent, the Administrative Agent and each Lender, (i) net income,
capital, doing business, and franchise and similar taxes imposed upon the
Collateral Agent, the Administrative Agent or such Lender by the laws of the
jurisdiction in which the Collateral Agent, the Administrative Agent or such
Lender is organized or any political subdivision or taxing authority thereof or
therein, or by any jurisdiction in which any Lender's or lending office or, in
the case of a Lender, Eurodollar lending office, as the case may be, is located
or any political subdivision or taxing authority thereof or therein, (ii) any
tax, levy, impost, duty, charge, fee, deduction or withholding that would not
have been imposed but for the existence of any present or former connection
between the Collateral Agent, the Administrative Agent or such Lender, as
relevant (or between shareholders of the Collateral Agent, the Administrative
Agent or such Lender), and the Governmental Authority imposing such tax, levy,
impost, duty, charge, fee, deduction or withholding including, without
limitation, the Collateral Agent, the Administrative Agent or such Lender (or
shareholders thereof) being or having been a resident thereof, being or having
been present therein, being or having been engaged in a trade or business
therein, or having had a permanent establishment or fixed place of business
therein (but excluding a connection arising from the Collateral Agent's, the
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Administrative Agent's or such Lender's execution or enforcement of or
performance of its obligations under or receipt of payment under the Loan
Documents), and (iii) any withholding of any United States federal income tax or
backup withholding that would not have been required but for a failure by any
Lender to timely deliver to the Borrowers and the Administrative Agent such
forms, certificates, statements or other documents pursuant to the requirements
of subsection 6.14(b) evidencing such Lender's eligibility for an exemption from
or a reduced rate of such tax (all such non-excluded taxes, levies, imposts,
deductions, charges or withholdings being hereinafter called "Taxes"). If any
Taxes are required to be withheld from any amounts payable or paid to the
Collateral Agent, the Administrative Agent or any Lender hereunder, the amounts
so payable or paid to the Collateral Agent, the Administrative Agent or such
Lender shall be increased to the extent necessary to yield thereto (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement. Whenever any Taxes are
payable by any Borrower or Guarantor, as promptly as possible thereafter, such
Borrower or Guarantor shall send to the Administrative Agent for its own account
or for the account of the Collateral Agent or such Lender a certified copy of an
original official receipt received by such Borrower or Guarantor showing payment
thereof. If any Borrower or Guarantor fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent any
payments due under this subsection 6.14 or the required receipts or other
required documentary evidence, the Borrowers and the Guarantors shall indemnify
the Collateral Agent, the Administrative Agent and each Lender from any
incremental taxes, interest or penalties that may become payable by the
Collateral Agent, the Administrative Agent or any Lender as a result of any such
failure.
(b) Prior to the first date a payment is to be made under this
Agreement (or, in the case of any Assignee, prior to the first date upon which
it is to receive a payment under this Agreement), each Lender that is not
incorporated under the laws of the United States of America or a state thereof
agrees that it will deliver to HCNA and the Administrative Agent (i) two duly
completed and executed copies of United States Internal Revenue Service Form
1001 or 4224 or successor applicable form, as the case may be, certifying in
each case that such Lender is entitled to receive payments under this Agreement
payable to it, without deduction or withholding of any United States federal
income taxes, and (ii) a duly completed and executed Internal Revenue Service
Form W-8 or W-9 or successor applicable form, as the case may be, to establish
an exemption from United States backup withholding tax. Each Lender which
delivers to HCNA and the Administrative Agent a Form 1001 or 4224 and Form W-8
or W-9 pursuant to the preceding sentence further undertakes to deliver promptly
to HCNA and the Administrative Agent two further copies of Form 1001 or 4224 and
Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, (x)
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upon request by HCNA or the Administrative Agent, (y) on or before the date upon
which any such previously delivered form expires or becomes obsolete and (z)
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to HCNA or the Administrative Agent, and such
extensions or renewals thereof as may reasonably be requested by HCNA or the
Administrative Agent, certifying in the case of a Form 1001 or 4224 that such
Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless in any such cases
an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such letter or form
with respect to it and such Lender advises HCNA that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax, and in the case of a Form W-8 or W-9, establishing an exemption from
United States backup withholding tax.
(c) In the event that any Borrower or Guarantor has actual knowledge
that it is required to, or there arises in such Borrower's or Guarantor's
reasonable opinion a substantial likelihood that such Borrower or Guarantor will
be required to, pay an increased amount or otherwise indemnify the Collateral
Agent, the Administrative Agent or any Lender for or on account of any United
States federal income tax pursuant to subsection 6.14(a), such Borrower or
Guarantor will promptly notify the Collateral Agent, the Administrative Agent or
such Lender, as the case may be, of the nature of such tax, and shall furnish
such information to the Collateral Agent, the Administrative Agent or such
Lender with respect to such tax as the Administrative Agent, the Collateral
Agent or such Lender, as the case may be, may reasonably request. In the event
of any knowledge or opinion of such Borrower or Guarantor described in the
preceding sentence, such Borrower or Guarantor, the Collateral Agent, the
Administrative Agent and such Lender shall consult in good faith to determine
what may be required to avoid or reduce the tax, and shall each use reasonable
efforts to avoid or reduce such tax (so long as such effort results in no
material incremental costs to the Collateral Agent, the Administrative Agent or
such Lender, as the case may be).
(d) If the Collateral Agent, the Administrative Agent or any Lender
is, in its reasonable opinion, able to apply for any tax refund, tax credit, tax
deduction or other reduction in tax by reason of any payment of an increased
amount or other indemnification respecting a Tax paid by any Borrower or
Guarantor under this subsection 6.14, the Collateral Agent, the Administrative
Agent or such Lender, as the case may be, will use reasonable efforts to obtain
such refund, credit, deduction or other reduction, and upon irrevocable receipt
of the benefit thereof, will pay to such Borrower or Guarantor such amount (plus
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any interest accrued or received by the Collateral Agent, the Administrative
Agent or such Lender, as the case may be, by reason of the relevant refund,
credit, deduction or other reduction) as is equal to the net after-tax value to
the Collateral Agent, the Administrative Agent or such Lender in its reasonable
opinion, of such part of such refund, credit, deduction or other reduction as it
considers to be allocable to such Tax; provided, however, that (i) none of the
Collateral Agent, the Administrative Agent nor any Lender shall be obligated by
this subsection 6.14(d) to disclose to such Borrower or Guarantor any
information regarding its tax affairs or computations and (ii) nothing in this
subsection 6.14(d) shall interfere with the right of the Collateral Agent, the
Administrative Agent and each Lender to arrange its tax affairs as it deems
appropriate.
(e) The agreements in subsections 6.14(a), 6.14(c) and 6.14(d) shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
6.15 Replacement of Claimant. If the Collateral Agent, the
Administrative Agent or any Lender shall make any demand upon any Borrower or
Guarantor for payment under subsection 6.12 or 6.13, or shall give any notice
that it is seeking reimbursement under the provisions of subsection 6.14, then
within 90 days after any such demand or notice, such Borrower or Guarantor may
request that the Collateral Agent, the Administrative Agent or such Lender, as
the case may be, assign at par to one or more financial institutions which is
designated by such Borrower or Guarantor all (but not less than all) of its
obligations, its Commitment and the Loans and other amounts owing to it
hereunder, under the Canadian Credit Agreement (including, without limitation,
in the case of the Collateral Agent and the Administrative Agent, its
obligations as a Lender) no later than the date which is the later to occur of
120 days following the date of such request and the last day of the latest to
expire of the then current Interest Periods applicable to such Loans. In the
event of any such request, the Collateral Agent, the Administrative Agent or the
relevant Lender, as the case may be, shall consummate such assignment to such
financial institution within such time period; provided that (a) such assignment
can be effected in accordance with the provisions of subsection 14.7(c), (b) the
financial institution designated by such Borrower or Guarantor is ready, willing
and able to become an Assignee hereunder, (c) such financial institution has
paid to the
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Collateral Agent, the Administrative Agent or such Lender, as the case may be,
in immediately available funds the principal of and interest accrued to the date
of such payment on the Loans made by it hereunder and all other amounts owed to
it hereunder (including, without limitation, any amounts owing pursuant to
subsection 6.16) and has assumed the obligations of the Collateral Agent, the
Administrative Agent or such Lender, as the case may be, in respect of
outstanding Swing Line Loans and L/C Obligations and (d) such Borrower or
Guarantor has paid to the Collateral Agent, the Administrative Agent or such
Lender, as the case may be, the amounts demanded by it pursuant to subsection
6.12, 6.13 or 6.14, as the case may be. Upon consummation of such assignment,
the assigning Lender shall be released from all of its obligations hereunder and
shall cease to be a Lender and such Assignee shall thereafter be a Lender for
all purposes hereunder.
6.16 Indemnity. Each Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default (other than as a result of the
operation of subsection 6.10) by such Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after such Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by such Borrower in making any prepayment of any
Eurodollar Loan after such Borrower has given a notice thereof in accordance
with the provisions of this Agreement or (c) subject to the provisions of
subsection 6.4(d), the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. For the purpose
of calculation of all amounts payable to a Lender under this subsection 6.16,
each Lender shall be deemed to have actually funded its relevant Eurodollar Loan
through the purchase of a deposit bearing interest at the Eurodollar Rate in an
amount equal to the amount of such Eurodollar Loan and having a maturity
comparable to the relevant Interest Period and each Lender shall be deemed to
have redeployed such deposits on the date of such default or prepayment by the
sale of such deposits in an amount equal to the amount defaulted upon or prepaid
and having a maturity comparable to the Interest Period with respect thereto;
provided, however, that each Lender may fund and redeploy each of its Eurodollar
Loans in any manner which it sees fit, and the foregoing assumption shall be
utilized only for the calculation of amounts payable under this subsection 6.16.
Such indemnification may include any such loss or expense arising from the
reemployment of funds obtained by it to maintain its Eurodollar Loans hereunder
or from fees payable to terminate the deposits from which such funds were
obtained (but, in any event, excluding any loss of profits or margin applicable
to such Loans), with such Lender being deemed to have "match funded" its
Eurodollar Loans hereunder by purchasing a contract for the deposits from which
such funds were obtained on the first day of the relevant Interest Period. A
certificate of the relevant Lender as to the amounts owing to it pursuant to
this subsection 6.16 shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder.
6.17 Repayment of Obligations. Each Borrower unconditionally agrees
to pay all outstanding Loans made to it together with accrued interest thereon,
and all other Obligations then owing by it, on the Termination Date.
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SECTION 7. REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent, the Collateral Agent
and the Lenders to enter into this Agreement and to induce the Lenders to make
the Loans and issue or participate in the Letters of Credit, HCNA and each
Borrower hereby represents and warrants to the Administrative Agent, the
Collateral Agent and each Lender that:
7.1 Financial Condition. (a) The consolidated balance sheets of HCNA
and its Subsidiaries as at March 30, 1996 and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
reported on by Coopers & ▇▇▇▇▇▇▇, copies of which have heretofore been furnished
to each Lender, are complete and correct in all material respects and present
fairly, in all material respects, the consolidated financial condition of HCNA
and its Subsidiaries as at such date, and the consolidated results of their
operations and their cash flows for the fiscal year then ended. The unaudited
consolidated balance sheets of HCNA and its Subsidiaries as at December 28, 1996
and the related unaudited consolidated statements of income and of cash flows
for the nine-month period ended on such date, certified by a Responsible Officer
of HCNA, copies of which have heretofore been furnished to each Lender, present
fairly, in all material respects, the consolidated financial condition of HCNA
and its Subsidiaries as at such date, and the consolidated results of their
operations and their cash flows for the nine-month period then ended (subject to
normal year-end audit adjustments).
(b) All such financial statements described in this subsection 7.1,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer of HCNA, and as
disclosed therein). Neither HCNA nor any of its Subsidiaries had, at the date of
the most recent balance sheet referred to above, any material Guarantee
Obligation, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation, any
interest rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto. Except for the
Sale/Leaseback Transaction and the ECMC Transaction, during the period from
March 30, 1996 to and including the Closing Date there has been no sale,
transfer or other disposition by HCNA or any of its Subsidiaries of any material
part of its business or property and no purchase or other acquisition of any
business or property (including any capital stock of any other Person) material
in relation to the consolidated financial condition of HCNA and its Subsidiaries
at March 30, 1996.
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7.2 No Change. (a) During the period between March 30, 1996 and the
Closing Date, no dividends or other distributions have been declared, paid or
made upon the Capital Stock of HCNA nor has any of the Capital Stock of HCNA
been redeemed, retired, purchased or otherwise acquired for value by HCNA or any
of its Subsidiaries.
(b) Since March 30, 1996, there has been no development or event
which has had or could reasonably be expected to have a Material Adverse Effect.
7.3 Corporate Existence; Compliance with Law. Each of HCNA and its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate power
and authority, and the legal right, to own and operate its material property, to
lease the material property it operates as lessee and to conduct the business in
which it is currently engaged, (c) is duly qualified as a foreign corporation
and in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification and where the failure to be so qualified (in the aggregate with
all other failures to be so qualified) could not reasonably be expected to have
a Material Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
7.4 Corporate Power; Authorization; Enforceable Obligations. (a)
HCNA has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party. Each Borrower has the corporate
power and authority, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and to borrow hereunder and has taken all
necessary corporate action to authorize the borrowings on the terms and
conditions of this Agreement and the Notes and to authorize the execution,
delivery and performance of the Loan Documents to which it is a party.
(b) No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required to be obtained, made or accomplished by HCNA or any Borrower in
connection with the borrowings hereunder or with the execution, delivery or
performance of the Loan Documents to which HCNA or such Borrower is a party,
other than (i) such consents, authorizations, filings and notices which have
been obtained or made and remain in full force and effect and (ii) at all times
after the Closing Date, such consents, authorizations, filings or notices the
failure of
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which to be made could not reasonably be expected to have a Material Adverse
Effect.
(c) This Agreement has been, and each other Loan Document to which
it is a party has been or will be, duly executed and delivered on behalf of HCNA
and each Borrower.
(d) This Agreement constitutes, and each other Loan Document to
which it is a party constitutes or when executed and delivered will constitute,
a legal, valid and binding obligation of HCNA and each Borrower enforceable
against HCNA or such Borrower, as the case may be, in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
equitable principles (whether by proceedings in equity or at law).
7.5 No Legal Bar. The execution, delivery and performance of the
Loan Documents to which it is a party, the borrowings hereunder and the use of
the proceeds thereof will not violate any Requirement of Law applicable to, or
Contractual Obligation of, HCNA or of any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of its or
their respective properties or revenues pursuant to any such Requirement of Law
or Contractual Obligation or otherwise, other than any such Liens which are
permitted pursuant to subsection 10.3 of this Agreement or subsection 10.3 of
the Canadian Credit Agreement.
7.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of HCNA or any Borrower, threatened by or against HCNA or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
7.7 No Default. Neither HCNA nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
7.8 Ownership of Property; Liens. Each of HCNA and its Subsidiaries
has good record and marketable title in fee simple to, or a valid leasehold
interest in, all its real property, and good title to, or a valid leasehold
interest in, all its other property, except to the extent that the failure to
have such title or leasehold interest could not (in the aggregate with all other
such failures) reasonably be expected to have a Material Adverse Effect. None of
such property is subject to any Lien except as permitted by subsection 10.3 of
this Agreement and subsection 10.3 of the Canadian Credit Agreement.
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7.9 Intellectual Property. HCNA and its Subsidiaries own, or are
licensed to use, all trademarks, tradenames, copyrights, technology, know-how
and processes necessary for the conduct of their businesses as currently
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). No claim has been asserted and is pending by any Person challenging
or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does HCNA or any of its
Subsidiaries know of any valid basis for any such claim, except such claims
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. The use of such Intellectual Property by HCNA and its
Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
7.10 No Burdensome Restrictions. So far as HCNA and its Subsidiaries
can reasonably foresee, no Requirement of Law or Contractual Obligation of HCNA
or any of its Subsidiaries could reasonably be expected to have a Material
Adverse Effect.
7.11 Taxes. Each of HCNA and its Subsidiaries has filed or caused to
be filed all material tax returns which, to the knowledge of HCNA, are required
to be filed and has paid all taxes shown to be due and payable on said returns
or on any assessments made against it or any of its property and all other
material taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any such taxes, fees and other charges
the amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of HCNA or its Subsidiaries, as the case
may be); no tax Lien (other than any such Lien permitted by subsection 10.3 of
this Agreement or subsection 10.3 of the Canadian Credit Agreement) has been
filed, and, to the knowledge of HCNA and its Subsidiaries, no material claim is
being asserted, with respect to any such tax, fee or other charge.
7.12 Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect or for any purpose which violates the provisions of the Regulations of
such Board of Governors. If requested by any Lender or the Administrative Agent,
the Borrowers will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in said Regulation U.
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7.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither any Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither any
Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if any Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. The
present value (determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees participating)
of the liability of any Borrower and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA) does
not, in the aggregate, exceed the assets under all such Plans allocable to such
benefits. Notwithstanding the foregoing, the representations and warranties
contained in this subsection 7.13 shall be deemed to be true and correct in all
material respects when made or deemed made except to the extent that any one or
more failures of such representations and warranties to be true and correct when
made or deemed made could, in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property or financial or
other condition of any Borrower and its Subsidiaries taken as a whole.
7.14 Investment Company Act; Other Regulations. No Borrower is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No
Borrower is subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Indebtedness.
7.15 Subsidiaries; Guarantors. Schedule III sets forth all of the
Subsidiaries of HCNA and each Borrower as of the Closing Date. HCNA and each
Person designated as a Guarantor on Schedule III constitute all of the
Guarantors as of the Closing Date.
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7.16 Environmental Matters. Except to the extent that all such
matters, circumstances, facts and events could not, in the aggregate, subject
HCNA and its Subsidiaries to liabilities in respect of remedial costs,
compliance costs, compensatory damages, punitive damages, fines, penalties or
any combination thereof which could reasonably be expected to result in the
payment by HCNA and its Subsidiaries (after giving effect to the proceeds of any
applicable insurance owing by a carrier who has acknowledged in writing its
liability under the relevant policy and to any applicable indemnities owing to
HCNA and its Subsidiaries from a Person (other than HCNA or any of its
Subsidiaries) which is reasonably likely to honor its indemnity) of an amount in
excess of $12,500,000 in the aggregate for any fiscal year of HCNA:
(i) The facilities and properties owned, leased or operated by HCNA
or any of its Subsidiaries (the "Properties") do not contain, and have not
previously contained, any Materials of Environmental Concern in amounts or
concentrations which (A) constitute or constituted a violation of, or (B)
could reasonably be expected to give rise to liability under, any
Environmental Law.
(ii) The Properties and all operations at the Properties are in
compliance, and have during the term of ownership or lease thereof by HCNA
and its Subsidiaries been in compliance with all applicable Environmental
Laws and there is no contamination at, under or about the Properties or
violation of any Environmental Law with respect to the Properties or the
business operated by HCNA or any of its Subsidiaries (the "Business").
(iii) Neither HCNA nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business,
nor does HCNA or any Borrower have knowledge or reason to believe that any
such notice will be received or is being threatened.
(iv) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a
location which could reasonably be expected to give rise to liability
under, any Environmental Law, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on or under any
of the Properties in violation of, or in a manner that could reasonably be
expected to give rise to liability under, any applicable Environmental
Law.
(v) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of HCNA or any Borrower, threatened, under
any Environmental
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Law to which HCNA or any of its Subsidiaries is or will be named as a
party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding
under any Environmental Law with respect to the Properties or the
Business.
(vi) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or
related to the operations of HCNA or any of its Subsidiaries in connection
with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that could reasonably be
expected to give rise to liability under Environmental Laws.
7.17 Solvency. On the Closing Date (after giving effect to the
extensions of credit to be made or maintained hereunder on such date and the use
of proceeds of each thereof, and the payment of all legal and accounting and
other fees and expenses relating hereto and thereto), each of HCNA, each
Borrower and each other Loan Party will be Solvent.
7.18 ▇▇▇▇▇▇▇ Valley Manufacturing Process. NACC has completed Steps
I and II of Phase I of the plan to significantly alter the manufacturing process
at ▇▇▇▇▇▇▇ Valley, California in order to reduce the cost of soda ash, improve
the mining of borax and raw carbonate materials and eliminate marginally
profitable potash and sodium borate production operations of the Trona Plant.
7.19 No Other Restriction. The payment of dividends and loans
between and among HCNA, the Borrowers, the Affiliate Guarantors and/or Sifto
will not violate any Requirement of Law (other than any state or provincial
corporate law limiting the ability of any corporation incorporated in such
jurisdiction to pay dividends or any bankruptcy, insolvency, reorganization or
similar law) applicable to, or Contractual Obligation (other than those
contained in this Agreement and the other Loan Documents, the Canadian Credit
Agreement and the other Loan Documents (as defined therein) and the
documentation under which the Public Debt is outstanding) of HCNA, the Borrower,
any of the Affiliate Guarantors and/or Sifto.
SECTION 8. CONDITIONS PRECEDENT
8.1 Conditions to Effectiveness. The effectiveness of this Agreement
is subject to the satisfaction on or prior to February 28, 1997 of the following
conditions precedent:
(a) Loan Documents, etc. The Administrative Agent and the Collateral
Agent shall have received:
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(i) this Agreement, executed and delivered by a duly
authorized officer of each Borrower and HCNA and by the Lenders;
(ii) the Canadian Credit Agreement, executed and delivered by
a duly authorized officer of Sifto and by the Lenders (as defined
therein);
(iii) an assignment agreement, in form and substance
satisfactory to the Administrative Agent, pursuant to which the
lenders ("Existing Lenders") under the Existing Credit Agreement
shall assign their commitments thereunder to the Lenders, and the
Lenders shall purchase the outstanding loans under the Existing
Credit Agreement from the Existing Lenders;
(iv) for each Lender, a Note executed and delivered by each
Borrower;
(v) amendments to the Security Agreements and replacement Lock
Box Agreements, in each case having terms satisfactory to the
Administrative Agent and the Lenders (and each Lender by executing
and delivering this Agreement shall be deemed to have consented to
such amendments and replacement Lock Box Agreements in the form
distributed to such Lender prior to the Closing Date); and
(vi) each other document or instrument as may be reasonably
requested by the Administrative Agent or the Collateral Agent,
including, without limitation, (x) a copy of any debt instrument,
security agreement or other material contract to which HCNA or any
of its Subsidiaries may be a party, (y) reaffirmations of the
Guarantees and (z) any instruments or other documents reasonably
deemed necessary by the Collateral Agent to maintain the security
interests created by the Security Documents.
(b) Corporate Proceedings of the Borrowers. The Administrative Agent
shall have received a copy of the resolutions, in form and substance
reasonably satisfactory to the Administrative Agent, of the Board of
Directors of each Borrower authorizing (i) the execution, delivery and
performance of this Agreement, the Notes and the other Loan Documents to
which it is a party, (ii) the borrowings contemplated hereunder and (iii)
the granting by it of the Liens created pursuant to the Security
Agreements, certified by the Secretary or an Assistant Secretary of such
Borrower as of the Closing Date, which certificate shall be in form and
substance reasonably satisfactory to the Administrative Agent and shall
state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
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(c) Borrower Incumbency Certificates. The Administrative Agent shall
have received, with a copy for each Lender, a certificate of each
Borrower, dated the Closing Date, as to the incumbency and signatures of
the officers of such Borrower executing any Loan Document reasonably
satisfactory in form and substance to the Administrative Agent, executed
by the President or any Vice President and the Secretary or any Assistant
Secretary of such Borrower.
(d) Corporate Proceedings of HCNA. The Administrative Agent shall
have received a copy of the resolutions, in form and substance reasonably
satisfactory to the Administrative Agent, of the Board of Directors of
HCNA authorizing the execution, delivery and performance of this
Agreement, certified by the Secretary or an Assistant Secretary of HCNA as
of the Closing Date, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state that
the resolutions thereby certified have not been amended, modified, revoked
or rescinded.
(e) HCNA Incumbency Certificate. The Administrative Agent shall have
received, with a copy for each Lender, a certificate of HCNA, dated the
Closing Date, as to the incumbency and signatures of the officers of HCNA
executing any Loan Document reasonably satisfactory in form and substance
to the Administrative Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of HCNA.
(f) Corporate Proceedings of Subsidiaries. The Administrative Agent
shall have received a copy of the resolutions, in form and substance
reasonably satisfactory to the Administrative Agent, of the Board of
Directors of each Subsidiary of HCNA (other than the Borrowers) which is a
Loan Party authorizing the execution, delivery and performance of the Loan
Documents to which it is a party, certified by the Secretary or an
Assistant Secretary of each such Subsidiary as of the Closing Date, which
certificate shall be in form and substance reasonably satisfactory to the
Administrative Agent and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded.
(g) Subsidiary Incumbency Certificates. The Administrative Agent
shall have received, with a copy for each Lender, a certificate of each
Subsidiary of HCNA (other than the Borrowers) which is a Loan Party, dated
the Closing Date, as to the incumbency and signatures of the officers of
such Subsidiaries executing any Loan Document, reasonably satisfactory in
form and substance to the Administrative Agent, executed by the President
or any Vice President and the Secretary or any Assistant Secretary of each
such Subsidiary.
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(h) Corporate Documents. The Administrative Agent shall have
received from each Loan Party the certificate of incorporation and by-laws
of such Loan Party certified by the Secretary or an Assistant Secretary of
such Loan Party.
(i) Consents, Licenses and Approvals. The Administrative Agent shall
have received a certificate of a Responsible Officer of each Borrower (i)
attaching copies of all consents, authorizations and filings referred to
in subsection 7.4 (other than those delivered in connection with the
Original Closing Date), and (ii) stating that all consents, licenses and
filings referred to in subsection 7.4 are in full force and effect, and
each such consent, authorization and filing (other than those delivered in
connection with the Original Closing Date) shall be in form and substance
reasonably satisfactory to the Administrative Agent. The Administrative
Agent shall have received a consent to this Agreement, in form and
substance satisfactory to the Administrative Agent, from each of the
parties to the Affiliate Guarantee (other than HCNA and the Borrowers).
(j) Fees. The Administrative Agent shall have received all fees to
be received by it on the Closing Date for its own account and for the
accounts of the Lenders. The Collateral Agent shall have received all fees
to be received by it on the Closing Date for its own account.
(k) Legal Opinions. The Administrative Agent shall have received,
with a counterpart for the Collateral Agent and each Lender, the executed
legal opinion of Winthrop, Stimson, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the
Borrowers and the other Loan Parties, in form and substance reasonably
satisfactory to the Collateral Agent and the Administrative Agent.
(l) Notice. The Administrative Agent shall have received evidence
satisfactory to it that the written notice referred to in subsection 14.9
shall have been duly delivered.
(m) Borrowing Base Certificates. The Administrative Agent, the
Collateral Agent and the Lenders shall have received a Borrowing Base
Certificate based, for the purposes of this paragraph only, on the
Collateral described in the most recent Borrowing Base Certificate
delivered pursuant to the terms of the Existing Credit Agreement prior to
the Closing Date but updated to include information as to the amounts
outstanding hereunder on the Closing Date after giving effect to the
transactions contemplated hereby and dated as of the Closing Date and
confirming that, as of the Closing Date, the conditions set forth in
subsection 8.2(e) shall be satisfied.
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Each of the documents listed in clauses (b) through (m) above shall be
reasonably satisfactory in form and substance to the Administrative Agent and
the Collateral Agent. Promptly following the Closing Date, the Administrative
Agent shall deliver to each Lender a copy of each of the documents, instruments
and agreements described in this subsection 8.1.
8.2 Conditions to Each Extension of Credit. Except to the extent
expressly set forth in this Agreement, the agreement of each Lender to make any
extension of credit requested to be made by it to a Borrower on any date
(including, without limitation, its initial extension of credit) is subject to
the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Loan Parties in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date, provided that the representations and
warranties contained in the second sentence of subsection 7.7 for the
purposes of this paragraph shall be deemed modified by paragraphs (b), (c)
and (d) below.
(b) No Undisclosed Default or Event of Default. No Default (other
than Defaults that have been disclosed in writing to the Lenders) or Event
of Default shall have occurred and be continuing on such date or after
giving effect to the extension of credit requested to be made on such
date.
(c) No Undisclosed Default or Event of Default under Canadian Credit
Agreement. No Default under (and as defined in) the Canadian Credit
Agreement (other than any such Defaults that have been disclosed in
writing to the Lenders) and no Event of Default under (and as defined in)
the Canadian Credit Agreement shall have occurred and be continuing on
such date.
(d) No Default. No Default hereunder or under (and as defined in)
the Canadian Credit Agreement shall have occurred and be continuing on
such date, in each case as to which the Aggregate Required Lenders have
delivered to the Administrative Agent a written notice specifying that no
extensions of credit hereunder may be made as a result thereof.
(e) Borrowing Base. After giving effect to the extension of credit
requested to be made on such date, the Aggregate Outstanding Extensions of
Credit owing by such Borrower to all Lenders will not exceed the Borrowing
Base then applicable to such Borrower.
(f) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal
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matters in connection with the transactions contemplated by this Agreement
and the other Loan Documents shall be reasonably satisfactory in form and
substance to the Administrative Agent and (to the extent that such
proceedings, documents, instruments and other matters relate to the
Collateral or the Collateral Agent) the Collateral Agent, and each of the
Administrative Agent and (with respect to matters relating to the
Collateral or the Collateral Agent) the Collateral Agent shall have
received such other documents and legal opinions in respect of any aspect
or consequence of the transactions contemplated hereby or thereby as it
shall reasonably request.
Each borrowing by, and Letter of Credit issued, extended or renewed on behalf
of, a Borrower hereunder shall constitute a representation and warranty by the
Borrowers as of the date of such extension of credit that the conditions
contained in subsections 8.2(a), 8.2(b), 8.2(c), 8.2(d) and 8.2(e) have been
satisfied.
SECTION 9. AFFIRMATIVE COVENANTS
HCNA hereby agrees that, so long as the Commitments remain in
effect, any Note or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender, the Collateral Agent or the Administrative
Agent hereunder, HCNA shall and shall cause each of its Subsidiaries to (except
in the case of delivery of financial information, reports and notices, in which
case HCNA and each Borrower shall):
9.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of HCNA, a copy of the audited consolidated and
consolidating balance sheets of HCNA and its consolidated Subsidiaries as
at the end of such year and the related audited consolidated and
consolidating statements of income and retained earnings and of cash flows
for such year, setting forth in comparative form the figures for the
previous year, reported on without a "going concern" explanatory paragraph
or like qualification or exception, or qualification arising out of the
scope of the audit, by Coopers & ▇▇▇▇▇▇▇ or other independent certified
public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of HCNA, the unaudited consolidated and consolidating balance sheets
of HCNA and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated and consolidating statements of
income and retained earnings and of cash flows of HCNA and its
consolidated Subsidiaries for such quarter
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and the portion of the fiscal year through the end of such quarter,
setting forth in comparative form the budget for such period and the
figures for the same period of the previous year, certified by a
Responsible Officer of HCNA as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
(c) as soon as available, but in any event within 30 days after the
end of each Interim Accounting Period in a fiscal year of HCNA (other than
any such Interim Accounting Period which ends on the last day of a fiscal
quarter of HCNA), the unaudited consolidated and consolidating balance
sheet, income statement and cash flow statement of HCNA and its
consolidated Subsidiaries, in each case for such Interim Accounting
Period, setting forth in comparative form the budget for such period and
the figures for the same period of the previous year, certified by a
Responsible Officer of HCNA (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
9.2 Certificates; Other Information. Furnish to each Lender, the
Collateral Agent and the Administrative Agent:
(a) concurrently with the delivery of the financial statements
referred to in subsection 9.1(a), a letter from the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such letter;
(b) concurrently with the delivery of the financial statements
referred to in subsection 9.1, a certificate of a Responsible Officer of
HCNA (i) stating that, to the best of such Responsible Officer's
knowledge, HCNA or the relevant Borrower, as the case may be, during such
period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and
in the Notes and the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such Officer has obtained
no knowledge of any Default or Event of Default except as specified in
such certificate, (ii) showing in detail the calculations supporting such
statement in respect of subsection 10.1 and (iii) in the case of financial
statements referred to in subsection 9.1(a) or (b), describing in
reasonable detail the status of each project referred to in the definition
of "Major Project Capital Expenditures", including the
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aggregate amount expended in connection therewith, together with the
amount remaining to be expended, through the date of such financial
statements;
(c) not later than 45 days following the last day of each fiscal
year of each Borrower, a copy of the annual business plan of such Borrower
(prepared on a month-by-month basis) for the next succeeding fiscal year
(incorporating an operating budget and projections of cash flow of its
Subsidiaries), accompanied by an outline of the assumptions upon which
such business plan was based and a certificate of a Responsible Officer of
such Borrower to the effect that such Responsible Officer (i) believes
that such business plan is based upon reasonable assumptions and (ii) has
no reason to believe that such business plan is incorrect or misleading in
any material respect (it being recognized by the Lenders that such
projections as to future events are not to be viewed as facts and that
actual results during the period covered may differ from the projected
results);
(d) within five days after the same are sent, copies of all
financial statements and reports relating to HCNA and its Subsidiaries
which HCG sends to its stockholders, and within five days after the same
are filed, copies of all financial statements and reports which HCNA or
any of its Subsidiaries may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental Authority;
(e) within five Business Days after each of (i) the end of the first
two weeks of each Interim Accounting Period and (ii) the last day of each
Interim Accounting Period, each of (x) a Borrowing Base Certificate for
each Borrower, each certified by a Responsible Officer of such Borrower as
being true and accurate in all material respects as of such end of the
first two weeks or last day of each Interim Accounting Period, as the case
may be, and (y) a certificate of a Responsible Officer of such Borrower
stating that such Borrower was in compliance with the Borrowing Base
applicable to it during the period subsequent to the most recent
certification;
(f) as soon as available, but in any event prior to May 31 of each
year, a report prepared by the environmental compliance officer of the
Borrowers, (i) reviewing all material developments relating to compliance
by each Borrower and Subsidiary thereof and their respective tenants with
all Environmental Laws applicable to such Borrower and its Subsidiaries
and their respective tenants, including without limitation a schedule
setting forth any discharges, emissions, or other activities of such
Borrower and its Subsidiaries and their respective tenants, reported or
required to be reported to any government agency, that are in excess of
any standard in any permits issued pursuant to
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any Environmental Laws, setting forth the amount by which the permit was
exceeded, and setting forth the number of days the discharges, emissions,
or other activities occurred in excess of the applicable standard; (ii)
attaching all material reports from environmental consultants working for
or hired by such Borrower or any of its Subsidiaries, including without
limitation, any annual report of an independent environmental consultant
to the Borrowers (which consultant shall be reasonably acceptable to the
Administrative Agent) concerning any property or facility owned, operated
or leased by, or a source of potential liability to, such Borrower or any
of its Subsidiaries; (iii) discussing the progress in the implementation
of the environmental compliance program of such Borrower and its
Subsidiaries (the "Environmental Compliance Program") including, but not
limited to, a facility-by-facility review of, where applicable,
groundwater remediation, installation of equipment to control air
emissions or water discharges, disposal of equipment containing
polychlorinated biphenyls, removal of asbestos-containing materials,
investigation or removal of any equipment in connection with environmental
concerns, storage containers or other property, remediation of landfills
or other contaminated land, changes in procedures in the handling or
disposal of any hazardous materials, and any other significant matters
addressed in the Environmental Compliance Program; (iv) reporting on the
extent to which ongoing maintenance and oversight procedures implemented
under the Environmental Compliance Program were followed by such Borrower
and its Subsidiaries during the preceding fiscal year; (v) setting forth
any changes to the Environmental Compliance Program implemented during the
preceding fiscal year; (vi) listing all material correspondence with, and
all notices of any kind received from, any Governmental Authority having
jurisdiction over any Environmental Laws and attaching copies thereof;
(vii) reporting on the status of any pending or threatened litigation
against such Borrower or any of its Subsidiaries pertaining to any
Environmental Laws; and (viii) certified as true and correct by such
environmental compliance officer; and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
9.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of HCNA or its Subsidiaries, as the case may be.
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9.4 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all material rights, privileges and franchises
necessary or desirable in the normal conduct of its business except as otherwise
permitted pursuant to subsection 10.7; comply with all Contractual Obligations
and Requirements of Law except to the extent that failure to comply therewith
could not, in the aggregate, be reasonably expected to have a Material Adverse
Effect.
9.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition, except to the
extent that all failures to do so could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(b) Except to the extent that such insurance is not available upon
commercially reasonable terms and HCNA and its Subsidiaries have agreed with the
Administrative Agent and the Collateral Agent upon commercially reasonably
alternatives thereto, maintain with financially sound and reputable insurance
companies insurance on all its property in at least such amounts and against at
least such risks (but including in any event public liability, product liability
and business interruption) as were in effect at the time of the insurance review
delivered pursuant to the closing of the Existing Credit Agreement, with the
Collateral Agent named as additional loss payee with respect to proceeds under
any such policies derived from Collateral.
(c) Furnish to each Lender, no later than fifteen days following
each renewal date with respect thereto and at such other times as the
Administrative Agent or the Collateral Agent reasonably may request, full
information as to the insurance carried (including, without limitation, evidence
reasonably acceptable to the Collateral Agent demonstrating that it has been
named as additional loss payee thereunder with respect to insurance proceeds
derived from Collateral). All such loss payee endorsements shall comply with the
terms and provisions of the Security Agreements and shall, in any event, provide
that no such policy shall be cancelled, materially reduced in amount or
materially changed in coverage until at least 30 days after receipt by the
Collateral Agent of written notice of such cancellation, reduction or change.
9.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of record and accounts containing entries with respect to all
dealings and transactions in relation to its business and activities which are
full, true and correct in all material respects in accordance with GAAP and all
Requirements of Law; and permit representatives of any Lender to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable
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time upon reasonable advance notice and as often as may reasonably be desired
and to discuss the business, operations, properties and financial and other
condition of the Borrowers and their Subsidiaries with officers of the Borrowers
and their Subsidiaries; and, upon reasonable notice to such Borrower, to permit
representatives of the Administrative Agent and the Collateral Agent to discuss
the business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrowers and
their Subsidiaries and with their respective independent certified public
accountants.
9.7 Notices. To the extent that a Responsible Officer of HCNA, any
Borrower, Sifto, the Subsequent Borrower or any Guarantor knows or should
reasonably be expected to know thereof, promptly give notice to the
Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of HCNA or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between HCNA or
any of its Subsidiaries and any Governmental Authority, which in either
case, if not cured or if adversely determined, as the case may be, could
(in the responsible judgment of such Responsible Officer) reasonably be
expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting HCNA or any of its
Subsidiaries (including, without limitation, with respect to compliance
with Environmental Laws) in which the amount involved is $500,000 or more
and not covered by insurance issued by an insurer who has acknowledged in
writing its liability under the relevant policy or in which injunctive or
similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after a Responsible Officer of HCNA knows or should
reasonably be expected to know thereof: (i) the occurrence or expected
occurrence of any Reportable Event with respect to any Plan, a failure to
make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC
or any Borrower or any Commonly Controlled Entity or any Multiemployer
Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and
(e) any development or event which could (in the reasonable judgment
of such Responsible Officer) reasonably be expected to have a Material
Adverse Effect.
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Each notice pursuant to this subsection 9.7 shall be accompanied by a statement
of a Responsible Officer of HCNA setting forth details of the occurrence
referred to therein and stating what action HCNA or the relevant Subsidiary
proposes to take with respect thereto.
9.8 Environmental Laws. (a) Give, and use its diligent efforts to
cause its tenants and its Subsidiaries' respective tenants to give, timely and
proper notice, and undertake any other measures necessary to ensure that it
obtains any indemnification, defense, contribution or reimbursement that may be
available for, any material liability or alleged material liability arising
under any Environmental Law.
(b) Diligently plan for and implement all measures reasonably
necessary and appropriate to eliminate any act, operation, omission or condition
that may be out of compliance with, in violation of, or otherwise giving rise to
material liability or potential material liability under, any Environmental Law.
9.9 Canadian Currency Risk. Maintain prudent business practices in
respect of currency risk with respect to the Canadian operations of the Sifto
Group.
9.10 Inventory. Use diligent efforts to cause each Public Warehouse
and landlord for any facility in which Inventory of any Borrower is located to
deliver to the Collateral Agent an acknowledgement copy of a Landlord's Waiver
(which may incorporate changes in form and substance reasonably satisfactory to
the Collateral Agent).
9.11 Field Analyses. Permit the Collateral Agent, at any reasonable
time upon reasonable advance notice and as often as may reasonably be required
to conduct a field analysis and examination of the Collateral, provided that
each Lender shall have the right to accompany the Collateral Agent on any such
field analysis and examination at such Lender's sole expense. The Collateral
Agent hereby agrees to provide promptly to each Lender and each Borrower a copy
(or summary thereof) of any field analysis and examination of the Collateral
conducted by it.
SECTION 10. NEGATIVE COVENANTS
HCNA hereby agrees that, so long as the Commitments remain in
effect, any Note or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender, the Collateral Agent or the Administrative
Agent hereunder, HCNA shall not, and (except with respect to subsection 10.1)
shall not permit any of its Subsidiaries to, directly or indirectly:
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10.1 Financial Condition Covenants.
(a) Interest Coverage. Permit the Interest Coverage Ratio of HCNA
and its Subsidiaries for any period of four consecutive fiscal quarters
ending during any "Test Period" set forth below to be less than the ratio
set forth opposite such period below:
Interest
Test Period Coverage Ratio
----------- --------------
Closing Date - 12/31/97 1.20 to 1.0
01/01/98 - 12/31/98 1.40 to 1.0
01/01/99 - 12/31/99 1.50 to 1.0
01/01/00 - thereafter 1.75 to 1.0
(b) Fixed Charge Coverage. Permit for any period of four consecutive
fiscal quarters ending during any "Test Period" set forth below the Fixed
Charge Coverage Ratio of HCNA and its Subsidiaries to be less than the
ratio set forth opposite such period below:
Fixed Charge
Test Period Coverage Ratio
----------- --------------
Closing Date - 12/31/98 1.00 to 1.0
01/01/99 - thereafter 1.10 to 1.0
(c) Net Funded Debt Coverage. Permit on the last day of any fiscal
year set forth below the ratio of (i) the amount equal to Consolidated
Funded Debt of HCNA and its Subsidiaries on such date minus cash and Cash
Equivalents owned by HCNA and its Subsidiaries on such date to (ii)
Consolidated EBITDA of HCNA and its Subsidiaries for the fiscal year then
ended to be greater than the ratio set forth opposite such fiscal year
below:
Fiscal Year Ratio
----------- -----
1997 6.25 to 1.0
1998 6.00 to 1.0
1999 4.85 to 1.0
2000 4.25 to 1.0
2001 and each fiscal year thereafter 3.60 to 1.0
10.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of HCNA and its Subsidiaries under the Loan
Documents;
(b) Indebtedness of HCNA and its Subsidiaries under the Public Debt;
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(c) Indebtedness of HCNA and its Subsidiaries under the Canadian
Credit Agreement;
(d) unsecured Indebtedness of a corporation which becomes a
Subsidiary of HCNA after the Closing Date, provided that (i) such
Indebtedness existed at the time such corporation became a Subsidiary and
was not created in anticipation thereof and (ii) immediately after giving
effect to the acquisition of such corporation by HCNA and its
Subsidiaries, no Default or Event of Default shall have occurred and be
continuing;
(e) Indebtedness of HCNA to any of its Subsidiaries and of any
Subsidiary of HCNA to HCNA or any other Subsidiary; provided that the
aggregate amount of such Indebtedness owed pursuant to this subsection
10.2(e) to any Guarantor by Subsidiaries of HCNA which are not then
Guarantors (other than members of the Sifto Group, as to which this
proviso shall not apply), in the aggregate with (i) all Investments made
by Guarantors in Subsidiaries which are not Guarantors (other than the
Sifto Group) pursuant to subsection 10.10(e) and (ii) all Guarantee
Obligations then outstanding pursuant to subsection 10.4(h), shall not
exceed the amount equal to the Permitted Investment Amount immediately
after giving effect to the incurrence of such Indebtedness;
(f) Indebtedness of HCNA and its Subsidiaries in respect of
Financing Leases (in addition to those permitted pursuant to subsection
10.2(g)) and in respect of all or a part of the purchase price of
property, plant and equipment in the ordinary course of business having
aggregate imputed principal amounts and aggregate principal amounts not to
exceed as to HCNA and its Subsidiaries $28,500,000 in the aggregate at any
time outstanding (of which not more than $5,000,000 shall be on account of
the Sifto Group);
(g) Indebtedness (including, without limitation, in respect of
Financing Leases) in existence on the Closing Date and listed on Schedule
V and any refinancings, refundings, renewals or extensions thereof,
provided that the terms applicable to such refinanced, renewed or extended
Indebtedness, as the case may be, are no more burdensome to the applicable
borrower thereof than the terms applicable to the original Indebtedness;
(h) Indebtedness of the Sifto Group which is permitted under the
Canadian Credit Agreement; and
(i) additional Indebtedness of HCNA and its Subsidiaries not
exceeding $2,000,000 in aggregate principal amount at any one time
outstanding.
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10.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its or any of its Subsidiaries' property, assets or
revenues, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due and payable or which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of HCNA or its
Subsidiaries, as the case may be, in conformity with GAAP (or, in the case
of Subsidiaries incorporated under the laws of a jurisdiction outside of
the United States, generally accepted accounting principles in effect from
time to time in their respective jurisdictions of incorporation);
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
in respect of amounts which are not overdue for a period of more than 60
days or which are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances with respect to real property incurred in the ordinary course
of business which, in the aggregate, are not substantial in amount and
which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of HCNA or such Subsidiary;
(f) Liens in existence on the Closing Date and listed on Schedule
VI, securing Indebtedness permitted by subsection 10.2(g), provided that
no such Lien is spread to cover any additional property after the Closing
Date and that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness permitted by subsection 10.2(f);
provided that (i) such Liens shall be created substantially simultaneously
with the incurrence of such Indebtedness, (ii) such Liens do not at any
time encumber any property other than the property (and, in the case of
real property, the improvements thereon) financed by
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such Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the principal amount of Indebtedness secured by any
such Lien shall at no time exceed 100% of the original purchase price of,
and the cost of construction of or improvement to, such property at the
time it was acquired, constructed or improved;
(h) Liens on Capital Stock of Subsidiaries of HCNA securing the
obligations of HCNA in respect of the Senior Secured Notes and securing
Guarantee Obligations permitted pursuant to subsection 10.4(c);
(i) Liens on assets of Sifto and its Subsidiaries securing the
obligations of Sifto in respect of the Sifto Notes;
(j) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to HCNA and its Subsidiaries in the
aggregate) $2,000,000 in aggregate amount at any time outstanding;
(k) Liens permitted under the Canadian Credit Agreement;
(l) Liens for unpaid royalties not then due and payable pursuant to
mineral leases running in favor of Governmental Authorities which Liens,
in the aggregate, are not substantial in amount and do not, in any case,
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of HCNA and
its Subsidiaries; provided that such Liens do not encumber any Collateral;
(m) Liens in respect of judgments and decrees not constituting an
Event of Default under Section 12(i);
(n) with respect to real property located in Canada, reservations or
exceptions contained in the original grants from the Crown and minor
discrepancies in the legal description of any real property which would be
disclosed in an up-to-date survey;
(o) with respect to real property located in Canada, zoning by-laws,
ordinances or other restrictions as to the use of real property, and
agreements with other persons registered against title to any real
property, which do not in the aggregate materially detract from the value
of the property subject thereto or materially interfere with the ordinary
conduct of the business of HCNA or any of its Subsidiaries; and
(p) Liens created pursuant to the Security Documents.
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10.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations outstanding on the Closing Date and listed
on Schedule VII;
(b) Guarantee Obligations incurred by HCNA and its Subsidiaries in
respect of unsecured interest rate and currency ▇▇▇▇▇▇ on market terms;
provided that the aggregate notional amount of such Guarantee Obligations
pursuant to this subsection 10.4(b) does not exceed (i) in the case of
interest rate ▇▇▇▇▇▇, the amount of principal due from HCNA and its
Subsidiaries with respect to Indebtedness permitted pursuant to subsection
10.2 which is reasonably subject to interest rate fluctuations and (ii) in
the case of currency ▇▇▇▇▇▇, the amount of the relevant currency
reasonably subject to exchange rate fluctuations which is owing to, or
held by, HCNA and its Subsidiaries in the ordinary course of business;
(c) Guarantee Obligations in respect of the Public Debt;
(d) Guarantee Obligations permitted pursuant to the Canadian Credit
Agreement;
(e) the Guarantees;
(f) Guarantee Obligations incurred by HCNA and its Subsidiaries in
respect of obligations of any Guarantor which are otherwise permitted
hereunder;
(g) Guarantee Obligations incurred by any Guarantor in respect of
obligations of the Sifto Group under Financing Leases and operating leases
(with the amount of such Guarantee Obligations under operating leases
being deemed to be the present value of the annual lease payments during
the life of such lease) in an aggregate amount not to exceed $5,000,000 at
any one time outstanding;
(h) Guarantee Obligations incurred by HCNA and its Subsidiaries in
respect of obligations under operating leases which are not otherwise
permitted pursuant to this subsection 10.4; provided that the aggregate
amount of Guarantee Obligations permitted pursuant to this subsection
10.4(h) shall not exceed, in the aggregate with (i) all Indebtedness owing
to Guarantors pursuant to subsection 10.2(e) by Subsidiaries which are not
then Guarantors (other than the Sifto Group) and (ii) all Investments made
by Guarantors in Subsidiaries which are not Guarantors (other than the
Sifto Group) pursuant to subsection 10.10(e), the amount equal to the
Permitted Investment Amount immediately after giving effect to the making
of such Guarantee Obligations; and
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(i) Guarantee Obligations incurred by HCNA and its Subsidiaries in
respect of the obligation of ▇▇▇▇▇▇▇ Domestic Water Company to provide
water to the residents of ▇▇▇▇▇▇▇ Valley, California; provided that any
payments on account of such Guarantee Obligations shall be deemed to be
Investments in a Subsidiary of HCNA which is not a Guarantor or a member
of the Sifto Group for purposes of subsection 10.10(e).
10.5 Limitation on Capital Expenditures. Make or commit to make (by
way of the acquisition of securities of a Person or otherwise) any Capital
Expenditures, other than Capital Expenditures in the ordinary course of business
not exceeding (excluding any capitalized interest which otherwise would be
included therein), (a) in the aggregate for HCNA and its Subsidiaries (excluding
Major Project Capital Expenditures and including Capital Expenditures made by
the Subsidiaries described in clause (b) below) during any of the fiscal years
of HCNA set forth below, the "HCNA Amount" set forth opposite such fiscal year
below, (b) in the aggregate for the Sifto Group (excluding Major Project Capital
Expenditures) during any of the fiscal years of HCNA set forth below, the "Sifto
Amount" set forth opposite such fiscal year below or (c) in the aggregate with
respect to Major Project Capital Expenditures during any of the fiscal years of
HCNA set forth below, the "Major Project Amount" set forth opposite such fiscal
year below (collectively, the "Permitted Capital Expenditures"):
HCNA Sifto
Major Project
Fiscal Year Amount Amount Amount
----------- ------ ------ ------
1997 $27,400,000 $ 8,000,000 $ 8,200,000
1998 27,000,000 8,000,000 13,000,000
1999 37,900,000 8,000,000 800,000
2000 29,900,000 8,000,000 300,000
2001 30,300,000 8,000,000 300,000
2002 30,300,000 8,000,000 300,000
provided, that (a) any portion of any such HCNA Amount for any fiscal year may
instead be added ("Transferred HCNA Amounts") to the Major Project Amount
available for Major Project Capital Expenditures in such fiscal year (which
Transferred HCNA Amounts shall also be deemed usage of any such HCNA Amount for
the purposes of this subsection), (b) any portion of any such HCNA Amount (not
to exceed 50% of the HCNA Amount set forth above for that fiscal year) which is
not expended in the fiscal year for which it is permitted above may be carried
over and added to the HCNA Amount which is to be available for expenditure by
HCNA and its Subsidiaries in the next following fiscal year and shall be deemed
to be the first such HCNA Amount so expended in such next following fiscal year
(provided, however, that the HCNA Amount so available in such next following
year (as adjusted by the amounts
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so carried over) shall not be increased by the portion of the Sifto Amount
carried over pursuant to clause (c) below), (c) any portion of any such Sifto
Amount (not to exceed 50% of the Sifto Amount set forth above for that fiscal
year) which is not expended in the fiscal year for which it is permitted above
may be carried over and added to the Sifto Amount which is to be available for
expenditure by the Sifto Group in the next following fiscal year and shall be
deemed to be the first such Sifto Amount so expended in such next following
fiscal year and (d) any portion of any such Major Project Amount which is not
expended in the fiscal year for which it is permitted above may be carried over
and added to the Major Project Amount which is to be available for expenditure
by HCNA and its Subsidiaries in the next following fiscal year and shall be
deemed to be the first such Major Project Amount so expended in such next
following fiscal year.
10.6 Limitation on Leases. Permit Consolidated Lease Expense for any
fiscal year of HCNA and its Subsidiaries to exceed $22,000,000 in the aggregate.
10.7 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Borrower may be merged or consolidated with or into another
Borrower (provided that (i) the relevant Administrative Agent and
Collateral Agent have received 30 days' prior written notice of such
merger or consolidation and (ii) after giving effect to such merger or
consolidation, the relevant Collateral Agent shall have a first priority,
perfected security interest in all Collateral in which it possessed a
perfected security interest immediately prior to giving effect to such
merger or consolidation);
(b) any wholly owned Subsidiary of a Borrower may be amalgamated,
merged or consolidated with or into such Borrower or any other Borrower
(provided that, in the case of a merger or consolidation, a Borrower shall
be the continuing or surviving corporation) or with or into any one or
more other Guarantors (provided that, in the case of a merger or
consolidation, such Guarantor shall be the continuing or surviving
corporation) or with or into any member of the Sifto Group (provided that,
in the case of a merger or consolidation, such member of the Sifto Group
shall be the continuing or surviving corporation); provided, further, that
the aggregate book value of all assets which are to become held by a
member of the Sifto Group in any fiscal year of HCNA pursuant to
subsections 10.7(c), 10.8(l)
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and this subsection 10.7(b) shall not exceed $3,000,000 and in the case of
any such disposition under this subsection 10.7(b) to any member of the
Sifto Group by any Person who is not a member of the Sifto Group, such
disposition shall be made for fair value and shall be made in accordance
with past business practice;
(c) any wholly owned Subsidiary of HCNA may convey, sell, lease,
assign, transfer or otherwise dispose of any or all of its business,
property or assets (upon voluntary liquidation or otherwise) to a
Borrower, any other Guarantor or any member of the Sifto Group and in the
case of any such disposition under this subsection 10.7(c) to any member
of the Sifto Group by any Person who is not a member of the Sifto Group,
such disposition shall be made for fair value and shall be made in
accordance with past business practice; provided that the aggregate book
value of all assets so conveyed, sold, leased, assigned, transferred or
otherwise disposed of pursuant to subsections 10.7(b), 10.8(l) and this
subsection 10.7(c) to members of the Sifto Group in any fiscal year of
HCNA shall not exceed $3,000,000;
(d) subject to any applicable restrictions contained in the Security
Documents, any Borrower or any Subsidiary of a Borrower may sell or
otherwise dispose of all or substantially all of its assets pursuant to a
transaction permitted by subsection 10.8(b); and
(e) HCNA and its Subsidiaries may enter into transactions which are
otherwise prohibited by this subsection 10.7 to the extent that such
transactions are permitted pursuant to subsection 10.7 of the Canadian
Credit Agreement;
provided, however, that in the case of any transaction permitted by subsection
10.7(a), 10.7(b) or 10.7(c), the Borrower, Guarantor or member of the Sifto
Group, as the case may be, which is the continuing or surviving corporation of
such merger, consolidation or amalgamation shall provide to the relevant
Collateral Agent and Administrative Agent such other documents, instruments,
agreements, legal opinions and certificates as may reasonably be deemed
necessary or appropriate by such Collateral Agent and Administrative Agent to
perfect the security interest of such Collateral Agent in the Collateral (as
defined in the relevant Security Agreements).
10.8 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables, leasehold interests, Capital Stock
and all Collateral), whether now owned or hereafter acquired, except:
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(a) the sale or other disposition of obsolete or worn out
equipment, fixtures or real property in the ordinary course of
business;
(b) the sale or other disposition of all or any portion of the
Capital Stock of a Subsidiary of HCNA which was not a Subsidiary of
HCNA on December 28, 1996 or of any equipment, fixtures or real
property of HCNA or any of its Subsidiaries for fair market value;
provided that (i) after giving effect to such sale or other
disposition, the aggregate book value of all assets so sold or disposed
of subsequent to December 28, 1996 (other than inventory sold in the
ordinary course of business) does not exceed $30,000,000 and not more
than $10,000,000 in the aggregate of such $30,000,000 shall be in
respect of the sale or other disposition of any property of members of
the Sifto Group and (ii) such sale or other disposition could not
reasonably be expected to have a Material Adverse Effect;
(c) the sale of inventory in the ordinary course of business;
(d) in the case of any Subsidiary of HCNA, the issuance or
sale of shares of such Subsidiary's Capital Stock to any Borrower or
any wholly owned Subsidiary of HCNA;
(e) the transfer or relinquishment of mineral lease acreage to
the extent required to stay within maximum allowable acreage or in
exchange for Public Land Act leases; provided that such transfer or
relinquishment could not reasonably be expected to have a Material
Adverse Effect;
(f) the extension or renewal of existing leases or new leases
covering nonindustrial commercial or residential property owned by HCNA
or its Subsidiaries; provided that any such new leases shall be on
commercially reasonable terms and could not reasonably be expected to
have a Material Adverse Effect;
(g) relinquishment for no consideration of federal rights of
way or portions thereof not needed for the operation of the business of
HCNA or any of its Subsidiaries;
(h) extension or renewal of existing leases or new leases with
public utilities serving HCNA or its Subsidiaries; provided that the
terms of such leases could not reasonably be expected to have a
Material Adverse Effect;
(i) the issuance or sale for cash of not more than $25,000,000
in the aggregate of preferred Capital Stock of HCNA, the rights,
designations and preferences for which are
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in form and substance reasonably satisfactory to the Majority Lenders;
(j) the sale, transfer or other disposition by Sifto of all or
any part of its assets to the Subsequent Borrower;
(k) the making of any Restricted Payment permitted under
subsection 10.9 or Investment permitted under subsection 10.10;
(l) the conveyance, sale, lease, assignment, transfer or other
disposition of any or all of its business, property or assets (upon
voluntary liquidation or otherwise) by any wholly owned Subsidiary of
HCNA to any Borrower, Guarantor or member of the Sifto Group; provided
that the aggregate book value of all assets so disposed of pursuant to
subsections 10.7(b), 10.7(c) and this subsection 10.8(l) to members of
the Sifto Group by any Person who is not a member of the Sifto Group in
any fiscal year of HCNA shall not exceed $3,000,000 and in the case of
any such disposition under this subsection 10.9(b) to any member of the
Sifto Group by any Person who is not a member of the Sifto Group, such
disposition shall be made for fair value and shall be made in
accordance with past business practice; and
(m) in the case of any Soda Ash Subsidiary, the issuance or
sale of up to 49% of the Capital Stock of such Soda Ash Subsidiary to
one or more Persons that are not Affiliates of HCNA in connection with
a joint venture arrangement with such Persons.
10.9 Limitation on Restricted Payments. Declare or pay any
dividend (other than dividends payable solely in common stock of a Borrower) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of HCNA or any warrants
or options to purchase any such Stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of HCNA or any of its Subsidiaries
(such declarations, payments, setting apart, purchases, redemptions,
defeasances, retirements, acquisitions and distributions being herein called
"Restricted Payments"), except:
(a) Restricted Payments made by Subsidiaries of HCNA to HCNA
or any Guarantor and Restricted Payments made by any member of the
Sifto Group to another member of the Sifto Group;
(b) during such time as no Default or Event of Default has
occurred and is continuing or would result therefrom, Restricted
Payments made by HCNA to HCG for the purpose of enabling HCG to pay its
actual operating expenses in the
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ordinary course of business in an aggregate amount not to exceed, in
any fiscal year of HCNA set forth below, the amount set forth opposite
such fiscal year:
Fiscal Year Amount
----------- ------
1997 $ 850,000
1998 892,500
1999 937,125
2000 984,000
2001 1,033,200
2002 1,084,900
provided that, in the event that any amounts otherwise available to be
paid to HCG pursuant to this subsection 10.9(b) may not be so paid
because of the occurrence and continuance of a Default or an Event of
Default, such amounts shall accrue (with such accrued amounts being
subordinated in right of payment to amounts owing hereunder and under
the Guarantees) and may be paid on a cumulative basis (without interest
thereon) at such later date when no Default or Event of Default has
occurred and is continuing or would result therefrom;
(c) Restricted Payments to HCG (in addition to those permitted
pursuant to subsection 10.9(b)) in an aggregate amount not to exceed at
any time the amount equal to (i) 25% of the cumulative Consolidated
Free Cash Flow of HCNA from December 28, 1996 through the date of the
then most recent financial statements of HCNA provided to the
Administrative Agent pursuant to subsection 9.1(a) or 9.1(b), as the
case may be, minus (ii) the amount of investments made during such
period pursuant to subsection 10.10(c); provided that the Restricted
Payment Allowance Condition shall be satisfied before and after giving
effect to the making of such Restricted Payment;
(d) during such time as no Default or Event of Default has
occurred and is continuing, Restricted Payments by HCNA in an aggregate
amount not to exceed $2,000,000 subsequent to December 28, 1996 in
respect of the purchase by HCNA of Capital Stock of HCG from management
of HCNA and its Subsidiaries to the extent that such repurchases are
required pursuant to an employee stock plan of HCNA, which plan shall
be in form and substance reasonably satisfactory to the Collateral
Agent and Administrative Agent;
(e) Restricted Payments pursuant to the Tax Sharing Agreement,
which Restricted Payments (i) shall be made not earlier than three
Business Days prior to the date upon which HCG's related liability to
the relevant Governmental Authority for tax (including, without
limitation, estimated taxes) is paid (or, if no such taxes are payable,
ordinarily would have been due) and (ii) shall not exceed the amount of
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income taxes which is to be paid by HCNA to HCG pursuant to such Tax
Sharing Agreement; and
(f) Restricted Payments in respect of the purchase by HCNA of
common stock of HCNA, which Restricted Payments may be made in any
combination of (i) cash constituting the proceeds of the sale (after
the Closing Date) of common stock of HCNA or (ii) common stock of HCNA.
10.10 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting all or substantially all of the assets of a business unit of, or
make any other investment in, any Person (such advances, loans, extensions of
credit, capital contributions, purchases and other investments being herein
called "Investments"), except:
(a) Investments in the form of extensions of trade credit in
the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) Investments by HCNA and its Subsidiaries not otherwise
permitted hereunder in Capital Stock and assets of Persons other than
Guarantors in an amount not to exceed at any time, in the aggregate
with all other Investments made by HCNA and its Subsidiaries permitted
by this subsection 10.10(c), the amount equal to (i) 25% of the
cumulative Consolidated Free Cash Flow of HCNA from December 28, 1996
through the date of the then most recent financial statements of HCNA
provided to the Administrative Agent pursuant to subsection 9.1(a) or
9.1(b), as the case may be, minus (ii) the amount of Restricted
Payments made during such period pursuant to subsection 10.9(c);
provided that (w) the business being acquired is substantially the same
as, or directly related to, that in which HCNA or any of its
Subsidiaries presently is engaged, (x) for purposes of this subsection
10.10(c), the aggregate amount of any such Investment (i) shall
include, without limitation, the amount of Indebtedness (including,
without limitation, Guarantee Obligations) and other liabilities
assumed or forgiven (and, in the case of any acquisition of more than
50% of the issued and outstanding Capital Stock of a Person (including,
without limitation, acquisitions by merger), with any Indebtedness and
other liabilities which remain on the consolidated balance sheet of
such acquired Person and its consolidated Subsidiaries after giving
effect to such acquisition being deemed to be assumed) and the fair
market value of any non-cash consideration and (ii) shall not exceed
10% of the book value of the assets of HCNA and its Subsidiaries on a
consolidated basis (as reflected on the most recent consolidated
balance sheet of HCNA and its Subsidiaries delivered pursuant to
subsection 9.1(a) or
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9.1(b), as the case may be, prior to the date upon which such
acquisition was consummated), (y) the Restricted Payment Allowance
Condition shall be satisfied before and after giving effect to the
making of such Investment and (z) HCNA and its Subsidiaries shall have
made available to the Administrative Agent and the Lenders at least 30
days prior to the consummation of such Investment all material due
diligence information provided to or prepared by HCNA and its
Subsidiaries in connection therewith;
(d) Investments in joint ventures in which HCNA or any of its
Subsidiaries holds (after giving effect to such Investment) Capital
Stock, which investments shall not, in the aggregate, exceed the amount
equal to (i) the Permitted Investment Amount immediately prior to the
making of such Investment plus (ii) the aggregate amount of any
additional Investments in such joint ventures which is treated as a
Capital Expenditure for purposes of this Agreement (and is made in
compliance with the provisions of subsection 10.5);
(e) Investments by HCNA or any of its Subsidiaries in HCNA or
any of its Subsidiaries (including, without limitation, the Borrowers);
provided that the aggregate amount of Investments made by Guarantors
pursuant to this subsection 10.10(e) in Subsidiaries of HCNA which are
not Guarantors (other than the Sifto Group, as to which this proviso
shall not apply) in the aggregate with all Indebtedness owing to
Guarantors pursuant to subsection 10.2(e) by Subsidiaries which are not
then Guarantors (other than members of the Sifto Group) and the
aggregate amount of all Guarantee Obligations then outstanding pursuant
to subsection 10.4(h), shall not exceed the amount equal to the
Permitted Investment Amount immediately after giving effect to the
making of such Investment;
(f) Investments in the form of loans and advances to employees
of HCNA and its Subsidiaries for travel, entertainment and relocation
expenses in the ordinary course of business in an aggregate amount for
HCNA and its Subsidiaries not to exceed $1,000,000 at any one time
outstanding;
(g) Investments permitted pursuant to subsection 10.11(c);
(h) Investments by members of the Sifto Group which are not
otherwise permitted hereunder and are permitted pursuant to the
Canadian Credit Agreement; and
(i) Investments by NACC of all or part of its soda ash
business in a Soda Ash Subsidiary.
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10.11 Limitation on Modifications of Debt Instruments and
Other Agreements; Optional Payments of Debt Instruments. (a) Amend, modify,
restate, supplement or change any of the terms of the Public Debt or of the
indentures governing the Public Debt, other than any such amendment,
modification or change which, (i) pursuant to clause (4), (5) or (6) of Section
901 of any indenture governing the Public Debt (or any comparable clauses of any
indenture governing Permitted Refinancing Indebtedness in respect of the Public
Debt) could be effected by the Trustee thereunder (and as defined therein)
without a vote of the holders of such Public Debt and (ii) could not reasonably
be expected to materially adversely affect the Administrative Agent, the
Collateral Agent or the Lenders.
(b) Amend, modify, restate, supplement or change (i) any of
the terms of the Tax Sharing Agreement or Services Agreement or (ii) any of the
terms of the Stockholders' Agreement in any respect which (in the case of this
clause (ii) only) could be adverse to the interests of the Administrative Agent,
the Collateral Agent or the Lenders or which (in the case of clause (i) or (ii))
could reasonably be expected to increase the obligations of HCNA or any of its
Subsidiaries thereunder.
(c) Make any optional payment or prepayment on, or redemption
or repurchase of, the Public Debt (including, without limitation, by way of an
"Offer to Purchase" pursuant to, and as defined in, the indentures governing the
Public Debt), in each case other than pursuant to the incurrence of Permitted
Refinancing Indebtedness; provided that, so long as no Default or Event of
Default has occurred and is continuing or would result therefrom, HCNA and Sifto
may collectively repurchase (other than with the proceeds of Loans hereunder):
(i) not more than $30,000,000 in aggregate principal amount of
the Senior Secured Notes and the Sifto Notes;
(ii) an additional amount of Senior Secured Notes and Sifto
Notes, provided that (A) the Debt Purchase Conditions are then
satisfied and (B) the aggregate consideration paid by HCNA and its
Subsidiaries for such Senior Secured Notes and Sifto Notes does not
exceed $25,000,000; and
(iii) an additional amount of Public Debt (including, without
limitation, Senior Subordinated Notes) not to exceed the amount of net
cash proceeds received subsequent to the Closing Date by HCNA (by way
of capital contribution in the event of a public offering of the
Capital Stock of HCG) from public offerings of the Capital Stock of HCG
or HCNA.
(d) Amend, modify, restate, supplement or change any material
terms of the Sale/Leaseback Documents.
10.12 Limitation on Transactions with Affiliates. Enter into
any transaction (other than the transactions
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contemplated by the Tax Sharing Agreement, the Services Agreement and the
Stockholders' Agreement, including, without limitation, any purchase, sale,
lease or exchange of property or the rendering of any service, with any
Affiliate unless such transaction (a) is otherwise permitted under this
Agreement, (b) is in the ordinary course of HCNA's or such Subsidiary's
business, (c) is upon terms no less favorable to HCNA or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person which is not an Affiliate (it being understood that the approval by the
independent directors of HCNA of a transaction shall be presumptive evidence
that such transaction is no less favorable than such an arm's length
transaction) and (d) could not reasonably be expected to have a detrimental
effect upon HCNA or any of its Subsidiaries. Notwithstanding the foregoing, any
Affiliate of HCNA who is an individual may serve as a director, officer,
employee or consultant of HCNA or any of its Subsidiaries and receive reasonable
compensation or indemnification in connection with his or her services in such
capacity, plus reimbursement of reasonable expenses, including travel and
entertainment expenses, directly relating to the business of HCNA or any of its
Subsidiaries, provided, that compensation per annum and indemnification to any
such individual in excess of $250,000 (i) shall be approved by the compensation
committee of the Board of Directors of HCNA or a majority of the directors of
the Board of Directors of HCNA and (ii) may only be paid to individuals holding
the title of Chairman or Vice Chairman.
10.13 Limitation on Changes in Fiscal Year. Permit the fiscal
year of HCNA or of any Borrower (as defined herein and in the Canadian Credit
Agreement) to end on a day other than the last Saturday in March.
10.14 Limitation on Negative Pledge Clauses. Enter into with
any Person any agreement which prohibits or limits the ability of any Borrower
or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired; provided that nothing contained in this subsection 10.14 shall
prohibit HCNA or any of its Subsidiaries from entering into this Agreement, any
other Loan Document, the Canadian Credit Agreement, any other Loan Document (as
defined therein) or any industrial revenue bonds, purchase money mortgages or
Financing Leases permitted by this Agreement (in which cases, any prohibition or
limitation on Liens contained therein shall only be effective against the assets
financed thereby) or the Public Debt or the Sale/Leaseback Documents.
10.15 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those businesses
in which the Borrowers and their Subsidiaries are engaged on the date of this
Agreement or which are directly related thereto.
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10.16 Payments in Respect of Accounts. (a) Instruct or
otherwise permit any Person obligated under any of the Accounts (as defined in
the Security Agreements) to remit any payment whether by check, wire transfer or
otherwise, to any account or address other than a lock box, concentration or
similar account established by the Collateral Agent pursuant to a Lock Box
Agreement.
(b) Request any withdrawals from any concentration account in
an amount which is in excess of the amount reasonably estimated by the relevant
Borrower as being necessary to finance its immediate cash requirements in the
ordinary course of business, with each request for a withdrawal from any such
concentration account by any Borrower being deemed to be a representation and
warranty by such Borrower that such request complies with the provisions of this
subsection 10.16(b).
10.17 Maintenance of Bank Accounts. (a) Maintain any material
bank accounts (other than the Master Concentration Account created pursuant to
(and as defined in) the Security Agreements) in the United States (including,
without limitation, any such accounts which could reasonably be deemed to be
"principal operating accounts") with a Person other than The Chase Manhattan
Bank or a Lender (or affiliate thereof).
(b) Maintain any material bank accounts (other than the Lock
Box Accounts created pursuant to (and as defined in) the Lock Box Agreements
provided pursuant to (and as defined in) the Canadian Credit Agreement) in
Canada (including, without limitation, any such accounts which could reasonably
be deemed to be "principal operating accounts") with a Person other than a
Canadian "Schedule I" bank or a Lender (or affiliate thereof).
(c) Maintain any material bank accounts outside of the United
States and Canada (including, without limitation, any such accounts which could
reasonably be deemed to be "principal operating accounts") with a Person other
than a Lender.
(d) During such time as any Loans or L/C Obligations which are
not cash collateralized are owing hereunder, maintain any material balances in
any deposit account with a bank or other financial institution in excess of the
amounts required to finance immediate cash requirements in the ordinary course
of business, except to the extent that such balances are directly attributable
to any conveyance, sale, lease, assignment, transfer or other disposal of any of
the property, business or assets (other than property, business or assets
constituting Collateral) of HCNA or any of its Subsidiaries permitted pursuant
to subsection 10.8.
10.18 Restriction on Cash Balances. Except to the extent that
(a) the indentures governing the Public Debt specifically otherwise require or
(b) no Loans or Acceptances are then outstanding (and, in the case of
Acceptances, not cash
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collateralized) under (and as defined in) the Canadian Credit Agreement, permit
any member of the Sifto Group to hold any cash or Cash Equivalents in excess of
the amounts required to finance immediate cash requirements in the ordinary
course of business.
10.19 Subsidiaries. Create, acquire or otherwise suffer to
exist any Subsidiary of HCNA (other than Subsidiaries of HCNA existing on the
date hereof, ▇▇▇▇▇▇▇ Domestic Water Company, the Sifto Group, any Soda Ash
Subsidiary and any Insignificant Subsidiary), unless either (a) such Subsidiary
has executed and delivered to the Collateral Agent a guarantee, substantially in
the form of Exhibit C, together with such certificates, approvals, legal
opinions and other documents as the Administrative Agent or the Collateral Agent
reasonably may request or (b) the Borrower which is to be the corporate parent
of such Subsidiary presents evidence to the Lenders that the making of such
guarantee by such Subsidiary could reasonably be expected to have a Material
Adverse Effect, and the holders of at least 75% of the Commitments (in their
sole discretion) agree in writing that such guarantee shall not be required.
10.20 Amendments to Charter and By-Laws. Amend, supplement or
otherwise modify its Certificate of Incorporation or by-laws.
10.21 Limitation on Dividend Restrictions. Enter into with any
Person any agreement which prohibits or limits the ability of any member of the
Sifto Group to make Restricted Payments in respect of its Capital Stock.
SECTION 11. GUARANTEES
11.1 Guarantees. To induce the Administrative Agent, the
Collateral Agent and the Lenders to execute and deliver this Agreement and to
make the extensions of credit hereunder, and in consideration thereof, HCNA and
each Borrower hereby, jointly and severally and unconditionally and irrevocably,
guarantee to the Administrative Agent, the Collateral Agent and each Lender (and
their respective successors and assigns) the prompt and complete payment when
due (whether at the stated maturity, by acceleration or otherwise, but subject
to applicable grace periods contained herein) of the Obligations. Anything
herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of any Borrower under this Section 11 shall in no event exceed
the amount which can be guaranteed by such Borrower under applicable federal and
state laws relating to the insolvency of debtors.
11.2 No Subrogation, Contribution, Reimbursement or Indemnity.
(a) Notwithstanding anything to the contrary contained in this Agreement,
neither HCNA nor any Borrower shall be entitled to be subrogated to any of the
rights of the Administrative Agent, the Collateral Agent or any Lender against
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any other Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent, the Collateral
Agent or any Lender for the payment of the Obligations, nor shall HCNA or any
Borrower seek or be entitled to seek any contribution or reimbursement from any
other Borrower or any other guarantor (including, without limitation, HCNA) in
respect of payments made by HCNA or such Borrower hereunder, until all amounts
owing to the Administrative Agent, the Collateral Agent and the Lenders by each
Borrower on account of the Obligations are paid in full and the Commitments are
terminated.
(b) So long as the Obligations remain outstanding, if any
amount shall be paid by or on behalf of any Borrower to any other Borrower or
HCNA on account of any of the rights waived in subsection 11.2, such amount
shall be held by such Borrower or HCNA (as the case may be) in trust, segregated
from other funds of such Borrower or HCNA, and shall, forthwith upon receipt by
such Borrower or HCNA (as the case may be), be turned over to the Collateral
Agent in the exact form received by such Borrower or HCNA (duly indorsed by such
Borrower or HCNA to the Collateral Agent, if required), to be applied against
the Obligations, whether matured or unmatured, as provided in subsection 6.11.
(c) The provisions of this subsection 11.2 shall survive the
termination of the guarantees contained in this Section 11, the payment in full
of the Obligations and the termination of the Commitments.
11.3 Modification of Obligations. HCNA and each Borrower
hereby consents that, without the necessity of any reservation of rights against
it and without notice to or further assent by it, any demand for payment of any
of the Obligations made by the Administrative Agent, the Collateral Agent or any
Lender may be rescinded by the Administrative Agent, the Collateral Agent or
such Lender, respectively, and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent, the Collateral Agent or such Lender and this Agreement
(other than the obligations specifically incurred by HCNA and the Borrowers
under this Section 11), any Note, any Application, any Letter of Credit, any
collateral security document or other guarantee or document in connection
therewith may (in accordance with the provisions of this Agreement, including,
without limitation, subsection 14.1) be amended, modified, supplemented or
terminated, in whole or in part, as any such Administrative Agent, the
Collateral Agent or such Lender may deem advisable from time to time, and any
collateral security or guarantee or right of offset at any time held by the
Administrative Agent, the Collateral Agent or any Lender for the payment of the
Obligations
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may be sold, exchanged, waived, surrendered or released, all without the
necessity of any reservations of rights against HCNA or any Borrower and without
notice to or further assent by HCNA or any Borrower (in respect of its guarantee
hereunder) each of which will remain bound hereunder notwithstanding any such
renewal, extension, supplement, termination, sale, exchange, waiver, surrender
or release. None of the Administrative Agent, the Collateral Agent nor any
Lender shall have any obligation to protect, secure, perfect or insure any
collateral security document or property subject thereto at any time held as
security for the Obligations. When making any demand hereunder against HCNA or
any Borrower (in respect of its Guarantee hereunder), the Administrative Agent,
the Collateral Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the relevant Borrower (in its capacity as a borrower)
or upon any other guarantor, and any failure by the Administrative Agent, the
Collateral Agent or such Lender to make any such demand or to collect any
payments from HCNA or any such Borrower or any such other guarantor or any
release of a Borrower or such other guarantor shall not relieve HCNA or any
other Borrower (in respect of its guarantee hereunder) of its obligations and
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Administrative Agent, the
Collateral Agent or any Lender against HCNA or any Borrower. For purposes of
this subsection 11.3, the term "demand" shall include the commencement and
continuance of any legal proceedings.
11.4 Waiver. Each of HCNA and each Borrower hereby waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent, the
Collateral Agent or any Lender upon the guarantees contained in this Section 11
or acceptance of the guarantees contained in this Section 11, and the
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred in reliance upon the guarantees contained in this Section
11, and all dealings between the Borrowers or HCNA and the Administrative Agent,
the Collateral Agent or the Lenders shall likewise be conclusively presumed to
have been had or consummated in reliance upon the guarantees contained in this
Section 11. HCNA and each Borrower hereby waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon HCNA
or such Borrower with respect to the Obligations. This Section 11 shall be
construed as continuing, absolute and unconditional guarantees of payment
without regard to the validity, regularity or enforceability of this Agreement,
the Notes, any Application, any Letter of Credit, any other Loan Document, any
of the Obligations, or any collateral security or guarantee therefor or right of
offset with respect thereto at any time or from time to time held by the
Administrative Agent, the Collateral Agent or any Lender and without regard to
any defense, set-off or counterclaim which may at any time be available to or be
asserted by HCNA or any Borrower against the Administrative Agent, the
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Collateral Agent or any Lender, or by any other circumstance whatsoever (with or
without notice to or knowledge of HCNA or any Borrower) (other than payment in
full of the Obligations) which constitutes, or might be construed to constitute,
an equitable or legal discharge of any Borrower for the Obligations or of HCNA
or any Borrower under the guarantees contained in this Section 11 in bankruptcy
or in any other instance, and the obligations and liabilities of HCNA and the
Borrowers hereunder shall not be conditioned or contingent upon the pursuit by
the Administrative Agent, the Collateral Agent or any Lender at any time of any
right or remedy against any Borrower or any other Person which may be or become
liable in respect of all or any part of the Obligations or against any
collateral security or guarantee therefor or right of offset with respect
thereto. The guarantees contained in this Section 11 shall remain in full force
and effect and be binding in accordance with and to the extent of their terms
upon HCNA and each Borrower (and any successors and assigns of either thereof)
and shall inure to the benefit of the Administrative Agent, the Collateral Agent
and the Lenders and their respective successors and assigns, until (subject to
subsection 11.5) all the Obligations and the obligations of HCNA and the
Borrowers under this Section 11 shall have been satisfied by payment in full,
notwithstanding that from time to time during the term of this Agreement the
Borrowers may be free from any Obligations.
11.5 Reinstatement. Each of the guarantees contained in this
Section 11 shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent,
the Collateral Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of a Borrower, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, a Borrower or any substantial part of its property or otherwise,
all as though such payments had not been made.
11.6 Payment of Obligations. HCNA and each Borrower hereby
guarantees that the Obligations will be paid to the Collateral Agent for the
account of the Lenders, the Collateral Agent or the Administrative Agent
entitled thereto without set-off or counterclaim at the office of the Collateral
Agent specified in subsection 14.3.
SECTION 12. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Any Borrower shall fail to pay (i) any principal of any
Loan or any L/C Obligation when due in accordance with the terms
thereof or hereof or (ii) any interest on any
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Loan, any commitment fee or any fee or commission relating to any
Letter of Credit hereunder within three days (in the case of this
clause (ii) only) after any such interest or other amount becomes due
in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by any
Borrower or any other Loan Party herein or in any other Loan Document
or which is contained in any certificate, document or financial or
other statement furnished by it at any time under or in connection with
this Agreement or any such other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed
made; or
(c) Any Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 10 of
this Agreement or any covenant contained in Section 4.3, 4.4 or
subsection 4.5(a) of a Security Agreement; or
(d) Any Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in clauses
(a) through (c) of this Section 12), and such default shall continue
unremedied for a period of 30 days; or
(e) Any Event of Default shall have occurred and be continuing
under the Canadian Credit Agreement; or
(f) (i) (A) HCNA or any of its Subsidiaries shall default in
any payment of principal of or interest on any Indebtedness (other than
Indebtedness owing under this Agreement or the Canadian Credit
Agreement) or in the payment of any Guarantee Obligation (other than
Guarantee Obligations under this Agreement or the Canadian Credit
Agreement), beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (B) HCNA or any of its Subsidiaries shall
default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or Guarantee Obligation or
contained in any instrument or agreement evidencing, securing or
relating thereto; or (C) any other event shall occur or condition
exist, and (ii) the effect of such default or other event or condition
is to immediately cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to immediately cause such Indebtedness
to become due prior to its stated maturity or such Guarantee Obligation
to become payable (regardless of whether any such holder or
beneficiary, as the case may be, has so caused
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such Indebtedness to become due or such Guarantee Obligation to become
payable); provided that such default or other event or condition shall
not constitute an Event of Default hereunder unless the sum of (x) the
aggregate amount of all such Indebtedness which has or could become due
prior to its stated maturity and (y) the aggregate amount of such
Guarantee Obligations which have or could become payable as a result of
all such defaults or other events or conditions which are then
outstanding, exceeds $5,000,000; or
(g) (i) HCNA or any of its Subsidiaries shall commence any
case, proceeding or action, or (in the case of any Canadian Subsidiary)
file a notice of intention to commence any of the foregoing, (A) under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or HCNA or any of its Subsidiaries
shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against HCNA or any of its Subsidiaries
any case, proceeding or action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against HCNA or any of its Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) HCNA or any of
its Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) HCNA or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due or
otherwise be insolvent under applicable law of any jurisdiction; or
(h) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of any Borrower or any Commonly
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Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Aggregate
Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) any Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Aggregate Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization
of, a Multiemployer Plan or (vi) any other event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to have
a Material Adverse Effect; or
(i) One or more judgments or decrees shall be entered against
HCNA or any of its Subsidiaries involving in the aggregate a liability
(to the extent not paid or fully covered by insurance provided by a
carrier who has acknowledged in writing its liability under the
relevant policy) of HCNA and its Subsidiaries of $1,000,000 or more,
and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
(j) (i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect, or any Borrower or any other
Loan Party which is a party to any of the Security Documents shall so
assert or (ii) the Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported
to be created thereby; or
(k) Any Guarantee (including, without limitation, any
Guarantee pursuant to Section 11 of this Agreement) shall cease, for
any reason, to be in full force and effect or any Guarantor shall so
assert; or
(l) (i) A "Change of Control" under (and as defined in) any
indenture governing the Public Debt shall have occurred or (ii) members
of the senior management of HCNA and the Guarantors shall own, in the
aggregate, less than 30% (or such higher percentage as may then be
necessary to elect a majority of the directors of HCNA) of the issued
and outstanding Voting Stock of HCG or (iii) any Person or "group"
(within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended) shall have acquired beneficial
ownership of a larger percentage of the
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Voting Stock of HCG than is then beneficially owned by the members of
senior management of HCNA and the Guarantors; or
(m) (i) HCG shall cease to own, beneficially or of record, 80%
of the issued and outstanding Capital Stock of HCNA or (ii) HCNA or any
of its wholly owned Subsidiaries shall cease to own, beneficially and
of record, 100% of the issued and outstanding Capital Stock of each
Borrower and each Guarantor existing on the Closing Date (other than
HCNA);
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of Section 12(g) above with respect to any Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) and the Loans shall
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) with the
consent of the Aggregate Required Lenders, the Administrative Agent may, or upon
the request of the Aggregate Required Lenders, the Administrative Agent shall,
by notice to the Borrowers declare the Commitments to be limited, restricted or
terminated forthwith, whereupon the Commitments shall immediately so be limited,
restricted or terminated; and (ii) with the consent of the Aggregate Required
Lenders, the Administrative Agent may, or upon the request of the Aggregate
Required Lenders, the Administrative Agent shall, by notice to the Borrowers,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement (including, without limitation, all amounts
of L/C Obligations, whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required thereunder) and
the Loans to be due and payable forthwith, whereupon the same shall immediately
become due and payable (the date of any termination or declaration referred to
in this paragraph, the "Acceleration Date").
Except as expressly provided above in this Section 12,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION 13. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
13.1 Appointment. Each Lender hereby irrevocably designates
and appoints (a) GE Capital as its Administrative Agent and its Collateral Agent
under this Agreement and the other Loan Documents. Each such Lender irrevocably
authorizes GE Capital (as its Administrative Agent or its Collateral Agent, as
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the case may be) to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent or the
Collateral Agent, as the case may be, by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, neither the Administrative Agent nor the Collateral Agent shall
have any duties or responsibilities, except those expressly set forth herein,
nor any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent or the Collateral Agent.
13.2 Delegation of Duties. (a) Each of the Administrative
Agent and the Collateral Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Neither the Administrative Agent nor the Collateral Agent shall be
responsible for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.
(b) The Lenders hereby designate the Collateral Agent to act,
and the Collateral Agent hereby accepts such designation to act, as the Lenders'
nominee and agent to hold for the Lenders' benefit all Collateral that may from
time to time be in the possession or control of the Collateral Agent, including
(to the extent authorized under the Security Documents), without limitation, all
lock box, cash collateral and regular or special deposit or collateral accounts
containing from time to time proceeds of, or otherwise constituting, Collateral.
(c) Subject to the provisions of subsections 13.8 and 14.13
and the other terms hereof, each of the Lenders hereby irrevocably authorizes
the Collateral Agent to take such action for the benefit of the Lenders under
the provisions of the Security Documents and to exercise such powers and
remedies and to perform such duties hereunder and thereunder as are specifically
provided or delegated to or required of the Collateral Agent by the terms hereof
and thereof and such other powers as are reasonably incidental thereto, and
undertakes not to take any action on its own with respect to the Security
Documents or the Collateral.
13.3 Exculpatory Provisions. Neither the Administrative Agent
nor the Collateral Agent (nor any of the officers, directors, employees, agents,
attorneys-in-fact or Affiliates of either) shall be (i) liable for any action
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or any other Loan Document (except for its or
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such Person's own gross negligence or willful misconduct) or (ii) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by any Guarantor, any Borrower or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent or the Collateral Agent under or in connection with,
this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the Notes or any other Loan Document or for any failure of any Guarantor or any
Borrower to perform its obligations hereunder or thereunder. Neither the
Administrative Agent nor the Collateral Agent shall be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of any Guarantor
or any Borrower.
13.4 Reliance by Administrative Agent and Collateral Agent.
Each of the Administrative Agent and the Collateral Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to any Guarantor or any of the Borrowers),
independent accountants and other experts selected by the Administrative Agent
or the Collateral Agent, as the case may be. Each of the Administrative Agent
and the Collateral Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent (with a
copy delivered to the Collateral Agent). Each of the Administrative Agent and
the Collateral Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Aggregate Required Lenders, the
Required Lenders or the Majority Lenders, as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each of the Administrative Agent and the
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the Notes and the other Loan
Documents in accordance with a request of the Aggregate Required Lenders (or
such other number of Lenders as may be required pursuant to the Loan Documents),
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Notes.
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13.5 Notice of Default. Neither the Administrative Agent nor
the Collateral Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent or the Collateral Agent, as the case may be, has received
notice from a Lender or a Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders and the Collateral
Agent. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the requisite
number of Lenders hereunder and, to the extent required hereby, the requisite
number of Lenders under (and as defined in) the Canadian Credit Agreement, and
the Collateral Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the requisite number of
Lenders hereunder and, to the extent required hereby, the requisite number of
Lenders under (and as defined in) the Canadian Credit Agreement (which, to the
extent provided herein or in the relevant Security Document, may be no Lenders);
provided that unless and until it shall have received such directions, the
Administrative Agent or the Collateral Agent, as the case may be, may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
13.6 Non-Reliance on Administrative Agent, Collateral Agent
and Other Lenders. Each Lender expressly acknowledges that neither the
Administrative Agent nor the Collateral Agent (nor any of the officers,
directors, employees, agents, attorneys-in-fact or Affiliates of either) has
made any representations or warranties to it and that no act by the
Administrative Agent or the Collateral Agent hereinafter taken, including any
review of the affairs of any of the Guarantors or any of the Borrowers, shall be
deemed to constitute any representation or warranty by the Administrative Agent
or the Collateral Agent to any Lender. Each Lender represents to the
Administrative Agent and the Collateral Agent that it has, independently and
without reliance upon the Administrative Agent, the Collateral Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of each
Guarantor and each Borrower and made its own decision to make its extensions of
credit hereunder and enter into this Agreement. Each Lender also represents that
it will, independently and without reliance upon the Administrative Agent, the
Collateral Agent 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 analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it
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deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Guarantors and of the
Borrowers. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent or the Collateral Agent
hereunder, neither the Administrative Agent nor the Collateral Agent, as the
case may be, shall have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness of any
Guarantor or any Borrower which may come into the possession of the
Administrative Agent or the Collateral Agent (or any of the officers, directors,
employees, agents, attorneys-in-fact or Affiliates of either).
13.7 Indemnification. The Lenders agree to indemnify each of
the Administrative Agent and the Collateral Agent (to the extent not reimbursed
by the Borrowers and without limiting the obligation of the Borrowers to do so),
ratably according to their respective Commitments Percentages in effect on the
date on which indemnification is sought under this subsection 13.7 (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with their Commitments Percentages immediately prior to such date), 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 (including, without limitation, at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Administrative Agent or the Collateral Agent, as the case may be, in
any way relating to or arising out of this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent or the Collateral Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the Administrative Agent's or the Collateral Agent's, as the case may be,
gross negligence or willful misconduct. The agreements in this subsection 13.7
shall survive the payment of the Notes and all other amounts payable hereunder.
13.8 Administrative Agent and Collateral Agent. Each of the
Administrative Agent and the Collateral Agent (and the Affiliates of each) may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrowers as though it were not the Administrative Agent or the
Collateral Agent, as the case may be, hereunder and under the other Loan
Documents. With respect to its Loans made or renewed by it and any Note issued
to it and with respect to any Letter of Credit issued or participated in by it,
each of the Administrative Agent
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and the Collateral Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not the Administrative Agent or the Collateral Agent, as the
case may be, and the terms "Lender" or "Lenders", shall include each of the
Administrative Agent and the Collateral Agent.
13.9 Successor Administrative Agent and Collateral Agent. Each
of the Administrative Agent and the Collateral Agent may resign as
Administrative Agent or Collateral Agent, as the case may be, upon 10 days'
notice to the Lenders and the Borrowers. If the Administrative Agent or the
Collateral Agent shall so resign, then the Majority Lenders shall appoint from
among the Lenders a successor administrative agent or collateral agent, as the
case may be, for the Lenders, which successor administrative agent or collateral
agent shall be subject to the approval of the Borrowers (which approval shall
not be unreasonably withheld), whereupon such successor administrative agent or
collateral agent shall succeed to the rights, powers and duties of the
Administrative Agent or the Collateral Agent, as the case may be, and the term
"Administrative Agent" or "Collateral Agent" shall mean such successor
administrative agent or collateral agent effective upon such appointment and
approval, and the rights, powers and duties of the former Administrative Agent
or Collateral Agent (in its capacity as such), as the case may be, shall be
terminated, without any other or further act or deed on the part of such former
Administrative Agent or Collateral Agent or any of the parties to this Agreement
or any holders of the Notes. The resignation of the Administrative Agent or the
Collateral Agent shall not be effective until a successor administrative agent
or a successor collateral agent, as the case may be, shall have been so
appointed and approved. After any retiring Administrative Agent's or Collateral
Agent's resignation as such, the provisions of this Section 13 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent or Collateral Agent, as the case may be, under this
Agreement and the other Loan Documents.
SECTION 14. MISCELLANEOUS
14.1 Amendments and Waivers. Neither this Agreement, any
Revolving Credit Note or any other Loan Document, nor any terms hereof or
thereof may be amended, restated, supplemented or modified except in accordance
with the provisions of this subsection 14.1. The Aggregate Required Lenders may,
or, with the written consent of the Aggregate Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrowers
written amendments, supplements or modifications hereto and to the Revolving
Credit Notes and the other Loan Documents for the purpose of adding any
provisions to this Agreement, the Revolving Credit Notes or the other Loan
Documents or changing in any manner the rights of the Lenders, or any
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Borrower hereunder or thereunder or (b) waive, on such terms and conditions as
the Aggregate Required Lenders or the Administrative Agent, as the case may be,
may specify in such instrument, any of the requirements of this Agreement, the
Revolving Credit Notes or the other Loan Documents or any Default or Event of
Default and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall:
(i) reduce the amount or extend the scheduled date of
maturity of any Revolving Credit Note or of any installment thereof, or
reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof or extend the
expiration date of any Lender's Commitment, in each case without the
consent of each Lender directly affected thereby; or
(ii) amend, modify or waive any provision of this
subsection 14.1 or reduce the percentage specified in the definition of
Aggregate Required Lenders, Required Lenders or Majority Lenders, or
consent to the assignment or transfer by any Borrower of any of its
rights and obligations under this Agreement and the other Loan
Documents or release all or substantially all of the Collateral or
increase the amount of any Lender's Commitment or increase the
percentages set forth as the advance rates in the definition of
"Borrowing Base" contained in subsection 1.1, in each case without the
written consent of all the Lenders; or
(iii) amend, modify or waive any provision of Section 13
or any other provision of this Agreement governing the rights or
obligations of the Administrative Agent or the Collateral Agent without
the written consent of the then Administrative Agent or the then
Collateral Agent, as the case may be; or
(iv) amend, modify or waive any provision of Section 3
or any other provision of this Agreement governing the rights or
obligations of any L/C Issuer without the written consent of each L/C
Issuer that (1) is a Lender and (2) is adversely affected by such
amendment, modification or waiver; or
(v) amend, modify or waive any provision of Section 5
or any other provision of this Agreement governing the rights or
obligations of the Swing Line Lender without the written consent of the
Swing Line Lender.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrowers, the
Lenders, the Administrative Agent, the Collateral Agent and all future holders
of the Loans. In the case of any waiver, the Borrowers, the Lenders, the
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Collateral Agent and the Administrative Agent shall be restored to their former
position and rights hereunder and under the outstanding Revolving Credit Notes
and any other Loan Documents, and any Default or Event of Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
14.2 [INTENTIONALLY OMITTED]
14.3 Notices. All notices, requests, demands and other
communications provided for hereunder to or upon the respective parties hereto
to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered by hand or by overnight courier or 7 days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrowers, the Collateral
Agent, the Administrative Agent and HCNA, and as set forth in Schedule I in the
case of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
The Borrowers and HCNA: ▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President Finance
and Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Winthrop, Stimson, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Collateral Agent and the
Administrative Agent (other than
borrowing, prepayment or issuance
notices with respect to
Loans or Letters of Credit):
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ Account Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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Attention: Region Counsel--Commercial
Finance
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent
(borrowing, prepayment or issuance
notices with respect to Loans or
Letters of Credit only): General Electric Capital
Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ Portfolio Analyst
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇/7817
provided that any notice, request or demand to or upon the Administrative Agent,
the Collateral Agent or the Lenders pursuant to subsection 2.5, 6.2, 6.3, 6.6,
6.11(b) or 6.15 shall not be effective until received.
14.4 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Collateral Agent, the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder or under the other Loan Documents shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
14.5 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the Notes and the making of the Loans hereunder.
14.6 Payment of Expenses and Taxes. The Borrowers agree to:
(a) pay or reimburse each of the Administrative Agent and the
Collateral Agent for all of their reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of this
Agreement, the Notes and the other Loan Documents and any other documents
prepared in connection herewith or therewith, and the
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consummation of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of the several counsel
to the Administrative Agent and the Collateral Agent;
(b) pay or reimburse the Administrative Agent and (only to the
extent that such amendment, supplement, modification or administration directly
relates to (x) the Collateral, (y) the responsibilities of the Collateral Agent
in its capacity as such or (z) the occurrence and continuance of a Default or an
Event of Default) the Collateral Agent for all of their reasonable out-of-pocket
costs and expenses incurred in connection with any amendment, supplement or
modification to, and the administration of, this Agreement, the Notes and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and (only to the extent that such amendment, supplement,
modification or administration directly relates to (x) the Collateral, (y) the
responsibilities of the Collateral Agent in its capacity as such or (z) the
occurrence and continuance of a Default or an Event of Default) counsel to the
Collateral Agent;
(c) pay or reimburse the Lenders, the Collateral Agent and the
Administrative Agent for all of their reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the Notes, the other Loan Documents and any such other documents, and
for any reasonable costs and expenses incurred in connection with any
proceedings under any bankruptcy, reorganization, compromise, arrangement,
insolvency, restructuring, debt, dissolution or liquidation or similar law;
provided that, in the case of fees and expenses of counsel to the Lenders, the
Collateral Agent and the Administrative Agent, the Borrowers shall be obligated
under this subsection 14.6(c) to pay only the reasonable fees and disbursements
of a single special counsel and any necessary local counsel to the
Administrative Agent, the Collateral Agent and the Lenders collectively (or in
the event that any such enforcement or preservation of rights involves matters
in which the interests of the Administrative Agent, the Collateral Agent and the
Lenders are materially distinct, a single special counsel and any necessary
local counsel to the Administrative Agent, a single special counsel and any
necessary local counsel to the Collateral Agent and a single special counsel and
any necessary local counsel to the Lenders taken as a whole), provided that in
each case the foregoing obligations shall apply to no more than one local
counsel per jurisdiction;
(d) pay, indemnify, and hold each Lender, the Collateral Agent
and the Administrative Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes (other than income taxes), if any, which
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may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the Notes, the other Loan
Documents and any such other documents prepared in connection herewith or
therewith;
(e) subject to the foregoing provisions of this subsection
14.6 with respect to the payment of costs, expenses and disbursements for the
matters expressly specified therein, pay, indemnify, and hold each Lender, the
Collateral Agent and the Administrative Agent harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, and related reasonable costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the Notes, the other Loan
Documents and any such other documents prepared in connection herewith or
therewith, including, without limitation, any of the foregoing relating to the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of any Borrower, any of its Subsidiaries or any of
the Properties (all the foregoing in this clause (e), collectively, the
"indemnified liabilities"), provided, that no Borrower shall have any obligation
hereunder to the Administrative Agent, the Collateral Agent or any Lender with
respect to indemnified liabilities arising from (i) the gross negligence or
willful misconduct of the Administrative Agent, the Collateral Agent or any such
Lender or (ii) legal proceedings commenced against the Administrative Agent, the
Collateral Agent or any such Lender by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such; and
(f) subject to the foregoing provisions of this subsection
14.6 with respect to the payment of costs, expenses and disbursements for the
matters expressly specified therein, pay, indemnify and hold the Administrative
Agent and each Lender harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, and related
reasonable costs, expenses or disbursements of any kind or nature whatsoever
with respect to the failure of the Administrative Agent or any Lender seeking
indemnification or of any L/C Issuer to honor a demand for payment under any
Letter of Credit or guaranty thereof as a result of compliance by the
Administrative Agent or any such Lender or L/C Issuer (or any corporation
controlling such Person) with any request or directive (whether or not having
the force of law) from any present or future de jure or de facto government or
Governmental Authority, provided, that no Borrower shall have an obligation
hereunder to the Administrative Agent or any Lender with respect to any such
indemnified liabilities arising from the gross
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negligence or willful misconduct of the Administrative Agent or such Lender, as
the case may be; and
(g) the agreements in this subsection 14.6 shall survive
repayment of the Notes and all other amounts payable hereunder.
14.7 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Lenders, the Administrative Agent, the Collateral Agent, all
other parties to this Agreement, all future holders of the Notes and their
respective successors and assigns, except that no Borrower may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time sell to one or more banks or
other entities ("Participants") participating interests in any Loan owing to
such Lender, any Note held by such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant:
(i) such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof;
(ii) such Lender shall remain the holder of any such Note for
all purposes under this Agreement and the other Loan Documents;
(iii) the Borrowers and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and the
other Loan Documents; and
(iv) such Participant shall have no right to enforce the
obligations of any Borrower or any other Loan Party relating to the
Obligations or to approve any amendment, modification or waiver of any
provision of this Agreement, other than any amendment, modification,
supplement or waiver decreasing any fees payable hereunder or the
amount of principal of or the rate at which interest is payable on the
Loans and L/C Obligations, extending the scheduled final maturity of
the Loans or any date scheduled for payment of interest on the Loans or
any fees, extending the Commitments or releasing any material
Collateral or Guarantee; provided in the case of any of the foregoing,
that the interests held by such Participant are directly affected by
such amendment, modification, supplement or waiver.
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Each Borrower agrees that if amounts outstanding under this Agreement and the
Notes are due or unpaid, or shall have been declared or shall have become due
and payable upon the occurrence of an Event of Default, each Participant shall
be deemed to have the right of setoff in respect of its participating interest
in amounts owing under this Agreement and any Note to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement or any Note, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in subsection 14.8(a) as fully as if it
were a Lender hereunder. Each Borrower also agrees that each Participant shall
be entitled to the benefits of subsections 6.13, 6.14 and 6.16 with respect to
its participation in the Commitments and the Loans outstanding from time to time
as if it was a Lender; provided that, in the case of subsection 6.14, such
Participant shall have complied with the requirements of said subsection 6.14;
and provided, further, that no Participant shall be entitled to receive any
greater amount pursuant to any such subsection than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time and from time to time assign to
(an "Assignee"):
(i) any Lender or any affiliate thereof, with the consent of
the Administrative Agent (which shall not be unreasonably withheld); or
(ii) an additional bank, financial institution or other
entity, with the consent of the Administrative Agent and the Borrowers
(which shall not be unreasonably withheld and, except as set forth in
subsection 14.7(e), shall not require the making of any additional
payment to the Administrative Agent or any Borrower), provided that
such consent of the Borrowers shall not be required at any time when an
Event of Default has occurred and is continuing;
all or any part of its rights and obligations under this Agreement and the Notes
pursuant to an assignment and acceptance, substantially in the form of Exhibit H
(the "Assignment and Acceptance"), executed by such Assignee, such assigning
Lender and the Administrative Agent (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrowers) and delivered to the
Administrative Agent for its acceptance and recording in the Register; provided
that:
(x) in the case of any such assignment to an Assignee which is
not a Lender or an Affiliate thereof (before giving effect to such
assignment), (i) the sum of the portion of the Aggregate Commitment
hereunder and the portion of the
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Aggregate Commitment under (and as defined in) the Canadian Credit
Agreement which are so assigned shall be not less than $5,000,000 and
(ii) unless such assignment is of all of such assigning Lender's
Commitment, such assigning Lender shall (after giving effect to such
assignment) have a Commitment hereunder and a Commitment under (and as
defined in) the Canadian Credit Agreement of not less than $5,000,000
in the aggregate; and
(y) notwithstanding the provisions of clause (x)(ii) above, no
such assignment shall be permitted hereunder if such assigning Lender
(or any Affiliate thereof) (1) holds any Commitment, or other rights or
obligations, under (and as defined in) the Canadian Credit Agreement
and (2) will, after giving effect to such assignment hereunder, have a
Commitment hereunder (and as defined herein) of less than $5,000,000.
Upon such execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment, as set forth therein, and (y) the assigning Lender thereunder
shall, to the extent provided in such Assignment and Acceptance, 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 assigning Lender shall cease to be a
party hereto).
(d) The Administrative Agent shall maintain at its address
referred to in subsection 14.3 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent, the Collateral Agent and the Lenders may treat each Person
whose name is recorded in the Register as the owner of the Loan recorded therein
for all purposes of this Agreement. The Register shall be available for
inspection by any Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender, an Assignee and the Administrative Agent (and, in the
case of an Assignee that is not then a Lender or an affiliate thereof, by the
Borrowers), together with payment to the Administrative Agent of a registration
and processing fee of $3,000 (or, in the case of an Assignee which is then a
Lender or an affiliate thereof, $500), the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
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determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrowers. Promptly following receipt of such notice, each Borrower, at its
own expense, shall execute and deliver to the Administrative Agent (in exchange
for the Revolving Credit Note of the assigning Lender) a new Revolving Credit
Note to the order of such Assignee in an amount equal to the Commitment assumed
by it pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained a Commitment hereunder, a new Revolving Credit Note to the order of
the assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Notes shall be dated the Original Closing Date and shall
otherwise be in the form of the Note replaced thereby.
(f) HCNA and each Borrower authorizes each Lender to disclose
to any Participant or Assignee (each, a "Transferee") and any prospective
Transferee any and all financial information in such Lender's possession
concerning the Borrowers, their Subsidiaries and their Affiliates which has been
delivered to such Lender by or on behalf of HCNA or any Borrower pursuant to
this Agreement or which has been delivered to such Lender by or on behalf of
HCNA or any Borrower in connection with such Lender's credit evaluation of the
Borrowers and their Affiliates prior to becoming a party to this Agreement;
provided that each such Transferee or prospective Transferee, as the case may
be, agrees to be bound by the same standard of confidentiality as is required of
such Lender hereunder and under the other Loan Documents.
(g) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Bank in accordance with applicable
law.
14.8 Adjustments; Set-off. (a) If any Lender (a "benefitted
Lender") shall at any time receive any payment of all or part of its Loans or
the L/C Obligations owing to it, or interest thereon, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 12(g), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans or
the L/C Obligations owing to it, or interest thereon, such benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan or the L/C Obligations owing to it, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefitted Lender,
such purchase shall be rescinded, and the
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purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to any
Borrower, any such notice being expressly waived by each Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by any
Borrower hereunder or under the Notes (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of any Borrower. Each Lender
agrees promptly to notify the relevant Borrower and the Administrative Agent
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.
14.9 Designation under Senior Subordinated Notes. HCNA hereby
irrevocably agrees that all amounts from time to time outstanding under this
Agreement, the Applications and the Notes and all other Obligations, and any
refinancing, refunding or renewal thereof, shall be deemed to be and shall be
"Designated Senior Debt" for purposes of (and as defined in) the Senior
Subordinated Notes. HCNA hereby represents and warrants that it has provided
written notice of such designation to IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as
trustee under the indenture governing the Senior Subordinated Notes and hereby
covenants promptly to take any such action as may be necessary or as otherwise
reasonably may be requested by the Administrative Agent in order to maintain
such designation.
14.10 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrowers and the
Administrative Agent.
14.11 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14.12 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the
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Administrative Agent, the Collateral Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent, the Collateral Agent or any Lender
relative to subject matter hereof not expressly set forth or referred to herein
or in the other Loan Documents.
14.13 Separate Obligations. Notwithstanding anything to the
contrary contained herein, each representation, warranty, covenant or other
undertaking made by HCNA or any of its Subsidiaries hereunder shall apply to or
be binding upon HCNA or such Subsidiary, as the case may be, and any of its
respective Subsidiaries, but shall not apply to or be binding upon any other
Person which is not a party hereto.
14.14 Application of Proceeds of Collateral. (a) Each of the
Administrative Agent, the Collateral Agent and each Lender hereby acknowledges
the agreement of the Lenders under (and as defined in) the Canadian Credit
Agreement that such Canadian Lenders shall not be entitled to receive the
proceeds of any Collateral provided pursuant to the Security Documents under
this Agreement or any Guarantee hereunder until such Canadian Lenders have used
their diligent efforts to realize upon the Collateral under (and as defined in)
the Canadian Credit Agreement; provided that the restrictions contained in this
subsection 14.14 shall terminate immediately upon notice from the Majority
Lenders under (and as defined in) the Canadian Credit Agreement to the
Administrative Agent and the Collateral Agent hereunder that such diligent
efforts have been used. Following receipt by the Administrative Agent and the
Collateral Agent of any such notice, any proceeds from the realization of
Collateral shall be applied to the Obligations hereunder and the Obligations
under (and as defined in) the Canadian Credit Agreement in such a manner so that
the holders of the Obligations hereunder shall have received (to the extent that
such proceeds are sufficient to do so) payment on the same percentage of the
aggregate amount of the Obligations hereunder as the holders of the Obligations
under (and as defined in) the Canadian Credit Agreement shall have received of
the Obligations (as defined in the Canadian Credit Agreement) thereunder.
(b) Each of the Administrative Agent, the Collateral Agent and
each Lender hereby acknowledges the agreement of the Administrative Agent, the
Collateral Agent and each Lender under (and as defined in) the Canadian Credit
Agreement that such Persons shall not be entitled to receive the proceeds of any
Collateral provided pursuant to the Security Documents hereunder or any
Guarantee hereunder to the extent that the Administrative Agent, the Collateral
Agent and the Lenders under (and as defined in) the Canadian Credit Agreement
have received any payment of all or part of the amounts owing to it thereunder
and under the other Loan Documents (as defined therein), or have received any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of
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the nature referred to in subsection 12(g) of the Canadian Credit Agreement or
otherwise), in a greater proportion than any such payment to or collateral
received by the Administrative Agent, the Collateral Agent and the Lenders
hereunder in respect of amounts owing to them hereunder and under the Loan
Documents.
(c) Notwithstanding anything to the contrary contained herein,
the foregoing provisions of this subsection 14.14 and subsection 14.14 of the
Canadian Credit Agreement are intended to constitute an inter-creditor agreement
between the Lenders hereunder and the Lenders under (and as defined in) the
Canadian Credit Agreement. The foregoing provisions of this subsection 14.14 are
not intended to inure to the benefit of any third party beneficiaries and
nothing contained herein shall be deemed to impair the perfection and/or
priority of security interests and other rights of the Lenders hereunder and
Lenders under (and as defined in) the Canadian Credit Agreement in the
Collateral hereunder or thereunder (and as defined therein).
(d) Each of the parties hereto acknowledges and agrees that,
so long as there shall have occurred and be continuing any Event of Default
under Section 12(a)(ii) as a result of a failure to pay (x) interest due on the
Revolving Credit Loans, (y) commitment fees on the Commitments or (z) fees or
commissions related to any Letter of Credit, proceeds of amounts received by it
pursuant to the Lock Box Agreements shall be applied in the order specified in
the first proviso to subsection 6.4(c) and that after an acceleration of the
Loans pursuant to Section 12 all proceeds of the Collateral that are applied to
the Obligations shall be applied in the order specified in the second proviso to
subsection 6.4(c). Notwithstanding anything to the contrary contained herein,
the provisions of this paragraph are intended to constitute an inter-creditor
agreement between the Lenders. The provisions of this paragraph are not intended
to inure to the benefit of any third party beneficiaries, and nothing contained
herein shall be deemed to impair the perfection and/or priority of security
interests and other rights of the Lenders in the Collateral.
14.15 GOVERNING LAW. THIS AGREEMENT AND THE NOTES
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
14.16 Submission to Jurisdiction; Waivers. HCNA and each
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general jurisdiction
of the courts of the State of New York, the courts of the
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United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to HCNA or such Borrower at its address set forth in
subsection 14.3 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law and in
the absence of bad faith on the part of the Administrative Agent, the
Collateral Agent or a Lender (with such waiver, in the case of any such
bad faith, ceasing to be effective only as to the Administrative Agent,
the Collateral Agent or such Lender as the case may be), any right it
may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential
damages.
14.17 Acknowledgements. HCNA and each Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Notes and the other
Loan Documents;
(b) none of the Administrative Agent, the Collateral Agent nor
any Lender has any fiduciary relationship with or duty to HCNA or any
Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between Administrative
Agent, the Collateral Agent and Lenders, on the one hand, and HCNA and
each Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among HCNA or any Borrower and
the Lenders.
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14.18 WAIVERS OF JURY TRIAL. HCNA, THE BORROWERS, THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND THE LENDERS HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
14.19 Confidentiality. (a) Each of the Administrative Agent
and each Lender agrees to keep confidential all non-public information provided
to it by any Borrower pursuant to this Agreement that is designated by such
Borrower as confidential and all copies thereof and extracts therefrom; provided
that nothing herein shall prevent the Administrative Agent or any Lender from
disclosing any such information (i) to the Administrative Agent, any other
Lender or, on a need-to-know basis, any affiliate of any Lender, (ii) to any
Transferee or prospective Transferee which agrees to comply with the provisions
of this Section 14.19, (iii) on a need-to-know basis, to the employees,
directors, agents, attorneys, accountants and other professional advisors of
such Lender or its affiliates, (iv) upon the request or demand of any
Governmental Authority having jurisdiction over the Administrative Agent or such
Lender, (v) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(vi) if requested or required to do so in connection with any litigation or
similar proceeding, (vii) which has been publicly disclosed other than in breach
of this Section 14.19, or (viii) in connection with the exercise of any remedy
hereunder or under any other Loan Document.
(b) Except as required by Requirements of Law, each of HCNA
and the Borrowers hereby agrees that it will not, and will not permit any one
acting on its behalf, to issue, authorize or release for external publication or
distribution any article, press release, advertisement or other publicity
material in any media disclosing the name of the Administrative Agent, the
Collateral Agent or any of the Lenders, without the prior written consent of the
affected Person.
(c) Except as required by Requirements of Law or in connection
with the enforcement or preservation of any rights under this Agreement, the
Notes and the other Loan Documents, each of the Administrative Agent, the
Collateral Agent and each of the Lenders hereby agrees that it will not, and
will not permit any one acting on its behalf, to issue, authorize or release for
external publication or distribution any article, press release, advertisement
or other publicity material in any media disclosing the name of HCNA or any of
its Subsidiaries, without the prior written consent of HCNA.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
NORTH AMERICAN CHEMICAL
COMPANY, as a Borrower and as a
Guarantor
By:____________________________________
Name:
Title:
NORTH AMERICAN SALT COMPANY,
as a Borrower and as a Guarantor
By:____________________________________
Name:
Title:
GREAT SALT LAKE MINERALS
CORPORATION, as a Borrower and as a
Guarantor
By:____________________________________
Name:
Title:
▇▇▇▇▇▇ CHEMICAL NORTH AMERICA,
INC., as a Guarantor
By:____________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent,
as Collateral Agent and as a Lender
By:____________________________________
Name: ▇▇▇▇ Luck
Title: Vice President,
GE Capital Commercial
Finance, Inc.,
Being Duly Authorized
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THE FIRST NATIONAL BANK OF
BOSTON, as a Lender
By:____________________________________
Name:
Title:
THE CIT GROUP/BUSINESS CREDIT,
INC., as a Lender
By:____________________________________
Name:
Title:
▇▇▇▇▇▇ FINANCIAL, INC., as a Lender
By:____________________________________
Name:
Title:
BANKAMERICA, as a Lender
By:____________________________________
Name:
Title:
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SCHEDULE I
to Credit Agreement
ADDRESSES FOR NOTICES
GENERAL ELECTRIC CAPITAL CORPORATION
For Funding Requests: Other Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ Portfolio Analyst Attention: ▇▇▇▇▇▇ Account Manager
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ or 7816 Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
THE FIRST NATIONAL BANK OF BOSTON
For Funding Requests: Other Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 01-09-06 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Attn: ▇▇▇ ▇'▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and Attn: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
THE CIT GROUP/BUSINESS CREDIT, INC.
For Funding Requests: Other Notices
1211 Avenue of the Americas ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇▇▇▇ FINANCIAL, INC.
For Funding Requests: Other Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and Attn: ▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA BUSINESS CREDIT, INC.
For Funding Requests: Other Notices:
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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